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[FORM OF UNDERWRITING AGREEMENT]
2,600,000 Shares
Quest Medical, Inc.
Common Stock
UNDERWRITING AGREEMENT
, 1995
VECTOR SECURITIES INTERNATIONAL, INC.
XXXXXXXX XXXXXX REFSNES, INC.
As Representatives of the Several Underwriters
c/o VECTOR SECURITIES INTERNATIONAL, INC.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Quest Medical, Inc., a Texas corporation (the "Company"), proposes to
issue and sell an aggregate of 1,516,667 shares of its common stock, par value
$0.05 per share, and the persons named in Schedule I hereto (the "Selling
Stockholders") propose to sell an aggregate of 1,083,333 shares of common stock
of the Company (together with the 1,516,667 shares of common stock to be issued
and sold by the Company, the "Initial Securities") to the several Underwriters
named in Schedule II hereto (the "Underwriters") for whom Vector Securities
International, Inc., ("Vector") and Xxxxxxxx Xxxxxx Refsnes, Inc. acting as
representatives (the "Representatives"). In addition, solely for the purpose
of covering over-allotments, the Company proposes to sell to the several
Underwriters, upon the terms and conditions set forth in Section 2 hereof, up
to an additional 390,000 shares of Common Stock of the Company (the "Option
Securities"). The Company and the Selling Stockholders are hereinafter
sometimes referred to as the "Sellers." The Initial Securities and the Option
Securities are hereinafter collectively referred to as the "Securities." The
Company's common stock, par value $0.05 per share, including the Securities, is
hereinafter referred to as the "Common Stock."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form SB-2 covering the registration of the Securities
under the Securities
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Act of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus, or prospectuses, and either (A) has prepared and proposes to file,
prior to the effective date of such registration statement, an amendment to
such registration statement, including a final prospectus or (B) if the Company
has elected to rely upon Rule 430A ("Rule 430A") of the rules and regulations
of the Commission under the 1933 Act (the "1933 Act Regulations"), will prepare
and file a prospectus, in accordance with the provisions of Rule 430A and Rule
424(b) ("Rule 424(b)") of the 1933 Act Regulations, promptly after execution
and delivery of this Agreement. Additionally, if the Company has elected to
rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, the Company will
prepare and file a term sheet (a "Term Sheet") in accordance with the
provisions of Rule 434 and Rule 424(b), promptly after execution and delivery
of this Agreement. The information, if any, included in such prospectus that
was omitted from the prospectus included in such registration statement at the
time it becomes effective but that is deemed, (i) pursuant to paragraph (b) of
Rule 430A, to be part of such registration statement at the time it becomes
effective is referred to herein as the "Rule 430A Information," and (ii)
pursuant to paragraph (d) of Rule 434, to be part of such registration
statement at the time it becomes effective is referred to herein as the "Rule
434 Information." Each prospectus used before the time such registration
statement becomes effective, and any prospectus that omits the Rule 430A
Information or the Rule 434 Information, if applicable, that is used after such
effectiveness and prior to the execution and delivery of this Agreement, is
herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto at the time it becomes effective and including,
if applicable, the Rule 430A Information or the Rule 434 Information, is herein
called the "Original Registration Statement." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as
the "Rule 462(b) Registration Statement," and the Original Registration
Statement and any Rule 462(b) Registration Statement are herein referred to
collectively as the "Registration Statement." The prospectus included in the
Original Registration Statement at the time it becomes effective is herein
called the "Prospectus," except that, (i) if the final prospectus first
furnished to the Underwriters after the execution of this Agreement for use in
connection with the offering of the Securities differs from the prospectus
included in the Original Registration Statement at the time it becomes
effective (whether or not such prospectus is required to be filed pursuant to
Rule 424(b)), the term "Prospectus" shall refer to the final Prospectus first
furnished to the Underwriters for such use, and (ii) if Rule 434 is relied
upon, the term "Prospectus" shall refer to the preliminary prospectus last
furnished to the Underwriters in connection with the offering of the
Securities, together with the Term Sheet.
2. AGREEMENTS TO SELL AND PURCHASE. Upon the basis of the
representations, warranties and agreements contained herein and
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subject to all the terms and conditions set forth herein and to such
adjustments as you may determine to avoid fractional shares, the Company hereby
agrees to issue and sell to each Underwriter and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$ per share (the "purchase price per share"), the number of Initial
Securities set forth in Schedule II opposite the name of such Underwriter (or
such number of Initial Securities increased as set forth in Section 12 hereof).
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein
and to such adjustments as you may determine to avoid fractional shares, each
Selling Stockholder agrees to sell to each Underwriter and each Underwriter
agrees, severally and not jointly, to purchase from each Selling Stockholder,
at the purchase price per share, that number of Initial Securities which bears
the same proportion to the number of Initial Securities set forth opposite the
name of such Selling Stockholder as the number of Initial Securities set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Initial Securities increased as set forth in Section 12 hereof) bears to the
aggregate number of Initial Securities to be sold by the Company.
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein,
the Company also agrees to sell to the Underwriters, and the Underwriters shall
have the right to purchase from the Company, at the purchase price per share,
pursuant to an option (the "over-allotment option") which may be exercised
prior to 5:00 P.M., Chicago time, on the 30th day after (i) the later of the
date upon which the Original Registration Statement and any Rule 462(b)
Registration Statement become effective, if the Company has elected not to rely
on Rule 430A, or (ii) the date of this Agreement, if the Company has elected to
rely on Rule 430A (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange
is open for trading), up to an aggregate of 390,000 Option Securities. Option
Securities may be purchased solely for the purpose of covering over-allotments
made in connection with the offering of the Securities. Upon any exercise of
the over-allotment option, each Underwriter, severally and not jointly, agrees
to purchase from the Company the number of Option Securities (subject to such
adjustments as you may determine in order to avoid fractional shares) that
bears the same proportion to the total number of Option Securities to be sold
by the Company as the number of Initial Securities to be sold by the Company
set forth opposite the name of such Underwriter in Schedule II hereto (or such
number of Initial Securities increased as set forth in Section 12 hereof) bears
to the aggregate number of Initial Securities to be sold by the Company.
