Shop At Home, Inc.
8,850,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
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_____________, 1999
PRUDENTIAL SECURITIES INCORPORATED
BANCBOSTON XXXXXXXXX XXXXXXXX, INC.
FRIEDMAN, BILLINGS, XXXXXX & COMPANY, INC.
SUNTRUST EQUITABLE SECURITIES CORPORATION
XXXXXX XXXXXX & COMPANY, INC.
E*OFFERING CORP.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Shop At Home, Inc., a Tennessee corporation (the "Company"),
and the persons listed on Schedule 4 hereto, as selling stockholders
(collectively, the "Selling Stockholders") hereby confirm their agreement with
the several underwriters named in Schedule I hereto (the "Underwriters"), for
whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to
be to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained,
the Company and the Selling Stockholders propose to issue and sell to the
several Underwriters an aggregate of 8,850,000 shares (the "Firm Securities")
of the Company's Common Stock, par value $.0025 per share ("Common Stock"). The
Company and the Selling Stockholders also propose to issue and sell to the
several Underwriters not more than 1,327,500 additional shares of Common Stock
if requested by the Representatives as provided in Section 3 of this Agreement.
Any and all shares of Common Stock to be purchased by the Underwriters pursuant
to such option are referred to herein as the "Option Securities", and the Firm
Securities and any Option Securities are collectively referred to herein as the
"Securities".
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(1) Plus an option to purchase from Shop At Home, Inc. and the Selling
Stockholders named herein up to 1,327,500 additional shares to cover
over-allotments
2. (A) Representations and Warranties of the Company and the Seller
Stockholders. The Company and the Selling Stockholders, jointly, and severally,
represent and warrant to, and agree with, each of the several Underwriters
that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on
such Form (File No. 333--___) with respect to the Securities, including a
prospectus subject to completion, has been filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Act, and one or
more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has
been declared by the Commission to be effective under the Act, either (A) if
the Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter
defined) relating to the Securities, that shall identify the Preliminary
Prospectus (as hereinafter defined) that it supplements and, if required to be
filed pursuant to Rules 434(c)(2) and 424(b), an Integrated Prospectus (as
hereinafter defined), in either case, containing such information as is
required or permitted by Rule 434, 430A and 424(b) under the Act or (B) if the
Company does not rely on Rule 434 under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or, if no
such amendment shall have been filed, in such registration statement), with
such changes or insertions as are required by Rule 430A under the Act or
permitted by Rule 424(b) under the Act, and in the case of clause (i)(A) or
(i)(B) of this sentence as have been provided to and approved by the
Representatives prior to the execution of this Agreement, or (ii) if such
registration statement, as it may have been amended, has not been declared by
the Commission to be effective under the Act, an amendment to such registration
statement, including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Representatives prior to the execution of this
Agreement. The Company may also file a related registration statement with the
Commission pursuant to Rule 462(b) under the Act for the purpose of registering
certain additional Securities, which registration shall be effective upon
filing with the Commission. As used in this Agreement, the term "Original
Registration Statement" means the registration statement initially filed
relating to the Securities, as amended at the time when it was or is declared
effective, including (A) all financial schedules and exhibits thereto, (B) all
documents incorporated by reference therein filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and (C) any information omitted
therefrom pursuant to Rule 430A under the Act and included in the Prospectus
(as hereinafter defined) or, if required to be filed pursuant to Rule 434(c)(2)
and 424(b), in the Integrated Prospectus; the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission pursuant
to Rule 462(b) under the Act (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration Statement"
includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in
the Registration Statement or any amendment thereto at the time it was or is
declared effective), including all documents incorporated by reference therein
filed under the Exchange Act; the term "Prospectus" means:
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(A) if the Company relies on Rule 434 under the Act, the Term
Sheet relating to the Securities that is first filed pursuant
to Rule 424(b)(7) under the Act, together with the
Preliminary Prospectus identified therein that such Term
Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act,
the prospectus first filed with the Commission pursuant to
Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the Act
and if no prospectus is required to be filed pursuant to Rule
424(b) under the Act, the prospectus included in the
Registration Statement, including, in the case of clauses
(A), (B) or (C) of this sentence, all documents incorporated
by reference therein filed under the Exchange Act;
the term "Integrated Prospectus" means a prospectus first
filed with the Commission pursuant to Rules 434(c)(2) and
424(b) under the Act; and the term "Term Sheet" means any
abbreviated term sheet that satisfies the requirements of
Rule 434 under the Act. Any reference in this Agreement to an
"amendment or supplement" to any Preliminary Prospectus,
Prospectus or Integrated Prospectus or an "amendment" to any
registration statement (including the Registration Statement)
shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the
Exchange Act after the date of such Preliminary Prospectus,
Prospectus, Integrated Prospectus or registration statement,
as the case may be; any reference herein to the "date" of a
Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet. For purposes of the preceding sentence, any
reference to the "effective date" of an amendment to a
registration statement shall, if such amendment is effected
by means of the filing with the Commission under the Exchange
Act of a document incorporated by reference in such
registration statement, be deemed to refer to the date on
which such document was so filed with the Commission.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus and any amendment or supplement thereto was filed with the
Commission, it (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the requirements
of, the Act, the Exchange Act and the respective rules and regulations of the
Commission thereunder, and (ii) did not include 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. When the Registration Statement or any amendment thereto
was or is declared effective, it (i) contained or will contain all statements
required to be stated therein in accordance with, and complied or will comply
in all material respects with the requirements of, the Act, the Exchange Act
and the respective rules and regulations of the Commission thereunder and (ii)
did not or will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading. When the Prospectus or any Term Sheet that is a part thereof or any
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Integrated Prospectus or any amendment or supplement to the Prospectus is filed
with the Commission pursuant to Rule 424(b) (or, if the Prospectus or part
thereof or such amendment or supplement is not required to be so filed, when
the Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective), on the date when
the Prospectus is otherwise amended or supplemented and on the Firm Closing
Date and any Option Closing Date (both as hereinafter defined), each of the
Prospectus, and, if required to be filed pursuant to Rules 434(c)(2) and 424(b)
under the Act, the Integrated Prospectus as amended or supplemented at any such
time, (i) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (ii) did not or will not
include 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. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made
in any Preliminary Prospectus or any amendment or supplement thereto, the
Registration Statement or any amendment thereto, the Prospectus or, if required
to be filed pursuant to Rules 434(c)(2) and 424(b) and the Act, the Integrated
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the
Rule 462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with and
that is effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (ii) the Company has given irrevocable
instructions for transmission of the applicable filing fee in connection with
the filing of the Rule 462(b) Registration Statement, in compliance with Rule
111 promulgated under the Act or the Commission has received payment of such
filing fee.
