Exhibit 1.1
Xxxx and Xxxx LLP
Draft 07/13/99
0-000-XXXXXXX.XXX, INC.
CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
----------------------
_____________, 1999
Xxxxxxx, Sachs & Co.,
Credit Suisse First Boston Corporation
Wit Capital Corporation
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
0-000-XXXXXXX.XXX, 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 6,000,000 shares (the "Firm Shares") and, at the election of the
Underwriters, the stockholder of the Company named in Schedule II hereto (the
"Selling Stockholder") and the Company propose, subject to the terms and
conditions stated herein, to sell to the Underwriters up to 900,000 additional
shares (the "Optional Shares") of Class A Common Stock, par value $.01 per share
("Stock") of the Company, as set forth opposite such Selling Stockholder's name
and the Company on Schedule II hereto (the Firm Shares and the Optional Shares
that the Underwriters elect to purchase pursuant to Section 2 hereof being
collectively called the "Shares").
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-78985)
and all pre-effective amendments thereto (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 became 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, each as amended at the time such part of the
Initial Registration Statement became effective or such part
of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes 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 a
Representative expressly for use therein or by a Selling
Stockholder expressly for use in the preparation of 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 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 a
Representative expressly for use therein or by a Selling
Stockholder expressly for use in 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
(other than pursuant to the exercise of options disclosed in
the Prospectus) 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, current or
future consolidated financial position, business,
stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole ("Material Adverse
Effect"), otherwise than, in each case, as set forth or
contemplated in the Prospectus;
(v) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and
marketable title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such
as would not be reasonably likely to have a Material Adverse
Effect and do not interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries;
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, except where failure to be
so qualified would not be reasonably likely to have a Material
Adverse Effect or result in any material loss or interference
with the Company's business or operations; 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 and validly
authorized and issued, are fully paid and non-assessable and
conform to the description of the Stock or the Class B Common
Stock, par value $.01 per share, of the Company ("Class B
Stock"), as the case may be contained in the Prospectus; 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 as set forth in
the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except that the Company only
owns 88% of Plow & Hearth, Inc., ___% of Floral Works, Inc.,
___% of Plow & Hearth, L.P. and ___% of Gerber Gardens, and
and are the only "significant subsidiaries" of the Company
within the meaning of Rule 1-02(w) of Regulation S-X under the
Securities Act (the "Material Subsidiaries");
(viii) The 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 by the Company hereunder
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, other than breaches or defaults
that are not individually or in the aggregate reasonably
likely to have a Material Adverse Effect, nor will such action
result in any violation of the provisions of the Certificate
of Incorporation or By-laws of the Company which are in effect
on the date hereof or which will be in effect at the Closing
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,
which violation of such statute, order, rule or regulation
would be reasonably likely to have a Material Adverse Effect;
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 and the International Underwriters, or those
consents, approvals, authorizations, orders, registrations or
qualifications which are not reasonably likely to have a
Material Adverse Effect;
(x) Neither the Company nor any of its subsidiaries is (i) in
violation of its Certificate of Incorporation or By-laws which
are in effect on the date hereof or which will be in effect at
the Closing, or (ii) 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, which, with respect to this subsection (ii) is
not reasonably likely to have a Material Adverse Effect;
(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 or
the Class B 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 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 be reasonably likely to have a Material
Adverse Effect; and, to 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) Ernst & Young LLP, which have certified certain
financial statements of the Company and its subsidiaries, and
KPMG LLP, which has certified certain financial statements of
The Plow and Hearth, Inc., are each independent public
accountants as required by the Act and the rules and
regulations of the Commission thereunder; and
(xv) The Company is in the process of reviewing its operations
and that of its subsidiaries and any third parties with which
the Company or any of its subsidiaries has a material
relationship to evaluate the extent to which the business or
operations of the Company or any of its subsidiaries will be
affected by the Year 2000 Problem. As a result of such review
to date, the Company has no reason to believe, and does not
believe, that the Year 2000 Problem will have a Material
Adverse Effect. The "Year 2000 Problem" as used herein means
any significant risk that computer hardware or software used
in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of
data or in the operation of mechanical or electrical systems
of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
(b) The Selling Stockholder 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, 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, 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
the 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) 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;
(v) 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;
(vi) 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);
(vii) 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 [_________________], 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
(viii) 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; 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 Agreement; 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 agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $........................, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Selling Stockholder
agrees to sell, and the Company agrees to issue and sell, to each of the
Underwriters that portion of the Optional Shares as set forth opposite such
Selling Stockholder's name and the Company on Schedule II hereto, and each of
the Underwriters agrees, severally and not jointly, to purchase from the Selling
Stockholder and 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 Selling Stockholder and the Company hereby grant to the
Underwriters the right to purchase at their election up to 900,000 Optional
Shares, at the purchase price per share set forth in the paragraph above, for
the purpose of covering sales of shares in excess of the number of 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, 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, the Company and the
Attorney-in-Fact otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice. In the event the Underwriters
exercise such election to purchase less than all of the Optional Shares, the
Company and the Selling Stockholder shall each sell to the Underwriters a number
of Optional Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the total number of Optional Shares as to which the
Underwriters have exercised such election by 5/90, in the case of Xxxxxxxxxxx X.