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Certificates in transferable form for the Securities that each of the
Selling Stockholders agrees to sell pursuant to this Agreement have been placed
in custody with [Name of Custodian] (the "Custodian") for delivery under this
Agreement pursuant to a Custody Agreement and Power of Attorney (collectively,
the "Custody Agreement") executed by each of the Selling Stockholders
appointing and as agents and
attorneys-in-fact (the "Attorneys-in-Fact"). Each Selling Stockholder agrees
that (i) the Securities represented by the certificates held in custody
pursuant to the Custody Agreement are subject to the interests of the
Underwriters, the Company and each other Selling Stockholder, (ii) the
arrangements made by the Selling Stockholders for such custody are, except as
specifically provided in the Custody Agreement, irrevocable, and (iii) the
obligations of the Selling Stockholders hereunder and under the Custody
Agreement shall not be terminated by any act of such Selling Stockholder or by
operation of law, whether by the death or incapacity of any Selling Stockholder
or the occurrence of any other event or, if the Selling Stockholder is not a
natural person, upon any dissolution, winding up, distribution of assets or
other event affecting the legal existence of such Selling Stockholder. If any
Selling Stockholder shall die or be incapacitated or if any other event shall
occur before the delivery of the Securities hereunder or if the Selling
Stockholder is not a natural person, shall dissolve, wind up, distribute assets
or if any other event affecting the legal existence of such Selling Stockholder
shall occur before the delivery of the Securities hereunder, certificates for
the Securities of such Selling Stockholder shall be delivered to the
Underwriters by the Attorneys-in-Fact, or any of them, in accordance with the
terms and conditions of this Agreement and the Custody Agreement as if such
death or incapacity, dissolution, winding up or distribution of assets or other
event had not occurred, regardless of whether or not the Attorneys-in-Fact or
any Underwriter shall have received notice of such death, incapacity,
dissolution, winding up or distribution of assets or other event. Each
Attorney-in-Fact is authorized, on behalf of each of the Selling Stockholders,
to execute this Agreement and any other documents necessary or desirable in
connection with the sale of the Securities to be sold hereunder by such Selling
Stockholder, to make delivery of the certificates for such Securities, to
receive the proceeds of the sale of such Securities, to give receipts for such
proceeds, to pay therefrom any expenses to be borne by such Selling Stockholder
in connection with the sale and public offering of such Securities, to
distribute the balance thereof to such Selling Stockholder, and to take such
other action as may be necessary or desirable in connection with the
transactions contemplated by this Agreement. Each Attorney-in-Fact agrees to
perform his duties under the Custody Agreement.
3. TERMS OF PUBLIC OFFERING. The Sellers have been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Securities as soon
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after the Registration Statement and this Agreement have become effective as in
your judgment is advisable and initially to offer the Securities upon the terms
set forth in the Prospectus.
4. DELIVERY OF THE SECURITIES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Initial Securities shall be made at the
office of ________________________ at 9:00 A.M., Chicago time, on , 1995 (the
"Closing Date"). The place of closing for the Initial Securities and the
Closing Date may be varied by agreement among you, the Company and the
Attorneys-in-Fact.
Delivery to the Underwriters of and payment for any Option Securities
to be purchased by the Underwriters shall be made at the aforementioned office
of ________________________ at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company of the Underwriters' determination to purchase a number, specified in
such notice, of Option Securities. The place of closing for any Option
Securities and the Option Closing Date for such Option Securities may be varied
by agreement between you and the Attorneys-in-Fact.
Certificates for the Initial Securities and for any Option Securities
to be purchased hereunder shall be registered in such names and in such
denominations as you shall request by written notice, it being understood that
a facsimile transmission shall be deemed written notice, prior to 9:30 A.M.,
Chicago time, on the second business day preceding the Closing Date or any
Option Closing Date, as the case may be. Such certificates shall be made
available to you in Chicago, Illinois for inspection and packaging not later
than 9:30 A.M., Chicago time, on the business day next preceding the Closing
Date or the Option Closing Date, as the case may be. The certificates and
stockpowers evidencing the Initial Securities and any Option Securities to be
purchased hereunder shall be delivered to you on the Closing Date or the Option
Closing Date, as the case may be, against payment of the purchase price
therefor by certified or official bank check or checks payable in New York
Clearing House (next day) funds to the order of the Company and the
Attorneys-in-Fact. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Vector, individually and
not as representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose check has not been
received by the Closing Date or the Option Closing Date, as the case may be,
but such payment
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shall not relieve such Underwriter from its obligations hereunder.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters as follows:
a. The Company will notify the Underwriters immediately, and confirm
the notice in writing, (i) of the effectiveness of the Registration Statement
and any amendment thereto, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
suspension of qualification of the Securities for offering or sale in any
jurisdiction or the initiation of any proceedings for such purpose and (v)
during the period when the Prospectus is required to be delivered under the
1933 Act or Securities Exchange Act of 1934, as amended (the "1934 Act"), of
any change in the Company's condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company or the happening of any
event, including the filing of any information, documents or reports pursuant
to the 1934 Act, that makes any statement of a material fact made in the
Registration Statement or the Prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to state a material fact
required by the 1933 Act or the 1933 Act Regulations to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus to comply with the 1933 Act or
any other law. The Company shall use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, and, if at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, the Company shall use
every reasonable effort to obtain the withdrawal or lifting of such order at
the earliest possible time.
b. The Company will give the Underwriters notice of its intention to
prepare or file any amendment to the Registration Statement (including any
post-effective amendment), any Rule 462(b) Registration Statement, any Term
Sheet or any amendment or supplement to the Prospectus (including any revised
prospectus or Term Sheet and preliminary prospectus which the Company proposes
for use by the Underwriters in connection with the offering of the Securities
which differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised
prospectus or Term Sheet and preliminary prospectus is required to be filed
pursuant to Rule
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424(b)), whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Underwriters with copies of any Rule 462(b) Registration Statement,
Term Sheet, amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such Rule
462(b) Registration Statement, Term Sheet, amendment or supplement or use any
such prospectus to which the Underwriters or counsel for the Underwriters shall
object.
c. The Company will deliver to the Underwriters as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) as the Underwriters may reasonably request.
d. The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended
or supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder.
e. If any event shall occur as a result of which it is necessary, in
the opinion of counsel for the Underwriters, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company
will forthwith amend or supplement the Prospectus (in form and substance
satisfactory to counsel for the Underwriters) so that, as so amended or
supplemented, the Prospectus will not include an 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 existing at the time it is delivered
to a purchaser, not misleading, and the Company will furnish to the
Underwriters a reasonable number of copies of such amendment or supplement.
