Exhibit 1.1
10,578,396 Shares
X.X. XXXXXXXX WORLDWIDE, INC.
Common Stock
UNDERWRITING AGREEMENT
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_______________, 1997
BT Alex. Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxx Xxxxxxx Inc.
As Representatives of the
Several Underwriters
c/o BT Alex. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
Certain stockholders (the "Selling Stockholders") of X.X. Xxxxxxxx
Worldwide, Inc., a Delaware corporation (the "Company"), propose to sell to the
several underwriters (the "Underwriters") named in Schedule I hereto for whom
you are acting as representatives (the "Representatives") an aggregate of
10,578,396 shares of the Company's Common Stock, $.10 par value (the "Firm
Shares"). The respective amounts of the Firm Shares to be so purchased by the
several Underwriters are set forth opposite their names in Schedule I hereto,
and the respective amounts to be sold by the Selling Stockholders are set forth
opposite their names in Schedule II hereto. The Selling Stockholders also
propose to sell at the Underwriters' option an aggregate of up to 1,586,759
additional shares of the Company's Common Stock (the "Option Shares") as set
forth below.
As the Representatives, you have advised the Company and the Selling
Stockholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata portion
of the Option Shares if you elect to
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exercise the over-allotment option in whole or in part for the accounts of the
several Underwriters. The Firm Shares and the Option Shares (to the extent the
aforementioned option is exercised) are herein collectively called the
"Shares."
The representations, warranties and covenants contained in this Agreement
give effect to the merger of X.X. Xxxxxxxx, Inc., a Minnesota corporation, with
and into the Company on the Closing Date (as hereinafter defined).
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company and the Selling
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Stockholders.
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(a) The Company represents and warrants to each of the Underwriters
as follows:
(i) A registration statement on Form S-1 (File No. 333-33731) with
respect to the Shares has been carefully prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"),
and the Rules and Regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder and has been filed with
the Commission. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
the Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore been
delivered by the Company to you. Such registration statement, together with
any registration statement filed by the Company pursuant to Rule 462(b) of
the Act, herein referred to as the "Registration Statement," which shall be
deemed to include all information omitted therefrom in reliance upon Rule 430A
and contained in the Prospectus referred to below, has become effective under
the Act and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. "Prospectus" means (a) the form of
prospectus first filed with the Commission pursuant to Rule 424(b) or (b) the
last preliminary prospectus included in the Registration Statement filed prior
to the time it becomes effective or filed pursuant to Rule 424(a) under the
Act that is delivered by the Company to the Underwriters for delivery to
purchasers of the Shares, together with the term sheet or abbreviated term
sheet filed with the Commission pursuant to Rule 424(b)(7) under the Act. Each
preliminary prospectus included in the Registration Statement prior to the
time it becomes effective is herein referred to as a "Preliminary Prospectus."
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate
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power and authority to own or lease its properties and conduct its business as
described in the Registration Statement. Each of the subsidiaries of the
Company listed in Exhibit A hereto (collectively, the "Subsidiaries") has been
duly organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement. The Company and each of the Subsidiaries are
duly qualified to transact business in all jurisdictions in which the conduct
of their business requires such qualification other than where the failure to
be so qualified would not have a material adverse effect on the business of
the Company and its subsidiaries, taken as a whole. The outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are owned by the Company
or another Subsidiary free and clear of all liens, encumbrances and equities
and claims; and no options, warrants or other rights to purchase, agreements
or other obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in the Subsidiaries are
outstanding.
(iii) The outstanding shares of Common Stock of the Company, including all
shares to be sold by the Selling Stockholders, have been duly authorized and
validly issued and are fully paid and non-assessable; and no preemptive rights
of stockholders exist with respect to any of the Shares or the issue and sale
thereof. Neither the filing of the Registration Statement nor the offering or
sale of the Shares as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating to the
registration of any shares of Common Stock.
(iv) The information set forth under the caption "Capitalization" in the
Prospectus is true and correct. All of the Shares conform to the description
thereof contained in the Registration Statement.