(d) The Company and each of its subsidiaries have been duly
organized and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation and are duly qualified
to transact business as foreign corporations and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries,
taken as a whole.
(e) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement, each of
the Prospectus and any Integrated Prospectus or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.
(f) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except as
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otherwise set forth in each of the Prospectus and any Integrated Prospectus or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus, are owned beneficially by the Company
free and clear of any security interests, liens, encumbrances, equities or
claims.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus and any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus. All of the issued shares
of capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable. The Firm Securities and the Option
Securities have been duly authorized and at the Firm Closing Date or the
related Option Closing Date (as the case may be), after payment therefor in
accordance herewith, will be validly issued, fully paid and nonassessable. No
holders of outstanding shares of capital stock of the Company are entitled as
such to any preemptive or other rights to subscribe for any of the Securities,
and no holder of securities of the Company has any right which has not been
fully exercised or waived to require the Company to register the offer or sale
of any securities owned by such holder under the Act in the public offering
contemplated by this agreement.
(h) The capital stock of the Company conforms to the
description thereof contained in each of the Prospectus and any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus or, each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus), there are not outstanding (A) securities or
obligations of the Company or any of its subsidiaries convertible into or
exchangeable for any capital stock of the Company or any such subsidiary, (B)
warrants, rights or options to subscribe for or purchase from the Company or
any such subsidiary any such capital stock or any such convertible or
exchangeable securities or obligations, or (C) obligations of the Company or
any such subsidiary to issue any shares of capital stock, any such convertible
or exchangeable securities or obligations, or any such warrants, rights or
options.
(j) The consolidated financial statements and schedules of
the Company and its consolidated subsidiaries included in the Registration
Statement, each of the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus) fairly present the financial position of
the Company and its consolidated subsidiaries and the results of operations and
changes in financial condition as of the dates and periods therein specified.
Such financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Financial Information" in each of
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus) and in the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1998, fairly present, on the basis
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stated in each of the Prospectus and any Integrated Prospectus (or such
Preliminary Prospectus) and such Annual Report, the information included
therein.
(k) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated financial
statements and schedules included in the Registration Statement of each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus), are independent public accountants as required by the
Act, the Exchange Act and the related published rules and regulations
thereunder.
(l) The execution and delivery of this Agreement have been
duly authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
(m) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or each of the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus), and
no such proceedings have been threatened against the Company or any of its
subsidiaries or with respect to any of their respective properties; and no
contract or other document is required to be described in the Registration
Statement or the Prospectus or any Integrated Prospectus or to be filed as an
exhibit to the Registration Statement that is not described therein (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus) or filed as required.
(n) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act, or (ii)
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, lease 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
or any of their respective properties are bound, or the charter documents or
by-laws of the Company or any of its subsidiaries, or any statute or any
judgment, decree, order, Rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of its
subsidiaries.
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(o) Subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus or any
Integrated Prospectus or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus,
neither the Company nor any of its subsidiaries has sustained any material loss
or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding
and there has not been any material adverse change, or any development
involving a prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth, or results of operations
of the Company or any of its subsidiaries, except in each case as described in
or contemplated by each of the Prospectus and any Integrated Prospectus or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) taken
any action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities or (ii) since the filing of the Registration Statement (A) sold,
bid for, purchased, or paid anyone any compensation for soliciting purchases
of, the Securities or (B) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company (except
for the sale of Securities by the Selling Stockholders under this Agreement).
(q) The Company has not distributed and, prior to the later
of (i) the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or other materials, if any, permitted by the
Act.
(r) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus),
(1) the Company and its subsidiaries have not incurred any material liability
or obligation, direct or contingent, nor entered into any material transaction
not in the ordinary course of business; (2) the Company has not purchased any
of its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and (3) there has
not been any material change in the capital stock, short-term debt or long-term
debt of the Company and its consolidated subsidiaries, except in each case as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(s) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items of real property and marketable
title to all personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely 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 or such subsidiary, and any real property and
buildings held under lease by the
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Company or any such subsidiary are held under valid, subsisting 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 such subsidiary, in each case except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(t) No labor dispute with the employees of the Company or any
of its subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(u) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent applications,
trademarks, service marks, trade names, licenses, copyrights and proprietary or
other confidential information currently employed by them in connection with
their respective businesses, and neither the Company nor any such subsidiary
has received any notice of infringement of or conflict with asserted rights of
any third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(v) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which
they are engaged; neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor any
such subsidiary has any 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 and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(w) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or any
other subsidiary of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(x) The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has
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received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(y) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and this transaction will not cause
the Company to become an investment company subject to registration under such
Act.
(z) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have a
material adverse effect on the Company and its subsidiaries) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
contested in good faith or as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(aa) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to occupational
safety and health or to the storage, handling or transportation of hazardous or
toxic materials and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to
conduct their respective businesses, and the Company and each such subsidiary
is in compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(bb) Each certificate signed by any officer of the Company
and delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
(cc) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the Company
nor any such subsidiary owns any shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
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(dd) There are no holders of securities of the Company, who,
by reason of the filing of the Registration Statement, have the right (and have
not waived such right) to request the Company to register under the Act, or to
include in the Registration Statement, securities held by them.
