Exhibit 1.1
FORM OF UNDERWRITING AGREEMENT
FLIR SYSTEMS, INC.
1,500,000 Shares of Common Stock
Underwriting Agreement
December ___, 2001
X.X. Xxxxxx Securities Inc.
Banc of America Securities LLC
Xxxxxxx and Company, Inc.
As Representatives of the several underwriters
listed in Schedule I hereto
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
FLIR Systems, Inc., an Oregon corporation (the "Company"), proposes to
issue and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of one million (1,000,000) shares of common
stock, par value $0.01 per share (the "Stock") of the Company and the
shareholder of the Company named in Schedule II hereto (the "Selling
Shareholder") proposes to sell to the Underwriters an aggregate of five hundred
thousand (500,000) shares of Stock and, at the election of the Underwriters, up
to two hundred twenty-five thousand (225,000) additional shares of Stock. The
aggregate of 1,500,000 shares to be sold by the Company and the Selling
Shareholder is herein called the "Underwritten Shares" and the aggregate of
225,000 additional shares to be sold by the Selling Shareholder is herein called
the "Option Shares." The Underwritten Shares and the Option Shares are herein
referred to as the "Shares." The Stock, including the Shares, will have attached
thereto rights (the "Rights") to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock of the Company. The Rights are to
be issued pursuant to a Rights Agreement (the "Rights Agreement") dated as of
June 2, 1999 between the Company and ChaseMellon Shareholder Services, L.L.C.,
a New Jersey limited liability company.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the
"Securities Act"), a registration statement, including a prospectus, relating to
the Shares and the Rights. The registration statement as amended at the time
when it shall become effective including information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act, is referred to in this Agreement as the "Registration
Statement", and the prospectus in the form first used to confirm sales of Shares
is referred to in this Agreement as the "Prospectus". If the Company has filed
an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the effective date of the
Registration Statement or the date of such preliminary prospectus or the
Prospectus, as the case may be and any reference to "amend", "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that are deemed to be incorporated by
reference therein.
The Company and the Selling Shareholder hereby agree with the Underwriters
as follows:
1. The Company and the Selling Shareholder agree, severally and not
jointly, to sell the Underwritten Shares to the several Underwriters as
hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Company and the Selling Shareholder at a purchase price per share of $ [_]
(the "Purchase Price) the number of Underwritten Shares (to be adjusted by you
so as to eliminate fractional shares) determined by multiplying the aggregate
number of Underwritten Shares to be sold by the Company and the Selling
Shareholder as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Underwritten
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Underwritten Shares to be purchased by all the Underwriters
from the Company and the Selling Shareholder hereunder.
In addition, the Selling Shareholder agrees to sell the Option Shares to
the several Underwriters and the Underwriters shall have the option to purchase
at their election up to 225,000 Option Shares for the sole purpose of covering
over-allotments in the sale of the Underwritten Shares. The Underwriters on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Selling Shareholder at the Purchase Price that portion of
the number of Option Shares as to which such election shall have been exercised
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying such number of Option Shares by a fraction the numerator of which is
the maximum number of Option Shares which such Underwriter is entitled to
purchase and the denominator of which is the maximum number of Option Shares
that all of the Underwriters are entitled to purchase hereunder, for the sole
purpose of covering over-allotments (if any) in the sale of the Underwritten
Shares by the several Underwriters.
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The Underwriters may exercise the option to purchase the Option Shares at
any time (but not more than once) on or before the thirtieth day following the
date of this Agreement, by written notice from the Representatives to the
Attorneys-in-Fact (as defined below). Such notice shall set forth the aggregate
number of Option Shares as to which the option is being exercised and the date
and time when the Option Shares are to be delivered and paid for which may be
the same date and time as the Closing Date (as hereinafter defined) but shall
not be earlier than the Closing Date nor later than the tenth full Business Day
(as hereinafter defined) after the date of such notice (unless such time and
date are postponed in accordance with the provisions of Section 9 hereof). Any
such notice shall be given at least two Business Days prior to the date and time
of delivery specified therein.
2. The Company and the Selling Shareholder understand that the Underwriters
intend (i) to make a public offering of the Shares as soon after (A) the
Registration Statement has become effective and (B) the parties hereto have
executed and delivered this Agreement, as in the judgment of the Representatives
is advisable and (ii) initially to offer the Shares upon the terms set forth in
the Prospectus.
