EXHIBIT 1.1
2,200,000 Shares/1/
ASI SOLUTIONS INCORPORATED
Common Stock
UNDERWRITING AGREEMENT
_________________, 1997
X.X. Xxxxxxxxxx & Co., Inc.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representatives of the several Underwriters
c/o X.X. Xxxxxxxxxx & Co., Inc.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Sirs and Madams:
ASI Solutions Incorporated, a Delaware corporation (the "Company"),
proposes to issue and sell 2,200,000 shares (the "Firm Shares") of its
authorized but unissued Common Stock. Certain stockholders of the Company named
in Schedule II hereto (the "Selling Stockholders") also propose to grant to the
Underwriters (as defined below) an option to purchase up to 330,000 additional
shares of Common Stock (the "Optional Shares" and, with the Firm Shares,
collectively, the "Shares"). The Common Stock is more fully described in the
Registration Statement and the Prospectus hereinafter mentioned.
The Company and the Selling Stockholders hereby confirm the agreements made
with respect to the purchase of the Shares by the several underwriters, for whom
you are acting, named in Schedule I hereto (collectively, the "Underwriters,"
which term shall also include any underwriter purchasing Shares pursuant to
Section 3(b) hereof). You represent and warrant that you have been authorized
by each of the other Underwriters to enter into this Underwriting Agreement (the
"Agreement") on its behalf and to act for it in the manner herein provided.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS. The Company and each of the Selling Stockholders hereby represent
and warrant to the several Underwriters as of the date hereof and as of each
Closing Date (as defined below) that:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 33-_____), including
the related preliminary prospectus, for the registration under the Securities
Act of 1933, as amended (the "Securities Act") of the Shares. Copies of such
registration statement and of each amendment thereto, if any, including the
related preliminary prospectus (meeting the requirements of Rule 430A of the
rules and regulations of the Commission) heretofore filed by the Company with
the Commission have been delivered to you.
The term Registration Statement as used in this Agreement shall mean such
registration statement, including all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and
/1/ Plus an option to purchase from the Selling Stockholders up to 330,000
additional shares to cover over-allotments.
contained in the Prospectus referred to below, in the form in which it became
effective, and any registration statement filed pursuant to Rule 462(b) of the
rules and regulations of the Commission with respect to the Shares (a "Rule
462(b) registration statement"), and, in the event of any amendment thereto
after the effective date of such registration statement (the "Effective Date"),
shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Shares first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration Statement) and, in the event of any supplement or amendment to such
prospectus after the Effective Date, shall also mean (from and after the filing
with the Commission of such supplement or the effectiveness of such amendment)
such prospectus as so supplemented or amended. The term Preliminary Prospectus
as used in this Agreement shall mean each preliminary prospectus included in
such registration statement prior to the time it becomes effective.
(b) The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
(c) Each of the Company and its subsidiaries has been duly incorporated and
each is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and authority to own
or lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and as being conducted, and is duly
qualified as a foreign corporation and in good standing in all jurisdictions in
which the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole).
(d) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21.1 to the Registration Statement. Except as otherwise described in
the Prospectus, the Company owns all of the outstanding capital stock of its
subsidiaries free and clear of all claims, liens, charges and encumbrances. The
Company and each of its subsidiaries are in possession of, and operating in
compliance with, all material authorizations, licenses, permits, consents,
certificates and orders material to the conduct of their respective businesses
as described in the Prospectus, all of which are valid and in full force and
effect.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change in the business, properties, condition (financial or otherwise)
or results of operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
other than as set forth in the Registration Statement and the Prospectus, and
since such dates, except in the ordinary course of business, neither the Company
nor any of its subsidiaries has entered into any material transaction not
referred to in the Registration Statement and the Prospectus.
(f) The Registration Statement and the Prospectus comply and on the Closing
Date (as hereinafter defined) and any later date on which Optional Shares are to
be purchased, the Prospectus will comply, in all material respects, with the
provisions of the Securities Act and the rules and regulations of the Commission
thereunder; on the Effective Date, the Registration Statement did not contain
any untrue statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and, on the Effective Date the Prospectus did not and,
on the Closing Date and
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any later date on which Optional Shares are to be purchased, will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that none of the representations and warranties in this paragraph shall apply to
statements in, or omissions from, the Registration Statement or the Prospectus
made in reliance upon and in conformity with information herein or otherwise
furnished in writing to the Company by or on behalf of the Underwriters for use
in the Registration Statement or the Prospectus.
(g) The Company has authorized and outstanding capital stock as set forth
under the heading "Capitalization" in the Prospectus. The issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities. All issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable. Except as disclosed in or contemplated by the
Prospectus and the financial statements of the Company and the related notes
thereto included in the Prospectus, neither the Company nor any subsidiary has
any outstanding options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required by the Securities Act and the rules and regulations promulgated
thereunder ("Rules and Regulations") to be shown with respect to such plans,
arrangements, options and rights.
(h) The Shares are duly authorized, are (or, in the case of Shares to be
sold by the Company, will be, when issued and sold to the Underwriters as
provided herein) validly issued, fully paid and nonassessable and conform to the
description thereof in the Prospectus. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for the
transfer and sale of the Shares to be sold by the Selling Stockholders or the
issuance and sale of the Shares to be sold by the Company as contemplated
herein.
(i) The Warrants (as defined in Section 6(p) below) will conform to the
description thereof in the Prospectus and, when sold to and paid for by the
Representatives in accordance with the Warrant Agreement (as defined in Section
6(p) below), will be duly authorized and validly issued and will be valid and
binding obligations of the Company entitled to all the benefits of the Warrant
Agreement. The Warrant Shares (as defined in Section 6(p) below) will be duly
authorized and reserved for issuance upon exercise of the Warrants and, when
issued upon such exercise in accordance with the terms of the Warrants and the
Warrant Agreement, will be duly and validly issued, fully paid and
nonassessable, free of preemptive rights and will conform to the description
thereof in the Prospectus.
(j) Prior to the Closing Date, (i) the Shares to be issued and sold by the
Company and to be sold by the Selling Stockholders and (ii) the Warrant Shares,
will be authorized for listing on the Nasdaq National Market upon official
notice of issuance.
(k) The Shares to be sold by the Company will be sold free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest, and
will conform to the description thereof contained in the Prospectus. Except as
described in the Prospectus, no preemptive right, co-sale right, registration
right, right of first refusal or other similar right to subscribe for or
purchase securities of the Company exists with respect to the issuance and sale
of the Shares by the Company pursuant to this Agreement. No stockholder of the
Company has any right which has not been waived, or complied with, to require
the Company to register the sale of any shares owned by such stockholder under
the Securities Act in the public offering contemplated by this Agreement.
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(l) The Company has all requisite corporate power and authority to enter
into this Agreement and perform the transactions contemplated hereby and
thereby. This Agreement and the Warrant Agreement have been duly authorized,
executed and delivered by the Company and constitute valid and binding
obligations of the Company enforceable in accordance with their terms, except as
enforceability may be limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium laws affecting creditors' rights
generally and except as to those provisions relating to rights to indemnity or
contribution for liabilities arising under federal and state securities laws.
The making and performance of this Agreement and the Warrant Agreement by the
Company and the consummation of the transactions contemplated hereby and thereby
(i) will not violate any provisions of the Certificate of Incorporation, Bylaws
or other organizational documents of the Company or any of its subsidiaries, and
(ii) will not conflict with, result in a material breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
material default under (A) any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties may be bound or affected, or
(B) any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company and its subsidiaries, taken as a
whole, or to which any of their respective properties are subject. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body that has not already been
obtained is required for the execution and delivery of this Agreement and the
Warrant Agreement or the consummation of the transactions contemplated by this
Agreement and the Warrant Agreement, except for compliance with the Securities
Act, the Blue Sky laws applicable to the public offering of the Shares by the
several Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD") and the listing of the
Shares on the Nasdaq National Market System.
