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EXHIBIT 1.1
MLC HOLDINGS, INC.
_________ Shares(1)
Common Stock
UNDERWRITING AGREEMENT
_______ __, 1996
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
Potomac Tower
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
As Representative of the Several Underwriters
Dear Sirs:
MLC Holdings, Inc., a Delaware corporation (the "Company")
hereby confirms its agreement with the several underwriters named in Schedule 1
hereto (the "Underwriters"), for whom you have been duly authorized to act as
representative (in such capacity, the "Representative"), as set forth below.
If you are the only Underwriter, all references herein to the Representative
shall be deemed to be to the Underwriters. All references herein to the
Company and representations and warranties relating thereto give effect to
formation of the Company through the share exchange between the shareholders of
MLC Group, Inc., a Virginia corporation ("MLC Group"), for shares in the
Company as a result of which MLC Group became a wholly-owned subsidiary of the
Company, which share exchange was consummated on September 1, 1996.
Accordingly, references to the Company herein at all times prior to the
September 1, 1996 shall mean MLC Group and reference to the Company on and
subsequent to the September 1, 1996 shall be deemed to include the Company and
MLC Group and the Company's other subsidiaries.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
an aggregate of _________ shares (the "Firm Securities") of the Company's
Common Stock, $0.01 par value per share (the "Common Stock"). The Company
also proposes to issue and sell to the several Underwriters not more than
_______ additional shares of Common Stock if requested by the Representative 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
-------------------------
(1) Plus an option to purchase from MLC Holdings, Inc. up to 150,000
additional shares to cover over-allotments.
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to herein as the "Option Securities," the Firm Securities and any Option
Securities are collectively referred to herein as the "Securities."
2. Representations and Warranties of the Company and the
Stockholders.
(a) The Company represents and warrants to, and agrees
with, each of the several Underwriters that:
(i) A registration statement on Form S-1 (File
No. 333-11737) 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
Securities Act of 1933, as amended (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 containing such information as is
required or permitted by Rules 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 either clause (i)(A) or
(i)(B) of this sentence, as have been provided to and approved by the
Representative 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
Representative 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 statement 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 all financial
schedules and exhibits thereto and including any information omitted
therefrom pursuant to Rule 430A under the Act and included in the
Prospectus (as hereinafter defined); 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
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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); the
term "Prospectus" means: (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; and the term "Term Sheet" means any term sheet that
satisfies the requirements of Rule 434 under the Act. Any reference
herein to the "date" of a Prospectus that includes a Term Sheet shall
mean the date of such Term Sheet.
(ii) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus. When
any Preliminary Prospectus was filed with the Commission it (A)
contained all statements required to be stated therein in accordance
with, and complied in all material respects with the requirements of,
the Act and the rules and regulations of the Commission thereunder and
(B) 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 (A) 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 and the rules and regulations of the Commission thereunder
and (B) 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 amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or,
if the Prospectus or any part thereof or such amendment or supplement
is not required to be so filed, when the Registration Statement or the
amendment thereto contain such amendment or supplement to the
Prospectus was or is declared effective) and on the Firm Closing Date
and any Option Closing Date (both as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (A) 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 and the rules and regulations of the
Commission thereunder and (B) 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 (ii) do not apply to statements
or omissions made in any Preliminary Prospectus, the Registration
Statement or any amendment thereto or the Prospectus or any amendment
or
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supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representative specifically for use therein.
(iii) 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.
(iv) The Company does not own or control, directly
or indirectly, any corporation, association or other entity other than
the subsidiaries listed in Schedule 2 hereto. 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 is not reasonably likely to result in a material adverse
change in the condition (financial or otherwise), management,
business, prospects, net worth or results of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect").
(v) 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 and the Prospectus (or, if the Prospectus is
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.
(vi) 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 are owned beneficially by
the Company free and clear of any security interests, liens,
encumbrances, equities or claims.
(vii) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus (or, if the
Prospectus is 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
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Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. At
the Firm Closing Date or the Option Closing Date, no holders of
outstanding shares of capital stock of the Company will be 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.