3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified to the Representatives by the Company
with regard to payment to the Company and by the Attorneys-in-Fact, or any of
them, with regard to payment to the Selling Shareholder in the case of the
Underwritten Shares, on December __, 2001, or at such other time on the same or
such other date, not later than the fifth Business Day thereafter, as the
Representatives and the Company and Attorneys-in-Fact may agree upon in writing
or, in the case of the Option Shares, on the date and time specified by the
Representatives in the written notice of the Underwriters' election to purchase
such Option Shares. The time and date of such payment for the Underwritten
Shares is referred to herein as the "Closing Date" and the time and date for
such payment for the Option Shares, if other than the Closing Date, are herein
referred to as the "Additional Closing Date". As used herein, the term "Business
Day" means any day other than a day on which banks are permitted or required to
be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company or the Selling
Shareholder, as the case may be. The certificates for the Shares will be made
available for inspection and packaging by the Representatives at the office of
X.X. Xxxxxx Securities Inc. set forth above not later than 1:00 P.M., New York
City time, on the Business Day prior to the Closing Date or the Additional
Closing Date, as the case may be.
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4. (A) The Company represents and warrants to each Underwriter and the
Selling Shareholder that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary prospectus
filed as part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act, and did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or, to the knowledge of the Company, threatened by the Commission; and the
Registration Statement and Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the Securities Act and
do not and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the date of the Prospectus and any
amendment or supplement thereto, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date or Additional Closing Date, as
the case may be, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to statements or
omissions in the Registration Statement or the Prospectus made in reliance upon
and in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly for
use therein;
(c) the documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission as the case may be
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act,
and will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
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(d) the financial statements, and the related notes thereto, included
or incorporated by reference in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations and changes in their consolidated cash flows for the periods
specified; and said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis, and the
supporting schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein;
(e) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries, or
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, prospects,
management, financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Prospectus; and except as set forth or contemplated in
the Prospectus neither the Company nor any of its subsidiaries has entered into
any transaction or agreement (whether or not in the ordinary course of business)
material to the Company and its subsidiaries taken as a whole;
(f) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(g) each of the Company's subsidiaries has been duly incorporated and
is validly existing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification, other
than where the failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a whole;
and all the outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and
non-assessable, and (except, in the case of foreign subsidiaries, for directors'
qualifying shares) are owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests and claims;
(h) this Agreement has been duly authorized, executed and delivered by
the Company;
(i) the Company has an authorized capitalization as set forth in the
Prospectus and such authorized capital stock conforms as to legal matters to the
description thereof set forth in the Prospectus, and all of the outstanding
shares of capital stock of the Company (including the Shares to be sold by the
Selling Shareholder) have been duly
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authorized and validly issued, are fully-paid and non-assessable and are not
subject to any pre-emptive or similar rights; and, except as described in or
expressly contemplated by the Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options;
(j) the Shares to be issued and sold by the Company hereunder have been
duly authorized, and, when issued and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be duly issued
and will be fully paid and non-assessable and will conform to the descriptions
thereof in the Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights;
(k) the Rights Agreement has been duly authorized, executed and delivered
by the Company; the Rights have been duly authorized and validly issued by the
Company, and the Series A Junior Participating Preferred Stock has been duly
authorized by the Company and validly reserved for issuance and, upon the
exercise of the Rights in accordance with the terms of the Rights Agreement,
such stock will be validly issued, fully paid and non-assessable;
(l) neither the Company nor any of its subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under, its Certificate of Incorporation or By-Laws or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them or
any of their respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Company and its
subsidiaries taken as a whole; the issue and sale of the Shares to be sold by
the Company hereunder and the performance by the Company of its obligations
under this Agreement and the consummation of the transactions contemplated
herein will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will any such action result in any
violation of the provisions of the Certificate of Incorporation or the By-Laws
of the Company or any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company, its subsidiaries or any of their respective properties; and no consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Shares to be sold by the Company hereunder or the consummation by
the Company of the transactions contemplated by this Agreement, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and as may be
required under state securities or Blue Sky Laws in connection with the purchase
and distribution of the Shares by the Underwriters;
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(m) other than as set forth or contemplated in the Prospectus, there are no
legal or governmental investigations, actions, suits or proceedings pending or,
to the knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries or any of their respective properties or to which the
Company or any of its subsidiaries is or may be a party or to which any property
of the Company or any of its subsidiaries is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate have, or reasonably be expected to have, a
material adverse effect on the general affairs, business, prospects, management,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and there are no statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(n) the Company and its subsidiaries have good and marketable title in fee
simple to all items of real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made or proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid, existing
and enforceable leases with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or its subsidiaries;
(o) no relationship, direct or indirect, exists between or among the
Company or any or its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Securities Act to be described in
the Registration Statement and the Prospectus which is not so described;
(p) no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and sale
of the Shares to be sold by the Company hereunder or, to the best knowledge of
the Company, the sale of the Shares to be sold by the Selling Shareholder
hereunder other than such rights as have been satisfied or waived;
(q) the Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(r) Xxxxxx Xxxxxxxx LLP and PricewaterhouseCoopers LLP who have certified
certain financial statements of the Company and its subsidiaries and Ernst &
Young LLP who have certified certain financial statements of Inframetrics, Inc.
