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EXHIBIT 1.1
4,000,000 Shares(1)
COMPLETE BUSINESS SOLUTIONS, INC.
Common Stock
UNDERWRITING AGREEMENT
February __, 1999
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXX XXXXX XXXX XXXXXX, INCORPORATED
WARBURG DILLON READ LLC, a subsidiary of UBS AG
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen and Ladies:
Complete Business Solutions, Inc., a Michigan corporation (the
"COMPANY"), and the shareholders of the Company named in Schedule II hereto
(collectively, the "SELLING SHAREHOLDERS"), severally propose to sell an
aggregate of 4,000,000 shares of common stock, no par value, of the Company (the
"FIRM SHARES"), to the several underwriters named in Schedule I hereto (the
"UNDERWRITERS"). The Firm Shares consist of 1,000,000 shares to be issued and
sold by the Company and 3,000,000 outstanding shares to be sold by the Selling
Shareholders. The Company and the Selling Shareholders also propose to sell to
the several Underwriters not more than 600,000 additional shares of common
stock, no par value, of the Company (the "OPTION SHARES"), if and to the extent
requested by the Underwriters as provided in Section 2 hereof. The Firm Shares
and the Option Shares are herein collectively called the "SHARES." The shares of
common stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK." The
Company and the Selling Shareholders are hereinafter collectively called the
"SELLERS."
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(1) Plus an option to purchase up to 600,000 additional shares from the Company
and the Selling Shareholders to cover over-allotments.
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1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "COMMISSION") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"ACT"), a registration statement on Form S-3 (File No. 333-_______) including a
prospectus relating to the Shares, which may be amended in accordance herewith.
The term "ORIGINAL REGISTRATION STATEMENT" as used in this Agreement shall mean
such registration statement, including all exhibits thereto, all financial
statements therein, all documents incorporated by reference therein and all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which such prospectus became
effective, and, in the event of any amendment thereto after the effective date
of such registration statement (the "EFFECTIVE DATE"), shall also mean (from and
after the effectiveness of such amendment) such registration statement as so
amended. The term "REGISTRATION STATEMENT" as used in this Agreement shall mean
the Original Registration Statement, together with the registration statement
filed pursuant to Rule 462(b) of the Act, if any (the "462(B) REGISTRATION
STATEMENT"). The term "PROSPECTUS" as used in this Agreement shall mean the
prospectus, including the documents incorporated by reference therein, relating
to the Shares first filed with the Commission pursuant to Rule 424(b) and Rule
430A (or if no such filing is required, as included in the Original Registration
Statement) and, in the event of any supplement or amendment to such prospectus
after the Effective Date, shall also mean (from and after the filing of such
supplement with the Commission or of the effectiveness of such amendment) such
prospectus as so supplemented or amended. The term "PRELIMINARY PROSPECTUS" as
used in this Agreement shall mean each preliminary prospectus included in the
Original Registration Statement prior to the time it becomes effective.
2. Agreements to Sell and Purchase; Other Covenants.
(a) Firm Shares. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
(i) the Company agrees to issue and sell 1,000,000 Firm Shares, (ii) each
Selling Shareholder agrees, severally and not jointly, to sell the number of
Firm Shares set forth opposite such Selling Shareholder's name in the top
portion of Schedule II hereto, and (iii) each Underwriter agrees, severally and
not jointly, to purchase from each Seller at a price per share of $______ (the
"PURCHASE PRICE") the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Firm Shares to be sold by such Seller as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto
bears to the total number of Firm Shares.
(b) Option Shares. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
(i) the Company agrees to issue and sell ____ Option Shares to the Underwriters;
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(ii) each Selling Shareholder named in Schedule II hereto agrees, severally and
not jointly, to sell the number of Option Shares set forth opposite such Selling
Shareholder's name in the lower portion of Schedule II hereto; and (iii) the
Underwriters shall have the right to purchase, severally and not jointly, up to
an aggregate 600,000 Option Shares from the Sellers at the Purchase Price.
Option Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
Underwriters may exercise their right to purchase Option Shares in whole or in
part from time to time by giving written notice thereof to the Company, in care
of its Chief Executive Officer, and to at least one of the attorneys-in-fact for
each of the Selling Shareholders listed in Schedule III hereto (the
"ATTORNEYS"), within 30 days after the date of this Agreement. You shall give
any such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Option Shares to be purchased pursuant to such exercise and
the date for payment and delivery thereof. The date specified in any such notice
shall be a business day (i) no earlier than the Closing Date (as hereinafter
defined), (ii) no later than ten business days after such notice has been given,
and (iii) no earlier than two business days after such notice has been given. If
any Option Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase from the Company and each Selling Shareholder the
number of Option Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Option Shares to be purchased from the Company and the Selling Shareholders
as the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I bears to the total number of Firm Shares.
