1
___________ SHARES
CORPORATEFAMILY SOLUTIONS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED [AUGUST] __, 1997
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TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES ...............................................................2
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING STOCKHOLDERS......................2
COMPLIANCE WITH REGISTRATION REQUIREMENTS.......................................................2
OFFERING MATERIALS FURNISHED TO UNDERWRITERS....................................................3
DISTRIBUTION OF OFFERING MATERIALS BY THE COMPANY...............................................3
THE UNDERWRITING AGREEMENT......................................................................3
AUTHORIZATION OF THE COMMON SHARES..............................................................3
NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS..............................................4
NO MATERIAL ADVERSE CHANGE......................................................................4
INDEPENDENT ACCOUNTANTS.........................................................................4
PREPARATION OF THE FINANCIAL STATEMENTS.........................................................4
INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS SUBSIDIARIES.............................5
CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS..................................................5
STOCK EXCHANGE LISTING..........................................................................6
NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER AUTHORIZATIONS OR
APPROVALS REQUIRED.........................................................................6
NO MATERIAL ACTIONS OR PROCEEDINGS..............................................................7
INTELLECTUAL PROPERTY RIGHTS....................................................................7
ALL NECESSARY PERMITS, ETC......................................................................7
TITLE TO PROPERTIES.............................................................................7
TAX LAW COMPLIANCE..............................................................................8
COMPANY NOT AN INVESTMENT COMPANY...............................................................8
INSURANCE.......................................................................................8
NO PRICE STABILIZATION OR MANIPULATION..........................................................8
RELATED PARTY TRANSACTIONS......................................................................8
NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS.....................................................8
COMPANY'S ACCOUNTING SYSTEM.....................................................................9
COMPLIANCE WITH ENVIRONMENTAL LAWS..............................................................9
ERISA COMPLIANCE...............................................................................10
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.....................................10
THE UNDERWRITING AGREEMENT.....................................................................10
THE CUSTODY AGREEMENT AND POWER OF ATTORNEY....................................................11
TITLE TO COMMON SHARES TO BE SOLD; ALL AUTHORIZATIONS OBTAINED.................................11
DELIVERY OF THE COMMON SHARES TO BE SOLD.......................................................11
NON-CONTRAVENTION; NO FURTHER AUTHORIZATIONS OR APPROVALS REQUIRED.............................11
NO REGISTRATION OR OTHER SIMILAR RIGHTS........................................................12
NO FURTHER CONSENTS, ETC.......................................................................12
DISCLOSURE MADE BY SUCH SELLING STOCKHOLDER IN THE PROSPECTUS..................................12
NO PRICE STABILIZATION OR MANIPULATION.........................................................12
CONFIRMATION OF COMPANY REPRESENTATIONS AND WARRANTIES.........................................12
SECTION 2. PURCHASE, SALE AND DELIVERY OF COMMON SHARES.................................................13
THE FIRM COMMON SHARES.........................................................................13
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THE FIRST CLOSING DATE.........................................................................13
THE OPTIONAL COMMON SHARES; THE SECOND CLOSING DATE............................................13
PUBLIC OFFERING OF THE COMMON SHARES...........................................................14
PAYMENT FOR THE COMMON SHARES..................................................................14
DELIVERY OF THE COMMON SHARES..................................................................15
DELIVERY OF PROSPECTUS TO THE UNDERWRITERS.....................................................16
SECTION 3. ADDITIONAL COVENANTS.........................................................................16
A. COVENANTS OF THE COMPANY.......................................................................16
REPRESENTATIVE'S REVIEW OF PROPOSED AMENDMENTS AND SUPPLEMENTS.................................16
SECURITIES ACT COMPLIANCE......................................................................16
AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER SECURITIES ACT
MATTERS...................................................................................17
COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS.....................................17
BLUE SKY COMPLIANCE............................................................................17
USE OF PROCEEDS................................................................................17
TRANSFER AGENT.................................................................................17
EARNINGS STATEMENT.............................................................................18
PERIODIC REPORTING OBLIGATIONS.................................................................18
AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES...........................................18
FUTURE REPORTS TO THE REPRESENTATIVE...........................................................18
B. COVENANTS OF THE SELLING STOCKHOLDERS..........................................................19
AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES...........................................19
DELIVERY OF FORMS W-8 AND W-9..................................................................19
SECTION 4. PAYMENT OF EXPENSES..........................................................................19
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS............................................20
ACCOUNTANTS' COMFORT LETTER....................................................................20
COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER, NO OBJECTION FROM
NASD......................................................................................21
NO MATERIAL ADVERSE CHANGE OR RATINGS AGENCY CHANGE............................................21
OPINION OF COUNSEL FOR THE COMPANY.............................................................21
OPINION OF COUNSEL FOR THE UNDERWRITERS........................................................22
OFFICERS' CERTIFICATE..........................................................................22
BRING-DOWN COMFORT LETTER......................................................................22
OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS................................................23
SELLING STOCKHOLDERS' CERTIFICATE..............................................................23
SELLING STOCKHOLDERS' DOCUMENTS................................................................23
LOCK-UP AGREEMENT FROM CERTAIN SHAREHOLDERS OF THE COMPANY OTHER THAN
SELLING STOCKHOLDERS......................................................................23
ADDITIONAL DOCUMENTS...........................................................................23
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES......................................................24
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT..............................................................24
SECTION 8. INDEMNIFICATION..............................................................................24
INDEMNIFICATION OF THE UNDERWRITERS............................................................24
INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS.....................................26
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NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.............................................27
SETTLEMENTS....................................................................................27
SECTION 9. CONTRIBUTION................................................................................28
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS..........................................29
SECTION 11. TERMINATION OF THIS AGREEMENT...............................................................30
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.........................................31
SECTION 13. NOTICES.....................................................................................31
SECTION 14. SUCCESSORS..................................................................................32
SECTION 15. PARTIAL UNENFORCEABILITY....................................................................32
SECTION 16. GOVERNING LAW PROVISIONS....................................................................32
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL AND
DELIVER COMMON SHARES......................................................................33
SECTION 18. GENERAL PROVISIONS..........................................................................33
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UNDERWRITING AGREEMENT
August __, 1997
XXXXXXXXXX SECURITIES
X.X. XXXXXXXX & CO., L.L.C.