are each independent public accountants as required by the Securities Act;
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(s) the Company and its subsidiaries have filed all federal, state, local
and foreign tax returns which have been required to be filed and have paid all
taxes shown thereon and all assessments received by them or any of them to the
extent that such taxes have become due and are not being contested in good
faith; and, except as disclosed in the Registration Statement and the
Prospectus, there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any subsidiary;
(t) the Company has not taken nor will it 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;
(u) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as conducted as of
the date hereof, and neither the Company nor any such subsidiary has received
any actual notice of any proceeding relating to revocation or modification of
any such license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and the
Prospectus; and each of the Company and its subsidiaries is in compliance with
all laws and regulations relating to the conduct of its business as conducted as
of the date hereof;
(v) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which are likely to have a material adverse effect on the Company
and its subsidiaries taken as a whole;
(w) the Company and its subsidiaries (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole; and
(x) each employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, ("ERISA") that is
maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as
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amended, ("Code"). No prohibited transaction, within the meaning of Section 406
of ERISA or Section 4975 of the Code has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative
exemption. For each such plan which is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA no "accumulated funding deficiency" as
defined in Section 412 of the Code has been incurred, whether or not waived, and
the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions.
4. (B) The Selling Shareholder represents and warrants to, and agrees with,
each of the Underwriters that:
(a) all consents, approvals, authorizations and orders necessary for the
execution and delivery by the Selling Shareholder of this Agreement and the
Power of Attorney (the "Power of Attorney") and the Custody Agreement (the
"Custody Agreement") hereinafter referred to, and for the sale and delivery of
the Shares to be sold by the Selling Shareholder hereunder, have been obtained;
and the Selling Shareholder has full right, power and authority to enter into
this Agreement, the Power of Attorney and the Custody Agreement and to sell,
assign, transfer and deliver the Shares to be sold by the Selling Shareholder
hereunder; this Agreement, the Power of Attorney and the Custody Agreement have
each been duly authorized, executed and delivered by the Selling Shareholder;
(b) the sale of the Shares to be sold by the Selling Shareholder
hereunder and the compliance by the Selling Shareholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody Agreement
and the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Selling Shareholder is a party or by which the Selling Shareholder is
bound or to which any of the property or assets of the Selling Shareholder is
subject, nor will such action result in any violation of the provisions of the
Charter or By-laws of the Selling Shareholder or any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Selling Shareholder or the property of the Selling Shareholder;
(c) the Selling Shareholder has good and valid title to the Shares to be
sold at the Closing Date or Additional Closing Date, as the case may be, by the
Selling Shareholder hereunder, free and clear of all liens, encumbrances,
equities or adverse claims; the Selling Shareholder will have, immediately prior
to the Closing Date or Additional Closing Date, as the case may be, good and
valid title to the Shares to be sold at the Closing Date or Additional Closing
Date, as the case may be, by the Selling Shareholder, free and clear of all
liens, encumbrances, equities or adverse claims; and, upon delivery of the
certificates representing such Shares and payment therefor pursuant hereto, good
and valid title to such Shares, free and clear of all liens, encumbrances,
equities or adverse claims, will pass to the several Underwriters;
(d) the Selling Shareholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares; and
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(e) the Registration Statement and the Prospectus (as amended or
supplemented) comply or will comply, as the case may be, in all material
respects the Securities Act and do not and will not, as of the applicable
effective date of the Registration Statement and any amendment thereto and as of
the date of the Prospectus and any amendment or supplement thereto, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplemented, if applicable, at the Closing
Date or Additional Closing Date, as the case may be, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; except that the foregoing representations and warranties
shall not apply to statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by the Underwriter through
the Representatives expressly for use therein.