(c) Lock-Up. Each Seller hereby agrees, severally and not jointly,
and solely with respect to his, her or itself and his, her or its Shares, and
the Company shall, concurrently with the execution of this Agreement, deliver an
agreement (a "LOCK-UP AGREEMENT") executed by each of the directors and
executive officers of the Company who is not a Selling Shareholder, in the case
of the Company, and by the respective Selling Shareholder in the case of the
Selling Shareholders, pursuant to which each such person agrees, during the
period specified in such person's respective agreement (and, in no event ending
less than ninety (90) days after the date of the Prospectus) (the "LOCK-UP
PERIOD"), and, to the extent specified in such person's respective agreement,
not to (1) offer, pledge, sell, contract to sell, engage in any short sale, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or (2) enter
into any swap or similar agreement that transfers, in whole or in part, the
economic risk of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise, otherwise than (i) as a
bona fide gift or gifts, (ii) by will or intestacy to such
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person's immediate family or to a trust the beneficiaries of which are
exclusively such person's and/or a member or members of his or her
immediate family, (iii) as a distribution to limited partners or
shareholders of such entity, or (iv) with the prior written consent of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In addition, all
Sellers holding registration rights agree that, without the prior
written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
on behalf of the Underwriters, he, she or it will not, during the
Lock-up Period, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
Notwithstanding the foregoing, during the Lock-Up Period (i) the
Company may grant stock options pursuant to the Company's existing
stock option plan provided that such options are not, by their terms,
exercisable during the Lock-Up Period, and (ii) the Company may issue
shares of its Common Stock upon the exercise of an option or warrant or
the conversion of a security outstanding on the date hereof.
3. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable, and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and payment
for the Firm Shares shall be made at 10:00 A.M., New York City time, on
_________ __, 1999 (the "CLOSING DATE"), at the offices of Butzel, Long,
Detroit, Michigan. The Closing Date and the location of delivery of and the form
of payment for the Firm Shares may be varied by agreement between you and the
Sellers.
Delivery to the Underwriters of, and payment for, any Option Shares to
be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "OPTION
CLOSING DATE"). Any such Option Closing Date and the location of delivery of and
the form of payment for such Option Shares may be varied by agreement among you,
the Company and the Attorneys.
Payment for Shares purchased from the Company shall be made to the
Company or its order, and payment for the Shares purchased from the Selling
Shareholders shall be made to the Custodian (as defined herein), for the account
of the Selling Shareholders, in each case in same day funds. Such payment shall
be made against delivery of certificates for the Shares to you for the
respective accounts of the several Underwriters as set forth below, against
receipt therefor signed by you. Certificates for the Shares shall be registered
in such names and issued in such denominations as you shall request in writing
not later than two full business days prior to the Closing Date or an Option
Closing Date, as the case may be. Such certificates shall be made available to
you for inspection not later than 9:30 A.M., New York City time, on the business
day next preceding the
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Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes, if
any, thereon duly paid by the respective Sellers, for the respective accounts of
the several Underwriters, against payment of the Purchase Price therefor by wire
transfer of same day funds to the order of the applicable Sellers.
5. Agreements of the Company. The Company agrees with you:
(a) If the Registration Statement is not effective as of the
execution of this Agreement, to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment to it becomes effective, (ii) of
any request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement (a "STOP ORDER"), (iv) of the receipt by the
Company of any notification with respect to the suspension of qualification of
the Shares for offer or sale in any jurisdiction, or with respect to the
initiation of any proceeding for such purposes, and (v) of the happening of any
event during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue a Stop Order,
the Company will make every reasonable effort to obtain the withdrawal or
lifting of such order at the earliest possible time.
(c) To furnish to you, without charge, five signed copies of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the
Registration Statement, whether before or after the time when it becomes
effective, or to make any amendment or supplement to the Prospectus of which you
shall not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause the same
to become promptly effective.
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(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in the reasonable
opinion of counsel for the Underwriters a prospectus is required by law to be
delivered in connection with sales by an Underwriter or a dealer, to furnish to
each Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer may
reasonably request.
(f) If during the period specified in paragraph (e), any event
shall occur as a result of which, in the reasonable opinion of counsel for the
Underwriters it becomes necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with any law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law, and to
furnish to each Underwriter and to such dealers as you shall specify, such
number of copies thereof as such Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such consents to service of process
or other documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its shareholders
not later than the 45th day following the end of the fifth fiscal quarter
occurring after the Effective Date an earnings statement in accordance with
Section 11(a) of the Act and Rule 158 thereunder, and to advise you in writing
when such statement has been so made available.
(i) During the period of five years after the date of this
Agreement, to mail as soon as reasonably practicable after the end of each
fiscal year to the record holders of its Common Stock a financial report of the
Company and its subsidiaries on a consolidated basis (and a similar financial
report of all unconsolidated subsidiaries, if any), all such financial reports
to include a consolidated balance sheet, a consolidated statement of operations,
a consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent certified public accountants.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Common Stock or filed with
the Commission and such
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other publicly available information concerning the Company and its subsidiaries
as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes (other than
expenses of counsel to the Underwriters, except as provided in subpart (iii)
below) incident to (i) the preparation, printing, filing and distribution under
the Act of the Registration Statement (including financial statements and
exhibits), each Preliminary Prospectus and all amendments and supplements to any
of them prior to or during the period specified in paragraph (e), (ii) the
printing and delivery of the Prospectus and all amendments and supplements to it
during the period specified in paragraph (e), (iii) the printing and delivery of
this Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all
other agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Shares (including in each case
any disbursements of counsel for the Underwriters relating to such printing and
delivery), (iv) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the several states (including in
each case the fees and disbursements of counsel for the Underwriters relating to
such registration or qualification and memoranda relating thereto), (v) filings
and clearance with the National Association of Securities Dealers, Inc. in
connection with the offering, (vi) the listing of the Shares on the Nasdaq
National Market, (vii) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be requested for
use in connection with the offering or sale of the Shares by the Underwriters or
by dealers to whom Shares may be sold, and (viii) the performance by the Sellers
of their other obligations under this Agreement.