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. CorporateFamily Solutions, Inc., a Tennessee
corporation (the "Company"), proposes to issue and sell to the several
underwriters named in SCHEDULE A (the "Underwriters") an aggregate of [___]
shares of its Common Stock, par value $.01 per share (the "Common Stock"); and
the shareholders of the Company named in SCHEDULE B (collectively, the "Selling
Stockholders") severally propose to sell to the Underwriters an aggregate of
[___] shares of Common Stock, each Selling Stockholder selling the amount set
forth opposite such Selling Stockholder's name in SCHEDULE B UNDER THE CAPTION
"NUMBER OF FIRM COMMON SHARES TO BE SOLD". The [___] shares of Common Stock to
be sold by the Company and the [___] shares of Common Stock to be sold by the
Selling Stockholders are collectively called the "Firm Common Shares". In
addition, certain of the Selling Stockholders have severally granted to the
Underwriters an option to purchase up to an additional [___] shares of Common
Stock, each such Selling Stockholder granting an option to sell up to the amount
set forth opposite such Selling Stockholder's name in SCHEDULE B UNDER THE
CAPTION "MAXIMUM NUMBER OF OPTIONAL COMMON SHARES TO BE SOLD", all as provided
in Section 2. The additional [___] shares to be sold by the Company and the
additional [___] shares to be sold by the Selling Stockholders pursuant to such
option are collectively called the "Optional Common Shares". The Firm Common
Shares and, if and to the extent such option is exercised, the Optional Common
Shares are collectively called the "Common Shares". Xxxxxxxxxx Securities and
X.X. Xxxxxxxx & Co. L.L.C. have agreed to act as representatives of the several
Underwriters (in such capacity, the "Representatives") in connection with the
offering and sale of the Common Shares.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-[___]), which contains a form of prospectus to be used in
connection with the public offering and sale of the Common Shares. Such
registration statement, as amended,
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including the financial statements, exhibits and schedules thereto, in the form
in which it was declared effective by the Commission under the Securities Act of
1933 and the rules and regulations promulgated thereunder (collectively, the
"Securities Act"), including any information deemed to be a part thereof at the
time of effectiveness pursuant to Rule 430A or Rule 434 under the Securities
Act, is called the "Registration Statement". Any registration statement filed by
the Company pursuant to Rule 462(b) under the Securities Act is called the "Rule
462(b) Registration Statement", and from and after the date and time of filing
of the Rule 462(b) Registration Statement the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Such prospectus, in the
form first used by the Underwriters to confirm sales of the Common Shares, is
called the "Prospectus"; PROVIDED, HOWEVER, if the Company has, with the consent
of Xxxxxxxxxx Securities, elected to rely upon Rule 434 under the Securities
Act, the term "Prospectus" shall mean the Company's prospectus subject to
completion (each, a "preliminary prospectus") dated [___] (such preliminary
prospectus is called the "Rule 434 preliminary prospectus"), together with the
applicable term sheet (the "Term Sheet") prepared and filed by the Company with
the Commission under Rules 434 and 424(b) under the Securities Act and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a preliminary prospectus, the
Prospectus or the Term Sheet, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("XXXXX").
The Company and each of the Selling Stockholders hereby
confirm their respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS. The Company represents, warrants and covenants to each
Underwriter as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The
Registration Statement and any Rule 462(b) Registration Statement have
been declared effective by the Commission under the Securities Act. The
Company has complied, to the Commission's satisfaction, with all
requests of the Commission for additional or supplemental information.
No stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to XXXXX (except as may be
permitted by Regulation S-T under the
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Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the
Common Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the
time it became effective, complied in all material respects with the
Securities Act and did not and will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, as amended or supplemented, as of its date, did not contain
any untrue statement of a material fact 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. The
representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments
or supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by the Representatives expressly for use therein. There are no
contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement which have not
been described or filed as required.
(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company
has delivered to the Representatives three complete manually signed
copies of the Registration Statement and of each consent and
certificate of experts filed as a part thereof, and conformed copies of
the Registration Statement (without exhibits) and preliminary
prospectuses and the Prospectus, as amended or supplemented, in such
quantities and at such places as the Representatives have reasonably
requested for each of the Underwriters.
(c) DISTRIBUTION OF OFFERING MATERIALS BY THE COMPANY. The
Company has not distributed and will not distribute, prior to the later
of the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering material
in connection with the offering and sale of the Common Shares in
violation of the Securities Act.
(d) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or
by general equitable principles.
(e) AUTHORIZATION OF THE COMMON SHARES. The Common Shares to
be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the
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Company pursuant to this Agreement, will be validly issued, fully paid
and nonassessable.
(f) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There
are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this Agreement,
except as described in the Prospectus or for such rights as have been
duly waived or satisfied.
(g) NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed
or contemplated in the Prospectus, subsequent to the respective dates
as of which information is given in the Prospectus: (i) there has been
no material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a "Material Adverse Change");
(ii) the Company and its subsidiaries, considered as one entity, have
not incurred any material liabilities or obligations, indirect, direct
or contingent, not in the ordinary course of business nor entered into
any material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution of any
kind declared, paid or made by the Company or, except for dividends
paid to the Company or other subsidiaries, any of its subsidiaries on
any class of capital stock or repurchase or redemption by the Company
or any of its subsidiaries of any class of capital stock.
(h) INDEPENDENT ACCOUNTANTS. Xxxxxx Xxxxxxxx LLP, who have
expressed their opinion with respect to the Company's financial
statements (which term as used in this Agreement includes the related
notes thereto) and supporting schedules filed with the Commission as a
part of the Registration Statement and included in the Prospectus,
Xxxxxx Xxxxxxxx LLP and Trien, Rosenberg, Rosenberg, Weinberg, Xxxxxx &
Xxxxxxx, LLP, who have expressed their opinion with respect to the
financial statements (which term as used in this Agreement includes the
related notes thereto) of Resources For Child Care Management, Inc.
("RCCM")] are each independent public or certified public accountants
as required by the Securities Act and the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder
(collectively, the "Exchange Act").
(i) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements of the Company and RCCM filed with the Commission as a part
of the Registration Statement and included in the Prospectus present
fairly the consolidated financial position of the Company and its
subsidiaries and RCCM, as the case may be, as of and at the dates
indicated and the results of their respective operations and the
respective cash flows for the periods specified. The supporting
schedules, if any, included in the Registration Statement present
fairly the information required to be
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stated therein. Such financial statements and supporting schedules have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto, and, in the case of interim financial statements, except for
any normal year end audit adjustments which adjustments are not
considered by the Company to be necessary for a fair presentation of
the Company's financial condition and results of operations. No other
financial statements or supporting schedules are required to be
included in the Registration Statement. The financial data set forth in
the Prospectus under the captions "Prospectus Summary--Summary Selected
Financial Data", "Selected Financial Data" and "Capitalization" fairly
present the information set forth therein on a basis consistent with
that of the audited financial statements contained in the Registration
Statement.