(m) The consolidated financial statements and schedules of the Company and
the related notes thereto included in the Registration Statement and the
Prospectus present fairly on a consolidated basis the financial position of the
Company and its subsidiaries as of the respective dates of such financial
statements and schedules, and the results of operations and cash flows of the
Company and its subsidiaries for the respective periods covered thereby. Such
statements, schedules and related notes have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods specified, as certified by the independent accountants
named in subsection 10(f) (except to the extent that certain footnote
disclosures regarding any stub period may have been omitted in accordance with
the applicable rules of the Commission under the Exchange Act). No other
financial statements or schedules are required to be included in the
Registration Statement. The selected financial data set forth in the Prospectus
under the captions "Capitalization" and "Selected Financial and Operating Data"
fairly present the information set forth therein on the basis stated in the
Registration Statement.
(n) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance 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. The representations and warranties given by the Company and its
officers to its independent public accountants for the purpose of supporting the
letters referred to in Sections 10(f) and (g) are true and correct.
(o) Neither the Company nor any of its subsidiaries is (i) in violation or
default of any provision of its Certificate of Incorporation, Bylaws or other
organizational documents, or (ii) in material breach of, or default with respect
to, any provision of any agreement, judgment, decree, order, mortgage, deed of
trust, lease, franchise,
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license, indenture, permit or other instrument to which it is a party or by
which it or any of its properties are bound; and there does not exist any state
of facts which, with notice or lapse of time or both, would constitute such a
breach or default on the part of the Company and its subsidiaries, taken as a
whole.
(p) There are no contracts or other documents required to be described in
the Registration Statement or to be filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have not
been described or filed as an exhibit to the Registration Statement as required.
The contracts so described in the Prospectus are in full force and effect on the
date hereof.
(q) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the best knowledge of
the Company and the Selling Stockholders, threatened to which the Company or any
of its subsidiaries is or is threatened to be made a party or of which property
owned or leased by the Company or any of its subsidiaries is or has been
threatened to be made the subject, which actions, suits or proceedings could,
individually or in the aggregate, prevent or materially adversely affect the
transactions contemplated by this Agreement or the Warrant Agreement or result
in a material adverse change in the business, properties, condition (financial
or otherwise), or results of operations of the Company and its subsidiaries,
taken as a whole; there are no outstanding claims, asserted or otherwise,
against the Company, any of its subsidiaries, or any of their respective
officers or directors, for violations of any federal or state securities laws,
or any other applicable laws, relating to any purchase, sale, or redemption of,
or other transaction with respect to, the Common Stock or shares of capital
stock of any of the Company's subsidiaries; and no labor disturbance by the
employees of the Company or any of its subsidiaries exists or is imminent which
could materially adversely affect the business, properties, condition
(financial or otherwise), or results of operations of the Company or its
subsidiaries, taken as a whole. Neither the Company nor any of its subsidiaries
is a party or subject to the provisions of any material injunction, judgment,
decree or order of any court, regulatory body, administrative agency or other
governmental body. Except as disclosed in the Prospectus, there are no material
legal or governmental actions, suits or proceedings pending or, to the Company's
and the Selling Stockholders' best knowledge, threatened against any executive
officers or directors of the Company.
(r) The Company or the applicable subsidiary has good title to all the
properties and assets reflected as owned in the financial statements hereinabove
described (or elsewhere in the Prospectus), subject to no lien, mortgage,
pledge, charge or encumbrance of any kind except (i) those, if any, reflected in
such financial statements (or elsewhere in the Prospectus), or (ii) those which
are not material in amount to the Company and its subsidiaries, taken as a
whole, and do not adversely affect the use made and proposed to be made of such
property by the Company or its subsidiaries. The Company or the applicable
subsidiary holds its leased properties under valid and binding leases. Except
as described in the Prospectus, the Company owns or leases all such properties
as are necessary to its operations as now conducted or as proposed to be
conducted.
(s) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not (A) incurred any material liabilities or obligations,
indirect, direct or contingent, or (B) entered into any oral or written
agreement or other transaction, which in the case of (A) or (B) is not in the
ordinary course of business; (ii) the Company and its subsidiaries have not
sustained any material loss or interference with their respective businesses or
properties from fire, flood, windstorm, accident or other calamity, whether or
not covered by insurance; (iii) the Company and its subsidiaries have not paid
or declared any dividends or other distributions with respect to their
respective capital stock and the Company and its subsidiaries are not in default
in the payment of principal or interest on any outstanding debt obligations;
(iv) there has not been any change in the capital stock of the Company or its
subsidiaries (other than upon the sale of the Shares hereunder or upon the
exercise of any options or warrants disclosed in the Prospectus); (v) there has
not been any material increase in the short- or long-term debt of the Company
and its subsidiaries; and (vi) there has not
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been any material adverse change or any development involving or which may
reasonably be expected to involve a prospective material adverse change, in the
business, condition (financial or otherwise), properties, or results of
operations of the Company and its subsidiaries, taken as a whole.
(t) The Company and its subsidiaries are conducting business in compliance
with all applicable laws, rules and regulations of the jurisdictions in which
they are conducting business, except where the failure to be so in compliance
would not have a material adverse effect on the business, properties, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole .
(u) The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns, and all such tax returns are
complete and correct in all material respects, and the Company and its
subsidiaries have not failed to pay any taxes which were payable pursuant to
said returns or any assessments with respect thereto. The Company has no
knowledge of any tax deficiency which has been or is likely to be threatened or
asserted against the Company or its subsidiaries.
(v) The Company has not distributed, and will not distribute prior to the
later to occur of (i) completion of the distribution of the Shares, or (ii) the
expiration of any time period within which a dealer is required under the
Securities Act to deliver a prospectus relating to the Shares, any offering
material in connection with the offering and sale of the Shares other than the
Prospectus, the Registration Statement and any other materials permitted by the
Securities Act and consented to by the Underwriters.
(w) Each of the Company and its subsidiaries maintains insurance of the
types and in the amounts generally deemed adequate for their business,
including, but not limited to, directors' and officers' insurance, insurance
covering real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect. The Company has not been refused any insurance coverage sought or
applied for, and the Company has no reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not materially adversely affect the business,
properties, condition (financial or otherwise) or results of operations of the
Company or its subsidiaries, taken as a whole.
(x) Neither the Company nor any of its subsidiaries nor, to the best of the
Company's or the Selling Stockholder's knowledge, any of their employees or
agents has at any time during the last five years (i) made any unlawful
contribution to any candidate for foreign office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any foreign,
federal or state governmental officer or official or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
(y) Neither the Company nor any Selling Stockholder has taken and will not
take, directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
(z) The Company has caused (i) each of its executive officers and directors
as set forth in the Prospectus and (ii) the holders of all of the outstanding
Common Stock (and shares issuable upon the exercise or conversion of any option
that vests prior to October 1, 1997, warrant or other security) to furnish to
the Underwriters an agreement in form and substance satisfactory to X.X.
Xxxxxxxxxx & Co., Inc. pursuant to which each such party has agreed that during
the period of one hundred eighty (180) days after the date the Registration
Statement becomes effective, without the prior written consent of X.X.
Xxxxxxxxxx & Co., such party will not, directly or indirectly, offer, sell,
pledge, contract to sell, grant any option to purchase or otherwise dispose of
any
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shares of Common Stock beneficially owned or otherwise held by such party
(including, without limitation, shares of Common Stock which may be deemed to be
beneficially owned by such party in accordance with the rules and regulations of
the Securities and Exchange Commission and shares of Common Stock which may be
issued upon exercise of a stock option or warrant) or any securities convertible
into, derivative of or exercisable or exchangeable for such Common Stock;
provided, however, that if such party is an individual, he or she may transfer
any or all of the Common Stock held by such party either during his or her
lifetime or on death, by gift, will or intestacy, to his or her immediate family
or to a trust the beneficiaries of which are exclusively such party and/or a
member or members of his or her immediate family (any of such transferees are
hereinafter referred to as a "Permitted Transferee"); provided, that in any such
case the Permitted Transferee executes a lock-up agreement in substantially the
same form covering the remainder of the lock-up period.
