4,600,000 Shares
PRT GROUP INC.
Common Stock
UNDERWRITING AGREEMENT
November __, 1997
XXXXX XXXXXX INC.
XXXXXXXXX XXXXXX & XXXXXXXX
SECURITIES CORPORATION
UBS SECURITIES LLC
PUNK, XXXXXX & COMPANY L.P.
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
PRT Group Inc., a Delaware corporation (the "Company"), proposes to
issue and sell an aggregate of 3,850,000 shares (the "Company Shares") of its
Common Stock, $0.001 par value per share, to the several Underwriters named in
Schedule II hereto (the "Underwriters") and the persons named in Part A of
Schedule I hereto (the "Selling Stockholders") propose to sell to the several
Underwriters an aggregate of 750,000 shares (the "Selling Stockholder Shares")
of such Common Stock of the Company. The Company and the Selling Stockholders
are hereinafter sometimes referred to as the "Sellers". The Company's Common
Stock, $0.001 par value, is hereinafter referred to as the "Common Stock" and
the 3,850,000 shares of Common Stock to be issued and sold to the Underwriters
by the Company and 750,000 shares of Common Stock to be sold to the
Underwriters by the Selling Stockholders are hereinafter referred to as the
"Firm Shares". The Selling Stockholders listed in Part B of Schedule I hereto
also propose to sell to the Underwriters, upon the terms and conditions set
forth in Section 2 hereof, up to an additional 690,000 shares (the "Additional
Shares") of Common Stock solely for the purpose of covering over-allotments.
The Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "Shares."
The Company and the Selling Stockholders wish to confirm as follows
their respective agreements with you (the "Representatives") and the other
several Underwriters on whose behalf you are acting, in connection with the
several purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 under the Act (the "registration
statement"), including a prospectus subject to completion relating to the
Shares. The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, or, if the registration statement
became effective prior to the execution of this Agreement, as supplemented or
amended prior to the execution of this Agreement. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared effective before the
offering of the Shares may commence, the term "Registration Statement" as used
in this Agreement means the registration statement as amended by said
post-effective amendment. If an abbreviated registration statement is prepared
and filed with the Commission in accordance with Rule 462(b) under the Act ("an
Abbreviated Registration Statement"), the term "Registration Statement" as used
in this Agreement includes such Abbreviated Registration Statement. The term
"Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant to Rule 424(b).
The term "Prepricing Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at the
time of the initial filing of the registration statement with the Commission,
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus.
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2. Agreements to Sell and Purchase. Subject to such adjustments as you
may determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $_______ per
Share (the "purchase price per share"), the number of Firm Shares which bears
the same proportion to the aggregate number of Firm Shares to be issued and
sold by the Company as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule II hereto (or such number of Firm Shares increased
as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares
to be sold by the Company and the Selling Stockholders.
Subject to such adjustments as you may determine in order to avoid
fractional shares, each Selling Stockholder agrees, subject to all the terms
and conditions set forth herein, to sell to each Underwriter and, upon the
basis of the representations, warranties and agreements of the Company and the
Selling Stockholders herein contained and subject to all the terms and
conditions set forth herein, each Underwriter, severally and not jointly,
agrees to purchase from each Selling Stockholder at the purchase price per
share that number of Firm Shares which bears the same proportion to the number
of Firm Shares set forth opposite the name of such Selling Stockholder in Part
A of Schedule I hereto as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule II hereto (or such number of Firm Shares
increased as set forth in Section 12 hereof) bears to the aggregate number of
Firm Shares to be sold by the Company and the Selling Stockholders.
The Selling Stockholders listed in Part B of Schedule I hereto also
agree, subject to all the terms and conditions set forth herein, to sell to the
Underwriters, and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from the Selling Stockholders listed in Part B
of Schedule I hereto, at the purchase price per share, pursuant to an option
(the "over-allotment option") which may be exercised at any time and from time
to time prior to 9:00 P.M., New York City time, on the 30th day after the date
of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter
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when the New York Stock Exchange is open for trading), up to an aggregate of
690,000 Additional Shares from the Selling Stockholders listed in Part B of
Schedule I hereto (the maximum number of Additional Shares which each of them
agrees to sell upon the exercise by the Underwriters of the over-allotment
option is set forth opposite their respective names in Part B of Schedule I).
Additional Shares may be purchased only for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
number of Additional Shares which the Underwriters elect to purchase upon any
exercise of the over-allotment option shall be provided by each Selling
Stockholder who has agreed to sell Additional Shares in proportion to the
respective maximum numbers of Additional Shares which each Selling Stockholder
has agreed to sell. Upon any exercise of the over-allotment option, each
Underwriter, severally and not jointly, agrees to purchase from each Selling
Stockholder who has agreed to sell Additional Shares the number of Additional
Shares (subject to such adjustments as you may determine in order to avoid
fractional shares) which bears the same proportion to the number of Additional
Shares to be sold by each Selling Stockholder who has agreed to sell Additional
Shares as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Company and the Selling Stockholders.
Certificates in transferable form for the Shares (including any
Additional Shares) which each of the Selling Stockholders agrees to sell
pursuant to this Agreement have been placed in custody with
_____________________ (the "Custodian") for delivery under this Agreement
pursuant to a Custody Agreement and Power of Attorney (the "Custody Agreement")
executed by each of the Selling Stockholders appointing ______________ and
______________ as agents and attorneys-in-fact (the "Attorneys-in-Fact"). Each
Selling Stockholder agrees that (i) the Shares represented by the certificates
held in custody pursuant to the Custody Agreement are subject to the interests
of the Underwriters, the Company and each other Selling Stockholder, (ii) the
arrangements made by the Selling Stockholders for such custody are, except as
specifically provided in the Custody Agreement, irrevocable, and (iii) the
obligations of the Selling Stockholders hereunder and under the Custody
Agreement shall not be terminated by any act of such Selling Stockholder or by
operation of law, whether by the death or incapacity of any Selling Stockholder
or the occurrence of any other event or, if the Selling Stockholder is not a
natural person, upon any dissolution, winding up,
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distribution of assets or other event affecting the legal existence of such
Selling Stockholder. If any Selling Stockholder shall die or be incapacitated
or if any other event shall occur before the delivery of the Shares hereunder,
or if the Selling Stockholder is not a natural person, shall dissolve, wind up,
distribute assets or if any other event affecting the legal existence of such
Selling Stockholder shall occur before the delivery of the Shares hereunder,
certificates for the Shares of such Selling Stockholder shall be delivered to
the Underwriters by the Attorneys-in-Fact in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such death or
incapacity or other event had not occurred, regardless of whether or not the
Attorneys-in-Fact or any Underwriter shall have received notice of such death,
incapacity or other event. Each Attorney-in-Fact is authorized, on behalf of
each of the Selling Stockholders, to execute this Agreement and any other
documents necessary or desirable in connection with the sale of the Shares to
be sold hereunder by such Selling Stockholder, to make delivery of the
certificates for such Shares, to receive the proceeds of the sale of such
Shares, to give receipts for such proceeds, to pay therefrom any expenses to be
borne by such Selling Stockholder in connection with the sale and public
offering of such Shares, to distribute the balance thereof to such Selling
Stockholder, and to take such other action as may be necessary or desirable in
connection with the transactions contemplated by this Agreement. Each
Attorney-in-Fact agrees to perform his duties under the Custody Agreement.