(l) To use its best efforts to maintain the inclusion of the
Common Stock in the Nasdaq National Market (or on a national securities
exchange) for a period of five years after the effective date of the
Registration Statement.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no Stop
Order is in effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading,
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(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act
and (iii) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) Each Preliminary Prospectus filed as part of the Original
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, and each Registration Statement
filed pursuant to Rule 462(b) under the Act, if any, complied when so filed in
all material respects with the Act and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) The Company owns, beneficially and of record, 100% of the
capital stock of: (i) Complete Business Solutions (Singapore) Private Limited, a
company organized under the laws of Singapore ("CBSI SINGAPORE"); (ii) CBS
Complete Business Solutions (Mauritius) Limited, a company organized under the
laws of Mauritius ("CBSI MAURITIUS"), which company, in turn, owns 100% of the
capital stock of Complete Business Solutions (India) Private Limited, a company
organized under the laws of India ("CBSI INDIA"); (iii) Synergy Software, Inc.,
a corporation organized under the laws of Michigan ("SYNERGY"); (iv) x.x.
Xxxxxxxx & Associates, inc., a corporation organized under the laws of Michigan
("XXXXXXXX"); (v) Claremont Technology Group, Inc., a corporation organized
under the laws of Oregon ("CLAREMONT"); and (vi) Sudbury River Consulting Group,
Inc., a corporation organized under the laws of Massachusetts ("SUDBURY") (CBSI
Singapore, CBSI Mauritius, CBSI India, Synergy, Xxxxxxxx, Claremont and Sudbury
are collectively referred to as the "SUBSIDIARIES"); all such shares of capital
stock are owned by the Company free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the Subsidiaries.
(e) The Company and each of the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as it is currently being conducted and to
own, lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not, individually or in the aggregate, have a material adverse effect on
business, prospects, condition (financial or otherwise) or results of operations
of the Company and
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the Subsidiaries, taken as a whole (any such effect to be referred to as a
"MATERIAL ADVERSE EFFECT").
(f) All the outstanding shares of capital stock of the Company
and the Subsidiaries (including the Shares to be sold by the Selling
Shareholders) have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights; and the
Shares to be issued and sold by the Company hereunder have been duly authorized
and, when issued and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(g) The authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the description thereof contained
in the Prospectus.
(h) Neither the Company nor any of the Subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company and the
Subsidiaries, taken as a whole, to which the Company or any of the Subsidiaries
is a party or by which it or any of the Subsidiaries or their respective
property is bound.
(i) Except as otherwise set forth in the Prospectus, there are
no material legal or governmental proceedings pending to which the Company or
any of its Subsidiaries is a party or to which any of their respective property
is the subject, and, to the Company's knowledge, no such proceedings are
threatened or contemplated. No contract or document of a character required to
be described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement is not so described or filed as
required.
(j) Neither the Company nor any of the Subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), nor any
foreign, federal or state law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable federal or state wages and
hours laws, nor any provisions of the Employee Retirement Income Security Act or
the rules and regulations promulgated thereunder, which in each case might
result in any Material Adverse Effect.
(k) The execution, delivery and performance of this Agreement
by the Company, compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory body,
administrative
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agency or other governmental body, except as such may be required under the Act,
state securities laws or Blue Sky laws of the various states, and will not
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of the Subsidiaries
or any agreement, indenture or other instrument to which it or any of the
Subsidiaries or their respective property is bound, or violate or conflict with
any laws, administrative regulation or ruling or court decree applicable to the
Company or the Subsidiaries, or their respective property.
(l) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("PERMITS"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in the
Prospectus, except those Permits the absence of which would not, singly or in
the aggregate, give rise to a Material Adverse Effect; the Company and each of
its Subsidiaries has fulfilled and performed all of its material obligations
with respect to such Permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any such
Permit; and, except as described in the Prospectus, such Permits contain no
restrictions that are materially burdensome to the Company or any of its
Subsidiaries.
(m) Except as otherwise set forth in the Prospectus or such as
are not material to the business, prospects, financial condition or results of
operation of the Company and its Subsidiaries, taken as a whole, the Company and
each of the Subsidiaries has good and marketable title, free and clear of all
liens, claims, encumbrances and restrictions except liens for taxes not yet due
and payable, to all property and assets described in the Registration Statement
as being owned by it. All leases to which the Company or any of the Subsidiaries
is a party are valid and binding and no default has occurred or is continuing
thereunder, which might result in any Material Adverse Effect, and the Company
and the Subsidiaries enjoy peaceful and undisturbed possession under all such
leases to which any of them is a party as lessee with such exceptions as do not
materially interfere with the use made by the Company or such Subsidiary.
(n) The Company and each of the Subsidiaries maintain
reasonably adequate errors and omissions and other liability insurance.
(o) Xxxxxx Xxxxxxxx LLP are independent public accountants
with respect to the Company as required by the Act.
(p) The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and the Subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective
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periods to which they apply; such statements and related schedules and notes
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(q) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and the Subsidiaries, taken as a whole, have sufficient
intellectual property rights (including, without limitation, trademarks, trade
names, patent rights, copyrights and licenses), approvals and governmental
authorizations to conduct their businesses as now conducted; the expiration of
any intellectual property rights (including, without limitation, trademarks,
trade names, patent rights, copyrights and licenses), approvals or governmental
authorizations would not have a Material Adverse Effect; and the Company has no
knowledge of any infringement by it or the Subsidiaries of intellectual property
rights (including, without limitation, trademarks, trade names, patent rights,
copyrights and licenses), trade secret or other similar rights of others, and
there is no claim being made against the Company or any Subsidiary regarding
trademark, trade name, patent, copyright, license, trade secret or other
infringement of intellectual property rights which could have a Material Adverse
Effect.