(aa) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba.
(bb) Except as specifically disclosed in the Prospectus, the Company and
its subsidiaries have sufficient trademarks, trade names, copyrights, licenses,
approvals and governmental authorizations to conduct their businesses as now
conducted; the expiration or absence of any trademarks, trade names, copyrights,
licenses, approvals or governmental authorizations would not have a material
adverse effect on the business, properties, condition (financial or otherwise)
or results of operations of the Company or its subsidiaries; neither the Company
nor any Selling Stockholder has any knowledge of any infringement by the Company
or its subsidiaries of trademark, trade name rights, patent rights, copyrights,
licenses, trade secret or other similar rights of others; and no claims have
been made or are threatened against the Company or its subsidiaries regarding
trademark, trade name, copyright, license, trade secret or other infringement
which could have a material adverse effect on the business, business prospects,
properties, condition (financial or otherwise) or results of operations of the
Company and its subsidiaries, taken as a whole.
(cc) Except as disclosed in the Prospectus, (i) the Company and its
subsidiaries are in compliance in all material respects with all material rules,
laws and regulations relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment ("Environmental
Laws") which are applicable to their business, (ii) neither the Company nor any
of its subsidiaries has received any notice from any governmental authority or
third party of an asserted claim under Environmental Laws, (iii) no facts
currently exist that will require the Company or any of its subsidiaries to make
future material capital expenditures to comply with Environmental Laws, and (iv)
to the knowledge of the Company and Selling Stockholders, no property which is
or has been owned, leased or occupied by the Company or any of its subsidiaries
has been designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C.Section 9601, et seq.), or otherwise designated as a contaminated site
under applicable state or local law.
(dd) The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 2. ADDITIONAL REPRESENTATIONS AND WARRANTIES, AND COVENANTS, OF
THE SELLING STOCKHOLDERS.
Each of the Selling Stockholders represents and warrants and covenants to
the several Underwriters as of the date hereof and as of each Closing Date
hereinafter mentioned that:
(a) Such Selling Stockholder is the sole shareholder of record of, and has
good title to, the Shares to be sold by such Selling Stockholder hereunder, free
and clear of all liens, encumbrances, pledges, charges,
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security interests and claims whatsoever, with full right and authority to
deliver the same hereunder, subject, in the case of each Selling Stockholder, to
the rights of_________________, as Custodian (the "Custodian"), and that upon
the delivery of and payment for such Shares hereunder, each Underwriter who
takes such Shares without knowledge of any adverse claim will acquire all the
rights of such Selling Stockholder in such Shares free of any adverse claim,
lien in favor of the issuer and restriction on transfer imposed by the issuer.
(b) Certificates in negotiable form for the Shares to be sold by such
Selling Stockholder have been placed in custody under a Custody Agreement for
delivery under this Agreement with the Custodian; such Selling Stockholder
specifically agrees that the Shares represented by the certificates so held in
custody for such Selling Stockholder are subject to the interests of the several
Underwriters and the Company, that the arrangements made by such Selling
Stockholder for such custody, including the Power of Attorney provided for in
such Custody Agreement, are to that extent irrevocable, and that the obligations
of such Selling Stockholder shall not be terminated by any act of such Selling
Stockholder or by operation of law, whether by the death or incapacity of such
Selling Stockholder (or, in the case of a Permitted Transferee of a Selling
Stockholder that is not an individual, the dissolution or liquidation of such
Permitted Transferee) or the occurrence of any other event; if any such death,
incapacity, dissolution, liquidation or other such event should occur before the
delivery of such Shares, certificates for the Shares shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death, incapacity, dissolution, liquidation or other event had not
occurred, regardless of whether the Custodian shall have received notice of
such death, incapacity, dissolution, liquidation or other event.
(c) Such Selling Stockholder has reviewed the Registration Statement and
Prospectus and, although such Selling Stockholder has not independently verified
the accuracy or completeness of all the information contained therein, nothing
has come to the attention of such Selling Stockholder that would lead such
Selling Stockholder to believe that (i) on the Effective Date, the Registration
Statement contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, (ii) on the Effective Date the
Prospectus contained and, on the Closing Date and any later date on which
Optional Shares are to be purchased contains, any untrue statement of a material
fact or omitted or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) All information in the Registration Statement or the Prospectus, or any
amendment or supplement thereto, relating to such Selling Stockholder
(including, without limitation, the information relating to the Selling
Stockholder which is set forth in the Prospectus under the caption "Principal
Stockholders"), and all representations and warranties of such Selling
Stockholder in the Custody Agreement are true and correct in all respects and do
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The sale of the Shares by such Selling Stockholder pursuant hereto
is not prompted by such Selling Stockholder's knowledge of any material
information concerning the Company or any subsidiary which is not set forth in
the Prospectus.
(e) Such Selling Stockholder has full power and authority to enter into
this Agreement and the Custody Agreement and perform the transactions
contemplated hereby and thereby. This Agreement and the Custody Agreement have
been duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and the form of such Custody Agreement has been delivered to you.
(f) The making and performance of this Agreement and the Custody Agreement
and the consummation of the transactions contemplated hereby and thereby will
not result in a breach or violation by such Selling Stockholder of any of the
terms or provisions of, or constitute a default by such Selling Stockholder
under,
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any indenture, mortgage, deed of trust, trust (constructive or other), loan
agreement, lease, franchise, license or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling Stockholder or any
of its properties is bound, any statute, or any judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to such
Selling Stockholder or any of its properties.
SECTION 3. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell the
2,200,000 Firm Shares to the several Underwriters, and each of the Underwriters
agrees to purchase from the Company the respective aggregate number of Firm
Shares set forth opposite its name in Schedule I. The price at which such Firm
Shares shall be sold by the Company and purchased by the several Underwriters
shall be $___ per share. The obligation of each Underwriter to the Company
shall be to purchase from the Company that number of Firm Shares which
represents the same proportion of the total number of Firm Shares to be sold by
the Company pursuant to this Agreement as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto represents of the
total number of Firm Shares to be purchased by all Underwriters pursuant to this
Agreement, as adjusted by you in such manner as you deem advisable to avoid
fractional shares. In making this Agreement, each Underwriter is contracting
severally and not jointly; except as provided in paragraphs (b) and (c) of this
Section 3, the agreement of each Underwriter is to purchase only the respective
number of shares of the Firm Shares specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 9 or 10 hereof) to purchase and pay
for the number of Shares agreed to be purchased by such Underwriter or
Underwriters, the Company shall immediately give notice thereof to you, and the
non-defaulting Underwriters shall have the right within 24 hours after the
receipt by you of such notice to purchase, or procure one or more other
Underwriters to purchase, in such proportions as may be agreed upon between you
and such purchasing Underwriter or Underwriters and upon the terms herein set
forth, all or any part of Shares which such defaulting Underwriter or
Underwriters agreed to purchase. If the non-defaulting Underwriters fail so to
make such arrangements with respect to all such shares and portion, the number
of Shares which each non-defaulting Underwriter is otherwise obligated to
purchase under this Agreement shall be automatically increased on a pro rata
basis to absorb the remaining shares and portion which the defaulting
Underwriter or Underwriters agreed to purchase; provided, however, that the non-
defaulting Underwriters shall not be obligated to purchase the portion which the
defaulting Underwriter or Underwriters agreed to purchase if the aggregate
number of such Shares exceeds 10% of the total number of Shares which all
Underwriters agreed to purchase hereunder. If the total number of Shares which
the defaulting Underwriter or Underwriters agreed to purchase shall not be
purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such Shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 3(b) as if such party had originally been a
party to this Agreement and had been allocated the number of Shares actually
purchased by it as a result of its original commitment (if applicable) to
purchase Shares and its purchase of Shares pursuant to this Section 3(b). If
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the 24-hour periods stated above for the purchase of all of the Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without
9
any liability on the part of any non-defaulting Underwriter to the Company.