(ee) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with management's
general or specific authorizations; (2) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3) access
to assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(ff) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease 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 or any of their respective properties is bound or may be
affected in any material adverse respect with regard to property, business or
operations of the Company and its subsidiaries.
(B) Each Selling Stockholder represents and warrants to, and
agrees with, each of the several Underwriters that:
(a) Such Selling Stockholder has caused certificates
for the number of Securities to be sold by such Selling Stockholder
hereunder to be delivered to _______________ (the "Custodian"),
endorsed in blank or with blank stock powers duly executed, with a
signature appropriately guaranteed, such certificates to be held in
custody by the Custodian for delivery, pursuant to the provisions of
this Agreement and an agreement dated ____________ among the Custodian
and the Selling Stockholder (including the related Power of Attorney,
the "Custody Agreement"). Such Selling Stockholder has full power to
enter into the Custody Agreement, this Agreement and to sell, assign,
transfer and deliver to the Underwriters the Securities to be sold by
such Selling Stockholder hereunder in accordance with the terms of the
Custody Agreement and this Agreement; and the Custody Agreement and
this Agreement has been duly executed and delivered by such Selling
Stockholder.
(b) Such Selling Stockholder is the lawful owner of
the Securities to be sold by such Selling Stockholder hereunder and
upon sale and delivery of, and payment for, such Securities, as
provided herein, such Selling Stockholder will convey good and
marketable title to such Securities, free and clear of any security
interests, liens, encumbrances, equities, claims or other defects.
(c) Such Selling Stockholder has not, directly or
indirectly, (i) taken any action designed to cause or result in, or
that has constituted or which might
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reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone
any compensation for soliciting purchases of, the Securities or (B)
paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company (except for
the sale of Securities by the Selling Stockholders under this
Agreement).
(d) To the extent that any statements or omissions
are made in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder
specifically for use therein, such Preliminary Prospectus did, and the
Registration Statement, the Prospectus and Integrated Prospectus and
any amendments or supplements thereto, when they become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder and
will 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 the light of the circumstances under
which they are made, not misleading. Such Selling Stockholder has
reviewed the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) and the Registration
Statement, and the information regarding such Selling Stockholder set
forth therein under the caption "Principal and Selling Stockholders"
is complete and accurate.
(e) The sale by such Selling Stockholder of
Securities pursuant hereto is not prompted by any adverse information
concerning the Company that is not set forth in the Registration
Statement or the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(f) The sale of the Securities to the Underwriters
by such Selling Stockholder pursuant to this Agreement, the compliance
by such Selling Stockholder with the other provisions of this
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained, such as may be required under state
securities or blue sky laws and, if the registration statement filed
with respect to the Securities (as amended) is not effective under the
Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act and the
Exchange Act, or (ii) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under
any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or any such Selling Stockholder's respective
properties are bound, or any statute or any judgment, decree, order,
Rule or regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Stockholder.
-11-
(g) In order to document the Underwriters'
compliance with the reporting and withholding provisions of the
Internal Revenue Code of 1986, as amended, with respect to the
transactions herein contemplated, each Selling Stockholder agrees to
deliver to you prior to or on the Firm Closing Date a properly
completed and executed United States Treasury Department Form W-8 or
W-9 (or other applicable form of statement specified by Treasury
Department regulations in lieu thereof).
3. Purchase, Sale and Delivery of the Securities. (a) On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
and the Selling Stockholders agree to issue and sell to each of the
Underwriters, the number of Firm Securities set forth opposite the name of the
Selling Stockholders and the Company in Schedule 1 hereto, and each of the
Underwriters, severally and not jointly, agree to purchase from the Company and
Selling Stockholder, at a purchase price of $_______ per share, the number of
Firm Securities set forth opposite the name of such Underwriter in Schedule 2
hereto. One or more certificates in definitive form for the Firm Securities
that the several Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Representatives request upon notice to the Company at least [48] hours prior to
the Firm Closing Date, shall be delivered by or on behalf of the Company to the
Representatives for the respective accounts of the Underwriters, against
payment by or on behalf of the Underwriters of the purchase price therefor by
wire transfer in same-day funds (the "Wired Funds") to the account of the
Company and the Selling Stockholders. Such delivery of and payment for the Firm
Securities shall be made at the offices of ________________ at 9:30 A.M., New
York time, on ______, 1999, or at such other place, time or date as the
Representatives, the Company and the Selling Stockholders may agree upon or as
the Representatives may determine pursuant to Section 9 hereof, such time and
date of delivery against payment being herein referred to as the "Firm Closing
Date". The Company and the Selling Stockholders will make such certificate or
certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at least
24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as
contemplated by the Prospectus, the Company and the Selling Stockholders hereby
grant to the several Underwriters an option to purchase, severally and not
jointly, the Option Securities, in such amounts as are identified on Schedule 3
hereto. The purchase price to be paid for any Option Securities shall be the
same price per share as the price per share for the Firm Securities set forth
above in paragraph (a) of this Section 3. The option granted hereby may be
exercised as to all or any part of the Option Securities from time to time
within thirty days after the date of the Prospectus (or, if such 30th day shall
be a Saturday or Sunday or a holiday, on the next business day thereafter when
the New York Stock Exchange is open for trading). The Underwriters shall not be
under any obligation to purchase any of the Option Securities prior to the
exercise of such option. The Representatives may from time to time exercise the
option granted hereby by giving notice in writing or by telephone (confirmed in
writing) to the Company and the Selling Stockholders setting forth the
aggregate principal amount of Option Securities as to which the several
Underwriters are then exercising
-12-
the option and the date and time for delivery of and payment for such Option
Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives, the
Company and the Selling Stockholders may agree upon or as the Representatives
may determine pursuant to Section 9 hereof, is herein called the "Option
Closing Date" with respect to such Option Securities. Upon exercise of the
option as provided herein, the Company and the Selling Stockholders shall
become obligated to sell to each of the several Underwriters, and, subject to
the terms and conditions herein set forth, each of the Underwriters (severally
and not jointly) shall become obligated to purchase from the Company and the
Selling Stockholders, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional Shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on
the related Option Closing Date in the manner, and upon the terms and
conditions, set forth in paragraph (a) of this Section 3, except that reference
therein to the Firm Securities and the Firm Closing Date shall be deemed, for
purposes of this paragraph (b), to refer to such Option Securities and Option
Closing Date, respectively.