(viii) The capital stock of the Company conforms to
the description thereof contained in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(ix) Except as disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no 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.
(x) The financial statements and schedules of the
Company and its subsidiaries included in the Registration Statement
and the Prospectus (or, if the Prospectus is 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 cash flows as of the dates and periods
therein specified. Such financial statements and schedules have been
prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved (except
as otherwise noted therein). The selected financial data set forth
under the captions "Capitalization" and "Selected Consolidated
Financial Data" in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present, in
accordance with GAAP on the basis stated in the Prospectus (or such
Preliminary Prospectus), the information included therein.
(xi) Deloitte & Touche LLP, who have audited
certain financial statements of the Company and its consolidated
subsidiaries and delivered their report with respect to the audited
consolidated financial statements included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), are independent
public accountants as required by the Act and the applicable rules and
regulations thereunder.
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(xii) 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, except as such enforceability may be
limited by the effect of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to rights and remedies of
creditors or by general equitable principles.
(xiii) 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 the Prospectus and are not described therein (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), to the best of the Company's knowledge, 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 to be filed as an exhibit
to the Registration Statement that is not described therein (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) or filed as required.
(xiv) 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, such as may be required under state
securities or blue sky laws, such as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") 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 (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 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.
(xv) 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), neither the Company nor any of its
subsidiaries has sustained any loss or interference with their
respective
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businesses or properties which is reasonably likely to have or result
in a Material Adverse Effect 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 event, circumstance, or development that results in, or that the
Company believes is reasonably likely to result in, a Material Adverse
Effect, 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).
(xvi) The Company has not, directly or indirectly
(except for the sale of Securities under this Agreement), (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.
(xvii) None of the Company, its subsidiaries or any
employee of the Company or its subsidiaries has made any payment of
funds of the Company or its subsidiaries prohibited by law and no
funds of the Company or its subsidiaries have been set aside to be
used for any payment prohibited by law.
(xviii) (a) 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 except where the failure to possess any
such item is not reasonably likely to have a Material Adverse Effect,
and (b) neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, is reasonably likely to have a Material Adverse Effect,
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xix) The Company is not an investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"),
and this transaction will not cause the Company to become an
investment company subject to registration under the 1940 Act.
(xx) 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 is reasonably likely to have a Material Adverse Effect) 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
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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).
(xxi) Except for the shares of capital stock of
each of the subsidiaries owned by the Company, 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.
(xxii) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (A) transactions are executed in
accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability; (C) access to assets is permitted only in accordance
with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxiii) Except as described in the Registration
Statement and the Prospectus, no default exists, and no event has
occurred that, with notice or lapse of time or both, is reasonably
likely to 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 respect that would have a Material Adverse Effect.
(xxiv) The Company has not distributed and, prior to
the later of (A) the Firm Closing Date or any Option Closing Date and
(B) 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, the Prospectus or Term
Sheet or any amendment or supplement thereto, or other materials, if
any, permitted by the Act.
(xxv) Neither the Company nor its subsidiaries own
any items of real property, and each of them has 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 as shown on the Company's financial
statements set forth in the Registration Statement 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 Company or any such subsidiary are held under
valid, subsisting and enforceable leases, with such exceptions as are
not material and do not interfere
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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).
(xxvi) No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the Company's
knowledge, is threatened or imminent that is reasonably likely to
result in a Material Adverse Effect, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxvii) The Company and its subsidiaries own or
possess, or can acquire on reasonable terms, all material 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, is reasonably likely to
have a Material Adverse Effect, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(xxviii) 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;
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 is reasonably likely to have a Material
Adverse Effect, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxix) The exchange of stock by the shareholders of
the Company of the shares of stock of MLC Group, in order to effect
the transaction of the Company in Delaware (the "Share Exchange") was
approved by all necessary corporate action on behalf of the Company
and MLC Group and the exchange agreement and related certificates, in
appropriate form to effect the Share Exchange and became effective at
8:00 A.M., Eastern Standard Time, on September 1, 1996.