XxXxxx, and 85/90, in the case of the Company.
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 Xxxxxxx, Sachs & Co. may request upon at least
forty-eight hours' prior notice to the Company and the Selling
Stockholder, shall be delivered by or on behalf of the Company and the
Selling Stockholder to Xxxxxxx, Xxxxx & Co., through the facilities of
the Depository Trust Company, ("DTC") 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 Stockholder, as
their interests may appear, to Xxxxxxx, Sachs & Co. at least
forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging
at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of DTC or its designated
custodian (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 City time, on ............., 1999 or such other time and date as
Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing, and,
with respect to the Optional Shares, 9:30 a.m., New York time, on the
date specified by Xxxxxxx, Sachs & Co. in the written notice given by
Xxxxxxx, Xxxxx & Co. of the Underwriters' election to purchase such
Optional Shares, or such other time and date as Xxxxxxx, Sachs & Co.,
the Company and the Selling Stockholder 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(j) hereof, will be delivered at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
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 2:00 p.m., New York City time, on the New
York 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, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in New York 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 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 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. New York City time, on the New York 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 event 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 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 eighteen 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 thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of (except (i) as
provided hereunder, (ii) for the issuance of Class A Stock upon the
conversion of Preferred Stock of the Company or the conversion of Class
B Stock of the Company, and (iii) for shares of Class A Common Stock or
Class B Common Stock issued by the Company in a private placement or
other unregistered sale, offer, grant or issuance in connection with an
acquisition in which the recipients of such Common Stock or securities
agree that such Common Stock or securities may not be transferred or
sold by them during the period ending 180 days from the date of the
Prospectus without your prior written consent), any securities of the
Company that are substantially similar to the Shares, including but not
limited to any shares of Class B Stock or any other securities that are
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities (other than
pursuant to employee stock option or purchase plans existing on, or
upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement), 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), to make available to its stockholders 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 and the International Underwriting 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");
(j) To file with the Commission such information on Form 10-Q or Form 10-K
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.
6. The Company and the Selling Stockholder, jointly and severally,
covenant and agree with one another and 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 counsel and 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 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
reasonable 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 reasonable 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; and (viii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section ; and (b) such Selling
Stockholder will pay or cause to be paid all costs and expenses incident to the
performance of such Selling Stockholder's obligations hereunder which are not
otherwise specifically provided for in this Section, including (X) any fees and
expenses of counsel for such Selling Stockholder, if any, (Y) the fees and
expenses of the Attorneys-in-Fact and the Custodian and (Z) all taxes incident
to the sale and delivery of the Shares to be sold by such Selling Stockholder to
the Underwriters hereunder. In connection with clause (b)(Z) of the preceding
sentence, Xxxxxxx, Xxxxx & Co. agrees to pay New York State stock transfer tax,
and the Selling Stockholder agrees to reimburse Xxxxxxx, Sachs & Co. for
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 Stockholder shall not be
required to pay to or reimburse the Company for, the cost of any such matters
not directly relating to the sale and purchase of the Shares sold by the Selling
Stockholder 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 herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its 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), (vii), (xi),
and (xiii) 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) Xxxxxxx, Phleger & Xxxxxxxx LLP, 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 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 which opinion, with respect to
valid existence and good standing, may be solely based upon a
review of a certificate from the Secretary of State of the
State of Delaware;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital
stock of the Company (including the Shares
being delivered at such Time of Delivery) have been duly and
validly authorized and issued and are, or, in the case of the
Shares being issued at such Time of Delivery by the Company,
will be upon payment therefor in accordance with the terms
hereof, fully paid and nonassessable; and the Shares will
conform in all material respects at the Time of Delivery to
the description of the Stock contained in the Prospectus;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws ____________, _________________,
____________________ and __________________ (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,
provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions
and certificates and such counsel provides you with copies of
such opinions and certificates);
(iv) Each of the Material Subsidiaries has been duly
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 Material
Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable, and (except as otherwise
set forth in the Prospectus) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances,
equities or claims, except that the Company only owns [88% of
Plow & Hearth, Inc., 88% of Plow & Hearth, L.P., and ___% of
Floral Works, Inc.] (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local
counsel and in respect to 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 and such counsel provides you with copies of such
opinions and certificates);
(v) To 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 be reasonably likely to have a Material
Adverse Effect; and, to such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The issue and sale of the Shares being delivered at such
Time of Delivery 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 filed as an exhibit to the
Registration
Statement, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of
the Company which are in effect on the date hereof or which
will be in effect at the Closing or any statute or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(viii) 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 and the International Underwriters;
(ix) 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 or
the Class B Stock, fairly summarize the matters referred to
therein in all material respects; and
(x) The Company is not an "investment company", as such term
is defined in the Investment Company Act.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the
United States.