(c) The Company and the Selling Stockholders hereby
acknowledge that the wire transfer by or on behalf of the Underwriters of the
purchase price for any Shares does not constitute closing of a purchase and
sale of the Shares. Only execution and delivery of a receipt for Shares by the
Underwriters indicates completion of the closing of a purchase of the Shares
from the Company and the Selling Stockholders. Furthermore, in the event that
the Underwriters wire funds to the Company and the Selling Stockholders prior
to the completion of the closing of a purchase of Shares, the Company and the
Selling Stockholders hereby acknowledge that until the Underwriters execute and
deliver a receipt for the Shares, by facsimile or otherwise, the Company and
the Selling Stockholders will not be entitled to the Wired Funds and shall
return the Wired Funds to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the closing of a
purchase of Shares is not completed and the Wired Funds are not returned by the
Company and/or the Selling Stockholders to the Underwriters on the same day the
Wired Funds were received by the Company and/or the Selling Stockholders, the
Company and the Selling Stockholders agree to pay to the Underwriters in
respect of each day the Wired Funds are not returned by it, in same-day funds,
interest on the amount of such Wired Funds in an amount representing the
Underwriters' cost of financing as reasonably determined by Prudential
Securities Incorporated.
(d) It is understood that any of you, individually and not as
one of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations
hereunder.
-13-
4. Offering by the Underwriters. Upon your authorization of
the release of the Firm Securities, the several Underwriters propose to offer
the Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5. (A) Covenants of the Company. The Company covenants and
agrees with each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term Sheet
that constitutes a part thereof, or each of the Prospectus and any amendment or
supplement thereto with the Commission in the manner and within the time period
required by Rule 434 and 424(b) under the Act. During any time when a
prospectus relating to the Securities is required to be delivered under the
Act, the Company (i) will comply with all requirements imposed upon it by the
Act and the Exchange Act and the respective rules and regulations of the
Commission thereunder to the extent necessary to permit the continuance of
sales of or dealings in the Securities in accordance with the provisions hereof
and each of the Prospectus and any Integrated Prospectus, as then amended or
supplemented, and (ii) will not file with the Commission the prospectus or the
amendment referred to in the third sentence of Section 2(a) hereof, any
amendment or supplement to such prospectus or any amendment to the Registration
Statement or any Rule 462(b) Registration Statement of which the
Representatives shall not previously have been advised and furnished with a
copy for a reasonable period of time prior to the proposed filing and as to
which filing the Representatives shall not have given their consent. The
Company will prepare and file with the Commission, in accordance with the rules
and regulations of the Commission, promptly upon request by the Representatives
or counsel for the Underwriters, any amendments to the Registration Statement
or amendments or supplements to the Prospectus and any Integrated Prospectus
that may be necessary or advisable in connection with the distribution of the
Securities by the several Underwriters, and will use its best efforts to cause
any such amendment to the Registration Statement to be declared effective by
the Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus and any Integrated Prospectus or any amendment or
supplement thereto has been filed and will provide evidence satisfactory to the
Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
post-effective amendment thereto or any order directed at any document
incorporated by reference in the Registration Statement or the Prospectus, any
required Integrated Prospectus, or any amendment or supplement thereto or any
order preventing or suspending the use of any Preliminary Prospectus, the
Prospectus, any Integrated Prospectus or any amendment or supplement thereto,
(ii) the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the
-14-
Original Registration Statement or any Rule 462(b) Registration Statement, for
amending or supplementing any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or for additional information. The Company will use its
best efforts to prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date
when a prospectus relating to the Securities is required to be delivered under
the Act or (ii) the Option Closing Date, any event occurs as a result of which
the Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Prospectus to comply with the
Act, the Exchange Act or the respective rules or regulations of the Commission
thereunder, the Company will promptly notify the Representatives thereof and,
subject to Section 5(a) hereof, will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus or any Integrated Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, certified by the Secretary or an Assistant Secretary of
the Company to be true and complete copies thereof as filed with the Commission
by electronic transmission, (ii) to each other Underwriter, a conformed copy of
such registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as
a prospectus relating to the Securities is required to be delivered under the
Act, as many copies of each Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request; without limiting the application of
clause (iii) of this sentence, the Company, not later than (A) 6:00 PM, New
York City time, on the date of determination of the public offering price, if
such determination occurred at or prior to 10:00 AM, New York City time on such
date or (B) 2:00 PM, New York City time, on the business day following the date
of determination of the public offering price, if such determination occurred
after 10:00 AM, New York City time, on such date, will deliver to the
Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably request
for purposes of confirming orders that are expected to settle on the Firm
Closing Date.
-15-
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earnings statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus or any
Integrated Prospectus.
(h) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of one hundred and eighty (180) days after the date hereof, except
pursuant to this Agreement and except for issuances pursuant to the exercise of
employee stock options outstanding on the date hereof or pursuant to the terms
of convertible securities of the Company outstanding on the date hereof.
(i) The Company will not, directly or indirectly, (i) take
any action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities or (ii) (A) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities or (B) pay or agree to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company (except for the sale of Securities by the Selling
Stockholders under this Agreement).
(j) The Company will obtain the agreements described in
Section 7(f) hereof prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the Option
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your opinion the market price of
the Common Stock 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 and any Integrated Prospectus), the Company will,
after notice from you advising the Company to the effect set forth above,
forthwith prepare, consult with you 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.