Nothing in this paragraph (b), and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the Selling
Stockholders hereby grant an option to the several Underwriters to purchase,
severally and not jointly up to 330,000 Optional Shares from the Selling
Stockholders at the same price per share as the Underwriters shall pay for the
Firm Shares, with the Optional Shares to be sold by each Selling Stockholder set
forth opposite the name of such Selling Stockholder on Schedule II hereto. Said
option may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters and may be exercised in whole or in part at any time
on or before the thirtieth day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate number of
Optional Shares as to which the several Underwriters are exercising the option.
Delivery of certificates for the Optional Shares, and payment therefor, shall be
made as provided in Section 5 hereof. The number of Optional Shares to be
purchased by each Underwriter shall be the same percentage of the total number
of Optional Shares to be purchased by the several Underwriters as such
Underwriter is purchasing of the Firm Shares, as adjusted by you in such manner
as you deem advisable to avoid fractional shares.
SECTION 4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the
Shares to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information (insofar as such information relates to the
Underwriters) set forth in the last paragraph on the front cover page and under
"Underwriting" in the Registration Statement, any Preliminary Prospectus and the
Prospectus relating to the Shares constitutes the only information furnished by
the Underwriters to the Company for inclusion in the Registration Statement, any
Preliminary Prospectus, and the Prospectus, and you on behalf of the respective
Underwriters represent and warrant to the Company and the Selling Stockholders
that the statements made therein are correct.
SECTION 5. DELIVERY OF AND PAYMENT FOR THE SHARES AND WARRANTS.
(a) Delivery of certificates for the Firm Shares, the Optional Shares (if
the option granted by Section 3(c) hereof shall have been exercised not later
than 10:00 A.M., Boston time, on the date two business days preceding the
Closing Date), and the Warrant Shares, and payment therefor, shall be made at
the office of Xxxxxxx, Procter & Xxxx LLP, Exchange Place, Boston,
Massachusetts at 10:00 a.m., Boston time, on the fourth business day after the
date of this Agreement, or at such time on such other day, not later than seven
full business days after such fourth business day, as shall be agreed upon in
writing by the Company and you. The date and hour of such delivery and payment
(which may be postponed as provided in Section 3(b) hereof) are herein called
the "Closing Date".
(b) If the option granted by Section 3(c) hereof shall be exercised after
10:00 a.m., Boston time, on the date two business days preceding the Closing
Date, delivery of certificates for the shares of Optional Shares, and payment
therefor, shall be made at the office of Xxxxxxx, Procter & Xxxx LLP, Exchange
Place, Boston, Massachusetts at 10:00 a.m., Boston time, on the third business
day after the exercise of such option.
10
(c) Payment for the Shares and the Warrants purchased from the Company
shall be made to the Company or its order, and payment for the Shares purchased
from the Selling Stockholders shall be made, in the discretion of the
Underwriters, to them or to the Custodian, for the account of the Selling
Stockholders, in each case by (i) one or more certified or official bank check
or checks in next day funds (and the Company and the Selling Stockholders agree
not to deposit any such check in the bank on which drawn until the day following
the date of its delivery to the Company or the Custodian, as the case may be) or
(ii) federal funds wire transfer (A) if to the Company, to an account designated
by the Company, and (B) if to the Selling Stockholders, to either an account
designated by each such Selling Stockholder or to the Custodian's account, as
each such Selling Stockholder may direct. Such payment shall be made upon
delivery of certificates for the Shares and the Warrants to you for your account
and the respective accounts of the several Underwriters (including without
limitation by "full-fast" electronic transfer by Depository Trust Company)
against receipt therefor signed by you. Certificates for the Shares and the
Warrants to be delivered to you shall be registered in such name or names and
shall be in such denominations as you may request at least one business day
before the Closing Date, in the case of Firm Shares and the Warrants, and at
least one business day prior to the purchase thereof, in the case of the
Optional Shares. Such certificates will be made available to the Underwriters
for inspection, checking and packaging at the offices of X.X. Xxxxxxxxxx & Co.,
Inc.'s clearing agent, __________________________, on the business day prior to
the Closing Date or, in the case of the Optional Shares, by 3:00 p.m., New York
time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Stockholders for shares to be purchased by any Underwriter whose
check shall not have been received by you on the Closing Date or any later date
on which Optional Shares are purchased for the account of such Underwriter. Any
such payment by you shall not relieve such Underwriter from any of its
obligations hereunder.
SECTION 6. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS. Each of
the Company and the Selling Stockholders covenants and agrees as follows:
(a) The Company will, and the Selling Stockholders shall use their best
efforts to cause the Company to, (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) the Company will not, and the Selling Stockholders shall use their best
efforts to ensure that the Company does not, file any amendment to the
Registration Statement or supplement to the Prospectus of which you shall not
previously have been advised and furnished with a copy or to which you shall
have reasonably objected in writing or which is not in compliance with the
Securities Act or the rules and regulations of the Commission.
(b) The Company will, and the Selling Stockholders shall use their best
efforts to cause the Company to, promptly notify each Underwriter in the event
of (i) the request by the Commission for amendment of the Registration Statement
or for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction, or (v) the receipt by the Company of notice
of the initiation or threatening of any proceeding for such purpose. The
Company and the Selling Stockholders will make every reasonable effort to
prevent the issuance of such a stop order and, if such an order shall at any
time be issued, to obtain the withdrawal thereof at the earliest possible
moment.
(c) The Company will, and the Selling Stockholders shall use their best
efforts to cause the Company to, (i) on or before the Closing Date, deliver to
you a signed copy of the Registration Statement as
11
originally filed and of each amendment thereto filed prior to the time the
Registration Statement becomes effective and, promptly upon the filing thereof,
a signed copy of each post-effective amendment, if any, to the Registration
Statement (together with, in each case, all exhibits thereto unless previously
furnished to you) and will also deliver to you, for distribution to the
Underwriters, a sufficient number of additional conformed copies of each of the
foregoing (but without exhibits) so that one copy of each may be distributed to
each Underwriter, (ii) as promptly as possible deliver to you and send to the
several Underwriters, at such office or offices as you may designate, as many
copies of the Prospectus as you may reasonably request, and (iii) thereafter
from time to time during the period in which a prospectus is required by law to
be delivered by an Underwriter or dealer, likewise send to the Underwriters as
many additional copies of the Prospectus and as many copies of any supplement to
the Prospectus and of any amended prospectus, filed by the Company with the
Commission, as you may reasonably request for the purposes contemplated by the
Securities Act.