(j) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS
SUBSIDIARIES. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and, in the
case of the Company, to enter into and perform its obligations under
this Agreement. Each of the Company and each subsidiary is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually
or in the aggregate, result in a Material Adverse Change. All of the
issued and outstanding capital stock of each subsidiary has been duly
authorized and validly issued, is fully paid and nonassessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance or claim.
The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries
listed in Exhibit 21 to the Registration Statement.
(k) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The
authorized, issued and outstanding capital stock of the Company is as
set forth in the Prospectus under the caption "Capitalization" (other
than for subsequent issuances, if any, pursuant to employee benefit
plans described in the Prospectus or upon exercise of outstanding
options or warrants for the purchase of Common Stock described in the
Prospectus). The Common Stock (including the Common Shares) conforms in
all material respects to the description thereof contained in the
Prospectus. All of the issued and outstanding shares of Common Stock
(including the shares of Common Stock owned by Selling Stockholders)
have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common Stock were
issued in violation of any preemptive rights, rights of first refusal
or other similar rights to
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subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights
of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or any of its subsidiaries other than
those accurately described in the Prospectus. The description of the
Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set
forth in the Prospectus accurately and fairly and in all material
respects presents the information required to be shown with respect to
such plans, arrangements, options and rights.
(l) STOCK EXCHANGE LISTING. The Common Stock, including the
Common Shares, is registered pursuant to Section 12(g) of the Exchange
Act and is listed on the Nasdaq National Market, and the Company has
taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act
or delisting the Common Stock from the Nasdaq National Market, nor has
the Company received any notification that the Commission or the
National Association of Securities Dealers, Inc. (the "NASD") is
contemplating terminating such registration or listing.
(m) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or is in
default (or, with the giving of notice or lapse of time, would be in
default) ("Default") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which it
or any of them may be bound (including, without limitation, the
Company's Term Loan and Security Agreement with NationsBank of
Tennessee, N.A., as lender), or to which any of the property or assets
of the Company or any of its subsidiaries is subject (each, an
"Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of this Agreement
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and consummation of the transactions contemplated hereby and by the
Prospectus (i) have been duly authorized by all necessary corporate
action and will not result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary, (ii) will not
conflict with or constitute a breach of, or Default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant
to, or require the consent of any other party to, any Existing
Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate,
result in a Material Adverse Change and (iii) will not result in any
violation of any law, administrative regulation or administrative or
court decree applicable to the Company or any subsidiary. No consent,
approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or
agency, is required for the Company's execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been
obtained or made by the Company and are in full force and effect under
the Securities Act, applicable state securities or blue sky laws and
from the NASD.
(n) NO MATERIAL ACTIONS OR PROCEEDINGS. Except as set forth in
the Prospectus, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge,
threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which has as the subject thereof any officer or
director of, or property owned or leased by, the Company or any of its
subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable probability
that such action, suit or proceeding might be determined adversely to
the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change. No material labor dispute with the
employees of the Company or any of its subsidiaries, exists or, to the
Company's knowledge, is threatened or imminent.
(o) INTELLECTUAL PROPERTY RIGHTS. The Company and its
subsidiaries own or possess sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as now conducted; and
the expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Neither the Company nor
any of its subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision,
would result in a Material Adverse Change.
(p) ALL NECESSARY PERMITS, ETC. The Company and each
subsidiary possess such valid and current certificates, authorizations
or permits (collectively, "Permits") issued by the appropriate state or
federal agencies or bodies necessary to conduct their respective
businesses, except where the failure to obtain such Permits would not
result in a Material Adverse Change, and neither the Company nor any
subsidiary has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such Permits
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Change.
(q) TITLE TO PROPERTIES. The Company and each of its
subsidiaries has good and marketable title to all the properties and
assets reflected as owned in the financial statements referred to in
Section 1(A)(i) above (or elsewhere in the Prospectus), in each case
free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims and other defects, except (i) those
reflected in the financial statements (or elsewhere in the Prospectus)
or (ii) such as do not materially
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and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by
the Company or such subsidiary. The real property, improvements,
equipment and personal property held under lease by the Company or any
subsidiary are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the
use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such subsidiary.
(r) TAX LAW COMPLIANCE. The Company and its subsidiaries have
filed all necessary federal, state and foreign income and franchise tax
returns and have paid all taxes reflected on such returns as being due
by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them, except for (i)
such returns for which the Company or its subsidiaries have obtained an
extension which has not yet expired or (ii) amounts being contested in
good faith for which adequate reserves have been established in the
most recent balance sheet contained in the Prospectus. The Company has
made adequate charges, accruals and reserves in the applicable
financial statements referred to in Section 1(A)(i) above in respect of
all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its
subsidiaries has not been finally determined.
(s) COMPANY NOT AN "INVESTMENT COMPANY". The Company is not,
and after receipt of payment for the Common Shares will not be, an
"investment company" within the meaning of Investment Company Act of
1940.
(t) INSURANCE. Each of the Company and its subsidiaries are
insured by what the Company believes to be recognized, financially
sound and reputable institutions with policies in such amounts and with
such deductibles and covering such risks as are believed by the Company
to be adequate and customary for their businesses including, but not
limited to, policies covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage,
destruction, and acts of vandalism. The Company has no reason to
believe that it or any subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Change. Neither
of the Company nor any subsidiary has been denied any insurance
coverage which it has sought or for which it has applied.
(u) NO PRICE STABILIZATION OR MANIPULATION. The Company has
not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
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(v) RELATED PARTY TRANSACTIONS. There are no business
relationships or related-party transactions involving the Company or
any subsidiary or any other person required to be described in the
Prospectus which have not been described as required.
(w) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither the
Company nor any of its subsidiaries nor, to the Company's knowledge,
any employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Prospectus.
(x) COMPANY'S ACCOUNTING SYSTEM. The Company maintains a
system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are generally executed in accordance
with management's general or specific authorization; (ii) transactions
are recorded as generally necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance 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.