(l) If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on
the date of this Agreement and (ii) the time confirmations are sent or given,
as specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly included
for quotation on The Nasdaq Stock Market's National Market (the "Nasdaq
National Market") prior to the Firm
-16-
Closing Date. The Company will ensure that the Securities remain included for
quotation on the Nasdaq National Market following the Firm Closing Date.
(B) Covenants of the Selling Stockholders. The Selling
Stockholders covenant and agree with each of the Underwrites that:
(a) Each Selling Stockholder will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any Securities legally or beneficially owned by
such Selling Stockholder or any securities convertible into, or exchangeable or
exercisable for, Securities for a period of one hundred and eighty (180) days
after the date hereof.
(b) Each Selling Stockholder will not, directly or
indirectly, (i) take any action designed to cause or result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (ii) (A) sell, bid for,
purchase, or pay anyone any compensation for soliciting purchases of, the
Securities or (B) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
6. Expenses. The Company will pay all costs and expenses
incident to the performance of its and the Selling Stockholders' obligations
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing or other
production of documents with respect to the transactions, including any costs
of printing the registration statement originally filed with respect to the
Securities and any amendment thereto, any Rule 462(b) Registration Statement,
any Preliminary Prospectus, the Prospectus and any Integrated Prospectus and
any amendment or supplement thereto, this Agreement and any blue sky memoranda,
(ii) all arrangements relating to the delivery to the Underwriters of copies of
the foregoing documents, (iii) the fees and disbursements of the counsel,
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the
Underwriters relating thereto, (vi) the filing fees of the Commission (and the
National Association of Securities Dealers, Inc.) relating to the Securities,
(vii) the quotation of the Securities on the Nasdaq National Market, (viii)
meetings with prospective investors in the Securities (other than shall have
been specifically approved by the Representatives to be paid for by the
Underwriters) and (ix) advertising relating to the offering of the Securities
(other than shall have been specifically approved by the Representatives to be
paid for by the Underwriters). If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11 hereof or because of any
failure, refusal or inability on the part of the Company or the Selling
Stockholders to perform all obligations and satisfy all conditions on its
-17-
part to be performed or satisfied hereunder other than by reason of a default
by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. The Company and the
Selling Stockholders shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
7. Conditions of the Underwriters' Obligations. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities shall be subject, in the Representatives' sole discretion, to the
accuracy of the representations and warranties of the Company and the Selling
Stockholders contained herein as of the date hereof and as of the Firm Closing
Date, as if made on and as of the Firm Closing Date, to the accuracy of the
statements of the Company's officers and the Selling Stockholders made pursuant
to the provisions hereof, to the performance by the Company and the Selling
Stockholders of their covenants and agreements hereunder and to the following
additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective as
of the time of execution hereof, the Original Registration Statement or such
amendment and, if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have been declared effective not later than
the earlier of (i) 11:00 A.M., New York time, on the date on which the
amendment to the registration statement originally filed with respect to the
Securities or to the Registration Statement, as the case may be, containing
information regarding the initial public offering price of the Securities has
been filed with the Commission and (ii) the time confirmations are sent or
given as specified by Rule 462(b)(2), or with respect to the Original
Registration Statement, or such later time and date as shall have been
consented to by the Representatives; if required, the Prospectus or any Term
Sheet that constitutes a part thereof and any Integrated Prospectus and any
amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rule 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereto and no order directed at any document
incorporated by reference in the Registration Statement, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission; and the Company shall have complied with any
request of the Commission for additional information (to be included in the
Registration Statement, the Prospectus or any Integrated Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Xxxxx, Xxxxxxx & Xxxxx, counsel for the Company and
the Selling Stockholders, to the effect that:
(i) the Company and each of its subsidiaries listed
in Exhibit 21 of the Registration Statement (the "Subsidiaries") have been duly
incorporated and are validly existing as corporations in good standing under
the laws of their respective jurisdictions of incorporation
-18-
and are duly qualified to transact business as foreign corporations and are in
good standing under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their respective
businesses requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to the Company
and the Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have
corporate power to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and the
Prospectus or any Integrated Prospectus, and the Company has corporate power to
enter into this Agreement and to carry out all the terms and provisions hereof
and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and [, except for directors' qualifying shares] and as
otherwise set forth in each of the Prospectus and any Integrated Prospectus,
are owned beneficially by the Company free and clear of any perfected security
interests or, to the best knowledge of such counsel, any other security
interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in each of the Prospectus or any
Integrated Prospectus; all of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable 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; the
Firm Securities have been duly authorized by all necessary corporate action of
the Company and, when issued and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable; the Securities have been duly included for trading on the Nasdaq
National Market; no holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to subscribe for
any of the Securities; and no holders of securities of the Company are entitled
to have such securities registered under the Registration Statement;
(v) the statements set forth under the heading
"Description of Capital Stock" in each of the Prospectus and any Integrated
Prospectus, insofar as such statements purport to summarize certain provisions
of the capital stock of the Company, provide a fair summary of such provisions;
and the statements set forth under the headings "Description of Notes,"
"Business - Governmental Regulation" and "Business - Litigation" in each of the
Prospectus and any Integrated Prospectus, insofar as such statements constitute
a summary of the legal matters, documents or proceedings referred to therein,
provide a fair summary of such legal matters, documents and proceedings,
(vi) the execution and delivery of this Agreement
have been duly authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the Company and the
Selling Stockholders;
-19-
(vii) no legal or governmental proceedings are
pending to which the Company or any of the Subsidiaries is a party or to which
the property of the Company or any of the Subsidiaries is subject that are
required to be described in the Registration Statement, the Prospectus and any
Integrated Prospectus and are not described therein, and, to the best knowledge
of such counsel, no such proceedings have been threatened against the Company
or any of the Subsidiaries or with respect to any of their respective
properties; and no contract or other document is required to be described in
the Registration Statement, the Prospectus and any Integrated Prospectus or to
be filed as an exhibit to the Registration Statement that is not described
therein or filed as required;
(viii) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A) require
the consent, approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained and such as may
be required under state securities or blue sky laws, or (B) conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, lease or
other agreement or instrument, known to such counsel, to which the Company or
any of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries or any of their respective properties are bound, or the charter
documents or by-laws of the Company or any of the Subsidiaries, or any statute
or any judgment, decree, order, Rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and applicable
to the Company or any of the Subsidiaries;
(ix) the Registration Statement is effective under
the Act; any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, and any Integrated Prospectus pursuant to Rules 434
and 424(b) has been made in the manner and within the time period required by
Rules 434 and 424(b); and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the Registration
Statement, the Prospectus and any Integrated Prospectus or any amendment or
supplement thereto has been issued, and no proceedings for that purpose have
been instituted or threatened or, to the best knowledge of such counsel, are
contemplated by the Commission; and
(x) the Registration Statement originally filed with
respect to the Securities and each amendment thereto and any Rule 462(b)
Registration Statement, the Prospectus and any Integrated Prospectus (in each
case, including the documents incorporated by reference therein but not
including the financial statements and other financial information contained
therein, as to which such counsel need express no opinion) comply as to form in
all material respects with the applicable requirements of the Act, the Exchange
Act and the respective rules and regulations of the Commission thereunder.