The Selling Shareholder represents and warrants that certificates in
negotiable form representing all of the Shares to be sold by the Selling
Shareholder hereunder have been placed in custody under a Custody Agreement
relating to such Shares, in the form heretofore furnished to you, duly executed
and delivered by the Selling Shareholder to ChaseMellon Shareholder Services, as
custodian (the "Custodian"), and that the Selling Shareholder has duly executed
and delivered Powers of Attorney, in the form heretofore furnished to you,
appointing the person or persons indicated in Schedule II hereto, and each of
them, as the Selling Shareholder's Attorneys-in-fact (the "Attorneys-in-Fact" or
any one of them the "Attorney-in Fact") with authority to execute and deliver
this Agreement on behalf of the Selling Shareholder, to determine the purchase
price to be paid by the Underwriters to the Selling Shareholder as provided
herein, to authorize the delivery of the Shares to be sold by the Selling
Shareholder hereunder and otherwise to act on behalf of the Selling Shareholder
in connection with the transactions contemplated by this Agreement and the
Custody Agreement.
The Selling Shareholder specifically agrees that the Shares represented by
the certificates held in custody for the Selling Shareholder under the Custody
Agreement, are subject to the interests of the Underwriters hereunder, and that
the arrangements made by the Selling Shareholder for such custody, and the
appointment by the Selling Shareholder of the Attorneys-in-Fact by the Power of
Attorney, are to that extent irrevocable. The Selling Shareholder specifically
agrees that the obligations of the Selling Shareholder hereunder shall not be
terminated by operation of law, by the dissolution of the Selling Shareholder,
or by the occurrence of any other event. If the Selling Shareholder should be
dissolved, or if any other such event should occur, before the delivery of the
Shares hereunder, certificates representing such Shares shall be delivered by or
on behalf of the Selling Shareholder in accordance with the terms and conditions
of this Agreement and the Custody Agreement, and actions taken by the
Attorneys-in-Fact pursuant to the Power of Attorney shall be as valid as if such
dissolution or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of
such dissolution or other event.
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5. (A). The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement to
become effective at the earliest possible time and, if required, to file the
final Prospectus with the Commission within the time periods specified by Rule
424(b) and Rule 430A under the Securities Act and to file promptly all reports
and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Shares and to furnish copies of the Prospectus to the Underwriters in New
York City prior to 10:00 a.m., New York City time, on the Business Day next
succeeding the date of this Agreement in such quantities as the Representatives
may reasonably request;
(b) to deliver, at the expense of the Company, to the Representatives
four (4) signed copies of the Registration Statement (as originally filed) and
each amendment thereto, in each case including exhibits and documents
incorporated by reference therein, and to each other Underwriter a conformed
copy of the Registration Statement (as originally filed) and each amendment
thereto, in each case without exhibits but including the documents incorporated
by reference therein and, during the period mentioned in paragraph (e) below, to
each of the Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto) and documents incorporated by reference
therein as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the Registration
Statement becomes effective, to furnish to the Representatives a copy of the
proposed amendment or supplement for review and not to file any such proposed
amendment or supplement to which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm such advice
in writing (i) when the Registration Statement has become effective, (ii) when
any amendment to the Registration Statement has been filed or becomes effective,
(iii) when any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof, (iv) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional information, (v)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus or the Prospectus or the initiation or threatening
of any proceeding for that purpose, (vi) of the occurrence of any event, within
the period referenced in paragraph (e) below, as a result of which the
Prospectus as then amended or supplemented would include an 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 when the Prospectus is
delivered to a purchaser, not misleading, and (vii) of the receipt by the
Company of any notification with respect to any suspension of the qualification
of the Shares for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best efforts to
prevent the issuance of any such stop order, or of any order
11
preventing or suspending the use of any preliminary prospectus or the
Prospectus, or of any order suspending any such qualification of the shares, or
notification of any such order thereof and, if issued, to obtain as soon as
possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall occur
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the Company) to
which Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Shares; provided that the Company
--------
shall not be required to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a period
of at least twelve months beginning with the first fiscal quarter of the Company
occurring after the effective date of the Registration Statement, which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder;
(h) so long as the Shares are outstanding, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange;
(i) for a period of ninety (90) days after the date of the initial public
offering of the Shares not to (i) offer, pledge, announce the intention to sell,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of Stock or
any securities convertible into or exercisable or exchangeable for Stock or (ii)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Stock or such other securities, in cash or otherwise without the prior
written consent of the Representatives, other than the Shares to be sold by the