(r) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(s) Except as disclosed in the Registration Statement, no
holder of any security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company.
(t) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(u) The Company's outstanding Common Stock is registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), and is listed on the Nasdaq National Market.
(v) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens related to
or entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company except as
otherwise disclosed in the Registration Statement.
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(w) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K of the Commission.
(x) Except as disclosed in the Prospectus, the Company has not
paid any dividends to any holders of the capital stock of the Company.
(y) There is (i) no significant unfair labor practice
complaint pending against the Company or any of its Subsidiaries or, to the
knowledge of the Company, threatened against any of them, before the National
Labor Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Company or
any of its Subsidiaries or, to the knowledge of the Company, threatened against
any of them, and (ii) no significant strike, labor dispute, slowdown or stoppage
pending against the Company or any of its Subsidiaries or, to the knowledge of
the Company, threatened against it or any of its Subsidiaries except for such
actions specified in clause (i) above, which, singly or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
(z) All material tax returns required to be filed by the
Company and each of its Subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its Subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
7. Representations and Warranties of the Selling Shareholders. Except
as provided in the final sentence of paragraph (i) below, each Selling
Shareholder represents and warrants, severally but not jointly, and with respect
to paragraph 7(j) below, severally covenants and agrees, in each case solely
with respect to him, her or itself and his, her or its Shares, to and with each
Underwriter that:
(a) Such Selling Shareholder is the lawful owner of the Shares
to be sold by such Selling Shareholder pursuant to this Agreement and has, and
on the Closing Date (and Option Closing Date, if applicable) will have, good and
clear title to such Shares, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
(b) Upon delivery of and payment for the Shares to be sold by
such Selling Shareholder pursuant to this Agreement, good and clear title to
such Shares will pass to the Underwriters, free of all restrictions on transfer,
liens, encumbrances, security interests and claims whatsoever.
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(c) Such Selling Shareholder has, and on the Closing Date will
have, full legal right, power and authority to enter into this Agreement and the
Custody Agreement (the "CUSTODY AGREEMENT") between such Selling Shareholder and
First Chicago Trust Company of New York, as Custodian (the "CUSTODIAN") and to
sell, assign, transfer and deliver such Shares in the manner provided herein and
therein, and this Agreement and the Custody Agreement have been duly authorized,
executed and delivered by such Selling Shareholder and each of this Agreement
and the Custody Agreement is a valid and binding agreement of such Selling
Shareholder enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by applicable law.
(d) The power of attorney signed by such Selling Shareholder
appointing their respective Attorneys as set forth in Schedule III, or any one
of them, as his, her or its attorneys-in-fact to the extent set forth therein
with regard to the transactions contemplated hereby and by the Registration
Statement and the Custody Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder and is a valid and binding
instrument of such Selling Shareholder enforceable in accordance with its terms,
and, pursuant to such power of attorney, such Selling Shareholder has
authorized, as appropriate, the respective Attorneys, or any one of them, to
execute and deliver on its behalf this Agreement and any other document
necessary or desirable in connection with transactions contemplated hereby and
to deliver the Shares to be sold by such Selling Shareholder pursuant to this
Agreement.
(e) Such Selling Shareholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by this Agreement, and other than as
permitted by the Act, such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement
by such Selling Shareholder, compliance by such Selling Shareholder with all the
provisions hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body (except
as such may be required under the Act, state securities laws or Blue Sky laws),
will not require any consent, approval, authorization or other order of any
board of directors, shareholders or other governing body of any Selling
Shareholder which is not an individual (other than the consents of the board of
directors of JF Electra, which has previously been obtained), and will not
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, organizational documents of such Selling Shareholder, if not an
individual, or any agreement, indenture or other instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder or property
of such Selling Shareholder is bound, or
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violate or conflict with any laws, administrative regulation or ruling or court
decree applicable to such Selling Shareholder or property of such Selling
Shareholder.
(g) Certificates in negotiable form for the Shares to be sold
by such Selling Shareholder have been placed in custody under the Custody
Agreement with Custodian for delivery under this Agreement. Such Selling
Shareholder specifically agrees that the Shares represented by the certificates
so held in custody for such Selling Shareholder are subject to the interests of
the several Underwriters and the Company, that the arrangements made by such
Selling Shareholder for such custody, including the Power of Attorney referenced
in such Custody Agreement, are to that extent irrevocable, and that to that
extent the obligations of such Selling Shareholder shall not be terminated by
any act of such Selling Shareholder or by operation of law, whether by the death
or incapacity of such Selling Shareholder (or, in the case of a Selling
Shareholder that is not an individual, the dissolution or liquidation of such
Selling Shareholder) or the occurrence of any other event; if any such death,
incapacity, dissolution, liquidation or such other event should occur before the
delivery of such Shares hereunder, certificates for such Shares shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such death, incapacity, dissolution, liquidation or other event
had not occurred, regardless of whether the Custodian shall have received notice
of such death, incapacity, dissolution, liquidation or other event.
(h) Such parts of the Registration Statement under the
captions "Management" and "Selling Shareholders" which specifically relate to
such Selling Shareholder do not, and will not on the Closing Date (and any
Option Closing Date, if applicable), contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of circumstances under which
they were made, not misleading.
(i) Other than the portions of the Registration Statement
referred to in paragraph (h) above (as to which portions, the provisions of
paragraph (h) will control), to the Selling Shareholder's knowledge, the
Prospectus does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph (i) do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(j) At any time during the period described in paragraph 5(e)
hereof, if there is any change in the information referred to in paragraph 7(h)
above with respect to such Selling Shareholder, such Selling Shareholder will
immediately notify you of such change.