(b) Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxx in their
individual capacities (the "Stockholders"), represent and warrant to, and
agree with each of the several Underwriters that 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, and the Prospectus, as amended
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or supplemented as of the Firm Closing Date and as of Option 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.
(c) Any certificate signed by (i) any officer of the
Company or (ii) by the Stockholders and delivered to the Representative or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter, as to the matters covered thereby.
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 agrees to sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees
to purchase from the Company, at a purchase price of $______ per share, the
number of Firm Securities set forth opposite the name of such Underwriter in
Schedule 1 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 Representative 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 Representative for the respective accounts of the Underwriters, against
payment by or on behalf of the Underwriters of the aggregate purchase price
therefor by wire transfer in same day funds (the "Wired Funds") to the account
of the Company. Such delivery of and payment for the Firm Securities shall be
made at the offices of Xxxxxx & Bird, 000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx
Xxxxxxxx, Xxxxx 000, Xxxxxxxxxx, X.X. 00000 at 9:30 A.M., Eastern Standard
Time, on __________, 1996, or at such other place, time or date as the
Representative and the Company may agree upon or as the Representative 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 will
make such certificate or certificates for the Firm Securities available for
checking and packaging by the Representative at the offices in New York, New
York of the Company's transfer agent or registrar at least 24 hours prior to
the Firm Closing Date.
(b) For the sole purpose of covering any over-allotments
in connection with the distribution and sale of the Firm Securities as
contemplated by the Prospectus, the Company hereby grants to the several
Underwriters an option to purchase, severally and not jointly, the Option
Securities. 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 Nasdaq National Market is open for trading). The Underwriters shall not be
under any obligation to purchase any of the Option
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Securities prior to the exercise of such option. The Representative may from
time to time exercise the option granted hereby by giving notice in writing or
by telephone (confirmed within 24 hours in writing) to the Company setting
forth the aggregate number of Option Securities as to which the several
Underwriters are then exercising 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 Representative 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
Representative and the Company may agree upon or as the Representative 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 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, 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 Representative in such
manner as it deems 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 3(b), to refer to such
Option Securities and Option Closing Date, respectively.
(c) It is understood that you, individually and not as
the Representative, 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.
(d) The Company hereby acknowledges that the wire
transfer by or on behalf of the Underwriters of the purchase price for any
Securities does not constitute closing of a purchase and sale of the
Securities. Only execution and delivery of a receipt (by facsimile or
otherwise) for the Securities by the Underwriters indicates completion of the
closing of a purchase of the Securities from the Company. Furthermore, in the
event that the Underwriters wire funds to the Company prior to the completion
of the closing of a purchase of Securities, the Company hereby acknowledges
that until the Underwriters execute and deliver a receipt for the Securities,
by facsimile or otherwise, the Company 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 Securities is not completed and the wire funds are not returned
by the Company to the Underwriters on the same day the wired funds were
received by the Company, the Company agrees to pay to the Underwriters in
respect of each day the wire funds are not returned by it, in same-day funds,
interest at the Prime
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Rate as stated in the Wall Street Journal on the date hereof on the amount of
such wire funds.
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. 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, to become effective as promptly as possible. If required, the
Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 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 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 of the Prospectus, as then amended or supplemented, and (ii) will not file
with the Commission the Prospectus, Term Sheet or the amendment referred to in
the second sentence of Section 2(a) hereof, any amendment or supplement to such
Prospectus, Term Sheet or any amendment to the Registration Statement or any
Rule 462(b) Registration Statement of which the Representative 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 Representative
shall not have given its 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 Representative or counsel for the Underwriters,
any amendments to the Registration Statement or amendments or supplements to
the 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 Representative, 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 or any amendment or supplement thereto has
been filed and will provide to the Representative copies of each such filing.