Company hereunder and any shares of Stock of the Company issued upon the
exercise of options granted under existing employee stock option plans;
12
(j) to use the net proceeds received by the Company from the sale of
the Shares by the Company pursuant to this Agreement in the manner specified in
the Prospectus under caption "Use of Proceeds";
(k) to use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations National Market
(the "Nasdaq National Market");
(l) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, reregistration, transfer, execution
and delivery of the Shares, (ii) incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, the Prospectus
and any preliminary prospectus (including in each case all exhibits, amendments
and supplements thereto), (iii) incurred in connection with the registration or
qualification of the Shares under the laws of such jurisdictions as the
Representatives may designate (including fees of counsel for the Underwriters
and its disbursements), (iv) in connection with the listing of the Shares on the
Nasdaq National Market, (v) related to the filing with, and clearance of the
offering by, the National Association of Securities Dealers, Inc., (vi) in
connection with the printing (including word processing and duplication costs)
and delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and the furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and shipping, as
herein provided, (vii) any expenses incurred by the Company in connection with a
"road show" presentation to potential investors, (viii) the cost of preparing
stock certificates and (ix) the cost and charges of any transfer agent and any
registrar.
5. (B). The Selling Shareholder covenants and agrees with each of the
several Underwriters as follows:
(a) for a period of ninety (90) days after the
date of the initial public offering of the Shares not to (i) offer, pledge,
announce to sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Stock or any securities convertible into or exercisable or
exchangeable for Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Stock, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of Stock or such other securities, in cash or
otherwise or (iii) make any demand for or exercise any right with respect to the
registration of any shares of Stock or any security convertible into or
exercisable or exchangeable for Stock without the prior written consent of the
Representatives, in each case other than the Shares to be sold by such Selling
Shareholder hereunder; and
13
(b) to deliver to the Representatives prior to or at the Closing Date
a properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by the Treasury Department
regulations in lieu thereof) in order to facilitate the Underwriters'
documentation of their compliance with the reporting and withholding provisions
of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated.
6. The several obligations of the Underwriters hereunder to purchase the
Shares on the Closing Date or the Additional Closing Date, as the case may be,
are subject to the performance by the Company and the Selling Shareholder of
their respective obligations hereunder and to the following additional
conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act, such
post-effective amendment shall have become effective) not later than 5:00 P.M.,
New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Representatives;
(b) the respective representations and warranties of the Company and
the Selling Shareholder contained herein are true and correct on and as of the
Closing Date or the Additional Closing Date, as the case may be, as if made on
and as of the Closing Date or the Additional Closing Date, as the case may be,
and each of the Company and the Selling Shareholder shall have complied with all
agreements and all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date or the Additional Closing Date, as the case may
be;
(c) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Additional Closing Date, as the case may be,
there shall not have occurred any downgrading, nor shall any notice have been
given of (i) any downgrading, (ii) any intended or potential downgrading or
(iii) any review or possible change that does not indicate an improvement, in
the rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, business, prospects, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares
14
on the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus; and neither the Company
nor any of its subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, (1) a certificate of an
executive officer of the Company, with specific knowledge about the Company's
financial matters, satisfactory to the Representatives to the effect set forth
in subsections (a) through (d) (with respect to the respective representations,
warranties, agreements and conditions of the Company) of this Section and to the
further effect that there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, business, prospects, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole from that set forth or contemplated in the
Registration Statement and (2) a certificate of the Selling Shareholder,
satisfactory to the Representatives to the effect set forth in subsection (b) of
this Section 6 (with respect to the respective representations, warranties,
agreements and conditions of the Selling Shareholder);
(f) Xxxx Xxxxx LLP, counsel for the Company, shall have furnished to
the Representatives their written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, in form and substance satisfactory
to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(ii) the Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure to
be so qualified or in good standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole;
(iii) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation with power and authority (corporate and other) to
own its properties and conduct its business as described in the Prospectus and
has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified and in good
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole; and all of the outstanding shares of capital
stock of each subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable, and (except, in the case of foreign subsidiaries,
for directors' qualifying shares are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