(d) If at any time during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the opinion of counsel
for the Company or of counsel for the Underwriters, to supplement or amend the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser of the Shares,
the Company will, and the Selling Stockholders shall use their best efforts to
cause the Company to, forthwith prepare and file with the Commission a
supplement to the Prospectus or an amended prospectus so that the Prospectus as
so supplemented or amended will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time such
Prospectus is delivered to such purchaser, not misleading. If, after the
initial public offering of the Shares by the Underwriters and during such
period, the Underwriters shall propose to vary the terms of offering thereof by
reason of changes in general market conditions or otherwise, you will advise the
Company in writing of the proposed variation, and, if in the opinion either of
counsel for the Company or of counsel for the Underwriters such proposed
variation requires that the Prospectus be supplemented or amended, the Company
will forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus setting forth such variation. The Company
authorizes the Underwriters and all dealers to whom any of the Shares may be
sold by the several Underwriters to use the Prospectus, as from time to time
amended or supplemented, in connection with the sale of the Shares in accordance
with the applicable provisions of the Securities Act and the rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, and the Selling Stockholders shall use
their best efforts to cause the Company to cooperate, when and as requested by
you, in the qualification of the Shares for offer and sale under the securities
or blue sky laws of such jurisdictions as you may designate and, during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, in keeping such qualifications in good standing under
said securities or blue sky laws; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified. The
Company will, from time to time, prepare and file such statements, reports, and
other documents as are or may be required to continue such qualifications in
effect for so long a period as you may reasonably request for distribution of
the Shares.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to
12
stockholders of the Company and of all information, documents and reports filed
with the Commission (including the Report on Form SR required by Rule 463 of the
Commission under the Securities Act).
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders an earnings statement
which need not be certified by independent certified public accountants unless
required by the Securities Act or the rules and regulations thereunder, but
which shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder, covering a period of at least twelve months beginning with
the day immediately succeeding the Effective Date.
(i) The Company agrees to pay, and the Selling Stockholders agree to use
their best efforts to cause the Company to pay, all costs and expenses incident
to the performance of their obligations under this Agreement, including all
costs and expenses incident to (i) the preparation, printing and filing with the
Commission and the NASD of the Registration Statement, any Preliminary
Prospectus and the Prospectus, (ii) the furnishing to the Underwriters and, if
applicable, the persons designated by them of copies of any Preliminary
Prospectus and of the several documents required by paragraph (c) of this
Section 6 to be so furnished, (iii) the printing of this Agreement and related
documents delivered to the Underwriters, (iv) the preparation, printing and
filing of all supplements and amendments to the Prospectus referred to in
paragraph (d) of this Section 6, (v) the furnishing to you and the Underwriters
of the reports and information referred to in paragraph (g) of this Section 6
and (vi) the printing and issuance of stock certificates, including the transfer
agent's fees. The Selling Stockholders will pay any transfer taxes incident to
the transfer to the Underwriters of the Shares being sold by the Selling
Stockholders.
(j) The Company agrees to reimburse you, and the Selling Stockholders shall
use their best efforts to cause the Company to reimburse you, for the account of
the several Underwriters, for blue sky fees and related disbursements (including
reasonable counsel fees and reasonable disbursements and cost of printing
memoranda for the Underwriters) paid by or for the account of the Underwriters
or their counsel in qualifying the shares under state securities or blue sky
laws and in the review of the offering by the NASD.
(k) The Company and the Selling Stockholders acknowledge that the
provisions of paragraphs (i) and (j) of this Section are intended to relieve the
Underwriters from the payment of the expenses and costs which the Company
hereby agrees to pay and shall not affect any agreement which the Company and
the Selling Stockholders may make, or may have made, for the sharing of any such
expenses and costs.
(l) The Company hereby agrees that, without the prior written consent of
X.X. Xxxxxxxxxx & Co., Inc., the Company will not, for a period of 180 days
following the date the Registration Statement becomes effective, directly or
indirectly, offer, sell, pledge, contract to sell, grant any option to purchase
or otherwise dispose of any shares of Common Stock owned beneficially or
otherwise (including, without limitation, shares of Common Stock which may be
deemed to be beneficially owned in accordance with the rules and regulations of
the Securities and Exchange Commission and shares of Common Stock which may be
issued upon exercise of a stock option or warrant) or any securities convertible
into, derivative of or exercisable or exchangeable for such Common Stock, except
for the issuance of shares of Common Stock upon the exercise of options to
purchase Common Stock which are outstanding on the date hereof.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the shares has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you
13
concerning the substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(n) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(o) The Company agrees to maintain directors' and officers' insurance
customary for the size and nature of the Company's business for a period of two
years from the date of this Agreement.
(p) At the Closing Date, the Company will further issue and sell to the
Representatives or, at its direction, to its bona fide officers or partners, as
described below, for a total purchase price of $220, warrants (the "Warrants")
entitling the holders thereof to purchase up to an aggregate of 220,000 shares
of Common Stock (subject to adjustment) (the "Warrant Shares") for a period of
four (4) years, such period to commence one year after the effective date of the
Registration Statement (except as otherwise set forth in the Warrant Agreement
referred to below). Said Warrants shall contain terms and provisions set forth
in the Warrant Agreement of even date among the Company and the Representatives
(the "Warrant Agreement"). As provided in the Warrant Agreement, the
Representatives may designate that some of all of the Warrants be issued in
varying amounts directly to its bona fide officers or partners and not to the
Representatives. Such designation will be made by the Representatives only if it
determines that such issuances would not violate the rules and interpretations
of the Board of Governors of the NASD relating to the review of corporate
financing arrangements and subject to applicable federal and state securities
laws. As further provided, no transfer, assignment or hypothecation of the
Warrants shall be made by the Representatives for a period of 12 months from the
issuance of the Warrants, except to its bona fide officers or partners and
subject to applicable federal and state securities laws.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) of this Section 7, the
Company and the Selling Stockholders, jointly and severally, agree to indemnify
and hold harmless each Underwriter and each person (including each partner or
officer thereof) who controls any Underwriter within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or the common law or otherwise, and the
Company and the Selling Stockholders, jointly and severally, agree to reimburse
each such Underwriter and controlling person for any legal or other expenses
(including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any Rule 462(b)
registration statement), or 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, or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that (1) the indemnity agreements of the Company
and the Selling Stockholders contained
14
in this paragraph (a) shall not apply to any such losses, claims, damages,
liabilities or expenses if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated in writing to the
Company by or on behalf of any Underwriter for use in any Preliminary Prospectus
or the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, (2) the indemnity agreement contained in this paragraph (a)
with respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Shares which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with subparagraphs (ii) and (iii) of paragraph (c) of Section 6
hereof and (3) each Selling Stockholder shall only be liable under this
paragraph with respect to (A) information pertaining to such Selling Stockholder
furnished by or on behalf of such Selling Stockholder expressly for use in any
Preliminary Prospectus or the Registration Statement or the Prospectus or any
such amendment thereof or supplement thereto or (B) facts that would constitute
a breach of any representation or warranty of such Selling Stockholder set forth
in Section 2 hereof. The indemnity agreements of the Company and the Selling
Stockholders contained in this paragraph (a) and the representations and
warranties of the Company and the Selling Stockholders contained in Sections 1
and 2 hereof shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any indemnified party and shall
survive the delivery of and payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its officers who signs the Registration Statement on his own
behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act, and the Selling Stockholders from and against any and
all losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or 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 or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated in writing to the
Company by or on behalf of such indemnifying Underwriter for use in the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto. The indemnity agreement of each Underwriter contained in
this paragraph (b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the delivery of and payment for the Shares.