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8. Indemnification.
(a) The Company and Xxxxxxxx X. Xxxxxxxxx agree, jointly and
severally, 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, from and against any and all losses, claims,
damages, liabilities and judgments ("LOSSES") caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such Losses are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriters furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use therein; provided,
however, that the foregoing indemnity agreement with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such Losses purchased Shares, or any person controlling
such Underwriter, if a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) was
not sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended and supplemented) would have cured the defect giving rise to such
Loss. Notwithstanding the foregoing, the aggregate liability of Xx. Xxxxxxxxx
pursuant to the provisions of this paragraph shall be limited to his proceeds
under this Agreement, that is, an amount equal to the sum of all proceeds of the
offering paid to him in his capacity as a Selling Shareholder by the
Underwriters.
(b) Each Selling Shareholder agrees, severally but not
jointly, 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, from and against any and all Losses caused by
any breach of such Selling Shareholder's representations and warranties under
Section 7 hereof, except insofar as such Losses are caused by any untrue
statement or omission or alleged untrue statement or omission in the Prospectus
or Registration Statement based upon information relating to any Underwriters
furnished in writing to the Company by or on behalf of any Underwriter through
you expressly for use therein. Notwithstanding the foregoing, the aggregate
liability of any Selling Shareholder pursuant to the provisions of this
paragraph shall be limited to his proceeds under this Agreement, that is, an
amount equal to the net aggregate purchase price received by him from the sale
of his Shares hereunder plus any proceeds of the offering paid to him by the
Company as described in the Registration Statement; provided, however, that the
foregoing indemnity agreement shall not inure with respect to any Preliminary
Prospectus to the benefit of any Underwriter from whom the person asserting any
such Losses purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or
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given by or on behalf of such Underwriter to such person, if required by law so
to have been delivered, at or prior to the written confirmation of the sale of
the Shares to such person, and if the Prospectus (as so amended and
supplemented) would have cured the defect giving rise to such Loss.
(c) In case any action shall be brought against any
Underwriter or any person controlling such Underwriter, based upon any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company and the Selling Shareholders, such Underwriter shall
promptly notify the Company and the Selling Shareholders as appropriate, in
writing, and the Company and the Selling Shareholders shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all reasonable fees and expenses of such
counsel. Any Underwriter or any such controlling person shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (i) the employment of such
counsel has been specifically authorized in writing by the Company, (ii) the
Company and the Selling Shareholders shall have failed to assume the defense and
employ counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter or such controlling person and
the Company or any Selling Shareholder, as the case may be, and such Underwriter
or such controlling person shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Company or the Selling Shareholders, as the
case may be (in which case the Company and the Selling Shareholders shall not
have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person, it being understood, however, that the
Company and the Selling Shareholders shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Underwriters and controlling
persons, which firm shall be designated in writing by Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation and that all such reasonable fees and expenses
shall be reimbursed as they are incurred). A Seller shall not be liable for any
settlement of any such action effected without the written consent of such
Seller but if settled with the written consent of such Seller, such Seller
agrees to indemnify and hold harmless any Underwriter and any such controlling
person from and against any Losses by reason of such settlement. Notwithstanding
the immediately preceding sentence, if in any case where the fees and expenses
of counsel are at the expense of the indemnifying party and an indemnified party
shall have requested the indemnifying party to reimburse the indemnified party
for such fees and expenses of counsel as incurred, such indemnifying party
agrees that it shall be liable for any settlement of any action effected without
its written consent if (i) such settlement is entered into more than ten
business days after the receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall have failed to reimburse the
indemnified party in accordance with such request for
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reimbursement prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Shareholder and each person, if any, controlling each Selling Shareholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Sellers to each Underwriter but
only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any Preliminary Prospectus. In case
any action shall be brought against the Company, any of its directors, any such
officer or any person controlling the Company, any Selling Shareholder or any
person controlling such Selling Shareholder based on the Registration Statement,
the Prospectus or any Preliminary Prospectus and in respect of which indemnity
may be sought against any Underwriter, the Underwriter shall have the rights and
duties given to the Sellers (except that if any Seller shall have assumed the
defense thereof, such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and any person controlling the Company
and such Selling Shareholder and any person controlling such Selling Shareholder
shall have the rights and duties given to the Underwriter, in each case by
paragraph 8(c) hereof.
(e) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any Losses referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Sellers and
the Underwriters in connection with the statements or omissions which resulted
in such Losses, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers and the Underwriters shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Sellers, and the total underwriting
discounts and commissions received by the Underwriters, bear to the total price
to the public of the Shares, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Sellers and the Underwriters
shall be determined
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by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the Company, the Selling Shareholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this paragraph (e) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the Losses referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this paragraph (e) are
several in proportion to the respective number of Shares purchased by each of
the Underwriters hereunder and not joint.
(f) Each Seller hereby designates Butzel Long, 000 Xxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000-0000, as its authorized agent,
upon which process may be served in any action, suit or proceeding which may be
instituted in any state or federal court in the State of New York by any
Underwriter or person controlling an Underwriter asserting a claim for
indemnification or contribution under or pursuant to this Section 8, and each
Seller will accept the jurisdiction of such court in such action, and waives, to
the fullest extent permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process shall be sent or
given to such Seller, at the address for notices specified in Section 12 hereof.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
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(b) The Registration Statement shall have become effective not
later than 5:00 P.M. (and in the case of a Registration Statement filed under
Rule 462(b) of the Act, not later than 10:00 p.m.), New York City time, on the
date of this Agreement or at such later date and time as you may approve in
writing, and at the Closing Date no Stop Order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission.