(xi) If the Company elects to rely on Rule 434, the
Prospectus is not "materially different", as such term is used in Rule 434,
from the prospectus included in the
-20-
Registration Statement at the time of its effectiveness or any effective
post-effective amendment thereto (including such information that is permitted
to be omitted pursuant to Rule 430A).
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus and any Integrated Prospectus, as of its date or the date
of such opinion, included or includes 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 the light of the circumstances under which they were
made, not misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials and, as to FCC
matters, to the extent satisfactory in form and scope to counsel for the
Underwriters, upon the opinion of [Wiley & Rein]. The foregoing opinion shall
also state that the Underwriters are justified in relying upon such opinion of
[Wiley & Rein], and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
References to the Registration Statement, the Prospectus and
any Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Xxxxxxx, Xxxx & Xxxxx LLP, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities, the
Registration Statement, the Prospectus or any Integrated Prospectus, and such
other related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
In rendering such opinion, such counsel may rely as to all matters of law upon
the opinion referred to in paragraph (b) above.
(d) The Representatives shall have received from
PricewaterhouseCoopers LLP a letter or letters dated, respectively, the date
hereof and the Firm Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants with respect to
the Company and its consolidated subsidiaries within the meaning of
the Act, the Exchange Act and the applicable rules and regulations
thereunder;
(ii) in their opinion, the audited consolidated
financial statements and schedules examined by them and included in
the Registration Statement, the Prospectus and any Integrated
Prospectus comply in form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the related
published rules and regulations thereunder;
-21-
(iii) on the basis of their limited review in
accordance with standards established by the American Institute of
Certified Public Accountants of any interim unaudited consolidated
condensed financial statements of the Company and its consolidated
subsidiaries as indicated in their reports incorporated in the
Registration Statement, the Prospectus and any Integrated Prospectus,
carrying out certain specified procedures (which do not constitute an
examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of significance
with respect to the comments set forth in this paragraph (iii), a
reading of the minute books of the shareholders, the board of
directors and any committees thereof of the Company and each of its
consolidated subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement, the Prospectus and
any Integrated Prospectus do not comply in form in all
material respects with the applicable accounting requirements
of the Act, the Exchange Act and the related published rules
and regulations thereunder, or are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited
consolidated financial statements included in the
Registration Statement, the Prospectus and any Integrated
Prospectus; and
(B) at a specific date not more than five business
days prior to the date of such letter, there were any changes
in the capital stock or long-term debt of the Company and its
consolidated subsidiaries or any decreases in net current
assets or stockholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts
shown on the March 31, 1999 unaudited consolidated balance
sheet included in the Registration Statement, the Prospectus
and any Integrated Prospectus, or for the period from April
1, 1999 to such specified date there were any decreases, as
compared with the comparable period in 1998, in net revenues,
net income before income taxes or total or per share amounts
of net income of the Company and its consolidated
subsidiaries, except in all instances for changes, decreases
or increases set forth in such letter; and
(iv) they have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information that are derived from
the general accounting records of the Company and its consolidated
subsidiaries and are included in the Registration Statement, the
Prospectus and any Integrated Prospectus under the captions
"Prospectus Summary - Summary Financial Data," "Selected Financial
Data" and "Consolidated Financial Statements", in Exhibit II to the
Registration Statement or under "Available Information" item numbers
(1) through (6) incorporated by reference in the Registration
Statement, the Prospectus and any Integrated Prospectus, and have
compared such amounts, percentages and financial information with such
records of the Company and its consolidated subsidiaries and with
-22-
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof.
References to the Registration Statement, the Prospectus and
any Integrated Prospectus in this paragraph (d) with respect to either letter
referred to above shall include any amendment or supplement thereto at the date
of such letter.
(e) The Representatives shall have received a certificate,
dated the Firm Closing Date, of the principal executive officer and the
principal financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the
Company in this Agreement are true and correct as if made on
and as of the Firm Closing Date; the Registration Statement,
as amended as of the Firm Closing Date, does not include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not
misleading, the Prospectus and any Integrated Prospectus, as
amended or supplemented as of the Firm Closing Date, does not
include 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; and the Company has
performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or
prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by
reference in the Registration Statement or the Prospectus or
any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or
threatened or, to the best of the Company's knowledge, are
contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement, the
Prospectus and any Integrated Prospectus, neither the Company
nor any of its Subsidiaries has sustained any material loss
or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, and
there has not been any material adverse change, or any
development involving a prospective material adverse change,
in the condition (financial or otherwise), management,
-23-
business prospects, net worth or results of operations of the
Company or any of its subsidiaries, except in each case as
described in or contemplated by the Prospectus and any
Integrated Prospectus.