(b) The Company will advise the Representative, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the 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
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13
for any such purpose, or (iv) any request made by the Commission for amending
the Original Registration Statement or any Rule 462(b) Registration Statement,
for amending or supplementing the 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 Representative 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 or the rules or regulations of the Commission thereunder, the Company will
promptly notify the Representative 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 that corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representative and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) and any Rule 462(b)
Registration Statement, (ii) to each other Underwriter, a conformed copy of
such registration statement and 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 or the Prospectus or any
amendment or supplement thereto as the Representative may reasonably request;
without limiting the application of clause (iii) of this sentence, the Company,
not later than (A) 8:00 P.M., Eastern Standard Time, on the date of
determination of the public offering price, if such determination occurred at
or prior to 10:00 A.M., Eastern time, on such date or (B) 2:00 P.M., Eastern
Standard Time, on the business day following the date of determination of the
public offering price, if such determination occurred after 10:00 A.M., Eastern
Standard 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
Representative may reasonably request for purposes of confirming orders that
are expected to settle on the Firm Closing Date. The Company will provide or
cause to be provided to each of the Representative, and to each Underwriter
that so requests in
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14
writing, a copy of each report on Form SR filed by the Company as required by
Rule 463 under the Act.
(f) 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 Standard Time on the date of this Agreement and (ii) the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(g) The Company, as soon as practicable, will make
generally available to its securityholders and to the Representative 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.
(h) The Company will apply the net proceeds from the sale
of the Securities as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will not, directly or indirectly, without
the prior written consent of the Representative, 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 180 days after the date hereof, except pursuant to this Agreement and except
for the grant of options to purchase an aggregate of 420,000 shares of Common
Stock as disclosed in the Prospectus, or issuances pursuant to the exercise of
warrants or employee stock options outstanding on the date hereof.
(j) 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.
(k) The Company will obtain the lockup agreements
described in Section 7(i) hereof prior to the Firm Closing Date.
(1) 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
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15
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, your counsel
and counsel to the Company responding to or commenting on such rumor,
publication or event.
(m) The Company will cause the Securities to be duly
included for quotation on the Nasdaq National Market prior to the Firm Closing
Date. The Company will use its best efforts to ensure that the Securities
remain included for quotation on the Nasdaq National Market following the Firm
Closing Date.
6. Expenses. The Company will pay all costs and expenses
incident to the performance of its 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 and the
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, the accountants and any other experts or advisors
retained by the Company, (iv) the fees and disbursements of counsel for the
Underwriters, (v) preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Securities, including transfer agent's and
registrar's fees, (vi) 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, (vii) the filing fees of the
Commission and the National Association of Securities Dealers, Inc. relating to
the Securities and (viii) any quotation of the Securities on the Nasdaq
National Market. 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 to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Representative upon demand for all reasonable out-of-pocket expenses (including
counsel fees and disbursements) that shall have been incurred by it in
connection with the proposed purchase and sale of the Securities. The Company
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 to the accuracy of the representations and warranties of the Company
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
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16
the accuracy of the statements of the Company's officers made pursuant to the
provisions hereof, to the performance by the Company of its 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 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., Eastern Standard 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) or, with respect to the Original
Registration Statement, such later time and date as shall have been consented
to by the Representative; if required, the Prospectus or any Term Sheet that
constitutes a part thereof and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period
required by Rules 434 and 424(b) under the Act; no stop order suspending the
effectiveness of the Registration Statement or any amendment 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 Representative, 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 or the Prospectus or otherwise).