(c)(i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary course of
business, of the Company, (ii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus, there shall not have
been any change, or any development involving a prospective material adverse
change, in the capital stock or in the long-term debt of the Company from that
set forth in the Registration Statement and Prospectus, (iii) the Company and
its Subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its Subsidiaries, taken as a whole, other
than those reflected in the Registration Statement and the Prospectus, and (iv)
on the Closing Date you shall have received a certificate dated the Closing
Date, signed by Xxxxxxxx Xxxxxxxxx and Xxxxxxx X. Xxxxxx, in their capacities as
the Chief Executive Officer and Chief Financial Officer of the Company,
respectively, confirming the matters set forth in paragraphs (a), (b), and (c)
of this Section 9.
(d) All the representations and warranties of the Selling
Shareholders contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the Closing
Date, and you shall have received a certificate to such effect, dated the
Closing Date, from each Selling Shareholder.
(e) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Butzel Long, counsel for the Company and the individual Selling
Shareholders (collectively referred to in this paragraph (e) as "INDIVIDUAL
SHAREHOLDERS"), substantially to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority required
to carry on its business as it is currently being conducted and to own, lease
and operate its properties;
(ii) the Company is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a Material Adverse Effect;
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(iii) all the outstanding shares of Common Stock
(including the Shares to be sold by the Individual Shareholders) have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights;
(iv) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will have
been validly issued and will be fully paid and non-assessable, and the issuance
of such Shares is not subject to any preemptive or similar rights;
(v) this Agreement has been duly authorized, executed
and delivered by the Company and duly executed and delivered by each of the
Individual Shareholders and is a valid and binding agreement of the Company and
each Individual Shareholder, enforceable in accordance with its terms (except as
enforceability (i) may be limited by laws relating to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally; (ii) may be limited by general principles of
equity); and (iii) of provisions relating to indemnity and contribution
hereunder may be limited by principles of public policy);
(vi) the authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters to the description
thereof contained in the Prospectus;
(vii) the Registration Statement has become effective
under the Act, no Stop Order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the knowledge of such counsel, pending
before or contemplated by the Commission;
(viii) the statements under Items 15 of Part II of
the Registration Statement, insofar as such statements constitute a summary of
legal matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings;
(ix) the Company is not in violation of its charter
or by-laws and, to the best of such counsel's knowledge after due inquiry, the
Company is not in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument material to the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
to which the Company is a party or by which it or its property is bound;
(x) the execution, delivery and performance of this
Agreement by the Company and each Individual Shareholder, compliance by the
Company and each
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Individual Shareholder with all the provisions hereof and the consummation of
the transactions contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the Act
or other securities or Blue Sky laws) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the charter or
by-laws of the Company or the organizational documents of any Individual
Shareholder that is not an individual or, to the best of such counsel's
knowledge, any material agreement, indenture or other instrument to which the
Company or any Individual Shareholder is a party or by which the Company or any
Individual Shareholder or their respective properties are bound, or violate or
conflict with any laws, administrative regulations or, to the best of such
counsel's knowledge, rulings or court decrees applicable to the Company or any
Individual Shareholder or their respective properties;
(xi) such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company is a party or
to which any of its property is subject which is required to be described in the
Registration Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the Registration
Statement or the Prospectus or is required to be filed as an exhibit to the
Registration Statement which is not described or filed as required;
(xii) to such counsel's knowledge, the Company has
not violated any Environmental Laws, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any applicable
federal or state wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, which in each case might result in any Material Adverse Effect;
(xiii) to such counsel's knowledge, the Company has
such material permits, licenses, franchises and authorizations of governmental
or regulatory authorities ("material permits"), including, without limitation,
under any applicable Environmental Laws, as are necessary to own, lease and
operate its properties and to conduct its business in the manner described in
the Prospectus; to such counsel's knowledge, the Company has fulfilled and
performed all of its material obligations with respect to such material permits
and no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such material permit, subject in
each case to such qualification as may be set forth in the Prospectus; and,
except as described in the Prospectus, such material permits contain no
restrictions that are materially burdensome to the Company;
(xiv) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
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(xv) to such counsel's knowledge, no holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company, except ________;
(xvi) to such counsel's knowledge, except as
otherwise set forth in the Registration Statement or such as are not material to
the business, prospects, financial condition or results of operation of the
Company and its Subsidiaries, taken as a whole, the Company has good and
marketable title, free and clear of all liens, claims, encumbrances and
restrictions except liens for taxes not yet due and payable, to all material
property and assets described in the Registration Statement as being owned by
it;
(xvii) to such counsel's knowledge, all leases to
which the Company is a party are valid and binding and no default has occurred
or is continuing thereunder, which might result in any Material Adverse Effect,
and the Company enjoys peaceful and undisturbed possession under all such leases
to which it is a party as lessee with such exceptions as do not materially
interfere with the use made by the Company;
(xviii) the Registration Statement and the Prospectus
comply as to form in all material respects as to the requirements of the Act,
except that such counsel does not need to express any opinion as to the
financial statements and related notes, schedules and other financial,
statistical and accounting data included in or excluded from the Registration
Statement or in the Prospectus and except that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus;
(xix) the Custody Agreement has been duly authorized,
executed and delivered by each Individual Shareholder and is a valid and binding
agreement of such Individual Shareholder enforceable in accordance with its
terms; except (A) as rights to indemnity and contribution may be limited by
applicable laws and considerations of public policy, (B) as may be limited by