3. Terms of Public Offering. The Sellers have been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New
York City time, on November __, 1997 (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date may be varied by agreement among you,
the Company and the Attorneys-in-Fact.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Xxxxx Xxxxxx
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Inc. at such time on such date (the "Option Closing Date"), which may be the
same as the Closing Date but shall in no event be earlier than the Closing Date
nor earlier than two nor later than ten business days after the giving of the
notice hereinafter referred to, as shall be specified in a written notice from
you on behalf of the Underwriters to the Company and the Attorneys-in-Fact of
the Underwriters' determination to purchase a number, specified in such notice,
of Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement among you, the
Company and the Attorneys-in-Fact.
Certificates for the Firm Shares (other than the Selling Stockholder
Shares and the Additional Shares) to be purchased hereunder shall be registered
in such names and in such denominations as you shall request prior to 9:30
A.M., New York City time, on the second business day preceding the Closing Date
or any Option Closing Date, as the case may be, and certificates for the Firm
Shares (other than Company Shares) and for any Additional Shares to be
purchased hereunder shall be endorsed to Xxxxx Xxxxxx Inc., as representative
of the several Underwriters or in blank, on each stock certificate in
registered form or on a separate document for the purpose of assigning or
transferring or granting a power to assign or transfer. Such certificates shall
be made available to you in New York City for inspection and packaging not
later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or the Option Closing Date, as the case may be. The
certificates evidencing the Firm Shares and any Additional Shares to be
purchased hereunder shall be delivered to you on the Closing Date or the Option
Closing Date, as the case may be, against payment to the order of the Company
and the Attorneys-in-Fact of the purchase price therefor in federal funds or
other funds immediately available in New York City.
5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and
will advise you promptly and, if requested by you, will confirm such advice
in writing, when the Registration Statement or such post-effective
amendment has become effective.
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(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission
for amendment of or a supplement to the Registration Statement, any
Prepricing Prospectus or the Prospectus or for additional information; (ii)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and (iii) within the period
of time referred to in paragraph (f) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth
or results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a material
fact required by the Act to be stated therein or necessary in order to make
the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with
the Act or any state securities laws. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, four (4) signed
copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements
and all exhibits thereto, and will also furnish to you, without charge,
such number of conformed copies of the registration statement as originally
filed and of each amendment thereto, but without exhibits, as you may
reasonably request.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which
you shall not previously have been advised or to which you shall reasonably
object after being so advised or (ii) so long as, in the opinion of counsel
for the Underwriters, a Prospectus is required to be delivered in
connection with sales by any Underwriter or dealer, file any information,
documents or reports pursuant to
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the Securities Exchange Act of 1934, as amended (the "Exchange Act")
without delivering a copy of such information, documents or reports to you,
as Representatives of the Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the Company
has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of the Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers, prior to the
date of the Prospectus, of each Prepricing Prospectus so furnished by the
Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the
Company will expeditiously deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any amendment or
supplement thereto) as you may reasonably request. The Company consents to
the use of the Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Act and with the securities or Blue
Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of
time thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If during such period
of time any event shall occur that in the judgment of the Company or in the
opinion of counsel for the Company and for the Underwriters is required to
be set forth in the Prospectus (as then amended or supplemented) or should
be set forth therein in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it
is necessary to supplement or amend the Prospectus to comply with the Act
or any state securities law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the Commission
an appropriate supplement or amendment thereto, and will expeditiously
furnish to the Underwriters and dealers a reasonable
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number of copies thereof. In the event that the Company and you, as
Representatives of the several Underwriters agree that the Prospectus
should be amended as supplemented, the Company, if requested by you, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to file a general consent to service of process or to take any other
action which would subject it to service of process in suits, other than
those arising out of the offering or sale of the Shares, or to taxation in
respect of doing business, in each case in any jurisdiction where it is not
now so subject.
(h) The Company will make generally available to its security holders
a consolidated earning statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement (as defined in Rule 158 under the Act) and ending not later than
18 months thereafter, as soon as practicable after the end of such period,
which consolidated earning statement shall satisfy the provisions of
Section 11(a) of the Act.
(i) During the period of three years hereafter, the Company will
furnish to you as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission, and from time to time
such other information concerning the Company as you may reasonably
request; provided, further, that you agree (i) to maintain the
confidentiality of any such information to the extent such information is
designated "confidential" by the Company and (ii) if reasonably requested
by the Company, to enter into a confidentiality agreement with respect to
any "confidential" information.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions
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hereof (otherwise than pursuant to the second paragraph of Section 12
hereof or by notice given by you terminating this Agreement pursuant to
Section 12 or Section 13 hereof) or if this Agreement shall be terminated
by the Underwriters because of any failure or refusal on the part of the
Company or the Selling Stockholders to comply with the terms or fulfill, in
all material respects, any of the conditions of this Agreement, the Company
agrees to reimburse the Representatives for all reasonable out-of-pocket
expenses (including fees and expenses of counsel for the Underwriters)
incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely file
the Prospectus pursuant to Rule 424(b) under the Act and will advise you of
the time and manner of such filing.