(b) The Representative shall have received an opinion,
dated the Firm Closing Date, of Xxxxx & Xxxxxx, P.C., counsel for the Company,
to the effect that:
(i) the Company and each of its U.S. subsidiaries
listed in Schedule 2 hereto (the "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 is not reasonably likely to have
a Material Adverse Effect;
(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, and the Company has corporate power to
enter into this Agreement and to carry out all the terms and
provisions hereof 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
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17
are owned by the Company free and clear of any security interests,
liens, encumbrances or claims;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the 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,
and, to the best knowledge of such counsel after due inquiry, 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; to the best knowledge of such counsel, 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, to the best knowledge of such counsel, 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 the Prospectus, insofar as such
statements purport to summarize certain provisions of the capital
stock of the Company, provide a fair summary of such provisions;
(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;
(vii) to the best knowledge of such counsel, (A)
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 or the Prospectus and are not
described therein, and no such proceedings have been threatened
against the Company or any of the Subsidiaries or with respect to any
of their respective properties and (B) no contract or other document
is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(viii) to the knowledge of such counsel, 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; and (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, except
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18
in each case as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus);
(ix) 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 and by the NASD, 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 after due inquiry 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, so far as it is known to such counsel after due
inquiry, any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator having jurisdiction over the Company or any of the
Subsidiaries, in each case, where such conflict, breach, violation or
default is not reasonably likely to have a Material Adverse Effect;
(x) the Registration Statement is effective under
the Act; any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, 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, to such counsel's best knowledge, no stop order
suspending the effectiveness of the Registration Statement or any
amendment thereto has been issued, and no proceedings for that purpose
have been instituted or threatened or are contemplated by the
Commission;
(xi) the Registration Statement originally filed
with respect to the Securities and each amendment thereto, any Rule
462(b) Registration Statement and the Prospectus (in each case, other
than the financial statements and other financial and statistical
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 and the rules and regulations of
the Commission thereunder;
(xii) 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 Registration Statement
at the time of its effectiveness or an effective post-effective
amendment thereto (including such information that is permitted to be
omitted pursuant to Rule 430A);
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(xiii) the Company is not, and the transactions
contemplated by this Agreement will not cause the Company to become,
an investment company subject to registration under the 1940 Act;
(xiv) the specimen stock certificate of the Company
filed as an exhibit to the Registration Statement is in due and proper
form to evidence shares of Common Stock, has been duly authorized and
approved by the Board of Directors of the Company and complies with
all legal requirements applicable under the Delaware General
Corporation Law; and
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, 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 (except such
counsel need express no view as to the financial statements and notes thereto,
schedules and reports thereon, and other financial and statistical data
included or incorporated by reference in the Registration Statement or
Prospectus).
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deem(s) proper, on certificates of
responsible officers of the Company and public officials and opinions of such
other counsel as are reasonably acceptable to the Representative.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at the
date of such opinion.
(c) The Representative shall have received from Deloitte
& Touche LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance reasonably satisfactory to the
Representative.
In the event that the letters referred to above set forth any
such changes, decreases or increases which, in the reasonable discretion of the
Representative, are reasonably likely to result in a Material Adverse Effect,
it shall be a further condition to the obligations of the Underwriters that
such letters shall be accompanied by a written explanation of the Company as to
the significance thereof, unless the Representative deems such explanation
unnecessary.
References to the Registration Statement and the Prospectus in
this paragraph (c) with respect to either letter referred to above shall
include any amendment or supplement thereto at the date of such letter.
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20
(d) The Representative shall have received a certificate,
dated the Firm Closing Date, of Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxx in their
capacities as the principal executive officer and the principal financial or
accounting officer, respectively, 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, and the 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 amendment 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 and the
Prospectus, neither the Company nor any of its subsidiaries has
sustained any loss or interference with their respective businesses or
properties reasonably likely to have or result in a Material Adverse
Effect 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 event,
circumstance, or development that results in, or that the Company
believes is reasonably likely to result in, a Material Adverse Effect,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto).
(e) The Representative shall have received a certificate,
dated the Firm Closing Date (or the Option Closing Date, as the case may be),
of the Stockholders, to the effect that (i) the Registration Statement, as
amended as of the Firm Closing Date (or the Option Closing Date, as the case
may be), 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 Firm
Closing Date (or the Option Closing Date, as the case may be), 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.
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21
(f) The Representative shall have received from each
Stockholder and from each person who is a director or officer of the Company or
who owns more than ____ shares of Common Stock (as calculated on the Firm
Closing Date) an agreement to the effect that such person will not, except to
the extent otherwise specifically permitted by the terms of each such person's
agreement and in accordance with Rule 144 under the Act, directly or
indirectly, without the prior written consent of the Representative, 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 360
days after the date of this Agreement.
(g) On or before the Firm Closing Date, the
Representative and counsel for the Underwriters shall have received such
further certificates, documents or other information as they may have
reasonably requested from the Company.
(h) Prior to the commencement of the offering of the
Securities, the Securities shall have been included for trading on the Nasdaq
National Market.