15
(iv) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or proceedings
pending or, to the best of such counsel's knowledge, threatened against or
affecting the Company or any of its subsidiaries or any of their respective
properties or to which the Company or any of its subsidiaries is or may be a
party or to which any property of the Company or its subsidiaries is or may be
the subject which, if determined adversely to the Company or any of its
subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the general affairs, business,
prospects, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; to the best of
such counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and such counsel does not know
of any statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(vii) the shares of capital stock of the Company outstanding prior
to the issuance of the Shares to be sold by the Company hereunder (including the
Shares to be sold by the Selling Shareholder) have been duly authorized and are
validly issued, fully paid and non-assessable;
(viii) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and when delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable and the issuance of the Shares is not
subject to any preemptive or similar rights;
(ix) the statements in the Prospectus under "Underwriting," in
the Prospectus incorporated by reference from Item 3 of Part 1 of the Company's
Annual Report on Form 10-K for the year ended December 31, 2000, as amended, and
in the Prospectus incorporated by reference to the Company's Registration
Statements on Form 8-A filed on ____________ and June 11, 1999, insofar as such
statements constitute a summary of the terms of the Stock, the Rights, legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such terms, legal matters, documents or
proceedings;
(x) such counsel is of the opinion that the Registration
Statement and the Prospectus and any amendments and supplements thereto (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion)
16
comply as to form in all material respects with the requirements of the
Securities Act and believes that (other than the financial statements and
related schedules therein, as to which such counsel need express no belief) the
Registration Statement and the prospectus included therein at the time the
Registration Statement became effective did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and that the
Prospectus, as amended or supplemented, if applicable, does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(xi) neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation of or in
default under, its Certificate of Incorporation or By-Laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a party or by
which it or any of them or any of their respective properties is bound, except
for violations and defaults which individually and in the aggregate are not
material to the Company and its subsidiaries taken as a whole; the issue and
sale of the Shares being delivered on the Closing Date or the Additional Closing
Date, as the case may be, to be sold by the Company hereunder and the
performance by the Company of its obligations under this Agreement and the
consummation of the transactions contemplated herein will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will any such action result in any violation of the
provisions of the Certificate of Incorporation or the By-Laws of the Company or
any applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, its
subsidiaries or any of their respective properties;
(xii) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental agency or
body is required for the issuance by the Company of the Shares to be sold by it
hereunder the consummation by the Company of the transactions contemplated by
this Agreement, except such consents, approvals, authorizations, orders,
licenses, registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters;
(xiii) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
(xiv) the documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by the Company prior to the
Closing Date or the Additional Closing Date, as the case may be, (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form
17
in all material respects with the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such documents, when
such documents became effective or were so filed, as the case may be contained,
in the case of a registration statement which became effective under the
Securities Act, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or, in the case of other documents which were filed
under the Exchange with the Commission, an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
documents were so filed, not misleading;
(xv) the Rights Agreement has been duly authorized, executed and
delivered by the Company; the Rights have been duly authorized by the Company
and, when issued upon issuance of the Shares, will be validly issued, and the
Series A Junior Participating Preferred Stock has been duly authorized by the
Company and validly reserved for issuance upon the exercise of the Rights and,
when issued upon such exercise in accordance with the terms of the rights
Agreement, will be validly issued, fully paid and non-assessable; and
(xvi) each of the Company and its subsidiaries owns, possesses or
has obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as conducted as of
the date hereof, and neither the Company nor any such subsidiary has received
any actual notice of any proceeding relating to revocation or modification of
any such license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and the
Prospectus; and each of the Company and its subsidiaries is in compliance with
all laws and regulations relating to the conduct of its business as conducted as
of the date of the Prospectus.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of Oregon and [ ], to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an opinion or opinions
(in form and substance reasonably satisfactory to Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel, familiar with
the applicable laws; (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company and certificates
or other written statements of officials of jurisdictions having custody of
documents respecting the corporate existence or good standing of the Company.