(v) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Shares nor, to
the Company's knowledge, instituted proceedings for that purpose. The
Registration Statement contains, and the Prospectus and any amendments or
supplements thereto will contain, all statements which are required to be stated
therein by, and will conform to, the requirements of the Act and the Rules and
Regulations. The Registration Statement and any amendment thereto do not
contain, and will not contain, any untrue statement of a material fact and do
not omit, and will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus and any amendments and supplements thereto do not contain, and will
not contain, any untrue statement of material fact and do not omit, and will not
omit, to state any 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 the Company makes no
representations or warranties as to information contained in or
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omitted from 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 or on behalf of any Underwriter
through the Representatives, specifically for use in the preparation thereof.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly the financial position and the results of
operations and cash flows of the Company and the consolidated Subsidiaries, at
the indicated dates and for the indicated periods. Such financial statements
and related schedules have been prepared in accordance with generally accepted
accounting principles, consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary financial
and statistical data included in the Registration Statement presents fairly the
information shown therein and such data has been compiled on a basis consistent
with the financial statements presented therein and the books and records of the
Company. The pro forma financial information included in the Registration
Statement and the Prospectus present fairly the information shown therein, and,
in the opinion of the Company, the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein.
(vii) Xxxxxx Xxxxxxxx LLP, who have certified certain of the financial
statements filed with the Commission as part of the Registration Statement, are
independent public accountants as required by the Act and the Rules and
Regulations.
(viii) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which if
determined adversely to the Company or any of its Subsidiaries might result in
any material adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and of the Subsidiaries taken as a whole or to prevent the
consummation of the transactions contemplated hereby, except as set forth in the
Registration Statement.
(ix) The Company and the Subsidiaries have good and marketable title to
all of the properties and assets reflected in the financial statements (or as
described in the Registration Statement) hereinabove described, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except those reflected
in such financial statements (or as described in the Registration Statement) or
which are not material in amount. The Company and the Subsidiaries occupy their
leased properties under valid and binding leases conforming in all material
respects to the description thereof set forth in the Registration Statement.
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(x) The Company and the Subsidiaries have filed all Federal, State, local
and foreign income tax returns which have been required to be filed and have
paid or are contesting in good faith all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such taxes have
become due. All tax liabilities have been adequately provided for in the
financial statements of the Company.
(xi) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not been
any material adverse change or any development involving a prospective material
adverse change in or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise), or prospects of
the Company and its Subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being entered into
by the Company or the Subsidiaries, other than transactions in the ordinary
course of business and changes and transactions described in the Registration
Statement, as it may be amended or supplemented. The Company and the
Subsidiaries have no material contingent obligations which are not disclosed in
the Company's financial statements which are included in the Registration
Statement.
(xii) Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, would be, in violation of or in
default under their respective charter or by-laws or under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a party or
by which it, or any of its properties, is bound and which default is of material
significance in respect of the condition, financial or otherwise of the Company
and its Subsidiaries taken as a whole or the business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and the Subsidiaries taken as a whole. The execution and delivery
of this Agreement and the consummation of the transactions herein contemplated
and the fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or any Subsidiary is a party, or of the Charter or by-laws of the
Company or any order, rule or regulation applicable to the Company or any
Subsidiary of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission,
the National Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public
offering by the Underwriters under state securities or Blue Sky laws) has been
obtained or
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made and is in full force and effect.
(xiv) The Company and each of the Subsidiaries hold all material licenses,
certificates and permits from governmental authorities which are necessary to
the conduct of their businesses; and neither the Company nor any of the
Subsidiaries has infringed any patents, patent rights, trade names, trademarks
or copyrights, which infringement is material to the business of the Company and
the Subsidiaries taken as a whole. The Company knows of no material
infringement by others of patents, patent rights, trade names, trademarks or
copyrights owned by or licensed to the Company.
(xv) Neither the Company, nor to the Company's best knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the Shares. The
Company acknowledges that the Underwriters may engage in passive market making
transactions in the Shares on The Nasdaq Stock Market in accordance with Rule
103 of Regulation M under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(xvi) Neither the Company nor any Subsidiary is an "investment company"
within the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
(xvii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xviii) The Company and each of its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar industries.