(y) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as would not,
individually or in the aggregate, result in a Material Adverse Change
(i) neither the Company nor any of its subsidiaries is in violation of
any federal, state, local or foreign law or regulation relating to
pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environment Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations required for the operation
of the business of the Company or its subsidiaries under applicable
Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any
written communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or any of
its subsidiaries is in violation of any Environmental Law; (ii) there
is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the
Company has received written notice, and no written notice by any
person or entity alleging potential liability for investigatory costs,
cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or
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penalties arising out of, based on or resulting from the presence, or
release into the environment, of any Material of Environmental Concern
at any location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, "Environmental
Claims"), pending or, to the best of the Company's knowledge,
threatened against the Company or any of its subsidiaries or any person
or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has retained or assumed either contractually or
by operation of law; and (iii) to the Company's knowledge, there are no
past or present actions, activities, circumstances, conditions, events
or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental
Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim
against the Company or any of its subsidiaries or against any person or
entity whose liability for any Environmental Claim the Company or any
of its subsidiaries has retained or assumed either contractually or by
operation of law.
(z) ERISA COMPLIANCE. The Company and its subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, its subsidiaries or their
"ERISA Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue
Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
subsidiary is a member. No "reportable event" (as defined under ERISA)
which would result in a Material Adverse Change has occurred or is
reasonably expected to occur with respect to any "employee benefit
plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have
any material "amount of unfunded benefit liabilities" (as defined under
ERISA). Neither the Company, its subsidiaries nor any of their ERISA
Affiliates has incurred any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit
plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing
has occurred, whether by action or failure to act, which would cause
the loss of such qualification.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
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B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, represents, warrants and
covenants to each Underwriter as follows:
(a) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as rights
to indemnification hereunder may be limited by applicable law and
except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles.
(b) THE CUSTODY AGREEMENT AND POWER OF ATTORNEY. Each of the
(i) Custody Agreement signed by such Selling Stockholder and
[ ], as custodian (the "Custodian"), relating to the
deposit of the Common Shares to be sold by such Selling Stockholder
(the "Custody Agreement") and (ii) Power of Attorney appointing certain
individuals named therein as such Selling Stockholder's
attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set forth
therein relating to the transactions contemplated hereby and by the
Prospectus (the "Power of Attorney"), of such Selling Stockholder has
been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as rights
to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles.
(c) TITLE TO COMMON SHARES TO BE SOLD; ALL AUTHORIZATIONS
OBTAINED. Such Selling Stockholder has, and on the First Closing Date
and the Second Closing Date (as defined below) will have, good and
valid title to all of the Common Shares which may be sold by such
Selling Stockholder pursuant to this Agreement on such date and the
legal right and power, and all authorizations and approvals required by
law and under its trust agreement or other organizational documents to
enter into this Agreement and its Custody Agreement and Power of
Attorney, to sell, transfer and deliver all of the Common Shares which
may be sold by such Selling Stockholder pursuant to this Agreement and
to comply with its other obligations hereunder and thereunder.
(d) DELIVERY OF THE COMMON SHARES TO BE SOLD. Delivery of the
Common Shares which are sold by such Selling Stockholder pursuant to
this Agreement will pass good and valid title to such Common Shares,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance or other claim.
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(e) NON-CONTRAVENTION; NO FURTHER AUTHORIZATIONS OR APPROVALS
REQUIRED. The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, this Agreement, the Custody Agreement and the Power of Attorney
will not contravene or conflict with, result in a breach of, or
constitute a Default under, or require the consent of any other party
to, the trust agreement or other organizational documents of such
Selling Stockholder or any other agreement or instrument to which such
Selling Stockholder is a party or by which it is bound or under which
it is entitled to any right or benefit, any provision of applicable law
or any judgment, order, decree or regulation applicable to such Selling
Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority
or agency, is required for the consummation by such Selling Stockholder
of the transactions contemplated in this Agreement, except such as have
been obtained or made and are in full force and effect under the
Securities Act, applicable state securities or blue sky laws and from
the NASD.
(f) NO REGISTRATION OR OTHER SIMILAR RIGHTS. Such Selling
Stockholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company
under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as are described
in the Prospectus under "Shares Eligible for Future Sale".
(g) NO FURTHER CONSENTS, ETC. No consent, approval or waiver
is required under any instrument or agreement to which such Selling
Stockholder is a party or by which it is bound or under which it is
entitled to any right or benefit, in connection with the offering, sale
or purchase by the Underwriters of any of the Common Shares which may
be sold by such Selling Stockholder under this Agreement or the
consummation by such Selling Stockholder of any of the other
transactions contemplated hereby.
(h) DISCLOSURE MADE BY SUCH SELLING STOCKHOLDER IN THE
PROSPECTUS. All information furnished by or on behalf of such Selling
Stockholder in writing expressly for use in the Registration Statement
and Prospectus is, and on the First Closing Date and the Second Closing
Date will be, true, correct, and complete in all material respects, and
does not, and on the First Closing Date and the Second Closing Date
will not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make such information not
misleading. Such Selling Stockholder confirms as accurate the number of
shares of Common Stock set forth opposite such Selling Stockholder's
name in the Prospectus under the caption "Principal and Selling
Stockholders" (both prior to and after giving effect to the sale of the
Common Shares).
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(i) NO PRICE STABILIZATION OR MANIPULATION. Such Selling
Stockholder has not taken and will not take, directly or indirectly,
any action designed to or that might be reasonably expected to cause or
result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
(j) CONFIRMATION OF COMPANY REPRESENTATIONS AND WARRANTIES.
Such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1(A)
hereof are not true I and correct, is familiar with the Registration
Statement and the Prospectus and has no knowledge of any material fact,
condition or information not disclosed in the Registration Statement or
the Prospectus which has had or would have a Material Adverse Effect
and is not prompted to sell shares of Common Stock by any information
concerning the Company which is not set forth in the Registration
Statement and the Prospectus.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
THE FIRM COMMON SHARES. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
[___] Firm Common Shares and (ii) the Selling Stockholders agree to sell to the
several Underwriters an aggregate of [___] Firm Common Shares, each Selling
Stockholder selling the number of Firm Common Shares set forth opposite such
Selling Stockholder's name on SCHEDULE B. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Underwriters agree, severally and not
jointly, to purchase from the Company and the Selling Stockholders the
respective number of Firm Common Shares set forth opposite their names on
SCHEDULE A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company and the Selling Stockholders shall be $[___] per
share.
THE FIRST CLOSING DATE. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx (or such other place as may be agreed to by the Company and the
Representative) at 6:00 a.m. San Francisco time, on [August] __, 1997, or such
other time and date not later than 10:30 a.m. San Francisco time, on [August]__,
1997 as the Representative shall designate by notice to the Company (the time
and date of such closing are called the "First Closing Date"). The Company and
the Selling Stockholders hereby acknowledge that circumstances under which the
Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company, the Selling Stockholders or the Representatives to recirculate to
the public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 10.