The opinion of such counsel for the Company shall state that the opinion of any
such other counsel upon which they relied is in form satisfactory to such
counsel and, in such counsel's opinion, the Underwriters and they are justified
in relying thereon. With respect to the matters to be covered in subparagraphs
(x) and (xiv) above counsel may state their opinion and belief is based upon
their participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto and review and discussion of
the contents thereof but is without independent check or verification except as
specified.
18
The opinion of Xxxx Xxxxx LLP described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(g) _______________, counsel for the Selling Shareholder, shall have
furnished to the Representatives their written opinion, dated the Closing Date
or Additional Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder;
(ii) a Power of Attorney and a Custody Agreement have been duly
authorized, executed and delivered by the Selling Shareholder and constitute
valid and binding agreements of the Selling Shareholder in accordance with their
terms;
(iii) the Selling Shareholder is the record, beneficial and lawful
owner of all of the Shares to be sold by the Selling Shareholder and has valid
and marketable title to such Shares, and upon delivery of and payment for the
Shares, the Underwriters will acquire valid and marketable title to the shares,
free and clear of any mortgage, pledge, security interest, lien, claim or other
encumbrance or restriction on transferability or any adverse claim; and
(iv) the sale of the Shares and the execution and delivery by the
Selling Shareholder of, and the performance by the Selling Shareholder of its
obligations under, this Agreement, and the consummation of the transactions
contemplated herein, (i) have been duly authorized on the part of the Selling
Shareholder, and (ii) will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to which
the Selling Shareholder is a party or by which the Selling Shareholder is bound
or to which any of the property or assets of the Selling Shareholder is subject,
nor will any such action result in any violation of the provisions of the
Charter or the By-Laws of the Selling Shareholder or any applicable law or
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Selling Shareholder or any of its properties;
and no consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the sale
of the Shares or the consummation by the Selling Shareholder of the transactions
contemplated by this Agreement, except such consents, approvals, authorizations,
registrations or qualifications as have been obtained under the Securities Act
and as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters.
In rendering such opinions, such counsel may rely as to matters involving
the application of laws other than the laws of the United States and the State
of [ ], to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an
19
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws. The opinion of such
counsel for the Selling Shareholder shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying thereon.
(h) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or Additional Closing Date,
as the case may be, Xxxxxx Xxxxxxxx LLP and PricewaterhouseCoopers LLP shall
have furnished to you letters, dated the respective dates of delivery thereof,
in form and substance satisfactory to you, containing statements and information
of the type customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
(i) the Representatives shall have received on and as of the Closing
Date or Additional Closing Date, as the case may be, an opinion of Xxxxx Xxxx &
Xxxxxxxx, counsel to the Underwriters, with respect to the due authorization and
valid issuance of the Shares, the Registration Statement, the Prospectus and
other related matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(j) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on the
Nasdaq National Market, subject to official notice of issuance;
(k) on or prior to the Closing Date or Additional Closing Date, as the
case may be, the Company and the Selling Shareholder shall have furnished to the
Representatives such further certificates and documents as the Representatives
shall reasonably request; and
(l) The "lock-up" agreements, each substantially in the form of Exhibit
A hereto, between you and certain shareholders, officers and directors of the
Company relating to sales and certain other dispositions of shares of Stock or
certain other securities, delivered to you on or before the date hereof, shall
be in full force and effect on the Closing Date or Additional Closing Date, as
the case may be.
7. The Company agrees to indemnify and hold harmless each Underwriter, each
affiliate of any Underwriter which assists such Underwriter in the distribution
of the Shares and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as
20
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use
therein.
