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PROXICOM, INC.
COMMON STOCK, $.01 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
April __, 1999
BT Alex. Xxxxx Incorporated
Prudential Securities Incorporated
Xxxxxx Xxxxxx Partners LLC
Friedman, Billings, Xxxxxx & Co., Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
BT Alex. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Proxicom, Inc., a Delaware corporation (the "Company"), proposes, subject
to the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of 4,000,000 shares
of Common Stock, par value $.01 per share ("Common Stock"), of the Company and,
at the election of the Underwriters, up to 675,000 additional shares of Common
Stock and the stockholders of the Company named in Schedule II hereto (the
"Selling Stockholders") propose, subject to the terms and conditions stated
herein, to sell to the Underwriters an aggregate of 500,000 shares of Common
Stock. The aggregate of 4,500,000 shares to be sold by the Company and the
Selling Stockholders is herein called the "Firm Shares" and the aggregate of
675,000 additional shares to be sold by the Company is herein called the
"Optional Shares." The Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 2 hereof are herein collectively called
the "Shares". The respective amounts of Firm Shares to be purchased by the
several Underwriters are set forth opposite their names in Schedule I hereto and
the amount to be sold by each Selling Stockholder is set forth opposite his or
her name in Schedule II hereto. BT Alex. Xxxxx Incorporated, Prudential
Securities Incorporated, Xxxxxx Xxxxxx Partners LLC and Friedman, Billings,
Xxxxxx & Co., Inc. are the representatives of the several Underwriters and shall
hereinafter be referred to as the "Representatives."
1. (a) The Company hereby represents and warrants to, and agrees with,
each of the Underwriters that:
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(i) A registration statement on Form S-1 (File No. 333-72297) (the
"Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which will
become effective upon filing, no other document with respect to the
Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus;" the various parts of the
Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to
be part of the Initial Registration Statement at the time it was
declared effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, each as
amended at the time such part of the Initial Registration Statement
became effective, are hereinafter collectively called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus;"
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through BT Alex. Xxxxx Incorporated expressly for use therein or by the
Selling Stockholders expressly for use in the preparation of the answers
therein to Items 7 and 11(m) of Form S-1;
(iii) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and
do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the
applicable filing
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date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through BT Alex.
Xxxxx Incorporated expressly for use therein or by a Selling Stockholder
expressly for use in the preparation of the answers therein to Items 7
and 11(m) of Form S-1;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in
the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(v) Neither the Company nor any of its subsidiaries owns any real
property, and each has good and marketable title to all personal
property owned by it, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus
or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property
by the Company or the subsidiary; and any real property and buildings
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 use made and proposed to
be made of such property and buildings by the Company and its
subsidiaries;
(vi) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
(vii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly
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and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(viii) The unissued Shares to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued and fully paid and non-assessable and
will conform to the description of the Stock contained in the
Prospectus;
(ix)The issue and sale of the Shares to be sold by the Company and
the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement, except the registration under the Act of the Shares and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters;
(x) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound;
(xi)The statements set forth in the Prospectus under the caption
"Description of Capital Stock" insofar as they purport to constitute a
summary of the terms of the Stock and under the caption "Underwriting,"
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair;
(xii) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a
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party or of which any property of the Company or any of its subsidiaries
is the subject which, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(xiii) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company," as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xiv) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
(xv) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(xvi) Other than as set forth or contemplated in the Prospectus, the
Company and its subsidiaries have sufficient interests or rights in all
patents, patent licenses, trademarks, servicemarks, trade names,
copyrights, trade secrets, information proprietary rights and processes
("Intellectual Property") necessary for their business as now conducted
and, to the Company's knowledge, necessary in connection with the
products and services under development and described in the Prospectus,
without any conflict with or infringement of the interests or rights of
others; except as disclosed in the Prospectus, the Company is not aware
of material outstanding options, licenses or agreements of any kind
relating to the Intellectual Property, and, except as disclosed in the
Prospectus, neither the Company nor any of its subsidiaries is a party
to or bound by any material options, licenses or agreements with respect
to the Intellectual Property of any other person or entity; none of the
technology employed by the Company or any of its subsidiaries has been