f. During the period of five years hereafter, the Company will furnish
to you (i) as soon as available, a copy of each report of the Company mailed to
stockholders or filed with the Commission or Nasdaq National Market ("NASDAQ"),
and (ii) from time to time such other information concerning the Company as you
may request.
g. The Company will endeavor, in cooperation with the Underwriters, to
qualify the Securities for offering and sale under the applicable securities or
Blue Sky laws of such states and other jurisdictions of the United States as
the Underwriters may designate; provided, however, that the Company shall not
be obligated to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified. In each jurisdiction in which the Securities have been
so qualified, the Company will file such
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statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one year
from the later of the effective date of the Original Registration Statement and
any Rule 462(b) Registration Statement.
h. The Company will make generally available to its security holders
as soon as practicable, but not later than 50 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
i. The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds."
j. If, at the time that the Registration Statement becomes effective,
any Rule 430A Information or Rule 434 Information shall have been omitted
therefrom, then immediately following the execution of this Agreement, the
Company will prepare, and file or transmit for filing with the Commission in
accordance with Rule 430A or Rule 434 and Rule 424(b), copies of a Prospectus
or Term Sheet containing such Rule 430A Information and Rule 434 Information,
respectively, or, if required by Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus), containing such Rule
430A Information.
k. If the Company elects to rely upon 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 of the 1933 Act Regulations by the earlier of (i) 10:00 P.M. Eastern Time
on the date hereof and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
l. The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of
the 1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act Regulations").
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m. During a period of 180 days from the date of the Prospectus, the
Company will not, without Vector's prior written consent on behalf of the
Underwriters, directly or indirectly, sell, offer to sell, grant any option for
the sale of, or otherwise dispose of, Common Stock or any security convertible
into Common Stock (except for Common Stock issued pursuant to this Agreement or
pursuant to reservations, agreements, conversions or employee or director
benefit plans or the exercise of convertible securities referred to in Section
7(g) hereof).
n. The Company has furnished or will furnish to you "lock-up" letters,
in form and substance satisfactory to you, signed by each of its current
officers and directors and each of its stockholders designated by you.
o. The Company will supply the Underwriters with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Securities under the 0000 Xxx.
p. Prior to the Closing Date, the Company shall furnish to the
Underwriters, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Company and its subsidiaries,
for any periods subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.
q. Prior to the Closing Date, the Company will issue no press release
or other communications directly or indirectly and hold no press conference
with respect to the Company or any of its subsidiaries, the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of any of them, or the offering of the Securities, without the prior written
consent of the Representatives unless in the judgment of the Company and its
counsel, and after notification to the Representatives, such press release or
communication is required by law.
r. The Company has complied and will comply with all provisions of
Florida H.B. 1771, codified as Section 517.075 of the Florida statutes, and all
regulations promulgated thereunder relating to issuers doing business with
Cuba.
s. If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 or pursuant to clauses (ii), (iii), (iv) and (v)
of Section 13 hereof) or if this Agreement shall be terminated by the
Underwriters because of any failure or refusal on the part of the Company or
any of the Selling Stockholders to comply, in any material respect, with the
terms or fulfill, in any material respect, any of the conditions of this
Agreement, the Company agrees to reimburse the
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Representatives for all reasonable out-of-pocket expenses (including reasonable
fees and expenses of counsel for the Underwriters) incurred by you in
connection herewith.
t. The Company has not taken, nor will it take, directly or
indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Securities.
u. The Company will use its best efforts to have the Securities
approved for listing on the NASDAQ.
6. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each of the Selling
Stockholders severally agrees with the several Underwriters as follows:
a. Such Selling Stockholder will cooperate to the extent necessary to
cause the Registration Statement or any post-effective amendment thereto to
become effective at the earliest possible time.
b. Such Selling Stockholder will pay all Federal, state and other
taxes, if any, on the transfer or sale of such Securities that are sold by the
Selling Stockholder to the Underwriters.
c. Such Selling Stockholder will do or perform all things required to
be done or performed by such Selling Stockholder prior to the Closing Date to
satisfy all conditions precedent to the delivery of the Securities pursuant to
this Agreement relating to such Selling Stockholder.
d. Such Selling Stockholder will not for a period of 270 days after
the date of the Prospectus, without Vector's prior written consent, on behalf
of the Underwriters, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, Common Stock or any security
convertible into Common Stock, except for Securities sold pursuant to this
Agreement.
e. Such Selling Stockholder has not taken, nor will it take, directly
or indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Securities.
f. Such Selling Stockholder promptly will advise you on behalf of the
several Underwriters, and immediately confirm such advice in writing, (i) of
receipt by such Selling Stockholder or by any representative or agent of such
Selling Stockholder, of any communication from the Commission relating to the
Registration
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Statement or the Prospectus, or any notice or order of the Commission relating
to the Company or such Selling Stockholder in connection with the transactions
contemplated by this Agreement and (ii) of the happening of any event which
makes or may make any statement made in the Registration Statement or the
Prospectus untrue or that requires the making of any change in the Registration
Statement or Prospectus in order to make any such statement, in the light of
the circumstances in which it was made, not misleading or to comply with the
1933 Act or any other law.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
a. When the Registration Statement becomes effective, including at the
date of any post- effective amendment, at the date of the Prospectus, if
different, and at the Closing Date and the Option Closing Date, as the case may
be, (i) the Registration Statement will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and 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. The Prospectus and any supplements or amendments thereto will
not at the date of the Prospectus, at the date of any such supplements or
amendments, and at the Closing Date and the Option Closing Date, if any,
include an 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; provided, however,
that the representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
relating to any Selling Stockholder or any Underwriter made in reliance upon
and in conformity with information furnished to the Company in writing by any
Underwriter, through Vector, expressly for use in the Registration Statement or
Prospectus.
b. The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
c. The financial statements included in the Registration Statement and
the Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. The
financial information and statistical data set forth in the Prospectus are
prepared on an
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accounting basis consistent with such financial statements.
d. Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(i) there has been no material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) there have been no
transactions entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with respect to
the Company and its subsidiaries considered as one enterprise, and (iii) there
has been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock. The Company has no material
contingent obligations which are not disclosed in the Registration Statement.
e. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Texas with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
f. Each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; all of the issued
and outstanding capital stock of each such subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. There are no
outstanding subscriptions, rights,
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warrants, commitments, convertible or exchangeable securities, or other options
outstanding entitling any person to acquire any shares of capital stock of or
ownership interests in any subsidiary of the Company.
g. The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus under "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement or pursuant to reservations,
agreements, employee or director benefit plans or the exercise of convertible
securities referred to in the Prospectus); the shares of issued and outstanding
capital stock of the Company, including the Common Stock, have been duly
authorized and validly issued and are fully paid and non-assessable and have
not been issued in violation of or are not otherwise subject to any preemptive
or other similar rights; the Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid and non-
assessable; the authorized capital stock of the Company, including the
Securities, conforms to all statements relating thereto contained in the
Prospectus; the issuance of the Securities is not subject to preemptive or
other similar rights. There are no outstanding options, warrants or other
rights granted to or by the Company to purchase shares of Common Stock or other
securities of the Company and there are no commitments, plans or arrangements
to issue any shares of Common Stock or any security convertible into Common
Stock, in each case other than as described in the Prospectus.
h. Except as disclosed in the Registration Statement and except as
would not, singly or in the aggregate, reasonably be expected to have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise (a) the Company and its subsidiaries
are each in compliance with all applicable Environmental Laws, (B) the Company
and its subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with their
requirements, (C) to the best knowledge of the Company, there are no pending or
threatened Environmental Claims against the Company or any of its subsidiaries
and (D) under applicable law, there are no circumstances with respect to any
property or operations of the Company or its subsidiaries that are reasonably
likely to form the basis of an Environmental Claim against the Company or its
subsidiaries.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) Federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any
judicial or administrative
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interpretation thereof, including any judicial or administrative order, consent
decree or judgement, relating to the environment, health, safety or any
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority. "Environmental Claims" means any and
all administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigations
or proceedings relating in any way to any Environmental Law.
i. Neither the Company nor any of its subsidiaries is in violation of
its charter or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any
of its subsidiaries is subject; and the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the Company
or any of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the charter or bylaws of the Company or any applicable law, rule,
statute, ordinance, administrative regulation or administrative or court
decree.
j. No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best knowledge of the Company, is imminent; and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors which
might, singly or in the aggregate, be expected to result in any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
k. There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or any
of its subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which, singly or in the
aggregate, might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
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business prospects of the Company and its subsidiaries considered as one
enterprise, or which, singly or in the aggregate, might materially and
adversely affect the properties or assets thereof or which might materially and
adversely affect the consummation of this Agreement; all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is a
party or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, are, considered in the
aggregate, not material; and there are no contracts or documents of the Company
or any of its subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations which
have not been so filed.
l. The Company owns or is licensed to use all patents, patent
applications, inventions, trademarks, tradenames, applications for registration
of trademarks, copyrights, know-how, trade secrets, licenses and rights in any
thereof (herein called the Proprietary Rights) which are material to the
businesses of the Company as now conducted and as proposed to be conducted, in
each case as described in the Prospectus. The Company does not have any
knowledge of, and the Company has not given or received any notice of, any
pending conflicts with or infringement of the rights of others with respect to
any Proprietary Rights or with respect to any license of Proprietary Rights.
No action, suit, arbitration, or legal, administrative or other proceeding, or
investigation is pending, or, to the best knowledge of the Company, threatened,
which involves any Proprietary Rights. Neither the Company nor any subsidiary
is subject to any judgment, order, writ, injunction or decree of any court or
any Federal, state, local, foreign or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
any arbitrator, or has entered into or is a party to any contract which
restricts or impairs the use of any such Proprietary Rights in a manner which
would have a material adverse effect on the use of any of the Proprietary
Rights. To the best knowledge of the Company, no Proprietary Rights used by
the Company or any of its subsidiaries, and no services or products sold by the
Company or any of its subsidiaries, conflict with or infringe upon any
proprietary rights available to any third party. Neither the Company nor any
subsidiary has received written notice of any pending conflict with or
infringement upon such third party proprietary rights. Neither the Company nor
any subsidiary has entered into consent, indemnification, forbearance to xxx or
settlement agreement with respect to Proprietary Rights other than in the
ordinary course of business. No claims have been asserted by any person with
respect to the validity of or the Company's or any of its subsidiaries'
ownership or right to use the Proprietary Rights and, to the best knowledge of
the Company, there is no reasonable basis for any such claim to be successful.
The Proprietary Rights are valid and enforceable and no registration relating
thereto has lapsed, expired or been abandoned or cancelled or is the subject of
cancellation or other
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adversarial proceedings, and all applications therefore are pending and are in
good standing. The Company and its subsidiaries have complied, in all material
respects, with their respective contractual obligations relating to the
protection of the Proprietary Rights used pursuant to licenses. To the best
knowledge of the Company, no person is infringing on or violating the
Proprietary Rights owned or used by the Company or any of its subsidiaries.
m. No authorization, approval or consent of any court or governmental
authority or agency is necessary in connection with the offering, issuance or
sale of the Securities hereunder, except such as may be required under the 1933
Act or the 1933 Act Regulations or state securities or Blue Sky laws (or such
as may be required by the National Association of Securities Dealers, Inc.
("NASD").
n. The Company and its subsidiaries possess and are operating in
compliance with all certificates, authorities, consents, certificates,
approvals or permits (collectively, "permits") issued by the appropriate state,
Federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such permit or any circumstance which would lead them to
believe that any such proceedings are reasonably likely which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and, except as described in the
Prospectus, none of such permits contains any restriction that is materially
burdensome to the Company or any of its subsidiaries.
o. This Agreement has been duly executed and delivered by the Company
and constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by state or Federal securities laws
or the public policy underlying such laws.
p. Except as described in the Prospectus, there are no persons with
registration or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under the
1933 Act.
q. No order preventing or suspending the use of any preliminary
prospectus has been issued and no proceedings for that purpose are pending,
threatened, or, to the knowledge of the Company, contemplated by the
Commission; and to the best knowledge of the Company, no order suspending the
offering of the Securities
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in any jurisdiction designated by the Underwriters pursuant to Section 5(g) of
this Agreement has been issued and, to the best knowledge of the Company, no
proceedings for that purpose have been instituted or threatened or are
contemplated.