(i) The Representative shall have received an opinion,
dated the Firm Closing Date, of Xxxxxx & Bird, counsel for the Underwriters,
with respect to the issuance and sale of the Firm Securities, the Registration
Statement and Prospectus, and such other related matters as the Representative
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.
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 Representative and
counsel for the Underwriters. The Company shall furnish to the Representative
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representative 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.
8. Indemnification and Contribution.
(a) The Company and the Stockholders 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, as amended,
(the "Exchange Act"), against any losses, claims,
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22
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon a breach or alleged breach by the Stockholders
of Section 2(b) of this Agreement, and the Company agrees 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 Exchange Act,
against any losses, claims, damages or liabilities to which such Underwriter or
such controlling person may become subject under the 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 in Section 2(a) 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, 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 based upon written information furnished by
or on behalf of the Company or Stockholders 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 or the 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 used in connection with the marketing of the Securities,
including without limitation, slides, videos, films, tape recordings,
and, such party or parties, as the case may be, 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 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 or any amendment
or supplement thereto or any Application in reliance upon and in conformity
with written information
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23
furnished to the Company by any Underwriter through the Representative
specifically for use therein; and provided, further, that neither the Company
nor any of the Stockholders will be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 5(d) and (e) of this Agreement. This indemnity agreement will be in
addition to any liability that the Company and Stockholders may otherwise have.
Neither the Company nor Stockholders will, without the prior written consent of
the Representative, 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
Underwriter or any person who controls any 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, Stockholders 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 against any losses, claims, damages or
liabilities to which the Company or any such director, officer of the Company,
Stockholders or controlling person of the Company or Stockholders may become
subject under the 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 or the 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
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 such Underwriter through the
Representative 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 or any such director,
officer or controlling person or Stockholders in connection with investigating
or defending any such loss, claim, damage, liability or any action in respect
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24
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 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 or
shall have been advised by its counsel that there may be one or more legal
defenses available to it and/or other indemnified parties that conflict with
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 Representative 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
- 24 -
25
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 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 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 alleged omission
to state a material fact relates to information supplied by the Company,
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, 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 amount of underwriting commissions received by such
Underwriter in connection with the Common Shares underwritten by it and
distributed to the public, 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 Representative's Agreement Among Underwriters. For the purposes of this
paragraph 8(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 or Stockholders 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 or Stockholders, as the case may
be.
(e) In making a claim for indemnification under this
Section 8, the indemnified parties may proceed against either (i) both the
Company and the Stockholders jointly or (ii) the Company only, but may not
proceed solely against the Stockholders. In
- 25 -
26
the event that the indemnified parties are entitled to seek indemnity or
contribution hereunder against any loss, liability, claim, damage and expense
incurred with respect to a settlement or judgment from a trial court (the
"First Judgment") then, as a precondition to any indemnified party obtaining
indemnification or contribution from the Stockholders, the indemnified parties
shall first obtain a judgment from a trial court that such indemnified parties
are entitled to indemnity or contribution under this Agreement with respect to
such loss, liability, claim, damage or expense (the "Final Judgment") from the
Company and the Stockholders and shall seek to satisfy such Final Judgment in
full from the Company by making a written demand upon the Company for such
satisfaction. The indemnified parties may seek a Final Judgment either through
a cross- or counter-claim in the action which results in the First Judgment, or
they may bring a subsequent, separate action against the Company and the
Stockholders for indemnification. Only in the event such Final Judgment shall
remain unsatisfied in whole or in part 45 days following the date of receipt by
the Company of such demand shall any indemnified party have the right to take
action to satisfy such Final Judgment by making demand directly on the
Stockholders (but only if and to the extent the Company has not already
satisfied such Final Judgment, whether by settlement, release or otherwise).