(xix) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension
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plan" (as defined in ERISA) for which the Company would have any liability; the
Company has not incurred and does not expect to incur liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(xx) The Company confirms as of the date hereof that it is in compliance
with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act
Relating to Disclosure of Doing Business with Cuba, and the Company further
agrees that if it commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever date is
later, or if the information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in Cuba
changes in any material way, the Company will provide the Department notice of
such business or change, as appropriate, in a form acceptable to the Department.
(b) Each of the Selling Stockholders severally represents and warrants as
follows:
(i) Such Selling Stockholder now is and at the Closing Date and the Option
Closing Date, as the case may be (as such dates are hereinafter defined), will
be the registered owner of the Firm Shares and the Option Shares to be sold by
such Selling Stockholder, free and clear of any liens, encumbrances, equities
and claims, and full right, power and authority to effect the sale and delivery
of such Firm Shares and Option Shares; and upon the delivery of, against payment
for, such Firm Shares and Option Shares pursuant to this Agreement, the
Underwriters will be entitled to register the transfer thereof free of adverse
claims.
(ii) Such Selling Stockholder has full right, power and authority to
execute and deliver this Agreement, the Selling Shareholder Authorization and to
perform its obligations under such Agreements. The execution and delivery of
this Agreement and the consummation by such Selling Stockholder of the
transactions herein contemplated and the fulfillment by such Selling Stockholder
of the terms hereof will not require any consent, approval, authorization, or
other order of any court, regulatory body, administrative agency or other
governmental body (except as may be required under the Act, state securities
laws or Blue Sky laws) and will not result in a breach of any of the
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terms and provisions of, or constitute a default under, organizational documents
of such Selling Stockholder, if not an individual, or any indenture, mortgage,
deed of trust or other agreement or instrument to which such Selling Stockholder
is a party, or of any order, rule or regulation applicable to such Selling
Stockholder of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction.
(iii) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action designed to, or which has constituted, or which might
reasonably be expected to cause or result in the stabilization or manipulation
of the price of the Common Stock of the Company and, other than as permitted by
the Act, the Selling Stockholder will not distribute any prospectus or other
offering material in connection with the offering of the Shares.
(iv) The information pertaining to such Selling Stockholder under the
caption "Selling Stockholders" in the Prospectus is complete and accurate in all
material respects.
2. Purchase, Sale and Delivery of the Firm Shares.
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(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Selling
Stockholders agree to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $_____ per share, the
number of Firm Shares set forth opposite the name of each Underwriter in
Schedule I hereof, subject to adjustments in accordance with Section 9 hereof.
The number of Firm Shares to be purchased by each Underwriter from each
Selling Stockholder shall be as nearly as practicable in the same proportion
to the total number of Firm Shares being sold by each Selling Stockholder as
the number of Firm Shares being purchased by each Underwriter bears to the
total number of Firm Shares to be sold hereunder. The obligations of each of
the Selling Stockholders shall be several and not joint.
(b) Each Selling Stockholder has issued instructions to the Company
as to the transfer of the Firm Shares and the Option Shares to the
Underwriters upon the direction of the Attorneys-In-Fact. Each of the Selling
Stockholders specifically agrees that the Firm Shares and Option Shares are
subject to the interests of the Underwriters hereunder and that the
obligations of the Selling Stockholders hereunder shall not be terminable by
any act or deed of the Selling Stockholders (or by any other person, firm or
corporation including the Company, the Attorneys-In-Fact or the Underwriters)
or by operation of law (including the death of an individual Selling
Stockholder) or by the occurrence of any other event or events, except as set
forth in the Selling Shareholder Authorization. If any such event should occur
prior to the delivery to the Underwriters of the Firm Shares or the Option
Shares hereunder, certificates for the Firm Shares or the
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Options Shares, as the case may be, shall be transferred to the Underwriters in
accordance with the terms and conditions of this Agreement as if such event has
not occurred.
(c) Payment for the Firm Shares to be sold hereunder is to be made in
immediately available funds by wire transfer to a bank designated by the
Attorneys-In-Fact, in each case against registration of transfer of the Firm
Shares to the Representatives for the several accounts of the Underwriters.
Such payment and delivery of evidence of registration of transfer shall be made
at the offices of BT Alex. Xxxxx Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx, at 10:00 a.m., Baltimore time, on the third business day after the
date of this Agreement or at such other time and date not later than five
business days thereafter as you and the Company shall agree upon, such time and
date being herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading and on
which banks in New York are open for business and not permitted by law or
executive order to be closed.)