r. The Company and each of its subsidiaries have good and marketable
title to their respective properties, free and clear of all material liens,
charges and encumbrances and equities of record. The properties of the Company
and its subsidiaries are, in the aggregate, in good repair (reasonable wear and
tear excepted), and suitable for their respective uses. Any real properties
held under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company
and its subsidiaries taken as a whole.
s. The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access
to assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
t. The Company and its subsidiaries have conducted and are conducting
their business in compliance with all applicable Federal, state and local laws,
rules, regulations, decisions, directives and orders, except where the failure
to do so would not, singly or in the aggregate, have a material adverse effect
on the condition, financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise.
u. To the Company's knowledge, neither the Company nor any of its
subsidiaries nor any employee or agent of the Company or any subsidiary has
made any payment of funds of the Company or any subsidiary or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus.
v. The Company is not now, and after sale of the Securities to be sold
by it hereunder and application of the net proceeds from such sale as described
in the Prospectus under the caption "Use of Proceeds" will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as
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amended.
w. The Company has complied with all provisions of Florida Statutes,
Section 517.075, relating to issuers doing business with Cuba.
x. The Company and each of its subsidiaries have filed all material
tax returns required to be filed, which returns are true and correct in all
material respects, and neither the Company nor any of its subsidiaries is in
default in the payment of any taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or otherwise assessed,
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without interest which were
payable pursuant to said returns or any assessments with respect thereto.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally represents and warrants to each Underwriter that:
a. Such Selling Stockholder is not prompted to sell the Securities to
be sold by such Selling Stockholder pursuant to this Agreement by any
information concerning the Company or any of its subsidiaries that is not set
forth in the Prospectus or other documents filed with the Commission.
b. Such Selling Stockholder now has, and on the Closing Date will
have, good and marketable title to the Securities to be sold by such Selling
Stockholder, free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on transfer.
c. Such Selling Stockholder now has, and on the Closing Date will
have, full legal right, power and authorization to sell, assign, transfer and
deliver such Securities in the manner provided in this Agreement, and upon
delivery of and payment for such Securities hereunder, the several Underwriters
will acquire good and marketable title to such Securities free and clear of any
lien, claim, security interest, or other encumbrance.
d. Such Selling Stockholder has full power (corporate or other) to
enter into this Agreement and the Custody Agreement and to perform its
obligations hereunder and thereunder. This Agreement and the Custody Agreement
have been duly authorized, executed and delivered by or on behalf of such
Selling Stockholder and are the valid and binding agreements of such Selling
Stockholder enforceable against such Selling Stockholder in accordance with
their terms.
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e. Neither the sale of the Securities, the execution, delivery or
performance of this Agreement or the Custody Agreement by or on behalf of such
Selling Stockholder, nor the consummation by or on behalf of such Selling
Stockholder of the transactions contemplated hereby and thereby (i) requires
any consent, approval, authorization registration or qualification of or with
any governmental instrumentality or court by such Selling Stockholder (except
such as may be required under the 1933 Act the securities or Blue Sky laws of
various jurisdictions in which the Securities are being distributed or pursuant
to the rules and regulations of the NASD) or (ii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under, any
agreement, indenture, mortgage, deed, trust, lease or other instrument or
agreement to which such Selling Stockholder is a party or by which such Selling
Stockholder is or may be bound, or violates or will violate the charter
documents, by-laws, partnership agreement or comparable governing documents of
such Selling Stockholder or any statute, law, regulation ruling or judgment,
injunction, order or decree applicable to such Selling Stockholder, or will
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of such Selling Stockholder pursuant to the terms of any
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder may be bound or to which any of the property or
assets of such Selling Stockholder is subject.
f. The Registration Statement and the Prospectus insofar as they
relate to such Selling Stockholder, do not and will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
g. The representations and warranties of such Selling Stockholder in
the Custody Agreement are, and on the Closing Date will be, true and correct.
h. Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action designed to, or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Securities; and such Selling
Stockholder has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Securities
other than the preliminary prospectus filed with the Commission or other
materials permitted by the 1933 Act and the 1933 Act Regulations.
i. Such Selling Stockholder does not have any knowledge or any reason
to believe that the Registration Statement or the Prospectus (or any amendment
or supplement thereto) contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make
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the statements therein not misleading.
9. INDEMNIFICATION AND CONTRIBUTION.
a. The Company agrees to indemnify and hold harmless (i) each
Underwriter and (ii) each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act (any of the persons referred to in
this clause (ii) being hereinafter referred to as a "controlling person") and
(iii) the respective directors, officers, partners and employees of any of the
Underwriters or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Person") to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities and expenses whatsoever (including, without limitation, all
reasonable costs of preparing, investigating and defending any claim, suit,
action or any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of counsel
to any Indemnified Person), directly or indirectly, caused by, related to,
based upon, arising out of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereto, including the Rule 430A Information and
Rule 434 Information, if applicable, or 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 or caused by, related to, based
upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) or any omission or
alleged omission to state therein 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.
b. If any action, suit or proceeding shall be brought against any
Indemnified Person in respect of which indemnity may be sought against the
Company or any Selling Stockholder, such Indemnified Person shall promptly
notify the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such Indemnified Person shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel or (iii) the named parties
to any such action, suit, investigation or proceeding (including any impleaded
parties) include both such Indemnified Person and the indemnifying parties and
representation of such Indemnified Person and any indemnifying party by the
same counsel would be inappropriate due to actual or potential differing
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interests between them (in which case the indemnifying party shall not have the
right to assume the defense of such action, suit or proceeding on behalf of
such Indemnified Person. It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Persons not having actual or potential differing interests
with you or among themselves, which firm shall be designated in writing by
Vector, and that all such fees and expenses shall be reimbursed as they are
incurred. The indemnifying parties shall not be liable for any settlement of
any such action, suit or proceeding effected without their written consent,
which consent shall not be unreasonably withheld, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless any Indemnified Person, to the extent provided in the preceding
paragraph, from and against any loss, claim, damage, liability or expense by
reason of such settlement or judgment.
c. Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless each Indemnified Person, the Company, its
directors, its officers who sign the Registration Statement, and any person who
controls the Company within the meaning of Section 15 of the 1933 Act to the
same extent as the foregoing indemnity from the Company to each Underwriter,
but only with respect to the information furnished in writing by or on behalf
of such Selling Stockholder expressly for use in the Registration Statement,
the Prospectus or any preliminary prospectus, or any amendment or supplement
thereto. If any action, suit, investigation or proceeding shall be brought
against any Indemnified Person, the Company, any of its directors, any such
officer, or any such controlling person of the Company, based on the
Registration Statement, the Prospectus or any preliminary Prospectus or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against any Selling Stockholder pursuant to this paragraph (c), such
Selling Stockholder shall have the rights and duties given to the Company by
paragraph (b) above, and each Indemnified Person, the Company, its directors,
any such officer, and any such controlling person of the Company shall have the
rights and duties given to the Indemnified Persons by paragraph (b) above.