(m) Except as provided in this Agreement, the Company will not sell,
offer to sell, solicit an offer to buy, contract to sell, grant any option
or warrant to purchase, pledge or otherwise transfer or dispose of any
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or grant any options or warrants to purchase
Common Stock, for a period of 180 days after the date of the Prospectus,
without the prior written consent of Xxxxx Xxxxxx Inc.; provided, however,
that the Company may (i) issue shares of Common Stock pursuant to benefit
plans, stock option plans or other compensation plans existing on the date
hereof and (ii) issue unregistered shares of Common Stock in a private
placement in connection with potential acquisitions.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance reasonably satisfactory to you, signed by
each of its current officers and directors and each of its stockholders set
forth on the attached Exhibit A.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or
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manipulation of the price of the Common Stock to facilitate the sale
or resale of the Shares.
(p) The Company will use its best efforts to have the Common Stock
included for quotation, subject to notice of issuance, on the Nasdaq
National Market concurrently with the effectiveness of the Registration
Statement.
6. Agreements of the Selling Stockholders. Each of the Selling
Stockholders agrees with the several Underwriters as follows (except that (i)
clause (f) shall be applicable to all Selling Stockholders other than The
Xxxxxxxxx Group LLC and (ii) clause (g) shall be applicable only to The
Xxxxxxxxx Group LLC):
(a) Such Selling Stockholder will cooperate to the extent reasonably
necessary to cause the Registration Statement or any post-effective
amendment thereto to become effective at the earliest possible time.
(b) Such Selling Stockholder will pay all Federal and other taxes, if
any, on the transfer or sale of the Shares being sold by such Selling
Stockholder to the Underwriters.
(c) Such Selling Stockholder will do or perform all things reasonably
required to be done or performed by such Selling Stockholder prior to the
Closing Date or any Option Closing Date, as the case may be, to satisfy all
conditions precedent with respect to such Selling Stockholder to the
delivery of the Shares pursuant to this Agreement.
(d) Such Selling Stockholder has executed or will execute a "lock-up"
letter as provided in Section 5(n) above and will not sell, offer to sell,
solicit an offer to buy, contract to sell, grant any option to purchase,
pledge or otherwise transfer or dispose of any shares of Common Stock, or
any securities convertible into or exercisable or exchangeable for Common
Stock, except for the sale of Shares to the Underwriters pursuant to this
Agreement, prior to the expiration of 180 days after the date of the
Prospectus, without the prior written consent of Xxxxx Xxxxxx Inc.;
provided, however, that such Selling Stockholder may transfer shares of
Common Stock to a member of such Selling Stockholder's immediate family, to
a trust of which such Selling Stockholder or an immediate family member is
the beneficiary, to a spouse
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in a divorce proceeding or to any other persons as a bona fide gift;
and provided further, that, upon any such transfer, the transferee agrees
to enter into a "lock-up" letter substantially similar to the "lock-up"
letter entered into by the Selling Stockholder for the remainder of the
"lock-up" period.
(e) Except as stated in this Agreement and in the Prepricing
Prospectus and the Prospectus, such Selling Stockholder will not take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price
of the Common Stock to facilitate the sale or resale of the Shares.
(f) To the extent that any statements or omissions made in the
Registration Statement or the Prospectuses (as amended or supplemented, if
amended or supplemented) specifically refer to the information regarding a
Selling Stockholder under the caption "Principal and Selling Stockholders,"
such Selling Stockholder will advise you promptly upon becoming aware, and
if requested by you, will confirm such advice in writing, within the period
of time referred to in Section 5(f) hereof, of any change in such
information that comes to the attention of such Selling Stockholder that
makes any statement made in the Registration Statement or the Prospectuses
(as then amended or supplemented) untrue or which requires the making of
any additions to or changes in the Registration Statement or the
Prospectuses (as then amended or supplemented) in order to state a material
fact required by the Act or the regulations thereunder to be stated therein
or necessary in order to make the statement therein not misleading, or of
the necessity to amend or supplement the Prospectuses (as then amended or
supplemented) to comply with the Act or any state securities law.
(g) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, within the period of
time referred to in Section 5(f) hereof, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth
or results of operations or of any change in information relating to such
Selling Stockholder or the Company or any new information relating to the
Company or relating to any matter stated in the Prospectus or any amendment
or supplement thereto which comes to the attention of such Selling
Stockholder that suggests that any statement
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made in the Registration Statement or the Prospectus (as then amended
or supplemented, if amended or supplemented) is or may be untrue in any
material respect or that the Registration Statement or Prospectus (as then
amended or supplemented, if amended or supplemented) omits or may omit to
state a material fact or a fact necessary to be stated therein in order to
make the statements therein not misleading in any material respect, or of
the necessity to amend or supplement the Prospectus (as then amended or
supplemented, if amended or supplemented) in order to comply with the Act
or any state securities law.
(h) Such Selling Stockholder shall provide you with a United States
Treasury Department Form W-9 properly completed or executed or other
evidence satisfactory to you that such Selling Stockholder is not subject
to backup withholding.
7. Representations and Warranties of the Company. The Company and,
with respect to clause (b) only, The Xxxxxxxxx Group LLC (the "Indemnifying
Selling Stockholder") represent and warrant to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The Registration Statement in the form in which it became or
becomes effective, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule
430A(b), and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any
supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act, complied or will comply in all material respects with
the provisions of the Act and did not or will not at any such times 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 case of the Prospectus, in light of the circumstances in which they
are made, not misleading, except that this representation and warranty does
not apply to statements in or omissions from the Registration
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Statement or the Prospectus made in reliance upon and in conformity
with information relating to any Selling Stockholder or any Underwriter
furnished to the Company in writing by or on behalf of any Selling
Stockholder or any Underwriter through you expressly for use therein.
(c) All the outstanding shares of Common Stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares to be issued and
sold by the Company after giving effect to the Amended and Restated
Certificate of Incorporation of the Company (in substantially the form
filed as an exhibit to the Registration Statement (the "Amended and
Restated Certificate of Incorporation")) will be duly authorized and, when
issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and will not be issued in violation of any preemptive or
similar rights; and the capital stock of the Company, after giving effect
to the Amended and Restated Certificate of Incorporation, will conform to
the description thereof in the Registration Statement and the Prospectus
under the caption "Description of Capital Stock."
(d) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where the nature of
its properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), business, properties, net worth or results
of operations of the Company and the Subsidiaries (as hereinafter defined)
taken as a whole (a "Material Adverse Effect").