obtained or is being used by the Company or its subsidiaries in
violation of any contractual fiduciary obligation binding on the
Company, any of its subsidiaries or any of its executive officers or, to
the Company's knowledge, any of its employees or otherwise in violation
of the rights of any person; except as disclosed in the Prospectus,
neither of the Company or any of its subsidiaries nor any of its
employees have received any written or, to the Company's knowledge, oral
communications alleging that the Company or any of its subsidiaries has
violated, infringed or conflicted with (and knows of no such violation,
infringement or conflict) or, by conducting its business as proposed,
would violate, infringe or conflict with (and knows of no such
violation, infringement or conflict) any of the Intellectual Property of
any other person or entity; neither the execution nor delivery of this
Agreement, nor the operation of the Company's business by the employees
of the Company, nor the operation of the business of any of its
subsidiaries, nor the conduct of the Company's business as proposed or
the business of
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any of its subsidiaries as proposed, will result in a breach or
violation of the terms, conditions or provisions of, or constitute a
default under, any material contract, covenant or instrument known to
the Company under which any of such employees is now obligated; and the
Company and its subsidiaries have taken and will maintain reasonable
measures to prevent the unauthorized dissemination or publication of
their confidential information and, to the extent contractually required
to do so, the confidential information of third parties in their
possession;
(xvii) The Company maintains insurance of the types and in the amounts
generally deemed adequate for its business, including, but not limited
to, insurance covering real and personal property owned or leased by the
Company against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in
full force and effect;
(xviii) There are no contracts, other documents or other agreements
required to be described in the Registration Statement or to be filed as
exhibits to the Registration Statement by the Act or by the rules and
regulations thereunder which have not been described or filed as
required; the contracts so described in the Prospectus are in full force
and effect on the date hereof; and neither the Company nor, to the best
of the Company's knowledge, any other party is in breach of or default
in any material respect under any of such contracts; and
(xix) The Company has not been advised, and has no reason to believe,
that it is not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is
conducting business, including, without limitation, all applicable
local, state and federal environmental laws and regulations; except
where failure to be so in compliance would not materially adversely
affect the condition (financial or otherwise), business, results of
operations or prospects of the Company.
(xx) The Company has filed all tax returns, Federal, state, county and
local, required to be filed by it, and the Company has paid all taxes
shown to be due by such returns as well as all other taxes, assessments
and governmental charges which have become due or payable, including
without limitation, all taxes which the Company is obligated to withhold
from amounts owing to employees, creditors and third parties. The
Company has established adequate reserves for all taxes accrued but not
yet payable. No audit of the Company's tax returns is in progress,
pending or, to the Company's knowledge, threatened. No deficiency
assessment with respect to or proposed adjustment of the Company's
Federal, state, county or local taxes is pending or, to the best of the
Company's knowledged, threatened.
(xxi) The computer systems and software owned, and to the best knowledge
of the Company, licensed, by the Company are able to accurately process,
provide and/or receive date data, including but not limited to,
calculating, comparing and sequencing from, into and between the
twentieth century (through year 1999), the year 2000 and the
twenty-first century, including leap year calculations. The Company has
instituted a program of
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questioning its material vendors and suppliers to assess their Year 2000
readiness. Of the vendors and suppliers that have responded to the
Company's inquiries, none have informed the Company of any material Year
2000 compliance issues and the Company has no reason to believe
otherwise; and
(xxii) The Company has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(b) Each of the Selling Stockholders represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement
and the Power of Attorney and the Custody Agreement hereinafter referred
to, and for the sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder, have been obtained; and such Selling
Stockholder has full right, power and authority to enter into this
Agreement, the Power-of-Attorney and the Custody Agreement and to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is subject, nor will such
action result in any violation of the provisions of or any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or the property
of such Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to each
Time of Delivery (as defined in Section 4 hereof) such Selling
Stockholder will have, good and valid title to the Shares to be sold by
such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and
payment therefor pursuant hereto, good and valid title to such Shares,
free and clear of all liens, encumbrances, equities or claims, will pass
to the several Underwriters;
(iv) During the period beginning from the date hereof and continuing
to and including the date 180 days after the effective date of the
Registration Statement, such Selling Stockholder will not, directly or
indirectly, offer, sell, pledge, contract to sell (including any short
sale), grant any option to purchase or otherwise dispose of, except as
provided hereunder, any shares of Common Stock (including, without
limitation, shares of Common Stock which may be deemed to be
beneficially owned by such Selling Stockholder
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in accordance with the rules and regulations of the Commission or Shares
which may be issuable upon exercise of a stock option or warrant) or