the effects of applicable bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws affecting rights and remedies of creditors
generally, and (C) as may be limited by the effects of general principles of
equity (including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing), whether applied by a court of law or equity;
(xx) each Individual Shareholder has full legal
right, power and authority, and any approval required by law (other than any
approval imposed by the applicable state securities and Blue Sky laws) to sell,
assign, transfer and deliver the Shares to be sold by such Individual
Shareholder in the manner provided in this Agreement and the Custody Agreement;
(xxi) delivery of the Shares to be sold by each
Individual Shareholder to the Underwriters against payment therefor as provided
in this Agreement will pass title to such Shares free and clear of any adverse
claim, assuming that each Underwriter purchases the Shares in good faith without
notice of any adverse claim; and
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(xxii) the Power of Attorney signed by each
Individual Shareholder appointing the respective Attorneys, or either of them,
as his attorneys-in-fact to the extent set forth therein with regard to the
transactions contemplated hereby and by the Registration Statement has been duly
authorized, executed and delivered by or on behalf of such Individual
Shareholder and is a valid and binding instrument of such Individual Shareholder
enforceable in accordance with its terms, except (A) as rights to indemnity and
contribution may be limited by applicable laws and considerations of public
policy, (B) as may be limited by the effects of applicable bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar laws
affecting rights and remedies of creditors generally, and (C) as may be limited
by the effects of general principles of equity (including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing), whether
applied by a court of law or equity, and pursuant to such Power of Attorney,
each of the Individual Shareholders has authorized Xxxxxxxx X. Xxxxxxxxx and
Xxxxxxx X. Xxxxxx, or either of them, to execute and deliver on their behalf
this Agreement and any other document necessary or desirable in connection with
transactions contemplated hereby and to deliver the Shares to be sold by such
Individual Shareholders pursuant to this Agreement.
In addition to the matters set forth above, such opinion shall
also include a statement to the effect that although such counsel has not
independently verified the accuracy or completeness of the information in the
Registration Statement and Prospectus, they have participated in conferences
with representatives of the Company and its independent accountants and
investment bankers and their counsel at which the contents of the Registration
Statement and the Prospectus were discussed at length and nothing has come to
their attention that causes them to believe that (except for financial
statements and schedules, as to which no belief need be expressed) the
Registration Statement and the Prospectus included therein at the time the
Registration Statement became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, as amended or supplemented, if applicable (except for financial
statements and schedules and other financial or statistical data, as aforesaid)
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The opinion of Butzel Long described in paragraph (e) above shall be
rendered to you at the request of the Company and the Individual Shareholders,
and shall so state therein.
(f) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Xxxxxxxxx & Co., counsel for CBSI India to the effect that:
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(i) CBSI India has been duly organized and is validly
existing as a private company limited by shares in good standing under the laws
of India;
(ii) CBSI India has 2,000,000 shares of stock
authorized, 552,756 of which are issued and outstanding; all necessary and
proper corporate proceedings have been taken in order to authorize validly such
authorized stock; all outstanding shares of such stock have been duly and
validly issued, are fully paid and non-assessable, have been issued in
compliance with Indian law, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase any securities;
(iii) all of the outstanding shares of capital stock
of, or other ownership interests in, CBSI India have been duly and validly
authorized and issued and are fully paid and non-assessable, and are owned by
CBSI Mauritius, except one share held by Xx. Xxxxxxxx Xxxxxxxxx, one of the
directors of CBSI India, as nominee shareholder of CBSI Mauritius, free and
clear of any security interest, claim, lien, encumbrance or adverse interest of
any nature; and
(iv) the consummation of the transactions
contemplated hereby will not result in a breach of, or constitute a default
under, any material indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other material agreement or
instrument to which CBSI India is a party or by which any of its properties may
be bound, or violate any statute, judgment, decree, order, rule or regulation
known to such counsel of any court or governmental body having jurisdiction over
CBSI India or any of its properties and to such counsel's knowledge, no
approval, authorization, order or consent of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery of this Agreement or the consummation by CBSI India of the
transactions contemplated herein, except as have been made or obtained.
In rendering such opinion, such counsel may rely as to matters of fact,
on certificates of the officers of CBSI India and of governmental officials, in
which case their opinion shall state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates shall be attached to the opinion.
(g) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxxxxx & Xxxxxx, Ltd., counsel for the
Underwriters, as to the matters set forth therein. In making the statements
analogous to those following Section 9(e)(xviii) in the opinion for counsel for
the Company, above, such counsel may state that their opinion and belief are
based upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
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(h) You shall have received from Xxxxxx Xxxxxxxx LLP a letter
or letters, in form and substance reasonably satisfactory to you and your
counsel addressed to the Underwriters and dated the Closing Date and any later
date on which Option Shares are purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the Act and
based upon the procedures described in their letter delivered to you
concurrently with the execution of this Agreement (herein called the "ORIGINAL
LETTER"), but carried out to a date not more than five business days prior to
the Closing Date or such later date on which the Option Shares are purchased, as
the case may be, (iii) confirming, to the extent true, that the statements and
conclusions set forth in the Original Letter are accurate as of the Closing Date
or such later date, as the case may be, and (iv) setting forth any revisions and
additions to the statements and conclusions set forth in the Original Letter, or
their knowledge thereof, after the date of the Original Letter or to reflect the
availability of more recent financial statements, date or information. If such
Original Letter discloses any material adverse decreases or increases, as the
case may be, in the items specified therein which are not set forth in or
contemplated by the Prospectus, or if the subsequent letter or letters to be
delivered at the Closing discloses any material adverse change in the statements
and conclusions set forth in the Original Letter, which in either case, in the
reasonable judgment of the Underwriters, makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated by the Prospectus, this Agreement and all
obligations of the Underwriters hereunder may be terminated by the Underwriters
by notifying the Company in the matter and with the effect provided below in
Section 12 of this Agreement.