(e) All of the Company's subsidiaries as defined in Rule 1-02(x) of
Regulation S-X (collectively, the "Subsidiaries") are listed in Exhibit A
hereto. Each Subsidiary is a corporation duly organized, validly
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existing and in good standing in the jurisdiction of its organization,
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered or qualified to
conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires
such registration or qualification, except where the failure so to register
or qualify does not have a Material Adverse Effect; all the outstanding
shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, and are
owned by the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any lien, adverse claim, security interest,
equity or other encumbrance.
(f) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to
which any of their respective properties is subject, that are required to
be described in the Registration Statement or the Prospectus but are not
described as required; and all pending legal or governmental proceedings to
which the Company or any of the Subsidiaries is a party or that affect any
of their respective properties, that are not described in the Prospectus,
including ordinary routine litigation incidental to the business, are not
expected to result, individually or in the aggregate, in a Material Adverse
Effect.
(g) There are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the Act.
(h) Neither the Company nor any of the Subsidiaries is in violation of
(A) its certificate or articles of incorporation or by-laws, or other
organizational documents, or (B) of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries, including, without limitation, (i) any foreign, Federal,
state or local law or regulation relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
15
pollutants or contaminants ("Environmental Laws"), (ii) any Federal or
state law relating to discrimination in the hiring, promotion or pay of
employees or any applicable Federal or state wages and hours laws, or (iii)
any provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder (collectively, "ERISA"), which in
the case of the foregoing clause (B) would, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(i) Neither the Company nor any of its Subsidiaries is (A) in
violation of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or (B) in default
in any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound,
except for such violations or defaults, in the case of the foregoing
clauses (A) and (B), as would not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(j) Neither the issuance and sale of the Company Shares, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby
(including, without limitation, the inclusion in the Registration Statement
of the Shares to be sold by the Selling Stockholders) (A) requires any
consent, approval, authorization or other order of or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for
the registration of the Shares under the Act and the Exchange Act and
compliance with the securities or Blue Sky laws of various jurisdictions,
all of which have been or will be effected in accordance with this
Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company
or (B) conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, any agreement, indenture, lease or other
instrument to which the
16
Company or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, or violates or will
violate any statute, law or regulation, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their
respective properties, or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of them may be
bound or to which any of the property or assets of any of them is subject
except for any such conflicts, breaches, defaults, liens, charges or
encumbrances under clause (B), which would not, individually or in the
aggregate, be reasonably likely to (i) have a Material Adverse Effect or
(ii) impair the validity or enforceability of the Shares.
(k) The accountants, Ernst & Young LLP and Schulman, Cohen, Xxxxx,
Xxxxxx & Xxxxx, P.C., who have certified or shall certify the financial
statements included in the Registration Statement and the Prospectus (or
any amendment or supplement thereto) are, to the best knowledge of the
Company, independent public accountants as required by the Act.
(l) The historical financial statements, together with related
schedules and notes, included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis stated
in the Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other historical financial and statistical
information and data included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are accurately
presented and prepared on a basis consistent with such financial statements
and the books and records of the Company and the Subsidiaries. The pro
forma condensed combined financial data for the year ended December 31,
1996 and the nine month period ended September 30, 1997 included in the
Prospectus, have been prepared in accordance with the Commission's
applicable rules and guidelines
17
with respect to pro forma financial statements, the pro forma
adjustments contained therein have been properly applied to the historical
amounts in the compilation of those statements, and, the Company believes
that the assumptions used in the preparation therefore reasonable.
(m) The execution and delivery of, and the performance by the Company
of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company.
(n) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
neither the Company nor any of the Subsidiaries has incurred any liability
or obligation, direct or contingent, or entered into any transaction, not
in the ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the
capital stock, or material increase in the short-term debt or long-term
debt, of the Company or any of the Subsidiaries, or any material adverse
change, or any development having or which may reasonably be expected to
have a Material Adverse Effect.
(o) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Prospectus as
being owned by it, free and clear of all liens, claims, security interests
or other encumbrances except such as are described in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) or in
a document filed as an exhibit to the Registration Statement and all the
property described in the Prospectus as being held under lease or sublease
by each of the Company and the Subsidiaries, which is material to the
business of the Company and its Subsidiaries taken as a whole, is held by
it under valid, subsisting and enforceable leases or subleases with only
such exceptions as in the aggregate do not interfere in any material
respect with the conduct of the business of the Company and its
Subsidiaries taken as a whole or the use made or proposed to be made of
such property by the Company or its Subsidiaries; neither the Company nor
any of the Subsidiaries has any
18
notice of any claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any of the Subsidiaries under any
of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any of the Subsidiaries to the continued
possession of the leased or subleased premises under any such lease or
sublease, which claim could reasonably be expected individually or in the
aggregate to have a Material Adverse Effect.
(p) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted
by the Act.
(q) The Company and each of its Subsidiaries possess such permits,
licenses, franchises and authorizations including, without limitation,
under any applicable Environmental Laws, of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties
and to conduct its business in the manner described in the Prospectus,
except where the failure to so possess would not, individually or in the
aggregate, have a Material Adverse Effect and subject to such
qualifications as may be set forth in the Prospectus; the Company and each
of the Subsidiaries has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit, except where any such revocation,
termination or impairment would not have, individually or in the aggregate,
a Material Adverse Effect and subject in each case to such qualification as
may be set forth in the Prospectus; and, except as described in the
Prospectus, none of such permits contains any restriction that is
materially burdensome to the Company or any of the Subsidiaries.
(r) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements
19
in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(s) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor 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 in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(t) The Company and each of its Subsidiaries have filed all tax
returns required to be filed or obtained extensions therefor, which returns
are complete and correct in all material respects, and neither the Company
nor any Subsidiary is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto,
except where the failure to file such returns or to pay such taxes is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect.
(u) Except as described in the Registration Statement and the
Prospectus, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company because of the filing of the Registration Statement or consummation
of the transactions contemplated by this Agreement.
(v) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Prospectus as being owned by them or any of
them or necessary for the conduct of their respective businesses, except
where the lack of such ownership or possession would not, individually or
in the aggregate, have a Material Adverse Effect, and the Company is not
aware of any claim to the contrary or any challenge by any other person to
the rights of the Company and the Subsidiaries with respect to the
foregoing.
20
(w) The Company is not now, and after sale of the Shares to be issued
and sold by it hereunder and application of the net proceeds to the Company
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(x) Except as disclosed in the Registration Statement and the
Prospectus, there are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of, or other ownership interest in, the Company
or any Subsidiary thereof from the Company or such Subsidiaries.