enter into any short sale (whether or not against the box) or any
purchase, sale or grant of any right (including any put or call option)
with respect to any security (other than a broad-based market basket or
index) that includes, relates to or derives any significant part of its
value from the Common Stock, without your prior written consent;
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(viii) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Stockholder hereunder have been placed in
custody under a Custody Agreement, in the form heretofore furnished to
you (the "Custody Agreement"), duly executed and delivered by such
Selling Stockholder to the Company, as custodian (the "Custodian"), and
such Selling Stockholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule II hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Stockholder, to determine the
purchase price to be paid by the Underwriters to the Selling Stockholder
as provided in Section 2 hereof, to authorize the delivery of the Shares
to be sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement; and
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(ix) The Shares represented by the certificates held in custody for
such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such
Selling Stockholder for such custody, and the appointment by such
Selling Stockholder of the Attorneys-in-Fact by the Power of Attorney,
are to that extent irrevocable; the obligations of the Selling
Stockholder hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Stockholder
or, in the case of an estate or trust, by the death or incapacity of any
executor or trustee or the termination of such estate or trust, or in
the case of a partnership or corporation, by the dissolution of such
partnership or corporation, or by the occurrence of any other event; if
any individual Selling Stockholder or any such executor or trustee
should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation should
be dissolved, or if any other such event should occur, before the
delivery of the Shares hereunder, certificates representing the Shares
shall be delivered by or on behalf of the Selling Stockholder in
accordance with the terms and conditions of this Agreement and of the
Custody Agreements; and actions taken by the Attorneys-in-Fact pursuant
to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact, or
any of them, shall have received notice of such death, incapacity,
termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company
and the Selling Stockholders agree, severally and not jointly, to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and the Selling Stockholders, at a
purchase price per share of $.............., the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Shares to be sold by the Company and the Selling
Stockholders as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Firm Shares to
be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the aggregate
number of Firm Shares to be purchased by all of the Underwriters from the
Company and the Selling Stockholders hereunder and (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares as provided below, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional
Shares by a fraction the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 675,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for
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the sole purpose of covering over-allotments in the sale of the Firm Shares. Any
such election to purchase Optional Shares may be exercised only by written
notice from you to the Company, given within a period of 30 calendar days after
the date of this Agreement and setting forth the aggregate number of Optional
Shares to be purchased and the date on which such Optional Shares are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless you and the Company
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form and in such authorized denominations and registered in such
names as BT Alex. Xxxxx Incorporated may request upon at least 48 hours' prior
notice to the Company and the Selling Stockholders, shall be delivered by or on
behalf of the Company and the Selling Stockholders to BT Alex. Xxxxx
Incorporated, for the account of such Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company and the Selling
Stockholders, as their interests may appear, to BT Alex. Xxxxx Incorporated at
least 48 hours in advance. The Company will cause the certificates representing
the Shares to be made available for checking and packaging at least 24 hours
prior to the Time of Delivery (as defined below) with respect thereto at the
office of BT Alex. Xxxxx Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000] (the "Designated Office"). The time and date of such delivery and payment
shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on
............., 1999 or such other time and date as BT Alex. Xxxxx Incorporated,
the Company and the Selling Stockholders may agree upon in writing, and, with
respect to the Optional Shares, 9:30 a.m., New York time, on the date specified
by BT Alex. Xxxxx Incorporated in the written notice given by BT Alex. Xxxxx
Incorporated of the Underwriters' election to purchase such Optional Shares, or
such other time and date as BT Alex. Xxxxx Incorporated and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery;" such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery," and each such time and date for delivery is herein
called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(l) hereof, will be delivered at the offices of Xxxx and
Xxxx LLP, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
such Time of Delivery. A meeting will be held at the Closing Location at 4:00
p.m., Eastern time, on the Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "Business Day" shall mean each Monday,
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Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in Washington, D.C. are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to the last Time of
Delivery which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish you with copies thereof; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, promptly to use its reasonable best efforts
to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 A.M., Eastern time, on the Business Day next
succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request, and, if the delivery of a prospectus is required
at any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Shares and if at
such time any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the Prospectus
in order to comply with the Act, to notify you and upon your request to prepare
and furnish without charge to each Underwriter and to any dealer in securities
as many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter is required
to
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deliver a prospectus in connection with sales of any of the Shares at any time
nine months or more after the time of issue of the Prospectus, upon your request
but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than 18 months after the effective date
of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) Other than pursuant to employee stock option and purchase plans and
other contractual obligations existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of this
Agreement during the period beginning from the date hereof and continuing to and
including the date 180 days after the effective date of the Registration
Statement, not to offer, sell, pledge, contract to sell or otherwise dispose of,
except as provided hereunder, any shares of Common Stock or enter into any short
sale (whether or not against the box) or any purchase, sale or grant of any
right (including any put or call options with respect to any security (other
than a broad-based market basket or index) that includes, relates to or derives
any significant part of its value from the Common Stock, without your prior
written consent;
(f) To furnish to its stockholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and statements
of income, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations National Market
System ("NASDAQ");
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(j) To file with the Commission Forms 10-Q or Forms 10-K containing all
such information as may be required by Rule 463 under the Act; and
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
(l) The Company will deliver to, or upon the order of, the Underwriters,
without charge from time to time, as many copies of any Preliminary Prospectus
as they may reasonably request. The Company will deliver to, or upon the order
of, the Underwriters without charge as many copies of the Prospectus, or as it
thereafter may be amended or supplemented, as they may from time to time
reasonably request. The Company consents to the use of such Prospectus by the
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for such other purposes
and for such period of time thereafter as the Prospectus is required by law to
be delivered in connection with the offering or sale of the Shares. The Company
will deliver to the Underwriters at or before the Closing Date two signed copies
of the Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Underwriters such number of copies of
the Registration Statement, without exhibits, and of all amendments thereto, as
they may reasonably request.
6. The Company covenants and agrees with the several Underwriters that
(a) the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's and the Selling Stockholders'
counsel and the Company's accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the Blue
Sky Memorandum, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) all fees and expenses in connection with listing the
Shares on the NASDAQ; (v) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) the cost of preparing stock certificates;
(vii) the cost and charges of any transfer agent or registrar; (viii) any fees
and expenses of the Attorney-in-Fact and the Custodian, and (ix) all other costs
and expenses incident to the performance of the obligations of the Company or
the Selling Stockholders hereunder which are not otherwise specifically provided
for in this Section; and (b) the Selling Stockholders will pay or cause to be
paid, all expenses and taxes incident to the sale and delivery of the Shares to
be sold by the Selling Stockholders to the Underwriters
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hereunder. In connection with clause (b) of the preceding sentence, BT Alex.
Xxxxx Incorporated agrees to pay New York State stock transfer tax, and each of
the Selling Stockholders agrees to reimburse BT Alex. Xxxxx Incorporated for his
or her respective associated carrying costs if such tax payment is not rebated
on the day of payment and for any portion of such tax payment not rebated. It is
understood, however, that the Company shall bear, and the Selling Stockholders
shall not be required to pay or to reimburse the Company for, the cost of any
other matters not directly relating to the sale and purchase of the Shares
pursuant to this Agreement, and that, except as provided in this Section, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes on resale of
any of the Shares by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxx and Xxxx LLP, counsel for the Underwriters, shall have
furnished to you such written opinion or opinions (a draft of each such opinion
is attached as Annex II(a) hereto), dated such Time of Delivery, with respect to
the matters covered in paragraphs (i), (ii), (vi), (vii) and (x) of subsection
(c) below as well as such other related matters as you may reasonably request,
and such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Xxxxx & Xxxxxxx L.L.P. counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached as
Annex II(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company was incorporated and is validly existing
and in good standing under the laws of the State of Delaware,
with corporate power and corporate authority under its
Certificate of Incorporation and the Delaware Corporation Law to
own or lease its properties and conduct its business as described
in the Prospectus;
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(ii) The Company has authorized capital stock as set forth
under the "Actual" column of the table under the caption
"Capitalization" in the Prospectus. All shares of capital stock
of the Company shown as issued and outstanding under such column
have been duly authorized and are validly issued and are fully
paid and non-assessable. Such counsel may rely, in respect of
matters of fact relating to consideration received for such
stock, upon certificates of officers of the Company.) The Shares