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THE OPTIONAL COMMON SHARES; THE SECOND CLOSING DATE. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
and the Selling Stockholders hereby grant an option to the several Underwriters
to purchase, severally and not jointly, up to an aggregate of [___] Optional
Common Shares from the Company and the Selling Stockholders at the purchase
price per share to be paid by the Underwriters for the Firm Common Shares. The
option granted hereunder is for use by the Underwriters solely in covering any
over-allotments in connection with the sale and distribution of the Firm Common
Shares. The option granted hereunder may be exercised at any time (but not more
than once) upon notice by the Representatives to the Company and the Selling
Stockholders, which notice may be given at any time within 30 days from the date
of this Agreement. Such notice shall set forth (i) the aggregate number of
Optional Common Shares as to which the Underwriters are exercising the option,
(ii) the names and denominations in which the certificates for the Optional
Common Shares are to be registered and (iii) the time, date and place at which
such certificates will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in such case the term
"First Closing Date" shall refer to the time and date of delivery of
certificates for the Firm Common Shares and the Optional Common Shares). Such
time and date of delivery, if subsequent to the First Closing Date, is called
the "Second Closing Date" and shall be determined by the Representatives and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Optional Common Shares are to be
purchased, (a) each Underwriter agrees, severally and not jointly, to purchase
the number of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Optional Common Shares to be purchased as the
number of Firm Common Shares set forth on SCHEDULE A opposite the name of such
Underwriter bears to the total number of Firm Common Shares and (b) the Company
and each Selling Stockholder agree, severally and not jointly, to sell the
number of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representative may determine) that bears the same
proportion to the total number of Optional Common Shares to be sold as the
number of Optional Common Shares set forth in SCHEDULE B opposite the name of
such Selling Stockholder (or, in the case of the Company, as the number of
Optional Common Shares to be sold by the Company as set forth in the paragraph
"Introductory" of this Agreement) bears to the total number of Optional Common
Shares. The Representatives may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to the Company and the
Selling Stockholders.
PUBLIC OFFERING OF THE COMMON SHARES. The Representatives hereby advise
the Company and the Selling Stockholders that the Underwriters intend to offer
for sale to the public, as described in the Prospectus, their respective
portions of the Common Shares as soon after this Agreement has been executed and
the Registration Statement has
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been declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
PAYMENT FOR THE COMMON SHARES. Payment for the Common Shares to be sold
by the Company shall be made at the First Closing Date (and, if applicable, at
the Second Closing Date) by wire transfer of immediately available funds to the
order of the Company. Payment for the Common Shares to be sold by the Selling
Stockholders shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date) by wire transfer of immediately available funds to the
order of the Custodian.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Common Shares and any Optional Common Shares the Underwriters have agreed
to purchase. Xxxxxxxxxx Securities, individually and not as the Representative
of the Underwriters, may (but shall not be obligated to) make payment for any
Common Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Common Shares to be sold by such Selling Stockholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Stockholder hereunder and to hold such amounts for the account of such
Selling Stockholder with the Custodian under the Custody Agreement.
DELIVERY OF THE COMMON SHARES. The Company and the Selling Stockholders
shall deliver, or cause to be delivered, to the Representatives for the accounts
of the several Underwriters certificates for the Firm Common Shares to be sold
by them at the First Closing Date, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The Company and the Selling Stockholders shall also deliver, or cause
to be delivered, to the Representatives for the accounts of the several
Underwriters, certificates for the Optional Common Shares the Underwriters have
agreed to purchase from them at the First Closing Date or the Second Closing
Date, as the case may be, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price therefor. The
certificates for the Common Shares shall be in definitive form and registered in
such names and denominations as the Representative shall have requested at least
two full business days prior to the First Closing Date (or the Second Closing
Date, as the case may be) and shall be made available for inspection on the
business day
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preceding the First Closing Date (or the Second Closing Date, as the case may
be) at a location in New York City as the Representatives may designate. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriters.
DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than 12:00 p.m.
on the second business day following the date the Common Shares are released by
the Underwriters for sale to the public, the Company shall deliver or cause to
be delivered copies of the Prospectus in such quantities and at such places as
the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS.
A. COVENANTS OF THE COMPANY. The Company further covenants and agrees
with each Underwriter as follows:
(a) REPRESENTATIVES' REVIEW OF PROPOSED AMENDMENTS AND
SUPPLEMENTS. During such period beginning on the date hereof and ending
on the later of the First Closing Date or such date, as in the opinion
of counsel for the Underwriters, the Prospectus is no longer required
by law to be delivered in connection with sales by an Underwriter or
dealer (the "Prospectus Delivery Period"), prior to amending or
supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the
Prospectus (including any amendment or supplement through incorporation
by reference of any report filed under the Exchange Act), the Company
shall furnish to the Representatives for review a copy of each such
proposed amendment or supplement, and the Company shall not file any
such proposed amendment or supplement to which the Representatives
timely and reasonably object.
(b) SECURITIES ACT COMPLIANCE. After the date of this
Agreement, the Company shall promptly advise the Representatives in
writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (ii) of
the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date
that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from the Nasdaq National Market or any other
securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter
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any such stop order at any time, the Company will use its best efforts
to obtain the lifting of such order at the earliest possible moment.
Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b), 430A and 434, as applicable, under the
Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under such Rule 424(b) were received in a
timely manner by the Commission.
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER
SECURITIES ACT MATTERS. If, during the Prospectus Delivery Period, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading or to comply
with law, or if in the opinion of the Representatives or counsel for
the Underwriters it is otherwise necessary to amend or supplement the
Prospectus to comply with law, the Company agrees to promptly prepare
(subject to Section 3(A)(a) hereof), file with the Commission and
furnish at its own expense to the Underwriters and to dealers,
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE
PROSPECTUS. The Company agrees to furnish the Representatives, without
charge, during the Prospectus Delivery Period, as many copies of the
Prospectus and any amendments and supplements thereto as the
Representatives may reasonably request.
(e) BLUE SKY COMPLIANCE. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register
the Common Shares for sale under (or obtain exemptions from the
application of) the Blue Sky or state securities laws of those
jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and
exemptions in effect so long as reasonably required for the
distribution of the Common Shares. The Company shall not be required to
qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where
it is not presently qualified or where it would be subject to taxation
as a foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Common Shares for offering, sale or
trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof
promptly.