(y) No labor problem exists with the employees of the Company or any
of the Subsidiaries or, to the knowledge of the Company, is imminent that,
in either case, could reasonably be expected individually or in the
aggregate to result in any Material Adverse Effect.
(z) The Company and each of the Subsidiaries maintain insurance of the
types and in the amounts that are customary for similarly situated
companies in the Company's and such Subsidiaries' industries.
8. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder represents and warrants to each Underwriter that:
(a) Such Selling Stockholder now has, and on the Closing Date and any
Option Closing Date, if applicable, will have, valid and marketable title
to the Selling Stockholder Shares to be sold by such Selling Stockholder,
free and clear of any lien, claim, security interest or other encumbrance,
including, without limitation, any restriction on transfer.
(b) Such Selling Stockholder now has, and on the Closing Date and any
Option Closing Date, if applicable, will have, full legal right, power and
authorization, and any approval required by law, to sell, assign, transfer
and deliver such Selling Stockholder Shares in the manner provided in this
Agreement, and upon delivery of and payment for such Shares hereunder, the
several Underwriters will acquire valid and marketable title to such Shares
free and
21
clear of any lien, claim, security interest, or other encumbrance.
(c) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder.
(d) Neither the execution and delivery of this Agreement or the
Custody Agreement by or on behalf of such Selling Stockholder nor the
consummation of the transactions herein or therein contemplated by or on
behalf of such Selling Stockholder (i) requires any consent, approval,
authorization or order of, or filing or registration with, any court,
regulatory body, administrative agency or other governmental body, agency
or official (except such as may be required under the Act or such as may be
required under state securities or Blue Sky laws governing the purchase and
distribution of the Shares) or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or default under, or violates
or will violate, any agreement, indenture or other instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder is or
may be bound or to which any of such Selling Stockholder's property or
assets is subject, or any statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to such Selling Stockholder or to
any property or assets of such Selling Stockholder, except for any such
conflicts, breaches, defaults, liens, charges or encumbrances under clause
(ii), which would not, individually or in the aggregate, be reasonably
likely to impair the validity, enforceability or rights of the Underwriters
pursuant to this Agreement or the Custody Agreement.
(e) The information pertaining to such Selling Stockholder provided to
the Company for inclusion under the caption "Principal and Selling
Stockholders" in the Registration Statement and the Prospectus, does not
and will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading.
(f) Such Selling Stockholder does not have any knowledge or any reason
to believe that the Registration Statement or the Prospectus (or any
amendment or supplement thereto) contains any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or
22
necessary to make the statements therein not misleading.
(g) The representations and warranties of such Selling Stockholder in
the Custody Agreement are, and on the Closing Date and, to the extent that
such Selling Stockholders sell Additional Shares, on any Option Closing
Date will be, true and correct.
(h) Such Selling Stockholder has not taken, directly or indirectly,
any action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares, except for the lock-up
arrangements described in the Prospectus.
9. Indemnification and Contribution. (a) Each of the Company and the
Indemnifying Selling Stockholder agrees to indemnify and hold harmless each of
you and each other Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
such Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith; provided,
however, the liability of the Indemnifying Selling Stockholder under this
paragraph (a) shall not exceed the net proceeds received by such Indemnifying
Selling Stockholder from the sale of such Selling Stockholder's Shares
hereunder; and provided, further, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of
23
the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to such
Underwriter in requisite quantity on a timely basis to permit such delivery or
sending. The foregoing indemnity agreement shall be in addition to any
liability which the Company or the Indemnifying Selling Stockholder may
otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company or the Indemnifying Selling
Stockholder, such Underwriter or such controlling person shall promptly notify
the parties against whom indemnification is being sought (the "indemnifying
parties"), and such indemnifying parties shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses. Such
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
indemnifying parties have agreed in writing to pay such fees and expenses, (ii)
the indemnifying parties have failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Underwriter or such controlling person
and the indemnifying parties and such Underwriter or such controlling person
shall have been advised by its counsel that representation of such indemnified
party and any indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar
or related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to one
local counsel in each jurisdiction) at any time for all such Underwriters and
24
controlling persons not having actual or potential differing interests with you
or among themselves, which firm shall be designated in writing by Xxxxx Xxxxxx
Inc., and that all such fees and expenses shall be reimbursed as they are
incurred. The indemnifying parties shall not be liable for any settlement of
any such action, suit or proceeding effected without their prior written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless any Underwriter, to
the extent provided in the preceding paragraph, and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of
such settlement or judgment.
(c) Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, the Company, its directors,
its officers who sign the Registration Statement, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
each Underwriter, but only with respect to the information furnished in writing
by or on behalf of such Selling Stockholder expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto; provided, however, the liability of a Selling
Stockholder under this paragraph (c) shall not exceed the net proceeds received
by such Selling Stockholder from the sale of such Selling Stockholder's Shares
hereunder. If any action, suit or proceeding shall be brought against any
Underwriter, any such controlling person of any Underwriter, the Company, any
of its directors, any such officer, or any such controlling person of the
Company, based on the Registration Statement, the Prospectus or any Prepricing
Prospectus or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Selling Stockholder pursuant to this
paragraph (c), such Selling Stockholder shall have the rights and duties given
to the Company by paragraph (b) above (except that if the Company shall have
assumed the defense thereof such Selling Stockholder shall not be required to
do so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such Selling
Stockholder's expense), and each Underwriter, each such controlling person of
any Underwriter, the Company, its directors, any such officer, and any such
controlling person of the Company shall have the rights and duties given to the
25
Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be
in addition to any liability which any Selling Stockholder may otherwise have.
(d) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each Selling Stockholder, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company
and the Selling Stockholders to each Underwriter, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf
of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, any Selling Stockholder,
or any such controlling person based on the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (d), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense thereof such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
such Underwriter's expense), and the Company, its directors, any such officer,
the Selling Stockholder, and any such controlling person shall have the rights
and duties given to the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which any Underwriter
may otherwise have.