The indemnified party or parties may exercise this right to first seek to
obtain payment from the Company and thereafter obtain payment from the
Stockholders without regard to the pursuit by any party of its rights to the
appeal of such Final Judgment. The indemnified party or parties shall,
however, be relieved of their obligation to first obtain a Final Judgment, seek
to obtain payment from the Company with respect to such Final Judgment or,
having sought such payment, to wait such 45 days after failure by the Company
to immediately satisfy any such Final Judgment if (i) the Company files a
petition for relief under the United States Bankruptcy Code (the "Bankruptcy
Code"), (ii) an order for relief is entered against the Company in an
involuntary case under the Bankruptcy Code, (iii) the Company makes an
assignment for the benefit of its creditors, or (iv) any court orders or
approves the appointment of a receiver or custodian for the Company or a
substantial portion of its assets.
(f) Notwithstanding any other provision of this
Agreement, the aggregate liability of the Stockholders under this Agreement,
including this Section 8 hereof, shall not exceed the sum of three million
dollars ($3,000,000).
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, then the other Underwriters may
make arrangements satisfactory to the Representative for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representative), 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
- 26 -
27
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 Representative 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, including the
Representative) 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 Representative 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 Company, its
officers, Stockholders 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 arid effect, regardless of (i) any investigation made by
or on behalf of the Company, any of its officers or directors, Stockholders,
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
Representative by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company or
the Stockholders shall have failed, refused or been unable to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Firm Closing Date or,
with respect to the Company, such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall
have, in the sole judgment of the Representative, sustained any loss
or interference with their respective businesses or properties having
or resulting in a Material Adverse Effect 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 event, circumstance of development that
results in, or that the Company believes would result in, a Material
Adverse Effect, except in
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28
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 New York Stock Exchange or Nasdaq
National Market shall have been suspended or minimum or maximum prices
shall have been established on either such exchange or market system;
(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 Representative, 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 (i) the last paragraph on the front cover page, (ii) under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus and (iii) on
page 2 in any Preliminary Prospectus or the Prospectus pertaining to
stabilization (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representative 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 Friedman, Billings,
Xxxxxx & Co., Inc., Potomac Tower, 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxx Xxxxxxxxx; and if sent to the Company, shall
be delivered or sent by mail, telex or facsimile, transmission and confirmed in
writing to the Company at 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
00000-0000, Attention: Chief Executive Officer; and if sent to Stockholders,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to Stockholders at 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000-0000, Attention: Chief Executive Officer.
14. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, Stockholders and
their respective
- 28 -
29
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 and Stockholders 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, Stockholders and any person or persons who control the
Company or Stockholders 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.
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 Commonwealth of Virginia,
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 Commonwealth of
Virginia, and by execution and delivery of this Agreement, the Company and
Stockholders each accepts for itself and in connection with their respective
properties, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and waives any defense of forum non conveniens and irrevocably
agree to be bound by any judgment rendered thereby in connection with this
Agreement. Stockholders designate and appoint Xxxxxxx X. Xxxxxx, and the
Company designates and appoints Xxxxx X. Xxxxx and such other persons as may
hereafter be selected by the Company or Stockholders irrevocably agreeing in
writing to so serve, as their respective agents 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 Stockholders 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/or Stockholders at their
respective addresses 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 or Stockholders refuses to accept service, the Company
and Stockholders each hereby agrees that service of process sufficient for
personal jurisdiction in any action against the Company or Stockholders in the
Commonwealth of Virginia may be made by registered or certified mail, return
receipt requested, to the Company and/or Stockholders, as applicable, at their
respective addresses provided in Section 13 hereof, and Stockholders and the
Company each 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
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30
permitted by law or shall limit the right of any Underwriter to bring
proceedings against the Company and Stockholders 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.
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 and
each of the several Underwriters.
Very truly yours,
MLC HOLDINGS, INC.
By
--------------------------
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
MLC GROUP, INC.
By
--------------------------
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
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31
Stockholders
By:
--------------------------------
By:
--------------------------------
By:
--------------------------------
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
By:
---------------------------
Name:
Title:
For itself and as the Representative.
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32
Schedule 1
UNDERWRITERS
Number of Firm
Underwriting Securities to be Purchased
------------ --------------------------
Friedman, Billings, Xxxxxx & Co., Inc. _________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________
=========
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33
Schedule 2
SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
MLC Group, Inc. Virginia
MLC Capital, Inc. Virginia
MLC/GATX Leasing Corporation Colorado
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