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(f) USE OF PROCEEDS. The Company shall apply in all material
respects the net proceeds from the sale of the Common Shares sold by it
in the manner described under the caption "Use of Proceeds" in the
Prospectus.
(g) TRANSFER AGENT. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Common Stock.
(h) EARNINGS STATEMENT. As soon as practicable, the Company
will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited)
covering the twelve-month period ending _____ [31], 1998 that satisfies
the provisions of Section 11(a) of the Securities Act.
(j) PERIODIC REPORTING OBLIGATIONS. During the Prospectus
Delivery Period, the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market, or other applicable exchange
or over-the-counter market all reports and documents required to be
filed under the Exchange Act.
(k) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.
During the period of 180 days following the date of the Prospectus, the
Company will not, without the prior written consent of Xxxxxxxxxx
Securities (which consent may be withheld at the sole discretion of
Xxxxxxxxxx Securities), directly or indirectly, sell, offer, contract
or grant any option to sell, pledge, transfer or establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the
offering of, or file any registration statement under the Securities
Act in respect of, any shares of Common Stock, options or warrants to
acquire shares of the Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other than
as contemplated by this Agreement with respect to the Common Shares);
PROVIDED, HOWEVER, that the Company may issue shares of its Common
Stock or options to purchase its Common Stock, or Common Stock upon
exercise of options, pursuant to any stock option, stock bonus or other
stock plan or arrangement described in the Prospectus or upon the
exercise of warrants to purchase common stock described in the
Prospectus, but only if the holders of such shares, options, or shares
issued upon exercise of such options, agree in writing not to sell,
offer, dispose of or otherwise transfer any such shares or options
during such 180 day period without the prior written consent of
Xxxxxxxxxx Securities (which consent may be withheld at the sole
discretion of Xxxxxxxxxx Securities); and provided further that the
Company may issue shares of Common Stock in acquisitions, but only if
the recipients of such shares agree in writing not to sell, offer,
dispose of or otherwise transfer any such shares or options during such
180 day period without the prior written consent of Xxxxxxxxxx
Securities (which consent may be withheld at the sole discretion of
Xxxxxxxxxx Securities).
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(m) FUTURE REPORTS TO THE REPRESENTATIVES. During the period
of five years hereafter, the Company will furnish to the
Representatives at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx: (i) as soon as practicable after the end
of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash
flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other report filed by the Company with the
Commission, the NASD or any securities exchange; and (iii) as soon as
available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder,
severally and not jointly, further covenants and agrees with each Underwriter:
(a) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. Such
Selling Stockholder will not, without the prior written consent of
Xxxxxxxxxx Securities (which consent may be withheld in its sole
discretion), directly or indirectly, sell, offer, contract or grant any
option to sell (including without limitation any short sale), pledge,
transfer, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or
convertible into shares of Common Stock currently or hereafter owned
either of record or beneficially (as defined in Rule 13d-3 under the
Exchange Act) by the undersigned, or publicly announce the
undersigned's intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of
trading on the date 180 days after the date of the Prospectus.
(b) DELIVERY OF FORMS W-8 AND W-9. To deliver to the
Representatives prior to the First Closing Date a properly completed
and executed United States Treasury Department Form W-8 (if the Selling
Stockholder is a non-United States person) or Form W-9 (if the Selling
Stockholder is a United States Person).
Xxxxxxxxxx Securities, on behalf of the several Underwriters, may, in
its sole discretion, waive in writing the performance by the Company or any
Selling Stockholder of any one or more of the foregoing covenants or extend the
time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company and the Selling
Stockholders, jointly and severally, agree to pay in such proportions as they
may agree upon among themselves all costs, fees and expenses incurred in
connection with the performance of their obligations hereunder and in connection
with the transactions
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contemplated hereby, including without limitation (i) all expenses incident to
the issuance and delivery of the Common Shares (including all printing and
engraving costs), (ii) all fees and expenses of the registrar and transfer agent
of the Common Stock, (iii) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Common Shares to the
Underwriters, (iv) all fees and expenses of the Company's counsel, independent
public or certified public accountants and other advisors, (v) all costs and
expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each preliminary
prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys' fees and expenses incurred by
the Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Common Shares for offer and sale under the Blue Sky laws, and, if
requested by the Representatives, preparing and printing a "Blue Sky Survey" or
memorandum, and any supplements thereto, advising the Underwriters of such
qualifications, registrations and exemptions, (vii) all filing fees payable to
the NASD, including for review of the underwriting arrangements, (viii) the
fees and expenses associated with including the Common Shares on the Nasdaq
National Market, and (ix) all other fees, costs and expenses referred to in Item
14 of Part II of the Registration Statement. Except as provided in this Section
4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay their
own expenses, including the fees and disbursements of their counsel.
The Selling Stockholders further agree with each Underwriter to pay
(directly or by reimbursement) all fees and expenses incident to the performance
of their obligations under this Agreement which are not otherwise specifically
provided for herein or in any applicable registration rights agreements,
including but not limited to (i) fees and expenses of counsel and other advisors
for such Selling Stockholders, (ii) fees and expenses of the Custodian and (iii)
expenses and taxes incident to the sale and delivery of the Common Shares to be
sold by such Selling Stockholders to the Underwriters hereunder (which taxes, if
any, may be deducted by the Custodian under the provisions of Section 2 of this
Agreement).
This Section 4 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Stockholders, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Stockholders set forth in Sections 1(A) and 1(B) hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Common Shares, as of the Second
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Closing Date as though then made, to the timely performance in all material
respects by the Company and the Selling Stockholders of their respective
covenants and other obligations hereunder, and to each of the following
additional conditions:
(a) ACCOUNTANTS' COMFORT LETTER. On the date hereof, the
Representatives shall have received from Xxxxxx Xxxxxxxx LLP,
independent public or certified public accountants for the Company, and
Trien, Rosenberg, Rosenberg, Weinberg, Xxxxxx & Xxxxxxx, LLP,
independent public or certified public accountants for RCCM, letters
dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representatives, containing statements
and information of the type ordinarily included in accountant's
"comfort letters" to underwriters, delivered according to Statement of
Auditing Standards No. 72 (or any successor bulletin), with respect to
the audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus
(and the Representatives shall have received an additional [___]
conformed copies of such accountants' letter for each of the several
Underwriters).