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a), (c) or (d) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Stockholders on the one hand and the Underwriters
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
26
(i) above but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Stockholders or the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling Stockholders, and
the underwriting discounts and commissions received by the Underwriters, from
the sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other hand 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 Selling
Stockholders on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (e) above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities and expenses referred
to in paragraph (e) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating any claim or defending
any such action, suit or proceeding. Notwithstanding the provisions of this
Section 9, no Underwriter shall be required to contribute any amount in
27
excess of the amount by which the total price of the Shares underwritten by it
and distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. Notwithstanding the
provisions of this Section 9, no Selling Stockholder shall be required to
contribute any amount in excess of the net proceeds of the Shares sold by such
Selling Stockholder. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to the respective numbers of Firm Shares set forth opposite their
names in Schedule II hereto (or such numbers of Firm Shares increased as set
forth in Section 12 hereof) and not joint.
(g) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Stockholders or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. Notwithstanding any other provisions of this
Agreement, if this Agreement terminates prior to the purchase of the Shares by
the Underwriters, the Company and the Selling Stockholders shall not be liable
for any lost profits. A successor to any Underwriter or any person controlling
any Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to
28
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 9.
10. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the registration statement or such post-effective amendment shall
have become effective not later than 5:30 P.M. (or in the case of a
Registration Statement filed pursuant to Rule 462(b) under the Act, not
later than 10:00 P.M.), New York City time, on the date hereof, or at such
later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have
been timely made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or
any Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company
and its Subsidiaries taken as a whole not contemplated by the Prospectus,
which in your reasonable opinion, as Representatives of the several
Underwriters, would materially, adversely affect the market for the Shares,
or (ii) any event or development relating to or involving the Company or
any officer or director of the Company or any Selling Stockholder which
makes any statement made in the Prospectus untrue or which, in the opinion
of the Company and its counsel or the Underwriters and their counsel,
requires the making of any addition to or change in the Prospectus in order
to state a material fact required by the Act or any other law to be stated
therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your reasonable opinion, as Representatives
29
of the several Underwriters, materially adversely affect the market for the
Shares.
(c) You shall have received on the Closing Date, an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Company and The
Xxxxxxxxx Group LLC, Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx Xxxxxxxxxxx, and Xxxxx Xxxxxx (collectively, the "PRT
Stockholders"), dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware (the opinion of such counsel to be based solely upon a
review of a certificate of and a telegram from the Secretary of State
of the State of Delaware);
(ii) The Company has the corporate power and corporate authority
to conduct its business and to own, lease and operate its properties,
in each case as described in the Prospectus;
(iii) After giving effect to the Amended and Restated Certificate
of Incorporation, the authorized capital stock of the Company consists
of (A) 50,000,000 shares of Common Stock of which, to such counsel's
knowledge, _______ shares are issued and outstanding, (B) 1,000,000
shares of Non-Voting Common Stock, of which, to such counsels
knowledge, _____ shares are issued and outstanding, and (C) 5,000,000
shares of Preferred Stock, of which, to such counsel's knowledge, no
shares are issued and outstanding; and the authorized capital stock of
the Company conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus under the caption
"Description of Capital Stock;"
(iv) The Company Shares have been duly authorized by the Company
and, when delivered to and paid for by the Underwriters in accordance
with the terms hereof, will be validly issued, fully paid and
non-assessable. As used herein, the term "Applicable Laws" means the
Delaware General Corporation Law and the laws, rules and regulations
of the State of New York and the United States of America that, in the
experience
30
of such counsel are normally applicable to transactions of the
type contemplated by this Agreement, but without such counsel having
made any special investigation concerning any other laws, rules or
regulations; provided, that the term "Applicable Laws" does not
include (A) the rules and regulations of the National Association of
Securities Dealers, Inc., (B) state securities or blue sky laws, (C)
antifraud laws or (D) any law, rule or regulation that may have become
applicable to the Company as a result of the Underwriters' involvement
with transactions contemplated by this Agreement or because of any
facts specifically pertaining to them;
(v) The issuance and sale of the Company Shares by the Company
and the sale of the Selling Stockholder Shares by the Selling
Stockholders are not subject to the preemptive or other similar rights
of any stockholder of the Company arising under any agreement listed
as an exhibit to the Registration Statement (the "Applicable
Contracts"), the Amended and Restated Certificate of Incorporation,
the Amended and Restated By-Laws or Applicable Laws;
(vi) The form of specimen certificate evidencing the Common Stock
attached as an exhibit to the Registration Statement to be delivered
to you at the Closing complies in all material respects with all
applicable requirements of the Delaware General Corporation Law and
with any applicable requirements of the Amended and Restated
Certificate of Incorporation and the Amended and Restated By-Laws;
(vii) The Registration Statement has become effective under the
Act and, to the best knowledge of such counsel after reasonable
inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the Commission; and any
required filing of the Prospectus pursuant to Rule 424(b) has been
made in accordance with Rule 424(b);
(viii) (A) The Company has the corporate power and corporate
authority to execute, deliver and perform its obligations hereunder
and to issue, sell and deliver the Company Shares to the
31
Underwriters pursuant to this Agreement and (B) this Agreement
has been duly authorized, executed and delivered by the Company;
(ix) The execution and delivery by the Company of this Agreement
and the performance by the Company of its obligations hereunder, the
compliance by the Company with the provisions hereof, and the
consummation by the Company of the transactions contemplated hereby,
each in accordance with its terms, do not (A) violate or conflict with
the Amended and Restated Certificate of Incorporation or the Amended
and Restated By-Laws, (B) constitute a violation of or a default under
any Applicable Contract, (C) result in the creation of any lien or
encumbrance upon any of the property of the Company or any of its
Subsidiaries pursuant to any Applicable Contract (except that with
respect to the foregoing clauses (B) and (C), such counsel need not
express an opinion as to any covenant, restriction or provision of any
Applicable Contract with respect to financial ratios or tests or any
aspect of the financial condition or results of operations of the
Company or any of its Subsidiaries, or (D) contravene any provision of
any Applicable Law or any Applicable Order (as defined herein). The
term "Applicable Orders" means those orders of Government Authorities
(as defined herein) identified to such counsel by the Company and set
forth in a schedule to such counsel's opinion;
(x) No Governmental Approval (as defined herein), which has not
been obtained, made or taken and is not in full force and effect, is
required for the execution or delivery by the Company of this
Agreement, or the performance by the Company of its obligations
hereunder, except those which are not required to be obtained, made or
taken prior to the date hereof. The term "Governmental Approval" means
any consent, approval, license, authorization or validation of, or
filing, recording or registration with, any New York or federal
executive, legislative, judicial, administrative or regulatory body
pursuant to Applicable Laws;
(xi) The Registration Statement, as of its effective date, and
the Prospectus and any supplements or amendments thereto, as of their
date, appeared on their face to be appropriately
32