Such opinion letter shall also state that although such counsel does
not assume any responsibility for the accuracy or fairness of the statements in
the Registration Statement, except for those referred to in Subsection (ix) of
this Section 7(c), such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and discussion of
the contents thereof with representatives of the Underwriters and their counsel,
officers and representatives of the Company, and nothing has come to such
counsel's attention that has caused it to believe that the Registration
Statement or any further amendment thereto, at the time the Registration
Statement or such amendment became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus or any further amendment or supplement thereto, as of its date or as
of such Time of Delivery, contained an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel express no opinion
with respect to the financial statements and the notes thereto and the related
financial schedules included in the Registration Statement or the Prospectus).
Such opinion letter shall also state that 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 the notes thereto and related financial schedules therein, as to which such
counsel need express no opinion) comply as to form in all material aspects with
the requirements of the Act and the rules and regulations thereunder, and
that such counsel does not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents required to be filed
as an exhibit to the Registration Statement or the Prospectus which are not
filed as required.
(d) The counsel for the Selling Stockholder, as indicated in Schedule II
hereto, shall have furnished to you its written opinion, 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 such Selling Stockholder and
constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms;
(ii) This Agreement has been duly executed and delivered by or
on behalf of such Selling Stockholder; and 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 terms or provisions of,
or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel 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 any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii) No consent, approval, authorization or order of any
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 such
Selling Stockholder hereunder, except such as have been
obtained under the Act and such as may be required under state
or foreign securities or Blue Sky laws in connection with the
purchase and distribution of such Shares by the Underwriters
or the International Underwriters;
(iv) Valid title to the Shares sold by the Selling
Stockholder, free and clear of any adverse claim within the
meaning of the Uniform Commercial Code has been transferred to
each of the several Underwriters who have purchased such
Shares in good faith and without notice of any such adverse
claim.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States and in
rendering the opinion in subparagraph (iv) such counsel may rely upon a
certificate of such Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on the Shares sold by
such Selling Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
(e) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City 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, Ernst & Young LLP and KPMG LLP shall
have furnished to you letters, dated the respective dates of delivery
thereof, in form and substance reasonably satisfactory to you, to the
effect set forth in Annex I hereto (the executed copies of the letters
delivered prior to the execution of this Agreement are attached as
Annex I(a) hereto and drafts of the forms of letters to be delivered on
the effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery are attached as Annex I(b)
hereto);
(f) 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;
(g) 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 Exchange or on NASDAQ, (ii)
a suspension or material limitation in trading in the Company's
securities on NASDAQ; (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 specified in this clause (iv)
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;
(h) The Shares to be sold by the Company and the Selling Stockholder at
such Time of Delivery shall have been duly listed for quotation on
NASDAQ;
(i) The Company has obtained and delivered to the Underwriters executed
copies of an agreement, substantially to the effect set forth in
Subsection 5(e) hereof in form and substance satisfactory to you, from
all officers, directors, and key employees identified under the caption
"Management" in the Prospectus and other shareholders and optionholders
of the Company beneficially owning at least the number of shares of
Stock, and options to purchase at least the number of shares of stock,
as are described as being subject to lock-up agreements in the
Prospectus under the caption "Shares Eligible for Future Sale";
(j) 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
(k) The Company and the Selling Stockholder shall have furnished or caused
to be furnished to you at such Time of Delivery certificates of
officers of the Company and of the Selling Stockholder satisfactory to
you as to the accuracy of the representations and warranties of the
Company and the Selling Stockholder herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling
Stockholder of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set
forth in subsections (a) and (f) of this Section and as to such other
matters as you may reasonably request.