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 who controls the Company within the meaning
of Section 15 of the 1933 Act and the Selling Stockholders, to the same extent
as the foregoing indemnity from the Company and the Selling Stockholders
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to each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through
Vector expressly for use in the Registration Statement, the Prospectus or any
preliminary prospectus, or any amendment or supplement thereto. If any action,
suit, investigation or proceeding shall be brought against the Company, any of
its directors, any such officer, any such controlling person or any Selling
Stockholder based on the Registration Statement, the Prospectus or any
preliminary prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any Underwriter pursuant to this
paragraph (d), such Underwriter shall have the rights and duties given to the
Company and the Selling Stockholders by paragraph (b) above, and the Company,
its directors, any such officer, any such controlling person, and the Selling
Stockholders, shall have the rights and duties given to the Indemnified Persons
by paragraph (b) above.
e. If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses 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, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Stockholders on the one hand and the Underwriters
on the other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus or, if Rule 434 is used,
the corresponding location on the Term Sheet. The relative fault of the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Selling Stockholders on the one hand or by the Underwriters
on the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The indemnity and contribution obligations of the Company and the Selling
Stockholder
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set forth herein shall be in addition to any liability or obligation the
Company or the Selling Stockholders may otherwise have to any Indemnified
Person.
f. The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses 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 any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 9, no Underwriter (or any of its
related Indemnified Persons) shall be required to contribute in the aggregate
any amount in excess of the amount by which the total price of the Securities
underwritten by such Underwriter and distributed 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 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to the respective numbers of Securities set forth opposite their
names in Schedule II hereto (or such numbers of Securities increased as set
forth in Section 12 hereof) and not joint.
g. No indemnifying party shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any Indemnified Person is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject
matter of such action, suit or proceeding.
h. Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Indemnified
Person, the
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Company, its directors or officers or the Selling Stockholders, any director,
officer or partner of a Selling Stockholder or any person controlling the
Company or any Selling Stockholder, (ii) acceptance of any Securities and
payment therefor hereunder and (iii) any termination of this Agreement.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Initial Securities hereunder
are subject to the following conditions:
a. The Original Registration Statement shall have become
effective not later than 5:30 P.M. on the date hereof, or with the consent of
Vector, at a later time and date, and if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become effective
not later than the earlier of (i) 9:00 P.M. Chicago time on the date hereof and
(ii) the time confirmations are sent or given, as specified by Rule 462(b)(2),
or, with respect to the Rule 462(b) Registration Statement, at such later time
and date as may be approved by Vector; no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission. If
the Company has elected to rely upon Rule 430A, Rule 430A Information
previously omitted from the effective Registration Statement pursuant to Rule
430A shall have been transmitted to the Commission for filing pursuant to Rule
424(b) within the prescribed time period and the Company shall have provided
evidence satisfactory to the Underwriters of such timely filing, or a
post-effective amendment providing such information shall have been promptly
filed and declared effective in accordance with the requirements of Rule 430A.
If the Company has elected to rely upon Rule 434, a Term Sheet shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within the
prescribed time period.
b. The Underwriters shall have received:
(i) The favorable opinion, dated as of the Closing Date, of Xxxxxx &
Xxxx, L.L.P., counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
A. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Texas.
B. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus and to enter into and perform its
obligations under this Agreement.
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C. To the best of their knowledge and information, the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required.
D. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Capitalization" (except
for subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans or the exercise of convertible securities referred
to in the Prospectus), and the shares of issued and outstanding capital
stock of the Company, including the Common Stock, have been duly authorized
and validly issued and are fully paid and non-assessable and, to their
knowledge, have not been issued in violation of or are not otherwise
subject to any preemptive rights or other similar rights.
E. The Securities have been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid and
non-assessable; and the issuance of the Securities is not subject to
preemptive or other similar rights.
F. Each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and, to the best of their knowledge
and information, is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required; all of the issued and outstanding capital stock
of each such subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, to the best of their knowledge and
information, is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
G. To the best of their knowledge and information, except as
described in the Prospectus, there are no outstanding options, warrants or
other
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rights granted to or by the Company to purchase shares of Common Stock or
other securities of the Company and there are no commitments, plans or
arrangements to issue any shares of Common Stock.
H. This Agreement has been duly authorized, executed and delivered
by the Company.
I. The Registration Statement is effective under the 1933 Act and,
to the best of their knowledge and information, no stop order suspending
the effectiveness of the Registration Statement has been issued under the
1933 Act nor have proceedings therefor been initiated or threatened by the
Commission.
J. At the time the Registration Statement became effective and at
the Closing Date, the Registration Statement (other than the financial
statements and supporting schedules included therein, as to which no
opinion need be rendered) complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations.
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K. The form of certificate used to evidence each of the Securities
is in due and proper form and complies with all applicable statutory
requirements.
L. To the best of their knowledge and information, there are no
legal or governmental proceedings pending or threatened which are required
to be disclosed in the Registration Statement other than those disclosed
therein, and all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or to which any of their property is
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are, considered in
the aggregate, not material.
M. The information in the Prospectus under "Business--Government
Regulation," "Business--Litigation," "Management--Employment Agreements,"
"Description of Capital Stock" and "Shares Eligible for Future Sale"
[others] to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions, has been
reviewed by them and is correct in all material respects and fairly and
correctly presents the information called for with respect thereto.
N. To the best of their knowledge and information, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto, the descriptions thereof
or references thereto are correct; and to their knowledge and information,
no default exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument of the Company or any of its subsidiaries.