responsive in all material respects to the requirements of the
Act, except that, in each case, such counsel need express no opinion
as to the financial statements, schedules and other financial or
statistical data included therein or excluded therefrom or the
exhibits to the Registration Statement, and such counsel may state
that it does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectuses (other than to the extent
specified in paragraph (xiv) below);
(xii) To the best knowledge of such counsel after reasonable
inquiry, other than as described or contemplated in the Prospectus (or
any supplement thereto), there are no legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or
any of their respective properties, is subject, which are required to
be described in the Registration Statement or Prospectus (or any
amendment or supplement thereto); such counsel may base its opinion
solely on discussions with the officers of the Company responsible for
the matters discussed herein and its review of documents furnished to
it by the Company; and such counsel may state that it has made no
other inquiries or searches of the public docket records of any court,
governmental agency or body or administrative agency;
(xiii) The statements set forth in the Prospectus under the
caption "Description of Capital Stock" insofar as they purport to
describe or summarize certain provisions of the Amended and Restated
Certificate of Incorporation, the Amended and Restated By-Laws or the
statutes and regulations referred to therein, fairly describe or
summarize such provisions in all material respects;
(xiv) Upon physical delivery to Xxxxx Xxxxxx Inc., as
representative of the several Underwriters (the "Buyer") in the State
of New York of the PRT Stockholders' Shares identified on Schedule I
hereto (the "Securities") indorsed to it or in blank, the Buyer will
acquire the Securities free of any adverse claims (within the meaning
of Section 8-102 (a)(1) of the New York
33
Uniform Commercial Code (the "UCC") (such counsel may assume that
neither the Buyer nor any other Underwriter has notice of any adverse
claims with respect to the Securities) and such opinion may be limited
to the UCC;
(xv) Such counsel has participated in conferences with officers
and other representatives of the Company, the Selling Stockholders,
representatives of the independent accountants of the Company and
representatives of and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon,
and does not assume any responsibility for, the accuracy, completeness
or fairness of the statements contained in the Registration Statement
or the Prospectus and has made no independent check or verification
thereof (other than to the extent specified in paragraph (xiv) above),
on the basis of the foregoing, no facts have come to such counsel's
attention that lead it to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date or as of the date
hereof, contained or contain an untrue statement of a material fact or
omitted or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, except that such counsel need not
express an opinion or belief with respect to the financial statements,
schedules and other financial or statistical data included therein or
excluded therefrom or the exhibits to the Registration Statement;
(xvi) This Agreement and the Custody Agreement have each been
duly executed and delivered by or on behalf of each of the PRT
Stockholders; and
(xvii) The execution and delivery by each of the PRT Stockholders
of this Agreement and the performance by each of the PRT Stockholders
of its obligations hereunder, the compliance by each of the PRT
Stockholders with the provisions hereof,
34
and the consummation by each of the PRT Stockholders of the
transactions contemplated hereby, each in accordance with its terms,
do not, to the extent applicable (A) violate or conflict with the
certificate of incorporation or the by-laws or other organizational
documents of such PRT Stockholder, (B) constitute a violation of or a
default under any Applicable Contract to which such PRT Stockholder is
a party, (C) result in the creation of any lien or encumbrance upon
any of the property of the PRT Stockholder pursuant to any Applicable
Contract to which such PRT Stockholder is a party (except that with
respect to the foregoing clauses (B) and (C), such counsel need not
express an opinion as to any covenant, restriction or provision of any
Applicable Contract with respect to financial ratios or tests or any
aspect of the financial condition or results of operations of the
Company or any of its Subsidiaries or (D) contravene any provision of
any Applicable Law or any Applicable Order, except for (other than in
the case of the certificate of incorporation and the by-laws or other
organizational documents of such PRT Stockholder, to the extent
applicable) such conflicts, breaches, violations or defaults which
would not, individually or in the aggregate, affect the validity or
enforceability of, or adversely affect such PRT Stockholder's ability
to consummate, the transactions contemplated by or perform its
obligations under this Agreement.
In rendering such opinion as aforesaid, counsel may, as to factual
matters, rely upon written certificates or statements of the Company's
officers or the Selling Stockholders and, as to matters of law, may rely
upon an opinion or opinions, each dated the Closing Date, of other counsel
retained by such counsel or the Company as to laws of any jurisdiction
other than the United States, the State of New York or the General
Corporation Law of the State of Delaware, provided that (1) each such local
counsel is reasonably acceptable to the Representatives, (2) such reliance
is expressly authorized by each opinion so relied upon and a copy of each
such opinion is delivered to the Representatives and is, in form and
substance reasonably satisfactory to them and their counsel, and (3) such
counsel shall state in its opinion that it believes that they and the
Underwriters are justified in relying thereon.
35
(d) You shall have received on the Closing Date an opinion of
Xxxxxxx X. Xxxxxxxx, Esq., Senior Vice President and General Counsel of
the Company, dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, to the effect that:
(i) All of the shares of capital stock of the Company outstanding
prior to the issuance of the Shares to be issued and sold by the
Company hereunder, have been duly authorized and validly issued, and
are fully paid and nonassessable;
(ii) To the best knowledge of such counsel, after reasonable
inquiry, neither the Company nor any of the Subsidiaries is in default
in the performance of any material obligation, agreement or condition
contained in any bond, debenture, note or other evidence of
indebtedness, except as may be disclosed in the Prospectus;
(iii) To the best knowledge of such counsel, the Company is not
in violation of its respective certificate or articles of
incorporation or bylaws;
(iv) To the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any of the Subsidiaries is in
violation of any law, ordinance, administrative or governmental rule
or regulation applicable to the Company or any of the Subsidiaries,
including, without limitation, (A) any Environmental Laws, (B) any
Federal or state law relating to discrimination in the hiring,
promotion or pay of employees or any applicable federal or state wages
and hours laws or (C) any provisions of ERISA, except for such
violations which in the case of any of (A), (B) or (C) above would
not, individually or in the aggregate, have a Material Adverse Effect;
(v) Neither the Company nor any of its Subsidiaries is in
violation of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries,
except for such violations which would not, individually or in the
aggregate, have a Material Adverse Effect;
(vi) To the best knowledge of such counsel, the Company and the
Subsidiaries own or
36
possess licenses to use all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights
(collectively, the "Intellectual Property") described in the
Prospectus as being owned by them or any of them or necessary for the
conduct of their respective businesses, and the general counsel for
the Company is not aware of any claim to the contrary or any challenge
by any other person to the rights of the Company and the Subsidiaries
with respect to the foregoing, except where the failure to own or
possess licenses to use such Intellectual Property would not have a
Material Adverse Effect;
(vii) Except as described in the Prospectus, there is no material
number of outstanding options, warrants or other rights calling for
the issuance of, and such counsel does not know of any commitment,
plan or arrangement to issue, any material number of shares of capital
stock of the Company or any security convertible into or exchangeable
or exercisable for capital stock of the Company; and (viii) Except as
described in the Prospectus, there is no holder of any security of the
Company or any other person who has the right, contractual or
otherwise, to cause the Company to sell or otherwise issue to them, or
to permit them to underwrite the sale of, the Shares or the right to
have any Common Stock or other securities of the Company included in
the Registration Statement or the right, as a result of the filing of
the Registration Statement, to require the Company to register under
the Act any shares of Common Stock or other securities of the Company.