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER;
NO OBJECTION FROM NASD. For the period from and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with
the Commission (including the information required by Rule
430A under the Securities Act) in the manner and within the
time period required by Rule 424(b) under the Securities Act;
or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required
by such Rule 430A, and such post-effective amendment shall
have become effective; or, if the Company elected to rely upon
Rule 434 under the Securities Act and obtained the
Representatives' consent thereto, the Company shall have filed
a Term Sheet with the Commission in the manner and within the
time period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of
the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and to the knowledge of the
Company no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iii) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and
arrangements.
(c) NO MATERIAL ADVERSE CHANGE. For the period from and after
the date of this Agreement and prior to the First Closing Date and,
with respect to the
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Optional Common Shares, the Second Closing Date the reasonable judgment
of the Representatives there shall not have occurred any Material
Adverse Change.
(d) OPINION OF COUNSEL FOR THE COMPANY. On each of the First
Closing Date and the Second Closing Date the Representatives shall have
received the favorable opinion of Bass, Xxxxx & Xxxx PLC, counsel for
the Company, dated as of such Closing Date, the form of which is
attached as EXHIBIT A (and the Representatives shall have received an
additional [___] conformed copies of such counsel's legal opinion for
each of the several Underwriters).
(e) OPINION OF COUNSEL FOR THE UNDERWRITERS. On each of the
First Closing Date and the Second Closing Date the Representatives
shall have received the favorable opinion of Piper & Marbury L.L.P.,
counsel for the Underwriters, dated as of such Closing Date, with
respect to the matters set forth in paragraphs (i), (vii), (viii),
(ix), (xi) (xi), (xii), and the next-to-last paragraph of EXHIBIT A
(and the Representatives shall have received an additional [___]
conformed copies of such counsel's legal opinion for each of the
several Underwriters).
(f) OFFICERS' CERTIFICATE. On each of the First Closing Date
and the Second Closing Date the Representatives shall have received a
written certificate executed by the President and Chief Executive
Officer of the Company and the Chief Financial Officer or Chief
Accounting Officer of the Company, dated as of such Closing Date, to
the effect set forth in subsections (b)(ii) and (c)(ii) of this Section
5, and further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not
occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of
the Company set forth in Section 1(A) of this Agreement are
true and correct with the same force and effect as though
expressly made on and as of such Closing Date; and
(iii) the Company has complied in all material
respects with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(g) BRING-DOWN COMFORT LETTER. On each of the First Closing
Date and the Second Closing Date the Representatives shall have
received from Xxxxxx Xxxxxxxx LLP and Trien, Rosenberg, Rosenberg,
Weinberg, Xxxxxx & Xxxxxxx, LLP, independent public or certified
public accountants for the Companioned RCCM, respectively, letters
dated such date, in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made
in the letter furnished by them pursuant to subsection (a) of this
Section 5, except that the
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specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing
Date or Second Closing Date, as the case may be (and the
Representatives] shall have received an additional [___] conformed
copies of such accountants' letter for each of the several
Underwriters).
(h) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. On each
of the First Closing Date and the Second Closing Date the
Representatives shall have received the favorable opinion of Bass,
Xxxxx & Xxxx PLC, counsel for the Selling Stockholders, dated as of
such Closing Date, the form of which is attached as EXHIBIT B (and the
Representatives shall have received an additional [___] conformed
copies of such counsel's legal opinion for each of the several
Underwriters).]
(i) SELLING STOCKHOLDERS' CERTIFICATE. On each of the First
Closing Date and the Second Closing Date the Representatives shall have
received a written certificate executed by each Selling Stockholder,
dated as of such Closing Date, to the effect that:
(i) the representations, warranties and covenants of
such Selling Stockholder set forth in Section 1(B) of this
Agreement are true and correct with the same force and effect
as though expressly made by such Selling Stockholder on and as
of such Closing Date; and
(ii) such Selling Stockholder has complied in all
material respects with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(j) SELLING STOCKHOLDERS' DOCUMENTS. On the date hereof, the
Company and the Selling Stockholders shall have furnished for review by
the Representatives copies of the Powers of Attorney and Custody
Agreements executed by each of the Selling Stockholders and such
further information, certificates and documents as the Representatives
may reasonably request.
(k) LOCK-UP AGREEMENT FROM CERTAIN SHAREHOLDERS OF THE COMPANY
OTHER THAN SELLING STOCKHOLDERS. On the date hereof, the Company shall
have furnished to the Representatives an agreement in the form of
EXHIBIT C hereto from each director and each executive officer of the
Company, and such agreement shall be in full force and effect on each
of the First Closing Date and the Second Closing Date.
(l) ADDITIONAL DOCUMENTS. On or before each of the First
Closing Date and the Second Closing Date, the Representatives and
counsel for the Underwriters shall have received such information,
documents and opinions as they may reasonably require for the purposes
of enabling them to pass upon the issuance and sale of the Common
Shares as contemplated herein, or in order to evidence
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the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied or waived
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by written notice to the Company and the Selling Stockholders at
any time on or prior to the First Closing Date and, with respect to the Optional
Common Shares, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement
is terminated by the Representatives pursuant to Section 5, Section 7, or
[Section 11] , or if the sale to the Underwriters of the Common Shares on the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company or the Selling Stockholders to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse the Representatives and the other Underwriters (or such Underwriters
as have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representatives and the Underwriters in connection with the proposed
purchase and the offering and sale of the Common Shares, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any
party by written notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the
Selling Stockholders to any Underwriter, except that the Company and the Selling
Stockholders shall be obligated to reimburse the expenses of the Representatives
and the Underwriters to the extent required by Sections 4 and 6 hereof, (b) of
any Underwriter to the Company or the Selling Stockholders, or (c) of any party
hereto to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS. Each of the Company
and each of the Selling Stockholders, jointly and severally, agrees to
indemnify and hold harmless
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each Underwriter, its officers and employees, and each person, if any,
who controls any Underwriter within the meaning of the Securities Act
and the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which such Underwriter or such controlling
person may become subject, under the Securities Act, the Exchange Act
or other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company),
insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i)
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule
430A or Rule 434 under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (ii) upon
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company or the Selling
Stockholders contained herein; or (iv) in whole or in part upon any
failure of the Company or the Selling Stockholders to perform their
respective obligations hereunder or under law; or (v) any act or
failure to act or any alleged act or failure to act by any Underwriter
in connection with, or relating in any manner to, the Common Stock or
the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out
of or based upon any matter covered by clause (i) or (ii) above,
PROVIDED that the Company shall not be liable under this clause (v) to
the extent that a court of competent jurisdiction shall have determined
by a final judgment that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or
willful misconduct; and to reimburse each Underwriter and each such
controlling person for any and all reasonable expenses (including the
reasonable fees and disbursements of counsel chosen by Xxxxxxxxxx
Securities) as such expenses are reasonably incurred by such
Underwriter or such controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action; PROVIDED, HOWEVER,
that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon
and in conformity with information furnished to the Company and the
Selling Stockholders by the Representatives expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto); and provided, further, that