O. No authorization, approval, consent or order of any court or
governmental authority or agency is required in connection with the
offering, issuance or sale of the Securities to the Underwriters, except
such as may be required under the 1933 Act or the 1933 Act Regulations or
state
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securities or Blue Sky laws or such as may be required by the NASD; and the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated herein and compliance by the Company with
its obligations hereunder will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of
the provisions of the charter or bylaws of the Company, or any applicable
law, rule, statute, ordinance, administrative regulation or administrative
or court decree.
P. To the best of their knowledge and information, the Company and
its subsidiaries possess and are in compliance with all permits issued by
the appropriate regulatory body or agency necessary to conduct the
businesses now operated by them, except where the failure to so possess or
comply with any permit would not have, singly or in the aggregate, a
material adverse effect on the business or financial condition of the
Company and its subsidiaries considered as one enterprise. To the best of
their knowledge and information, there are no proceedings, pending or
threatened, which if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the business or financial
condition of the Company and its subsidiaries considered as one enterprise.
Q. Except as described in the Prospectus, to the best of their
knowledge and information, there are no persons with registration or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
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. All sales of the Company's capital stock during the three years
immediately prior to the
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date hereof were at all relevant times duly registered or exempt from the
registration requirements of the 1933 Act.
(ii) The favorable opinion, dated as of
the Closing Date, of Venture Law Group & Professional Corporation,
counsel for the Underwriters with respect to the issuance and sale of
the Securities, the Registration Statement and the Prospectus and such
other related matters as the Underwriters shall reasonably request.
(iii) The favorable opinion, dated as of
the Closing Date, of Xxxxxx & Xxxx, L.L.P., counsel for the Selling
Stockholders with respect to the sale of the Securities, the
Registration Statement and the Prospectus and such related matters as
the Underwriter shall reasonably request, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
A. Each Custody Agreement has been duly executed and delivered by
each Selling Stockholder and the execution and delivery of this Agreement
on behalf of each of the Selling Stockholders by the Attorneys-in-Fact, or
any of them, has been duly authorized by all necessary action (whether
corporate or other) by each Selling Stockholder and constitutes legal,
valid, binding and enforceable instruments of each of the Selling
Stockholders.
B. To the best of their knowledge and information, each Selling
Stockholder has full right, power and authority and any approval required
by law to sell, transfer and deliver the Securities to be offered by such
Selling Stockholder pursuant to this Agreement.
C. By delivery of a certificate or certificates representing the
Securities to be offered by a Selling Stockholder pursuant to this
Agreement, and upon the receipt of payment therefor as contemplated herein,
such Selling Stockholder will transfer to the Underwriters who have
purchased such Securities good and marketable title to such Securities,
free and clear of any pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind.
D. The execution and delivery of this Agreement and the Custody
Agreement by the Selling Stockholders and the consummation of the
transactions contemplated herein and therein will
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not conflict with, constitute a breach of, or a default under any material
agreement, indenture, mortgage, deed, trust, lease or other instrument or
agreement known to such counsel to which any Selling Stockholder is a party
or by which any of them or any of their assets or property is bound, or
violate the charter documents, by-laws, partnership agreement or comparable
governing document of any Selling Stockholders or any statute, law,
regulation, filing, judgment, injunction, order or decree known to such
counsel to be applicable to any Selling Stockholder or to any of the
property or assets of any Selling Stockholder, except for any such
conflicts, breaches, defaults or violations that would not have a material
adverse effect on the ability of such Selling Stockholder to consummate the
transactions contemplated by this Agreement and by the Custody Agreement;
and
(iv) In giving their opinions required by
subsections (b)(i), b)(ii) and (b)(iii), respectively, of this Section
10, and Venture Law Group & Professional Corporation shall each
additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement (except for
financial statements and schedules and other financial included
therein, as to which counsel need make no statement), at the time it
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (except for financial statements and schedules and other
financial data included therein, as to which counsel need make no
statement), at the date hereof (unless the term "Prospectus" refers to
a prospectus which has been provided to the Underwriters by the
Company for use in connection with the offering of the Securities
which differs from the Prospectus on file at the Commission at the
time the Registration Statement becomes effective, in which case at
the time it is first provided to the Underwriters for such use) or at
the Closing Date or the Option Closing Date, as the case may be,
included or includes an 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.
c. (i) There shall not have been, since the date hereof or since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) the representations and
warranties of the Company in Section 7 hereof shall be true and correct with
the same force and effect as though expressly made at and as of the Closing
Date, except to the extent that any such representation or warranty relates to
a specific date, (iii) the Company shall have complied in all material respects
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date, (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the Commission and (v)
Vector shall have received a certificate, dated the Closing Date and signed by
the President or any Vice President and the chief financial or accounting
officer of the Company to the effect set forth in clauses (i), (ii), (iii) and
(iv) above.
d. At the time of the execution of this Agreement, the Underwriters
shall have received from Ernst & Young L.L.P. a letter dated such date, in form
and substance satisfactory to the Underwriters, to the effect that (i) they are
independent public accountants with respect to the Company and its subsidiaries
within the meaning of the 1933 Act and the 1933 Act Regulations, (ii) it is
their opinion that the financial statements and supporting schedules included
in the Registration Statement and covered by their opinions therein comply as
to form in all material respects with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations, (iii) based upon limited procedures
set forth in detail in such letter, nothing has come to their attention which
causes them to believe that (A) the unaudited financial statements and
supporting schedules of the Company and its subsidiaries included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration Statement or (B)
at a specified date not more than five days prior to the date of this
Agreement, there has been any change in the capital stock of the Company or any
increase in the consolidated long-term debt of the Company and its subsidiaries
or any decrease in consolidated net current assets or net assets as compared
with the amounts shown in the [_____________] balance sheet included in the
Registration Statement or, during the period from [_____________] to a
specified date not more than five days prior to the date of this Agreement,
there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues, net income or net income per share of
the Company and its subsidiaries, except in all instances for changes,
increases or decreases which the
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Registration Statement and the Prospectus disclose have occurred or may occur
and (iv) in addition to the examination referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are included in
the Registration Statement and Prospectus and which are specified by the
Underwriters, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial and
other records of the Company and its subsidiaries identified in such letter.
e. The Underwriters shall have received from Ernst & Young L.L.P. a
letter, dated as of the Closing Date, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to the Closing Date.
f. The Securities shall have been approved for listing on NASDAQ.
g. (i) the representations and warranties of each Selling Stockholder
set forth in Section 8 and in any certificate by or on behalf of any Selling
Stockholder delivered pursuant to the provisions hereof shall be true and
correct with the same force and effect as though expressly made at and as of
the Closing Date, except to the extent that any such representation or warranty
relates to a specific date, and (ii) each Selling Stockholder shall have
complied in all material respects with all agreements and satisfied in all
material respects all conditions on its part to be performed or satisfied at or
prior to the Closing Date.
h. In the event that the Underwriters exercise their option provided
in Section 2 hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of the Option Closing Date and, at the relevant Option Closing
Date, the Underwriters shall have received:
(1) A certificate, dated such Option Closing Date, of the President
or any Vice President of the Company and of the chief financial or
accounting officer of the Company confirming that the certificate delivered
at the Closing Date pursuant to Section 10(c) hereof remains true and
correct as of such Option Closing Date.