(e) You shall have received on the Closing Date an opinion of the
respective counsel for each of the Selling Stockholders (other than the PRT
Stockholders, which are covered in the opinion of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP pursuant to the foregoing paragraph (c)), dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, with respect to the matters referred to in clauses (xv),
(xvi) and (xvii) to the foregoing paragraph (c).
(f) You shall have received on the Closing Date an opinion of
Xxxxxxxxxx & Xxxxx LLP, counsel for the
37
Underwriters, dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, with respect to the matters
referred to in clauses (iv), (vii), (viii) (with respect to paragraph (B)
only), (xi) and (xiv) of the foregoing paragraph (c) and such other related
matters as you may request.
In addition to the matters set forth above, such opinion shall also
contain a statement to the effect that, although such counsel has not
undertaken, except as otherwise indicated in its opinion, to determine
independently, and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement, such counsel
has participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof, and
nothing has come to the attention of such counsel that has caused it to
believe (i) that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) that the Prospectus, any
amendment or supplement to the Prospectus, as of its respective date, and
as of the Closing Date or the Option Closing Date, as the case may be,
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no statement with respect
to the financial statements and the notes thereto and the schedules and
other financial and statistical data included in the Registration Statement
or the Prospectus).
(g) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and
the Closing Date from Ernst & Young LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(h)(A) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated
by the Commission at or prior to the Closing Date; (B) there shall not have
been any material change in the capital stock of the Company nor
38
any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth
or contemplated in the Registration Statement or the Prospectus, as amended
or supplemented to the date hereof; (C) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, as amended or supplemented to the date
hereof, except as may otherwise be stated in the Registration Statement and
Prospectus, as amended or supplemented to the date hereof, any material
adverse change in the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole; (D) the Company and the Subsidiaries shall
not have any liabilities or obligations, direct or contingent (whether or
not in the ordinary course of business), that are material to the Company
and the Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement or the Prospectus, as amended or supplemented to the
date hereof; and (E) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing
Date and signed by the chief executive officer and the chief financial
officer of the Company (or such other officers as are acceptable to you),
to the effect set forth in this Section 10(h) and in Section 10(i) hereof.
(i) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior
to the Closing Date.
(j) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing
Date and signed by or on behalf of the Selling Stockholders to the effect
set forth in this Section 10(j) and in Section 10(k) hereof.
(k) The Selling Stockholders shall not have failed at or prior to the
Closing Date to have performed or complied with any of their agreements
39
herein contained and required to be performed or complied with by them
hereunder at or prior to the Closing Date.
(l) The Shares shall have been approved for quotation upon notice of
issuance on the Nasdaq National Market.
(m) The Sellers shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or
any Attorney-in-Fact or any Selling Stockholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, in
connection with the execution of this Agreement shall be deemed a
representation and warranty by the Company, the Selling Stockholders or the
particular Selling Stockholder, as the case may be, to each Underwriter as to
the statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 10, except that, if
any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (k) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(c), (d), (e) and (f) shall be revised to reflect the sale of Additional
Shares.
11. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, each
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be
40
reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp taxes in connection with
the original issuance and sale of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the registration of the Shares under the Exchange Act and
the listing of the Shares on the Nasdaq National Market; (vi) the filing fees
and the fees and expenses of counsel for the Underwriters in connection with
any filings required to be made with the National Association of Securities
Dealers, Inc.; (vii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; and (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company and the PRT Stockholders.
12. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company, by notifying you, or by you, as Representatives of the several
Underwriters, by notifying the Company and the Selling Stockholders.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but
41
fail or refuse, to purchase. If any one or more of the Underwriters shall fail
or refuse to purchase Shares which it or they are obligated to purchase on the
Closing Date and the aggregate number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares which
the Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or
more non-defaulting Underwriters or other party or parties approved by you and
the Company are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any such default of any such Underwriter under this Agreement. The
term "Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule II hereto who, with your approval
and the approval of the Company, purchases Shares which a defaulting
Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but, if by telephone, shall be subsequently confirmed in writing.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or any Selling Stockholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to
42
the public set forth on the cover page of the Prospectus or to enforce
contracts for the resale of the Shares by the Underwriters. Notice of such
termination may be given to the Company by telegram, telecopy or telephone and,
if by telephone, shall be subsequently confirmed in writing.
14. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first (including the table
thereunder), third, sixth, eleventh, twelfth and thirteenth paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and
13 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company or the Selling
Stockholders, at the office of the Company at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, Senior Vice President
and General Counsel; or (ii) if to you, as Representatives of the several
Underwriters, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Selling Stockholders, the Company, its directors and
officers, and the other controlling persons referred to in Section 9 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any Underwriter of any
of the Shares in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
43
shall have been executed and delivered on behalf of each party hereto.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
PRT GROUP INC.
By:
----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief
Executive Officer
Each of the Selling
Stockholders named in
Schedule I hereto
By:
---------------------------
Attorney-in-Fact
By:
---------------------------
Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
XXXXXXXXX XXXXXX & XXXXXXXX
SECURITIES CORPORATION
UBS SECURITIES LLC
PUNK, XXXXXX & COMPANY L.P.
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By:
-----------------------------
Name:
Title: Managing Director
44