conform to the description of the Stock contained in the
Prospectus under the caption "Description of Capital Stock --
Common Stock" and when issued in accordance with the provisions
of this Agreement, will be validly issued, fully paid and
non-assessable;
(iii) The Company is in good standing and is duly
authorized to transact business as a foreign corporation under
the laws of each jurisdiction specified by you prior to the time
of delivery based on where it leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of failure to be so
qualified in any such jurisdiction (such counsel being entitled
to rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates
of officers of the Company and officials of such jurisdictions);
(iv) Each domestic subsidiary of the Company was
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation;
and all of the issued shares of capital stock of each such
subsidiary have been duly authorized and are validly issued, are
fully paid and non-assessable, and (except for directors'
qualifying shares) are owned of record, directly or indirectly,
by the Company, free and clear, to such counsel's knowledge, of
all liens, encumbrances, equities or claims, other than the
pledge of such shares to secure the Company's credit facility,
(such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying
upon such opinions and certificates);
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi) The execution, delivery and performance as of the
date of such opinion by the Company of this Agreement do not (a)
violate the Delaware General Corporation Law, or the Certificate
of Incorporation or Bylaws of the Company, (b) to such counsel's
knowledge, violate any law, rule, regulation, or order applicable
to the Company of any federal court, regulatory body,
administrative agency or governmental body having jurisdiction
over the Company (other than with respect to federal securities
statutes, laws, rules or regulations) or (c) breach
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or constitute a default under any agreement or contract filed as
an exhibit to the Registration Statement;
(vii) No consent, approval, authorization, order,
registration or qualification of or with any federal or
governmental agency or body having jurisdiction over the Company
or any of its properties is required to be obtained or made by
the Company in connection with the execution, delivery and
performance by the Company of this Agreement as of the date of
the opinion, except the registration under the Act of the Shares,
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters;
(viii) The information in the Prospectus under the caption
"Description of Capital Stock", to the extent that such
information constitutes matters of law or legal conclusions, has
been reviewed by us, is correct in all material respects. The
Common Stock conforms to the description thereof set forth in the
Prospectus under the caption "Description of Capital Stock --
Common Stock";
(ix) The Company is not an "investment company", as such
term is defined in the Investment Company Act; and
(x) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the rules
and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in
subsection (xi) of this Section 7(c), no facts have come to their
attention which cause such counsel to believe that (a) as of its
effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) 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,
as of the Time of Delivery, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (b) there are any legal or governmental
proceedings pending or threatened against the Company that are
required to be disclosed in the Registration Statement or the
Prospectus other
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than those disclosed therein, or (c) there are any contracts or
other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus which
are not filed or described as required, provided, however, that
in making the foregoing statements, such counsel need express no
views as to the financial statements and notes thereto, related
schedules and other financial information and data.
(d) Xxxxxxxxxxx Xxxxxxx, general counsel for the Company, shall have
furnished to you his written opinion (a draft of such opinion is attached as
Annex II(c) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) As of the date of the opinion, none of the issue and
sale of the Shares, the consummation of any other transaction
contemplated in this Agreement or fulfillment of the terms of
this Agreement violates the Certificate of Incorporation or
By-laws of the Company or its subsidiaries or conflicts with or
results in a breach or default in the performance or observance
of any material obligation, agreement, covenant or condition
contained in any agreement or contract filed as an exhibit to
the Registration Statement;
(ii) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position
stockholders' equity or results of operations of the Company and
its subsidiaries; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and
(iii) Neither the Company nor any subsidiary owns any real
property. Any real property and buildings 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 use made and proposed to
be made of such property and buildings by the Company and its
subsidiaries (in giving the opinion in this clause, such counsel
may state that no examination of record titles for the purpose of
such opinion has been made, and that they are relying upon a
general review of the titles of the Company and its subsidiaries,
upon opinions of local counsel and abstracts, reports and
policies of title companies rendered or issued at or subsequent
to the time of acquisition of such property by the Company or its
subsidiaries, upon opinions of counsel to the lessors of such
property and, in respect of matters of fact, upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall
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state that they believe that both you and they are justified in
relying upon such opinions, abstracts, reports, policies and
certificates);
(e) Xxxxx & Xxxxxxx, L.L.P., counsel for the Selling Stockholders, as
indicated in Schedule II hereto, shall have furnished to you their written
opinion with respect to the Selling Stockholder (a draft of such opinion is
attached as Annex II(d) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been