The Selling Shareholder agrees to indemnify and hold harmless each
Underwriter, each affiliate of any Underwriter which assists such Underwriter in
the distribution of the Shares and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only with
reference to information relating to the Selling Shareholder furnished to the
Company in writing by the Selling Shareholder expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act and the Selling
Shareholder to the same extent as the foregoing indemnity from the Company and
the Selling Shareholder to each Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to the preceding paragraphs
of this Section 7, such person (the "Indemnified Person") shall promptly notify
the person or persons against whom such indemnity may be sought (each an
"Indemnifying Person") in writing, and such Indemnifying Persons, upon request
of the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
and not the Indemnifying Persons unless (i) the Indemnifying Persons and the
Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Persons has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both an
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that no Indemnifying
21
Person shall, in connection with any proceeding or related proceeding in the
same jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Indemnified Persons, and that
all such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Shares and such control
persons of Underwriters shall be designated in writing by X.X. Xxxxxx Securities
Inc. and any such separate firm for the Company, its directors, its officers who
sign the Registration Statement and such control persons of the Company shall be
designated in writing by the Company and any such separate firm for the Selling
Shareholder shall be designated in writing by the Attorney-in-Fact. No
Indemnifying Person shall be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, each Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, such
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first four paragraphs of this
Section 7 is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholder on the one hand and
the Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholder on the one hand and the Underwriters on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholder on the one hand and the Underwriters on the other hand shall be
deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Selling Shareholder and the
total underwriting discounts and the commissions received by the Underwriters,
in each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate public offering price of the Shares. The relative fault of the
Company and the Selling Shareholder on the one hand and the Underwriters on the
22
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
and the Selling Shareholder or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Selling Shareholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Selling Shareholder or the
--- ----
Underwriters were treated as one entity for such purposes) or by any other
method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective number of Shares set forth
opposite their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company and the Selling Shareholder
set forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any other person
controlling the Company or the Selling Shareholder and (iii) acceptance of and
payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company and the Selling Shareholder, if after the execution and delivery
of this Agreement and prior to the Closing Date (or, in the case of the Option
Shares, prior to the Additional Closing Date) (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange or the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the
23
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Representatives, is material and adverse and which, in the judgment of the
Representatives, makes it impracticable to market the Shares being delivered at
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
--------
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-tenth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representatives, the Company
and the Selling Shareholder for the purchase of such Shares are not made within
36 hours after such default, this Agreement (or the obligations of the several
Underwriters to purchase the Option Shares, as the case may be) shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Shareholder. In any such case either you or the Company and the
Selling Shareholder shall have the right to postpone the Closing Date (or, in
the case of the Option Shares, the Additional Closing Date), but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or the
Selling Shareholder to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason any of the Company or the Selling
Shareholder shall be unable to perform its obligations under this Agreement or
any condition of the Underwriters' obligations cannot be fulfilled, the
24
Company and the Selling Shareholder agree to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and expenses of
its counsel) reasonably incurred by the Underwriter in connection with this
Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Selling Shareholder and the Underwriters, each affiliate of any
Underwriter which assists such Underwriter in the distribution of the Shares,
any controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Shares from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by X.X. Xxxxxx Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
X.X. Xxxxxx Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (telefax: 212-622-6038); Attention: Syndicate
Department. Notices to the Company shall be given to it at 00000 X.X. 00xx
Xxxxxx, Xxxxxxxx, Xxxxxx 00000, (telefax:________); Attention:____________.
Notice to the Selling Shareholder shall be given to the Attorneys-in-Fact at
_____________, _____________, ____________, (telefax: _________); Attention:
___________
13. This Agreement may be signed in counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
25
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
FLIR SYSTEM, INC.
By:
----------------------------------------
Title:
Selling Shareholder
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
As Attorneys-in-Fact acting on behalf of the
Selling Shareholder named in Schedule II of
this Agreement.
26
Accepted: December __, 2001
X.X. Xxxxxx Securities Inc.
Banc of America Securities LLC
Xxxxxxx and Company, Inc.
Acting severally on behalf of themselves and the several Underwriters listed in
Schedule I hereto.
By: X.X. Xxxxxx Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By: ________________________
Title:
27
SCHEDULE I
Number of Shares
Underwriter To Be Purchased
----------- ---------------
X.X. Xxxxxx Securities Inc. ........................
Banc of America Securities LLC......................
Xxxxxxx and Company, Inc. ..........................
Total
================
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SCHEDULE II
Number of Number of
Selling Shareholder: Underwritten Shares Option Shares
------------------- ------------------- -------------
[Thermo] 500,000 225,000
29