(i) The Company and the Selling Shareholders shall not have
failed at or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company at or prior to the Closing Date.
(j) You shall have received on the Closing Date a properly
completed and executed United States Treasury Department Form W-9 from each
Individual Shareholder.
The several obligations of the Underwriters to purchase any Option
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such Option
Shares and other matters related to the issuance of such Option Shares.
10. Termination.
(a) This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Sellers if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective
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material adverse change in the condition, financial or otherwise, of the Company
and Subsidiaries, taken as a whole, or the earnings, affairs, or business
prospects of the Company and its Subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business, which would, in your judgment, make
it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus, (ii) any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in your judgment, is material and adverse and would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (iii) the suspension or material limitation of trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market or limitation on prices for securities on any such
exchange or Nasdaq National Market, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company or any Subsidiary, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
(b) If on the Closing Date or on an Option Closing Date, as
the case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Option Shares, as the case may be, which it or they
have agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Option Shares, as the case may be, which such defaulting Underwriter
or Underwriters, as the case may be, agreed but failed or refused to purchase is
not more than one-tenth of the total number of Shares to be purchased on such
date by all Underwriters, each non-defaulting Underwriter shall be obligated
severally, in the proportion which the number of Firm Shares set forth opposite
its name in Schedule I bears to the total number of Firm Shares which all the
non-defaulting Underwriters, as the case may be, have agreed to purchase, or in
such other proportion as you may specify, to purchase the Firm Shares or Option
Shares, as the case may be, which such defaulting Underwriter or Underwriters,
as the case may be, agreed but failed or refused to purchase on such date;
provided, however, that in no event shall the number of Firm Shares or Option
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such number of Firm Shares or Option Shares, as
the case may be, without the written consent of such Underwriter. If on the
Closing Date or on an Option Closing Date, as the case may be, any Underwriter
or Underwriters shall fail or refuse to purchase Firm Shares, or Option Shares,
as the case may be, and the aggregate number of Firm Shares or Option Shares, as
the case may be, with respect to which such default occurs is more than
one-tenth of the aggregate number of Shares to be purchased on such date by all
Underwriters and arrangements satisfactory to you and the applicable Sellers for
purchase of such Shares are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any
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non-defaulting Underwriter and the applicable Sellers. In any such case which
does not result in termination of this Agreement, either you or the Sellers
shall have the right to postpone the Closing Date or the applicable Option
Closing Date, as the case may be, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
11. Agreements of the Selling Shareholders. Each Selling Shareholder
agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes, if any,
with respect to the Shares to be sold by such Selling Shareholder; and
(b) To take all reasonable actions in cooperation with the
Company and the Underwriters to cause the Registration Statement to become
effective at the earliest possible time, to do and perform all things to be done
and performed by such Selling Shareholder under this Agreement prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Shares pursuant to this Agreement that apply to such Selling Shareholder.
12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to Complete
Business Solutions, Inc., 00000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx
Xxxxx, XX 00000, (b) if to any Selling Shareholder, to any of their respective
Attorneys, and (c) if to any Underwriter or to you, to you c/x Xxxxxxxxx, Lufkin
& Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Shareholders, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Sellers, the officers or directors of
the Company or any controlling person of the Sellers, (ii) acceptance of the
Shares and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
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Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "SUCCESSORS AND ASSIGNS" shall include controlling persons
and successors in interest by operation of law, or by virtue of sale of all the
assets of an entity, but shall not include a purchaser of any of the Shares from
any of the several Underwriters merely because of such purchase.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without reference to the rules governing the
conflicts of laws.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
* * * * *
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Shareholders and the several
Underwriters.
Very truly yours,
Complete Business Solutions, Inc.
By:
--------------------------------
Title:
-------------------------
THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE II HERETO
By:
--------------------------------
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
-------------------------------
Title:
-------------------------------
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SCHEDULE I
UNDERWRITERS
NUMBER OF FIRM SHARES
NAME TO BE PURCHASED
---- ---------------
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES
CORPORATION............................................
CREDIT SUISSE FIRST BOSTON CORPORATION...................
XXXX XXXXX XXXX XXXXXX, INCORPORATED.....................
WARBURG DILLON READ LLC, a subsidiary of UBS AG..........
TOTAL........................................... 4,000,000
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SCHEDULE II
SELLING SHAREHOLDERS
NUMBER OF FIRM SHARES
NAME BEING SOLD
---- ----------
Xxxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxx De Paolis
Xxxxx X. Xxxxx
Xxxxxxxx X. Xxxxxxxxx Foundation
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Land
Xxx X. Xxxxxx
Xxxxxxx D. Xxxxxx
Xxxxx Fast
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SCHEDULE III
Xxxxxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxxx shall serve as Attorneys-in-Fact
for:
Xxxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Land
Xxxxx Xxxxxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxx and Xxxxx Xxxxxx shall serve as
Attorneys-in-Fact for JF Electra (Mauritius) Limited