duly executed and delivered by each of the Selling Stockholders
and constitute valid and binding agreements of each of the
Selling Stockholder in accordance with their terms, except (i) as
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights (including,
without limitation, the effect of statutory and other law
regarding fraudulent conveyances, fraudulent transfers and
preferential transfers), (ii) as may be limited by the exercise
of judicial discretion and the application of principles of
equity including, without limitation, requirements of good faith,
fair dealing, conscionability and materiality (regardless of
whether such agreements are considered in a proceeding at equity
or at law), and (iii) no opinion is expressed as to the
enforceability of any indemnification provisions under the
federal securities laws;
(ii) This Agreement has been duly executed and delivered
by or on behalf of each of the Selling Stockholders; and the sale
of the Shares to be sold by each such Selling Stockholder
hereunder and the compliance by each such Selling Stockholder
with all of the provisions of this Agreement, the
Power-of-Attorney and the Custody Agreement and the consummation
of the transactions herein and therein contemplated, to counsel's
knowledge, do not violate (i) any applicable provisions of
federal statutes or regulations, the contract laws of the
Commonwealth of Virginia (but not including any statutes,
ordinances, administrative decisions, rules or regulations of any
political subdivision of the Commonwealth of Virginia); or (ii)
any judgment, order or decree of any federal or Virginia
governmental body, agency or court having jurisdiction over any
of the Selling Stockholders;
(iii) To such counsel's knowledge, no consent, approval,
authorization or order of any federal or Virginia court or
governmental agency or body is required for the consummation of
the transactions contemplated by this Agreement in connection
with the Shares to be sold by the Selling Stockholders hereunder,
except such as have been obtained under the Act and such as may
be required under state securities or Blue Sky laws in connection
with the purchase and distribution of such Shares by the
Underwriters; and
(iv) Each of the Selling Stockholders is the registered
owner of the Shares to be sold by each such Selling Stockholder.
Each Selling Stockholder
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acquired its Shares to be sold in the Offering free of any adverse
claims within the meaning of Section 8.8A-302(c) of the Commercial
Code of the Commonwealth of Virginia. Upon delivery to the
Underwriters of the Shares to be sold by the Selling Stockholders,
registered in the names of the Underwriters or indorsed to the
Underwriters or in blank by an effective indorsement pursuant to
the Underwriting Agreement and the Custody Agreements, or
registration of such Shares in the names of the Underwriters in
the stock records of the Company, and assuming in either case that
the Underwriters purchased such Shares for value, in good faith
and without notice of any adverse claim to such Shares within the
meaning of Section 8.8A-302(c) of the Commercial Code of the
Commonwealth of Virginia, the Underwriters will have acquired such
Shares free of adverse claims.
In rendering the opinion in paragraph (iv), such counsel may rely upon a
certificate of the Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold by
the Selling Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
(f) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., Eastern time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, PricewaterhouseCoopers
LLP shall have furnished to you a letter or letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex I hereto (the executed copy of the letter delivered prior to
the execution of this Agreement is attached as Annex I(a) hereto and a draft of
the form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(g)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is in the
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock
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Exchange or on the NASDAQ National Market System; (ii) a suspension or material
limitation in trading in the Company's securities on the NASDAQ National Market
Square; (iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities; or (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated in the Prospectus;
(i) The Shares at such Time of Delivery shall have been duly listed for
quotation on the NASDAQ National Market System;
(j) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from [all officers and directors of the Company and each
of the Selling Stockholders listed on Schedule II and certain other persons as
agreed to by the Company and you], substantially to the effect set forth in
Subsection 1(b)(iv) hereof in form and substance satisfactory to you;
(k) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(l) The Company and the Selling Stockholder shall have furnished to you
at such Time of Delivery certificates of officers of the Company and of the
Selling Stockholders, respectively, satisfactory to you as to the accuracy of
the representations and warranties of the Company and the Selling Stockholders,
respectively, herein at and as of such Time of Delivery, as to the performance
by the Company and the Selling Stockholders of all of their respective
obligations hereunder to be performed at or prior to such Time of Delivery, and
as to such other matters as you may reasonably request, and the Company shall
have furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (g) of this Section.
If any of the conditions hereinabove provided for in this Section 7
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
you by notifying the Company and the Selling Stockholders of such termination in
writing or by telegram at or prior to the relevant Time of Delivery.
8. INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such Underwriter or
any such controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or
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alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading any act or failure to act, or (iii) any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Shares or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon matters covered by clause (i) or (ii) above; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof.