with respect to any preliminary prospectus, the foregoing indemnity
agreement shall not inure to the benefit of any Underwriter from whom
the
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person asserting any loss, claim, damage, liability or expense
purchased Common Shares, or any person controlling such Underwriter, if
copies of the Prospectus were timely delivered to the Underwriter
pursuant to Section 2 and a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Common Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss,
claim, damage, liability or expense. The maximum liability of any
Selling Stockholder hereunder shall be limited to the proceeds received
by such Selling Stockholder upon the sale of Common Shares hereunder
(including any Optional Common Shares). The indemnity agreement set
forth in this Section 8(a) shall be in addition to any liabilities that
the Company and the Selling Stockholders may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND
OFFICERS. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signed the Registration Statement, the Selling
Stockholders and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer, Selling
Stockholder or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of such Underwriter), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or
alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or arises out of or is based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement,
any preliminary prospectus, the Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with
information furnished to the Company and the Selling Stockholders by
the Representatives expressly for use therein; and to reimburse the
Company, or any such director, officer, Selling Stockholder or
controlling person for any legal and other expense reasonably incurred
by the Company, or any such director, officer, Selling Stockholder or
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action. Each of the Company and each of the
Selling Stockholders, hereby acknowledges that the only information
that the Underwriters have furnished to the Company and the Selling
Stockholders expressly for use in the Registration
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Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) are the statements set forth (A) as
the last two paragraphs on the inside front cover page of the
Prospectus concerning stabilization and passive market making by the
Underwriters and (B) in the table in the first paragraph and in the
second, sixth, seventh, eighth, and ninth paragraphs under the caption
"Underwriting" in the Prospectus; and the Underwriters confirm that
such statements are correct. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing of
the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it
is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
PROVIDED, HOWEVER, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between
the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(together with local counsel), approved by the indemnifying party
(Xxxxxxxxxx Securities in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel
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satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party.
(d) SETTLEMENTS. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise
or consent includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held
to be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (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 Common Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Stockholders, on the one
hand, and the Underwriters, on the other hand, in connection with the statements
or omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholders, on the one hand, and the Underwriters,
on the other hand, in connection with the offering of the Common Shares pursuant
to this Agreement shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Common Shares pursuant to this
Agreement (before
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deducting expenses) received by the Company and the Selling Stockholders, and
the total underwriting discount received by the Underwriters, in each case as
set forth on the front cover page of the Prospectus (or, if Rule 434 under the
Securities Act is used, the corresponding location on the Term Sheet) bear to
the aggregate initial public offering price of the Common Shares as set forth on
such cover. 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 any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company or the Selling Stockholders, on
the one hand, or 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.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; PROVIDED, HOWEVER,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall
be required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
SCHEDULE A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
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SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on SCHEDULE A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In
any such case either the Representatives or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date. this Agreement maybe terminated by the Representatives by written notice
given to the Company and the Selling Stockholders if at any time (i) trading or
quotation in any of the Company's securities shall have been suspended or
limited by the Commission or by the Nasdaq Stock Market, or trading in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, New York or California authorities; (iii) there
shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or
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any substantial change or development involving a prospective substantial change
in United States' or international political, financial or economic conditions,
as in the judgment of the Representatives is material and adverse and makes it
impracticable to market the Common Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(iv) in the reasonable judgment of the Representatives there shall have occurred
any Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representatives may interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company or the Selling Stockholders
to any Underwriter, except that the Company and the Selling Stockholders shall
be obligated to reimburse the expenses of the Representatives and the
Underwriters to the extent required by to Sections 4 and 6 hereof, (b) any
Underwriter to the Company or the Selling Stockholders, or (c) of any party
hereto to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 13 NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
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If to the Company:
CorporateFamily Solutions, Inc.
000 00xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxx X. Xxxxxx
If to the Selling Stockholders:
Xxxx Xxxxx & Xxxx PLC
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx III, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and personal representatives, and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
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SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL
AND DELIVER COMMON SHARES. If one or more of the Selling Stockholders shall fail
to sell and deliver to the Underwriters the Common Shares to be sold and
delivered by such Selling Stockholders at the First Closing Date pursuant to
this Agreement, then the Underwriters may at their option, by written notice
from the Representatives to the Company and the Selling Stockholders, either (i)
terminate this Agreement without any liability on the part of any Underwriter
or, except as provided in Sections 4, 6, 8 and 9 hereof, the Company or the
Selling Stockholders, or (ii) purchase the shares which the Company and other
Selling Stockholders have agreed to sell and deliver in accordance with the
terms hereof. If one or more of the Selling Stockholders shall fail to sell and
deliver to the Underwriters the Common Shares to be sold and delivered by such
Selling Stockholders pursuant to this Agreement at the First Closing Date or the
Second Closing Date, then the Underwriters shall have the right, by written
notice from the Representatives to the Company and the Selling Stockholders, to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person or entity who was represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company and the Custodian the enclosed
copies hereof, whereupon this instrument, along with all counterparts hereof,
shall become a binding agreement in accordance with its terms.
Very truly yours,
CORPORATEFAMILY SOLUTIONS, INC.
By:________________________________
Xxxxxxxxxx X. Xxxxxx
President and Chief Executive
Officer
SELLING STOCKHOLDERS
By:________________________________
(Attorney-in-fact)
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Representatives in San Francisco, California as of the date first above
written.
XXXXXXXXXX SECURITIES
X.X. XXXXXXXX & CO. L.L.C.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: XXXXXXXXXX SECURITIES
By:___________________________
Xxxxxxx X. Xxxxx
Authorized Signatory
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SCHEDULE A
NUMBER OF
FIRM COMMON SHARES
UNDERWRITERS TO BE PURCHASED
Xxxxxxxxxx Securities ................................. [___]
X.X. Xxxxxxxx & Co., L.L.C. ........................... [___]
[___] ................................................. [___]
[___] ................................................. [___]
Total.......................................... [___]
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40
SCHEDULE B
NUMBER OF MAXIMUM NUMBER OF
SELLING STOCKHOLDER FIRM COMMON SHARES OPTIONAL COMMON SHARES
TO BE SOLD TO BE SOLD
[___] [___]
[___] [___]
Total: [___] [___]
-1-