(f) The Representatives shall have received from each person
who is a director or officer of the Company or who owns _______ shares of
Common Stock an agreement to the effect that such person will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to sell,
contract to sell, pledge, grant any option to purchase or otherwise sell or
dispose (or announce any offer, sale, offer of sale, contract of sale, pledge,
grant of an option to purchase or other sale or disposition) of any shares of
Common Stock or any securities convertible into, or exchangeable or exercisable
for, shares of Common Stock for a period of One Hundred and Eighty (180) days
after the date of this Agreement.
(g) The Selling Stockholders shall have furnished to the
Representatives the opinion of [insert name of counsel for the Selling
Stockholders], counsel for the Selling Stockholders, dated the Closing Date, to
the effect that:
(i) each Selling Stockholder has full power to enter
into this Agreement and the Custody Agreement and to sell, transfer
and deliver the Common Stock being sold by such Selling Stockholder
hereunder in the manner provided in this Agreement and to perform its
obligations under the Custody Agreement; the execution and delivery of
this Agreement and the Custody Agreement have been duly authorized by
all necessary action of each Selling Stockholder; this Agreement and
the Custody Agreement have been duly executed and delivered by each
Selling Stockholder; assuming due authorization, execution and
delivery by the Custodian, the Custody Agreement is the legal, valid,
binding and enforceable instrument of such Selling Stockholder,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(ii) the delivery by each Selling Stockholder to the
several Underwriters of certificates for the Securities being sold
hereunder by such Selling Stockholder against payment therefor as
provided herein, will convey good and marketable title to such
Securities to the several Underwriters, free and clear of all security
interests, liens, encumbrances, equities, claims or other defects; and
(iii) the sale of the Securities to the Underwriters
by each Selling Stockholder pursuant to this Agreement, the compliance
by such Selling Stockholder with the other provisions of this
Agreement, the Custody Agreement and the consummation of the other
transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such as
may be required under state securities or blue sky laws, or (ii)
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under any indenture,
mortgage, deed
-24-
of trust, lease or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder or any of
such Selling Stockholder's properties are bound, or any statute or any
judgment, decree, order, Rule or regulation of any court or other
governmental authority or any arbitrator applicable to such Selling
Stockholder.
(h) The Representatives shall have received a certificate
from each Selling Stockholder, dated the Closing Date, to the effect that:
(i) the representations and warranties of such
Selling Stockholder in this Agreement are true and correct as if made
on and as of the Closing Date;
(ii) the Registration Statement, as amended as of
the Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented as of the Closing Date, does not include 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; and
(iii) such Selling Stockholder has performed all
covenants and agreements on its part to be performed or satisfied at
or prior to the Closing Date.
(i) On or before the Firm Closing Date, the Representatives
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(j) Prior to the commencement of the offering of the
Securities, the Securities shall have been included for trading on the Nasdaq
National Market.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company and the Selling Stockholders shall
furnish to the Representatives such conformed copies of such opinions,
certificates, letters and documents in such quantities as the Representatives
and counsel for the Underwriters shall reasonably request.
The respective obligations of the several Underwriters to
purchase and pay for any Option Securities shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm
Securities, except that all references to the Firm Securities and the Firm
Closing Date shall be deemed to refer to such Option Securities and the related
Option Closing Date, respectively.
-25-
8. Indemnification and Contribution.
(a) The Company and each Selling Stockholder jointly and
severally agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Securities Exchange Act of 1934 (the "Exchange
Act") against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company or such Selling Stockholder in Section 2 of this
Agreement;
(ii) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration
Statement or any amendment thereto or any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or such Selling Stockholder or based upon
written information furnished by or on behalf of the Company or such
Selling Stockholder filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application");
(iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus and all Integrated Prospectus or any
amendment or supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading; or
(iv) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual
materials provided by the Company or based upon written information
furnished by or on behalf of the Company, including without
limitation, slides, videos, films and tape recordings, used in
connection with the marketing of the Securities and including, without
limitation, statements communicated to securities analysts employed by
the Underwriters;
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and the
Selling Stockholders will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus and all Integrated Prospectus or any amendment or
supplement thereto, or any Application in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
-26-
Representatives specifically for use therein. This indemnity agreement will be
in addition to any liability which the Company and the Selling Stockholders may
otherwise have. Neither the Company nor any Selling Stockholders will, without
the prior written consent of the Underwriter or Underwriters purchasing, in the
aggregate, more than fifty percent (50%) of the Securities, 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 any such Underwriter or any person who
controls any such Underwriter within the meaning of Section 15 of the 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 all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, each Selling Stockholder and
each person, if any, who controls the Company or such Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which the Company, any
such director or officer of the Company, such Selling Stockholder or any such
controlling person of the Company or such Selling Stockholder may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto, or any Application or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, or
the Prospectus or any Integrated Prospectus or any amendment or supplement
thereto, or any Application or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein; and, subject to the limitation set forth immediately preceding
this clause, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company, any such director, officer or controlling
person or such Selling Stockholder in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 8. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
-27-
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in
any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this Section
8, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not
be liable for the costs and expenses of any settlement of such action effected
by such indemnified party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party on the other from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
or alleged 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 proportion as the total proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or
-28-
alleged omission to state a material fact relates to information supplied by
the Company, the Selling Stockholders or the Underwriters, the parties'
relative intents, knowledge, access to information and opportunity to correct
or prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company, the Selling Stockholders and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Underwriter shall be obligated to
make contributions hereunder that in the aggregate exceed the total public
offering price of the Securities purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11 (f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions
among Underwriters shall be governed by the provisions of the Prudential
Securities Incorporated Master Agreement Among Underwriters. For purposes of
this paragraph (d ), each person, if any, who controls an Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
(e) The liability of each Selling Stockholder under this
Section 8(e) shall not exceed an amount equal to the public offering price of
the Securities sold by such Selling Stockholder to the Underwriters.
9. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Firm Securities or Option Securities
hereunder and the aggregate number of such Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or
less of the aggregate number of Firm Securities or Option Securities to be
purchased by all of the Underwriters at such time hereunder, the other
Underwriters may make arrangements satisfactory to the Representatives for the
purchase of such Securities by other persons (who may include one or more of
the non-defaulting Underwriters, including the Representatives), but if no such
arrangements are made by the Firm Closing Date or the related Option Closing
Date, as the case may be, the other Underwriters shall be obligated severally
in proportion to their respective commitments hereunder to purchase the Firm
Securities or Option Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If one or more Underwriters so
default with respect to an aggregate number of Securities that is more than ten
percent of the aggregate number of Firm Securities or Option Securities, as the
case may be, to be purchased by all of the Underwriters at such time hereunder,
and if arrangements satisfactory to the Representatives are not made within 36
hours after such default for the purchase by other persons (who may include one
or more of the non-defaulting Underwriters,
-29-
including the Representatives) of the Securities with respect to which such
default occurs, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Company other than as provided in Section
10 hereof. In the event of any default by one or more Underwriters as described
in this Section 9, the Representatives shall have the right to postpone the
Firm Closing Date or the Option Closing Date, as the case may be, established
as provided in Section 3 hereof for not more than seven business days in order
that any necessary changes may be made in the arrangements or documents for the
purchase and delivery of the Firm Securities or Option Securities, as the case
may be. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Selling
Stockholders, the Company, its officers and the several Underwriters set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Selling Stockholders, the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with
respect to the Firm Securities or any Option Securities in the sole discretion
of the Representatives by notice to the Company and the Selling Stockholders
given prior to the Firm Closing Date or the related Option Closing Date,
respectively, in the event that the Company or the Selling Stockholders shall
have failed, refused or been unable to perform all obligations and satisfy all
conditions on their part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing
Date, respectively,
(i) the Company or any of its subsidiaries shall
have, in the sole judgment of the Representatives, sustained
any material loss or interference with their respective
businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective
material adverse change (including without limitation a
change in management or control of the Company), in the
condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its
subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or
trading in securities generally on the Nasdaq National Market
shall have been suspended or minimum or maximum prices shall
have been established on such market system;
-30-
(iii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any
foreign power, (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or
(C) any other calamity or crisis or material adverse change
in general economic, political or financial conditions having
an effect on the U. S. financial markets that, in the sole
judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the
Registration Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided
in Section 10 hereof.
12. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus, the Prospectus or any Integrated
Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representatives to the Company for the purposes of Sections 2(b) and 8 hereof.
The Underwriters confirm that such statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Prudential
Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Equity Transactions Group; and if sent to the Company or the Selling
Stockholders, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Company at Shop At Home, Inc.,
0000 Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxx, 00000.
14. Successors. This Agreement shall inure to the benefit of
and shall be binding upon the several Underwriters, the Selling Stockholders,
the Company and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company contained in Section 8 of this Agreement shall also be for the benefit
of any person or persons who control any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Underwriters contained in Section 8 of this Agreement shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement and any person or persons
who control the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act. No purchaser of Securities from any Underwriter shall
be deemed a successor because of such purchase.
-31-
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All
judicial proceedings arising out of or relating to this Agreement may be
brought in any state or federal court of competent jurisdiction in the State of
New York, and by execution and delivery of this Agreement, the Company and each
Selling Stockholder accepts for itself and in connection with its properties,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and waives any defense of forum non conveniens and irrevocably agrees to
be bound by any judgment rendered thereby in connection with this Agreement.
The Company and each Selling Stockholder designates and appoints _____________,
and such other persons as may hereafter be selected by the Company and each
Selling Stockholder irrevocably agreeing in writing to so serve, as its agent
to receive on its behalf service of all process in any such proceedings in any
such court, such service being hereby acknowledged by the Company and each
Selling Stockholder to be effective and binding service in every respect. A
copy of any such process so served shall be mailed by registered mail to the
Company and the Selling Stockholders at the Company's address provided in
Section 13 hereof; provided, however, that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of such process. If any agent appointed by the Company and each Selling
Stockholder refuses to accept service, the Company and each Selling Stockholder
hereby agrees that service of process sufficient for personal jurisdiction in
any action against the Company or any Selling Stockholder in the State of New
York may be made by registered or certified mail, return receipt requested, to
the Company and the Selling Stockholders at the Company's address provided in
Section 13 hereof, and the Company and the Selling Stockholders hereby
acknowledge that such service shall be effective and binding in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Underwriter to bring
proceedings against the Company or any Selling Stockholder in the courts of any
other jurisdiction.
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute an agreement binding the
Company, the Selling Stockholders and each of the several Underwriters.
Very truly yours,
SHOP AT HOME, INC.
By
--------------------------------
[Title]
SELLING SECURITYHOLDERS
-----------------------------------
(Name)
-----------------------------------
(Name)
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
BANCBOSTON XXXXXXXXX XXXXXXXX, INC.
FRIEDMAN, BILLINGS, XXXXXX & COMPANY, INC.
SUNTRUST EQUITABLE SECURITIES CORPORATION
XXXXXX XXXXXX & COMPANY, INC.
E*OFFERING CORP.
By PRUDENTIAL SECURITIES INCORPORATED
By
---------------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
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SCHEDULE 1
SALE OF FIRM SECURITIES
Number of Firm Securities to be Sold
------------------------------------
Shop At Home, Inc.
================
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SCHEDULE 2
UNDERWRITERS
Underwriter Number of Firm Securities to be Purchased
----------- -----------------------------------------
Prudential Securities Incorporation
BancBoston Xxxxxxxxx Xxxxxxxx, Inc.
Friedman, Billings, Xxxxxx & Company, Inc.
SunTrust Equitable Securities Corporation
Xxxxxx Xxxxxx & Company, Inc.
E*OFFERING Corp.
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SCHEDULE 3
OVER-ALLOTMENT OPTION
[Once determined, identify who and in what amounts over-allotment will
be exercised]
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SCHEDULE 4
SELLING STOCKHOLDERS
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