(2) to reimburse each Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry related to the
offering of the Shares, whether or not such Underwriter or controlling person is
a party to any action or proceeding. In the event that it is finally judicially
determined that the Underwriters were not entitled to receive payments for legal
and other expenses pursuant to this subparagraph, the Underwriters will promptly
return all sums that had been advanced pursuant hereto.
(b) The Selling Stockholder agrees to indemnify the Underwriters and
each person, if any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such Underwriter or
controlling person may become subject under the Act or otherwise provided,
however, that no Selling Stockholder shall be liable under this Section 8(b) for
an amount in excess of the Net Proceeds (as defined below) received by such
Selling Stockholder with respect to the Shares purchased by the Underwriters
from such Selling Stockholder. The "Net Proceeds" shall mean the proceeds
received by a Selling Stockholder for the Shares purchased by the Underwriters
from a Selling Stockholder net of the applicable underwriting discount to the
same extent as indemnity is provided by the Company pursuant to Section 8(a)
above. This indemnity obligation will be in addition to any liability which the
Company may otherwise have.
(c) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, the Selling Stockholders, and each person, if
any, who controls the Company or Selling Stockholder within the meaning of the
Act, against any losses, claims, damages or liabilities to which the Company or
any such director, officer, Selling Shareholder or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the
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Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances under
which they were made; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, Selling Stockholder or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by or through
[the Representatives] specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a), (b) or (c) shall be available to any party who shall fail to give notice
as provided in this Section 8(d) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a), (b) or (c). In case
any such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation) the
fees and expenses of the counsel retained by the indemnified party in the event
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified
pursuant to Section 8(a) or (b) and by the Company and the Selling
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Stockholders in the case of parties indemnified pursuant to Section 8(c). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding of which indemnification may be sought hereunder (whether
or not any indemnified party is an actual or potential party to such claim,
action or proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action or proceeding.
(e) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under Section 8(a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) 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 from the offering
of the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total 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. The
relative fault 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 the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 8(e)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(e). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred
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to above in this Section 8(e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by such Underwriter, and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in this Section
8(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 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 8 and the
representations and warranties of the Company 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 Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within 36 hours after
such default by any Underwriter you do not arrange for the purchase of such
Shares, then the Company and the Selling Stockholders shall be entitled to a
further period of 36 hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and the
Selling Stockholders that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone a Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file
24
25
promptly any amendments to the Registration Statement or the Prospectus which in
your opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholders, except for the expenses
to be borne by the Company and the Selling Stockholders and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or the Selling Stockholder, or any officer or
director or controlling person of the Company, or any controlling person of any
of the Selling Stockholders, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor any Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by
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you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company and the Selling Stockholders shall then
be under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.
12. TERMINATION.
(a) This Agreement may be terminated by you by notice to the
Company and the Selling Stockholders at any time prior to the Time of Delivery
if any of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and its subsidiaries or the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and its subsidiaries, whether or not arising in the ordinary course
of business, (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of the Shares, or (iii) suspension of trading in securities generally
on the New York Stock Exchange or the NASDAQ National Market System or
limitation on prices (other than limitations on hours or numbers of days of
trading) for securities on either of such systems, (iv) the enactment,
publication, decree or other promulgation of any statute, regulation, rule or
order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company, (v) declaration of a banking moratorium
by United States or New York State authorities, (vi) the suspension of trading
of the Company's common stock by the NASDAQ Stock Market, the Commission, or any
other governmental authority or, (vii) the taking of any action by any
governmental body or agency in respect of its monetary or fiscal affairs which
in your reasonable opinion has a material adverse effect on the securities
markets in the United States; or
(b) as provided in Sections 7 and 9 of this Agreement.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by BT Alex. Xxxxx Incorporated on behalf of you as the
representatives; and in all dealings with the Selling Stockholders hereunder,
you and the Company shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of such Selling Stockholders made or
given by any or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of BT Alex. Xxxxx
Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
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21202, Attention: Registration Department; if to the Selling Stockholders shall
be delivered or sent by mail, telex or facsimile transmission to counsel for
such Selling Stockholders at its address set forth in Schedule II hereto; and if
to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(d) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire or telex constituting such Questionnaire, which
address will be supplied to the Company or the Selling Stockholders by you on
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of [Maryland].
17. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
18. The Company, the Selling Stockholders and the Underwriters
acknowledge and agree that the only information furnished or to be furnished by
any Underwriter to the Company for inclusion in any Prospectus or the
Registration Statement consists of the information set forth in the last
paragraph on the front cover page (insofar as such information relates to the
Underwriters), legends required by Item 502(d) of Regulation S-K under the Act
and the information under the caption "Underwriting" in the Prospectus.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel and the Custodian, if any counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and the Selling Stockholders. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is pursuant
to the authority set forth in a form of Agreement among Underwriters, the form
of which shall be submitted to the Company and the Selling Stockholders for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
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Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
Proxicom, Inc.
By:
----------------------------
Name:
-------------------------
Title:
------------------------
Xxxx Xxxxxxxxx
By:
------------------------------
Name:
-------------------------
Title:
------------------------
As Attorney-in-Fact acting
on behalf of the Selling
Stockholders named in
Schedule II to this Agreement.
Accepted as of the date hereof
at ...........................:
BT Alex. Xxxxx Incorporated
Prudential Securities Incorporated
Xxxxxx Xxxxxx Partners LLC
Xxxxxxxx, Xxxxxxxx & Xxxxxx Co., Inc.
By:........................................
(BT Alex. Xxxxx Incorporated)
On behalf of each of the Underwriters
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SCHEDULE I
Number of Optional
Total Number Shares to be Purchased
of Firm Shares if Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ----------------------
BT Alex. Xxxxx Incorporated ..................
Prudential Securities Incorporated.............
Xxxxxx Xxxxxx Partners LLC
Friedman, Billings, Xxxxxx & Co. Inc...........
---------------- --------------
Total.................... $4,500,000 675,000
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SCHEDULE II
Number of Optional
Shares to be
Total Number of Sold if
Firm Shares Maximum Option
to be Sold Exercised
---------- ---------
The Company............................................ 4,000,000 675,000
Xxxxxxx Xxxxxxxxx....................................... 250,000 --
Xxxxx XxXxxxxx.......................................... 200,000 --
Xxxxxxx Xxxxxxxx........................................ 50,000 --
--------- -----------
Total........................................... 4,500,000 675,000
(a) The Selling Stockholders are represented by Xxxxx & Xxxxxxx L.L.P., 000
Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 and has appointed Xxxx
Xxxxxxxxx as the Attorney-in-Fact for each such Selling Stockholder.
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ANNEX I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
separately furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which have
been separately furnished to the Representatives and on the basis of
specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act
and the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees
with the corresponding amounts (after restatements where applicable) in
the audited consolidated financial statements for such five fiscal
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years which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of
the latest audited financial statements included in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on
a basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
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(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise
of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest
financial statements included in the Prospectus) or any increase in
the consolidated long-term debt of the Company and its subsidiaries,
or any decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with amounts shown in the latest balance sheet
included in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred
or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
decreases or increases which the Prospectus discloses have occurred
or may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus, or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by
the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
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ANNEX II(C)
FORM OF OPINION OF GENERAL COUNSEL
Based upon, subject to and limited by the foregoing, I am of the opinion
that:
(i) As of the date of the opinion, none of the issue and sale of the
Shares, the consummation of any other transaction contemplated in this Agreement
or fulfillment of the terms of this Agreement violates the Certificate of
Incorporation or By-laws of the Company or its subsidiaries or conflicts with or
results in a breach or default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any agreement or
contract filed as an exhibit to the Registration Statement;
(ii) To the best of such counsel's knowledge and other than as set forth
in the Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a material adverse effect on the current or future
consolidated financial position stockholders' equity or results of operations of
the Company and its subsidiaries; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others; and
(iii) Neither the Company nor any subsidiary owns any real property. Any
real property and buildings 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 use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries (in giving the opinion in this clause, such counsel may state that
no examination of record titles for the purpose of such opinion has been made,
and that they are relying upon a general review of the titles of the Company and
its subsidiaries, upon opinions of local counsel and abstracts, reports and
policies of title companies rendered or issued at or subsequent to the time of
acquisition of such property by the Company or its subsidiaries, upon opinions
of counsel to the lessors of such property and, in respect of matters of fact,
upon certificates of officers of the Company or its subsidiaries, provided that
such counsel shall state that they believe that both you and they are justified
in relying upon such opinions, abstracts, reports, policies and certificates);