(c) Each party indemnified under the provision of paragraphs (a) and (b) of
this Section 7 agrees that, upon the service of a summons or other initial legal
process upon it in any action or suit instituted against it or upon its receipt
of written notification of the commencement of any investigation or inquiry of,
or proceeding
15
against, it in respect of which indemnity may be sought on account of any
indemnity agreement contained in such paragraphs, it will promptly give written
notice (the "Notice") of such service or notification to the party or parties
from whom indemnification may be sought hereunder. No indemnification provided
for in such paragraphs shall be available to any party who shall fail so to give
the Notice if the party to whom such Notice was not given was unaware of the
action, suit, investigation, inquiry or proceeding to which the Notice would
have related and was prejudiced by the failure to give the Notice, but the
omission so to notify such indemnifying party or parties of any such service or
notification shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of such indemnity agreement. Any indemnifying party
shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, an
indemnified party. Any indemnifying party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(the "Notice of Defense") to the indemnified party, to assume (alone or in
conjunction with any other indemnifying party or parties) the entire defense of
such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or parties,
by counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; provided, however, that (i) if
the indemnified party or parties reasonably determine that there may be a
conflict between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled to have counsel chosen by such
indemnified party or parties participate in, but not conduct, the defense. If,
within a reasonable time after receipt of the Notice, an indemnifying party
gives a Notice of Defense and the counsel chosen by the indemnifying party or
parties is reasonably satisfactory to the indemnified party or parties, the
indemnifying party or parties will not be liable under paragraphs (a) through
(c) of this Section 7 for any legal or other expenses subsequently incurred by
the indemnified party or parties in connection with the defense of the action,
suit, investigation, inquiry or proceeding, except that (A) the indemnifying
party or parties shall bear the legal and other expenses incurred in connection
with the conduct of the defense as referred to in clause (i) of the proviso to
the preceding sentence and (B) the indemnifying party or parties shall bear such
other expenses as it or they have authorized to be incurred by the indemnified
party or parties. If, within a reasonable time after receipt of the Notice, no
Notice of Defense has been given, the indemnifying party or parties shall be
responsible for any legal or other expenses incurred by the indemnified party or
parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under paragraph (a) or (b) of
this Section 7, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in paragraph (a) or (b) of this Section 7 (i) in such proportion as
is appropriate to reflect the relative benefits received by each indemnifying
party from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of each indemnifying party in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the shares received by the Company and the Selling
Stockholders and the total underwriting discount received by the Underwriters,
as set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the shares. Relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
16
state a material fact relates to information supplied by each indemnifying party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be 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 into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this paragraph
(d), no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter. 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 in this paragraph (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) Neither the Company nor the Selling Stockholders will, without the
prior written consent of each Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not such Underwriter or any person who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of such Underwriter and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding.
(f) The liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in Section 2 hereof and
under the indemnity and reimbursement agreements contained in the provisions of
this Section 7 and Section 8 hereof shall be limited to an amount equal to the
initial public offering price of the shares sold by such Selling Stockholder to
the Underwriters. The Company and the Selling Stockholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
SECTION 8. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 7 of this Agreement, (and subject, in the case of a
Selling Stockholder, to the provisions of paragraph (f) of Section 7), the
Company and the Selling Stockholders hereby jointly and severally agree to
reimburse on a monthly basis the Underwriters for all reasonable legal and other
expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 8 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such
17
payments shall promptly refund them and (ii) such persons shall provide to the
Company, upon request, reasonable assurances of their ability to effect any
refund, when and if due.
SECTION 9. TERMINATION. This Agreement may be terminated by you at any
time prior to the Closing Date by giving written notice to the Company and the
Selling Stockholders in accordance with Section 10, or if after the date of this
Agreement trading in the Common Stock shall have been suspended, or if there
shall have occurred (i) the engagement in hostilities or an escalation of major
hostilities by the United States or the declaration of war or a national
emergency by the United States on or after the date hereof, (ii) any outbreak of
hostilities or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, calamity,
crisis or change in economic or political conditions in the financial markets of
the United States or the Company's industry sector would, in the Underwriters'
reasonable judgment, make the offering or delivery of the shares impracticable,
(iii) suspension of trading in securities generally or a material adverse
decline in value of securities generally on the New York Stock Exchange, the
American Stock Exchange, or The Nasdaq Stock Market, or limitations on prices
(other than limitations on hours or numbers of days of trading) for securities
on either such exchange or system, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order
of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the securities
markets in the United States. If this Agreement shall be terminated pursuant to
this Section 9, there shall be no liability of the Company or the Selling
Stockholders to the Underwriters and no liability of the Underwriters to the
Company and the Selling Stockholders; provided, however, that in the event of
any such termination, the Company and the Selling Stockholders agree to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company and the Selling
Stockholders under this Agreement, including all costs and expenses referred to
in paragraphs (i) and (j) of Section 6 hereof.
SECTION 10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Shares shall be subject to
the performance by the Company and by the Selling Stockholders of all their
respective obligations to be performed hereunder at or prior to the Closing Date
or any later date on which Optional Shares are to be purchased, as the case may
be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Shares hereunder and
the validity and form of the certificates representing the Shares, all corporate
proceedings and other legal matters incident to the foregoing, and the form of
the Registration Statement and of the Prospectus (except as to the financial
statements contained therein), shall have been approved at or prior to the
Closing Date by Xxxxxxx, Procter & Xxxx llp counsel for the Underwriters.
(c) You shall have received from Xxxxxxx, Xxxxxxxxxx & Xxxxxx, counsel for
the Company and the Selling Stockholders, an opinion, addressed to the
Underwriters and dated the Closing Date, covering the matters set forth in Annex
A hereto, and if Optional Shares are purchased at any date after the Closing
Date, additional
18
opinions from such counsel, addressed to the Underwriters and dated such later
date, confirming that the statements expressed as of the Closing Date in such
opinion remains valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct, and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading; (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment; (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, whether or not arising from transactions in the ordinary course of
business, and, since such dates, except in the ordinary course of business,
neither the Company nor any of its subsidiaries has entered into any material
transaction not referred to in the Registration Statement in the form in which
it originally became effective and the Prospectus contained therein; (iv) the
Commission has not issued any order preventing or suspending the use of the
Prospectus or any Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending the effectiveness
of the Registration Statement has been issued; and to the best knowledge of the
respective signers, no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act; (v) neither the Company nor
any of its subsidiaries has any material contingent obligations which are not
disclosed in the Registration Statement and the Prospectus; (vi) there are not
any pending or known threatened legal proceedings to which the Company or any of
its subsidiaries is a party or of which property of the Company or any of its
subsidiaries is the subject which are material and which are not disclosed in
the Registration Statement and the Prospectus; (vii) there are not any
franchises, contracts, leases or other documents which are required to be filed
as exhibits to the Registration Statement which have not been filed as required;
and (viii) the representations and warranties of the Company herein are true and
correct in all material respects as of the Closing Date or any later date on
which Optional Shares are to be purchased, as the case may be.
(e) You shall have received on the Closing Date and on any later date on
which Optional Shares are purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, stating that the respective signers of said
certificate have carefully examined the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein and
any supplements or amendments thereto, and that the statements included in
clauses (i) through (viii) of paragraph (d) of this Section 10 are true and
correct.
(f) You shall have received from Coopers & Xxxxxxx, a letter or letters,
addressed to the Underwriters and dated the Closing Date and any later date on
which Optional Shares are purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations thereunder and
based upon the procedures described in their letter delivered to you
concurrently with the execution of this Agreement (the "Original Letter"), but
carried out to a date not more than three business days prior to the Closing
Date or such later date on which Optional Shares are purchased (i) confirming,
to the extent true, that the statements and conclusions set forth in the
Original Letter are accurate as of the Closing Date or such later date, as the
case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of the Original Letter or to reflect the availability of more recent
financial statements, data or information. The letters shall not disclose any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company
19
or any of its subsidiaries which, in your sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Shares or the purchase of
the Optional Shares as contemplated by the Prospectus.
(g) You shall have received from Coopers & Xxxxxxx, a letter stating that
their review of the Company's system of internal accounting controls, to the
extent they deemed necessary in establishing the scope of their examination of
the Company's financial statements as at [December 31, 1996], did not disclose
any weakness in internal controls that they considered to be material
weaknesses.
(h) You shall have been furnished evidence in usual written or telegraphic
form from the appropriate authorities of the several jurisdictions, or other
evidence satisfactory to you, of the qualification referred to in paragraph (f)
of Section 6 hereof.
(i) Prior to the Closing Date, the Shares and the Warrant Shares shall have
been duly authorized for listing by the Nasdaq National Market upon official
notice of issuance.