8. The Company and the Selling Stockholder, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in light if the circumstances under which they were
made, not misleading, or (ii) an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
any amendment or supplement thereto, or arise out of or are based upon
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, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as
such expenses are incurred; PROVIDED, HOWEVER, that the Company and the
Selling Stockholder shall 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 any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through a Representative
expressly for use therein; provided, further, that notwithstanding
anything herein to the contrary, the Selling Stockholder shall not be
liable in any case for any amounts in excess of fifty percent (50%) of
the product of the price per share set forth in clause of Section 2 of
this Agreement, multiplied by the number of Optional Shares sold by the
Selling Stockholder hereunder;
(b) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities
to which the Company or such Selling Stockholder may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon (i) an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (ii) an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or
any amendment or supplement thereto, or arise out of or are based upon
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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through a Representative
expressly for use therein; and will reimburse the Company and the
Selling Stockholder for any legal or other expenses reasonably incurred
by the Company or the Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify
the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party under such subsections (a) and (b),
unless failure to do so materially prejudices the indemnifying party's
ability to defend against such action. In case any such action 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 reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under
such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party,
in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
party is an actual or potential party to such action or claim) unless
such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such
action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions 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 in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company
and the Selling Stockholder 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 or if the indemnified party failed to give the notice
required under subsection (c) above, 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 Stockholder 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 in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Selling Stockholder 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 of the Shares purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholder bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Shares purchased under
this Agreement, 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 Stockholder 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, each of the Selling Stockholder and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) 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
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) 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 (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Stockholder under this
Section 8 shall be in addition to any liability which the Company and
the Selling Stockholder may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Company (including any person, if any, who, with his or her consent, is
named in the Registration Statement as about to become a director of
the Company) and to each person, if any, who controls the Company
within the meaning of the Act.
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 thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, then the Company
and the Selling Stockholder shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties reasonably
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
Stockholder that you have so arranged for the purchase of such Shares, or the
Company and the Selling Stockholder notifies you that it has so arranged for the
purchase of such Shares, you or the Company and the Selling Stockholder shall
have the right to postpone such 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 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 Stockholder 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 Stockholder 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 Stockholder as provided in subsection (a)
above, the aggregate number of such Shares which remains unpurchased
exceeds one-eleventh of the aggregate number of all the Shares to be
purchased at such Time of Delivery, or if the Company and the Selling
Stockholder 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 Selling Stockholder to sell the
Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company or the Selling
Stockholder, except for the expenses to be borne by the Company and the
Selling Stockholder 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 Stockholder 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, 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 the 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 Stockholder as provided herein, the Company and each of
the Selling Stockholder pro rata (based on the number of Shares to be sold by
the Company and such Selling Stockholder hereunder) will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
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 Stockholder 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. 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 Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives and in all dealings with the Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder 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 Xxxxxxx, Sachs &
Co., 00 Xxx Xxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to the Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such Selling Stockholder 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: Xxxxx X. XxXxxx;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
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 Stockholder by you upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the Selling Stockholder 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 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.
14. 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.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. 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.
If the foregoing is in accordance with your understanding, please sign
and return to us five 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 between each of the Underwriters and
the Company. 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 for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
0-000-XXXXXXX.XXX, INC.
By:
----------------------------------
Name:
Title:
----------------------------------
Xxxxxxxxxxx X. XxXxxx
Accepted as of the date hereof:
XXXXXXX, XXXXX & CO.
CREDIT SUISSE FIRST BOSTON CORPORATION
WIT CAPITAL CORPORATION
BY:
-------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
Xxxxxxx, Xxxxx & Co................................................
Credit Suisse First Boston Corporation ............................
Wit Capital Corporation ...........................................
[Names of other Underwriters]
Total.............................................
6,000,000 900,000
SCHEDULE II
TOTAL NUMBER OF OPTIONAL
------------------------
SHARES TO BE SOLD
Xxxxxxxxxxx X. XxXxxx... .................................... 50,000
0-000-XXXXXXX.XXX, Inc....................................... 850,000
ANNEX I
[FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1]
Pursuant to Section 7(d) 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 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 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;
(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.