(2) The favorable opinion of counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Option
Closing
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Date, relating to the Option Securities to be purchased on such Option
Closing Date and otherwise to the same effect as the opinion required by
Sections 10(b)(i) and 10(b)(iii) hereof.
(3) The favorable opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx,
counsel for the Underwriters, dated such Option Closing Date, relating to
the Option Securities to be purchased on such Option Closing Date and
otherwise to the same effect as the opinion required by Sections 10(b)(ii)
and 10(b)(iv) hereof.
(4) A letter from Ernst & Young, L.L.P. in form and substance
satisfactory to the Underwriters and dated such Option Closing Date,
substantially the same in form and substance as the letter furnished to the
Underwriters pursuant to Section 10(e) hereof, except that the "specified
date" in the letter furnished pursuant to this Section 10(h)(4) shall be a
date not more than five days prior to such Option Closing Date.
i. Counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
Any certificate or document signed by any officer of the Company or any
Attorney-in-Fact or any Selling Stockholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company, the Selling
Stockholders or the particular Selling Stockholder, as the case may be, to each
Underwriter as to the statements made therein.
11. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by them
it of their its obligations hereunder: (i) the preparation, printing or
reproduction, and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), each preliminary
prospectus, the Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air
freight and charges for counting and packaging) of such copies of the
Registration Statement, each
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preliminary prospectus, the Prospectus, and all amendments or supplements to
any of them as may be reasonably requested for use in connection with the
offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp taxes in connection with the original issuance and sale of
the Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda and all other
agreements or documents printed (or reproduced) and delivered in connection
with the original issuance and sale of the Securities; (v) the registration of
the Common Stock under the 1934 Act and the listing of the Securities on
NASDAQ; (vi) the registration or qualification of the Securities for offer and
sale under the securities or Blue Sky laws of the several states as provided in
Section 5(g) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification); (vii) the filing fees and
the fees and expenses of counsel for the Underwriters incident to securing any
required review by the NASD; and (vii) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company and the Selling Stockholders.
12. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by or on behalf of the
parties hereto; or (ii) if, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the
Securities may commence, when notification of the effectiveness of the
Registration Statement or such post-effective amendment has been released by
the Commission. Until such time as this Agreement shall have become effective,
it may be terminated by the Company, by notifying you, or by you, as
Representatives of the several Underwriters, by notifying the Company and the
Selling Stockholders.
If one or more of the Underwriters shall fail on the Closing Date to
purchase the Initial Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
a. if the number of Defaulted Securities does not exceed 10% of the
number of Initial Securities, the non-defaulting
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Underwriters shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters, or
b. if the number of Defaulted Securities exceeds 10% of the number of
Initial Securities, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone the Closing Date for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 12.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. TERMINATION OF AGREEMENT. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Date or Option Closing Date, as the case may be, (i) if there has been, since
the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse
change, any development involving a prospective material adverse change in or
affecting the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, (ii)
if there has occurred any change in the financial markets in the United States
or elsewhere or any outbreak of hostilities or escalation thereof or other
calamity or crisis the effect of which is such as to make it, in your
judgement, impracticable or inadvisable to market the Securities or to enforce
contracts for the sale of the Securities, (iii) if trading in the Common Stock
has been suspended by the Commission, or if trading generally on such exchange
or markets the American Stock Exchange, the New York Stock Exchange or in the
over-the-counter markets has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by such exchange or markets or by order of the Commission or any
other governmental authority, or if a banking moratorium has been declared by
either Federal, New York or Illinois authorities, (iv) the enactment,
publication,
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decree or other promulgation of any Federal or state statute, regulation, rule
or order of any court or other governmental authority which in your judgement
materially and adversely affects or will materially or adversely affect the
business or operations of the Company and its subsidiaries or (v) 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 judgement has a material adverse
effect on the securities markets in the United States, and would in your
judgement make it impracticable or inadvisable to market the Securities or to
enforce any contract for the sale thereof.
Notice of such termination may be given by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
14. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover page, and the statements in the first through [ ]
paragraphs under the caption "Underwriting" in any preliminary prospectus and
in the Prospectus constitute the only information furnished by or on behalf of
the Underwriters through you as such information is referred to in Sections
7(b) and 9 hereof.
15. MISCELLANEOUS. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company or the Selling
Stockholders at the office of the Company at, Quest Medical, Inc., Xxx
Xxxxxxxxx Xxxxxxx, Xxxxx, Xxxxx 00000, Attention: Xxxxxx Xxxxxxxx, Chairman; or
(ii) if to you, as Representatives of the several Underwriters, care of Vector
Securities International, Inc., 0000 Xxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: .
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, the other
persons referred to in Section 9 hereof and the Selling Stockholders and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Securities in his status as such purchaser.
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16. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois
applicable to contracts made and to be performed within the State of Illinois.
17. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and other persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
QUEST MEDICAL, INC.
By .......................
President and Chief
Executive Officer
Each of the Selling Stockholders
named in Schedule I hereto
By ..........................
Attorney-in-Fact
By .......................
Attorney-in-Fact
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Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
VECTOR SECURITIES INTERNATIONAL, INC.
XXXXXXXX XXXXXX REFSNES, INC.
As Representatives of the Several Underwriters
By VECTOR SECURITIES INTERNATIONAL, INC.
By ............................
Vice President
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SCHEDULE I
[NAME OF COMPANY]
Number of
Selling Stockholders Initial Securities
-------------------- ------------------
Xxxxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxx
--------------
Total........ ______________
38