(j) The Warrant Agreement and the Warrants shall have been executed and
delivered to the Representatives on behalf of the Company.
(k) On or prior to the Closing Date, you shall have received agreements
from all executive officers and directors as set forth in the Prospectus and the
holders of all shares of outstanding Common Stock (including shares issuable
upon the exercise or conversion of any option that vests prior to October 1,
1997, warrant or other security), in form reasonably satisfactory to X.X.
Xxxxxxxxxx & Co., Inc., stating that without the prior written consent of X. X.
Xxxxxxxxxx & Co., Inc., such person or entity will not, for a period of 180 days
following the date the Registration Statement became effective, directly or
indirectly, offer, sell, pledge, contract to sell, grant any option to purchase
or otherwise dispose of any shares of Common Stock beneficially owned or
otherwise held by such person or entity (including, without limitation, shares
of Common Stock which may be deemed to be beneficially owned by such person or
entity in accordance with the rules and regulations of the Securities and
Exchange Commission and shares of Common Stock which may be issued upon exercise
of a stock option or warrant) or any securities convertible into, derivative of
or exercisable or exchangeable for such Common Stock; provided, however, that,
in the case of any such person, he or she may transfer any or all of the Common
Stock held by such person to a Permitted Transferee; provided, that in any such
case the Permitted Transferee executes a lock-up agreement in substantially the
same form covering the remainder of the lock-up period.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxxxxx, Procter & Xxxx LLP, counsel for the
Underwriters, shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and the Selling Stockholders. Any such termination shall be without
liability of the Company or the Selling Stockholders to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Stockholders; provided, however, that (i) in the event of such termination, the
Company and the Selling Stockholders agree to indemnify and hold harmless the
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Stockholders under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholders to perform any agreement herein, to fulfill any of the conditions
herein, or to comply with any provision hereof other than by reason of a default
by any of the Underwriters, the Company and the Selling Stockholders will
reimburse the Underwriters severally upon demand for all
20
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the transactions
contemplated hereby.
SECTION 11. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
STOCKHOLDERS. The obligation of the Company and the Selling Stockholders to
deliver the Shares shall be subject to the conditions that (a) the Registration
Statement shall have become effective and (b) no stop order suspending the
effectiveness thereof shall be in effect and no proceedings therefor shall be
pending or threatened by the Commission.
In case either of the conditions specified in this Section 11 shall not be
fulfilled, this Agreement may be terminated by the Company and the Selling
Stockholders by giving notice to you. Any such termination shall be without
liability of the Company and the Selling Stockholders to the Underwriters and
without liability of the Underwriters to the Company and the Selling
Stockholders; provided, however, that in the event of any such termination the
Company and the Selling Stockholders agree to indemnify and hold harmless the
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Stockholders under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
SECTION 12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of the Company, the Selling Stockholders and the
several Underwriters and, with respect to the provisions of Section 7 hereof,
the several parties (in addition to the Company and the Selling Stockholders,
and the several Underwriters) indemnified under the provisions of said Section
7, and their respective personal representatives, successors and assigns.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The term
"successors and assigns" as herein used shall not include any purchaser, as such
purchaser, of any of the shares from any of the several Underwriters.
SECTION 13. NOTICES. Except as otherwise provided herein, all
communications hereunder shall be in writing or by telegraph and, if to the
Underwriters, shall be mailed, telexed, telegraphed, transmitted by facsimile
transmission or delivered to X.X. Xxxxxxxxxx & Co., Inc., Xxx Xxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: ___________; and if to the Company,
shall be mailed, telexed, telegraphed, transmitted by facsimile transmission or
delivered to it at its office, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxx. All notices given by telex, telegraph or
facsimile transmission shall be promptly confirmed by letter.
SECTION 14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or the Selling Stockholders or their respective directors
or officers, and (c) delivery and payment for the Shares under this Agreement;
provided, however, that if this Agreement is terminated prior to the Closing
Date, the provisions of paragraph (2) of Section 1 and paragraphs (l), (m) and
(n) of Section 6 hereof shall be of no further force or effect.
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.
21
SECTION 16. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of The Commonwealth of Massachusetts.
SECTION 17. GENERAL. This Agreement and the Warrant Agreement constitute
the entire agreement of the parties to this Agreement and the Warrant Agreement
and supersede all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof and
thereof. This Agreement may be executed in several counterparts, each one of
which shall be an original, and all of which together shall constitute one and
the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Attorneys-in-fact by or on behalf
of the Selling Stockholders and you.
Any person executing and delivering this Agreement as Attorney-in-fact for
the Selling Stockholders represents by so doing that he has been duly appointed
as Attorney-in-fact by such Selling Stockholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-fact to take
such action. Any action taken under this Agreement by the Attorney-in-fact will
be binding on all of the Selling Stockholders.
[Remainder of page intentionally left blank.]
22
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed copies hereof, whereupon it will
become a binding agreement among the Company, the Selling Stockholders and the
several Underwriters, including you, all in accordance with its terms.
Very truly yours,
ASI SOLUTIONS INCORPORATED
By:________________________________________
Title:
THE SELLING STOCKHOLDERS
By:________________________________________
Attorney-in-fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted
by us in Boston, Massachusetts as of
the date first above written.
X.X. XXXXXXXXXX & CO., INC.
XXXXXX XXXXXXXXXX XXXXX INC.
______________________________________
Acting for ourselves and as the Representatives of
the several Underwriters named in the attached
Schedule A
By: X.X. Xxxxxxxxxx & Co., Inc.
By:____________________________
Name:
Principal
For itself and on behalf of the
Representatives
23
SCHEDULE I
UNDERWRITERS
NUMBER OF FIRM
UNDERWRITERS SHARES TO BE PURCHASED
________________________________________________________________________________
X.X. Xxxxxxxxxx & Co., Inc......................................................
Xxxxxx Xxxxxxxxxx Xxxxx Inc.....................................................
Total..............................................................
I-1
SCHEDULE II
SELLING STOCKHOLDERS
NAME AND ADDRESS NUMBER OF OPTIONAL
OF SELLING STOCKHOLDERS SHARES TO BE SOLD
________________________________________________________________________________
_______________________.........................................................
_______________________.........................................................
Total................................................................
I-2
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXX, XXXXXXXXXX & XXXXXX
COUNSEL FOR THE COMPANY
AND THE SELLING STOCKHOLDERS
In connection with the preparation of this opinion, we have examined,
and have relied as to matters of fact upon, originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records, agreements,
documents and other instruments and such certificates or comparable documents of
public officials, and have made such other and further investigations as we have
deemed relevant and necessary as a basis of the opinions hereinafter set forth.
We have relied upon, without independent investigation, the representations and
warranties of the Company and the Selling Stockholders contained in the
__________________ and upon statements and representations of officers and other
representatives of the Company. In such examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. In
addition, we have, with your permission, assumed that each of the
____________________ has been duly authorized, executed and delivered on behalf
of the parties thereto (other than the Company and the Selling Stockholders).
We have also assumed that all of the parties to the ____________________ will
perform their respective obligations thereunder in accordance with their
respective terms and conditions.
In connection with the opinions expressed herein as being made "to our
knowledge," our examination has been limited to (i) a review of documents in our
firm's files as to which we have represented the Company, (ii) conversations
with certain of the executive officers of the Company, and (iii) reasonable
inquiry by this firm into applicable laws. We have made no independent
investigation as to the accuracy or completeness of any representations,
warranties, data or other information, written or oral, made or furnished by the
Company to us or to you.
(i) 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, is duly qualified as a foreign
corporation and in good standing in each state of the United States of America
in which the nature of its business or its ownership or leasing of property
requires such qualification (except where the failure to be so qualified would
not have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole) and has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement;
all the issued and outstanding capital stock of each of the subsidiaries of the
Company has been duly authorized and validly issued and is fully paid and
nonassessable (with respect to the subsidiaries, subject to Section 630 of the
New York Business Corporation Law), and is owned by the Company free and clear
of all liens, encumbrances and security interests, and to the best of such
counsel's knowledge, other than as described in the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock or
ownership interests in such subsidiaries are outstanding;
(ii) the authorized capital stock of the Company consists of 2,000,000
shares of Preferred Stock, $.01 par value, none of which are outstanding, and
20,000,000 shares of Common Stock, $.01 par value, of which there are
outstanding 4,625,158 shares; all of the outstanding shares of such capital
stock (including the Firm Shares and the Optional Shares issued, if any) have
been duly authorized and validly issued and are fully paid and nonassessable;
any Optional Shares purchased after the Closing Date have been duly authorized
and, when issued and delivered to, and paid for by, the Underwriters as provided
in the Underwriting Agreement, will be validly issued and fully paid and
nonassessable; and no preemptive rights of, or rights of refusal in favor of,
A-1
stockholders exist with respect to the Shares, or the issue and sale thereof,
pursuant to the Certificate of Incorporation or Bylaws of the Company or any
other instrument and, to the knowledge of such counsel, there are no contractual
preemptive rights that have not been waived, rights of first refusal or rights
of co-sale which exist with respect to the Shares being sold by the Selling
Securityholders or the issue and sale of the Shares by the Company;
(iii) the Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act, and with the
rules and regulations of the Commission thereunder;
(v) such counsel have no reason to believe that the Registration
Statement (except as to the financial statements and schedules and other
financial and statistical data contained therein, as to which such counsel need
not express any opinion or belief) at the Effective Date contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus (except as to the financial statements and schedules and
other financial and statistical data contained therein, as to which such
counsel need not express any opinion or belief) as of its date or at the Closing
Date (or any later date on which Optional Shares are purchased), contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) the information required to be set forth in the Registration
Statement in answer to Items 9 (Description of Securities to be Registered), 10
(Interests of Names Experts and Counsel) (insofar as it relates to such counsel)
and 11(c) (Legal Proceedings) of Form S-1 and under the caption "Certain
Transactions" in the Prospectus is, to such counsel's knowledge, accurately and
adequately set forth therein in all material respects or no response is required
with respect to such Items, and the description of the Company's stock option
plan and the options granted and which may be granted thereunder in the
Prospectus accurately and fairly presents the information required to be shown
with respect to said plan and options to the extent required by the Securities
Act and the rules and regulations of the Commission thereunder;
(vii) such counsel do not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(viii) all issuances and repurchases or redemptions by the Company
and any of its subsidiaries of any of their respective securities have been
effected in compliance with all federal and state securities laws;
(ix) the Underwriting Agreement and the Warrant Agreement have been
duly authorized, executed and delivered by the Company;
(x) the Underwriting Agreement has been duly executed and delivered by
or on behalf of the Selling Stockholders and the Custody Agreement between the
Selling Stockholders and______________, as Custodian,
A-2
including the power of attorney contained in such Custody Agreement, have been
duly executed and delivered by the several Selling Stockholders;
(xi) the Company has the requisite corporate power and authority to
enter into the Underwriting Agreement and the Warrant Agreement and to sell and
deliver the Shares and the Warrants to be sold by it to the several
Underwriters;
(xii) the Custody Agreements, including the power of attorney
contained therein, are valid and binding agreements of each of the Selling
Stockholders enforceable in accordance with their terms except as enforceability
may be limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium receivership, fraudulent conveyance and other similar
laws now or hereinafter in effect relating to or affecting creditors', debtors'
and shareholders' rights generally and except with respect to those provisions
relating to indemnity or contribution for liabilities under the Securities Act,
as to which no opinion need be expressed, and each Selling Stockholder has full
legal right and authority to enter into the Underwriting Agreement and the
Custody Agreement, including the power of attorney contained therein, and to
sell, transfer and deliver in the manner provided in the Underwriting Agreement
the Shares sold by such Selling Stockholder hereunder;
(xiii) the issue and sale by the Company of the Shares and the
Warrants sold by the Company as contemplated by the Underwriting Agreement and
the Warrant Agreement will not conflict with, or result in a breach of, or
constitute a default under the Certificate of Incorporation or Bylaws of the
Company or any of its subsidiaries or any agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or by which
any of its properties may be bound or any applicable law or regulation, or so
far as is known to such counsel, any order, writ, injunction or decree, of any
jurisdiction, court or governmental instrumentality;
(xiv) to the best of our knowledge, the transfer and sale by the
Selling Stockholders of the Shares to be sold by the Selling Stockholders as
contemplated by the Underwriting Agreement and the Custody Agreement, including
the power of attorney contained therein, will not conflict with, result in a
breach of, or constitute a default under any agreement or instrument known to
such counsel to which any of the Selling Stockholders is a party or by which any
of the Selling Stockholders or any of their properties may be bound, or any
applicable law or regulation, or so far is known to such counsel, order, writ,
injunction or decree of any jurisdiction, court or governmental instrumentality
body;
(xv) all holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, because of the
filing of the Registration Statement by the Company have waived such rights or
such rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement;
(xvi) good title to the Shares under the Underwriting Agreement, free
and clear of all liens, encumbrances, equities, security interests and claims,
has been transferred to the Underwriters who have severally purchased such
Shares under the Underwriting Agreement, assuming for the purpose of this
opinion that the Underwriters purchased the same in good faith without notice of
any adverse claims;
(xvii) good title to the Warrants under the Warrant Agreement, free
and clear of all liens, encumbrances, equities, security interests and claims,
has been transferred to the Representative who has purchased such Warrants under
the Warrant Agreement, assuming for the purpose of this opinion that the
Representative purchased the same in good faith without notice of any adverse
claims;
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(xviii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except such as have been obtained
under the Securities Act and such as may be required under state securities or
blue sky laws in connection with the purchase and distribution of the Shares by
the Underwriters and the clearance of the offering with the NASD and the Nasdaq
National Market System;
(xix) the Shares issued and sold by the Company and sold by the
Selling Stockholders and the Warrant Shares will be duly authorized for listing
by the Nasdaq National Market upon official notice of issuance.
(xx) The Warrants conform to the description thereof in the Prospectus
(it being understood that with respect to the fair presentation of such
description and whether it is an accurate summary such counsel's opinion is
limited to that set forth in clause (vi) above) and have been duly authorized
and validly issued and are valid and binding obligations of the Company entitled
to all the benefits of the Warrant Agreement and are enforceable against the
Company, (except (1) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance, or
other similar laws now or hereinafter in effect relating to or affecting
creditors', debtors' and shareholders' rights generally and by general
principles of equity, (2) that the remedies of specific performance and
injunctive and other forms of relief are subject to general equitable
principles, whether such enforcement is sought at law or in equity, and such
enforcement may be subject to the discretion of the court before which any
proceedings therefor may be brought and (3) as rights to indemnity and
contribution may be limited by state or federal laws or by policies underlying
such laws). The Warrant Shares have been duly authorized and reserved for
issuance upon exercise of the Warrants and, when issued upon such exercise in
accordance with the terms of Warrants and the Warrant Agreement, will be duly
and validly issued, fully paid and nonassessable, free of preemptive rights and
will conform to the description thereof in the Prospectus.
We express no opinion as to the laws of any state or other
jurisdiction other than as to the substantive laws of the State of New York, the
General Corporation Law of the State of Delaware and the federal law of the
United States, without giving effect to principles relating to conflicts of law.
This opinion is rendered to you in connection with the above-described
transactions and is for your exclusive benefit. This opinion may not be relied
upon by you for any other purpose, or relied upon or furnished to any other
person, firm or corporation without our prior written consent.
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Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or of the State of New York,
upon opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
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