(d) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Selling
Stockholders hereby grant an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of this
Section 2. The maximum number of Option Shares to be sold by each Selling
Stockholder is set forth opposite their respective names on Schedule II hereto.
The option granted hereby may be exercised in whole or in part by giving written
notice (i) at any time before the Closing Date and (ii) only once thereafter
within 30 days after the date of this Agreement, by you, as Representatives of
the several Underwriters, to the Attorneys-in-Fact setting forth the number of
Option Shares as to which the several Underwriters are exercising the option and
the time and date at which payment therefor is to be made. If the option
granted hereby is exercised in part, the respective number of Option Shares to
be sold by each of the Selling Stockholders shall be determined on a pro rata
basis in accordance with the maximum number of option shares to be sold by each
Selling Stockholder set forth opposite their names on Schedule II hereto,
adjusted by you in such manner as to avoid fractional shares. The time and date
at which Option Shares are to be transferred shall be determined by the
Representatives but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to the
Closing Date (such time and date being herein referred to as the "Option Closing
Date"). If the date of exercise of the option is three or more days before the
Closing Date, the notice of exercise shall set the Closing Date as the Option
Closing Date. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such Underwriter bears
to the total number of Firm Shares, adjusted by you in such manner as to avoid
fractional shares. The option with respect to the Option Shares granted
hereunder may be exercised only to cover over-allotments in the sale of the Firm
Shares by the
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Underwriters. You, as Representatives of the several Underwriters, may cancel
such option at any time prior to its expiration by giving written notice of
such cancellation to the Company and the Attorney-in-Fact. To the extent, if
any, that the option is exercised, payment for the Option Shares shall be made
on the Option Closing Date in immediately available funds by wire transfer to
a bank designated by the Attorneys-In-Fact against registration of transfer at
the offices of BT Alex. Xxxxx Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx.
(e) The Company acknowledges receipt of, and agrees to be bound by,
instructions as to the transfer of the Firm Shares and the Option Shares to the
Underwriters upon the direction of the Attorneys-In-Fact. Until the termination
of this Agreement, the Company agrees that, with respect to the registration of
transfer of the Firm Shares and the Option Shares, it will recognize only the
direction of the Attorneys-In-Fact.
3. Offering by the Underwriters.
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It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. Covenants of the Company and the Selling Stockholders.
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(a) The Company covenants and agrees with the several Underwriters
that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule 430A
of the Rules and Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a
form approved by the Representatives containing information previously omitted
at the time of effectiveness of the Registration Statement in reliance on Rule
430A of the Rules and Regulations and (B) not file any amendment to the
Registration Statement or supplement to the Prospectus of which the
Representatives shall not previously have been advised and furnished with a
copy or to which the Representatives shall have reasonably objected in writing
or which is not in compliance with the Rules and Regulations.
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(ii) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission, (C)
of any request of the Commission for amendment of the Registration Statement
or for supplement to the Prospectus or for any additional information, and (D)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the use of the Prospectus or of
the institution of any proceedings for that purpose. The Company will use its
best efforts to prevent the issuance of any such stop order preventing or
suspending the use of the Prospectus and to obtain as soon as possible the
lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of such
jurisdictions as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided 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 where it is not now
so qualified or required to file such a consent. The Company will, from time
to time, prepare and file such statements, reports, and other documents, as
are or may be required to continue such qualifications in effect for so long a
period as the Representatives may reasonably request for distribution of the
Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period when
delivery of a Prospectus is required under the Act, as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, four signed copies of the
Registration Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representatives such number of copies of
the Registration Statement (including such number of copies of the exhibits
filed therewith that may reasonably be requested), and of all amendments
thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution of
the Shares as contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
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Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 15 months after the effective date of the Registration Statement, an
earning statement (which need not be audited) in reasonable detail, covering a
period of at least 12 consecutive months beginning after the effective date of
the Registration Statement, which earning statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has been so
made available.
(vii) The Company will, for a period of five years from the
Closing Date, deliver to the Representatives copies of annual reports and
copies of all other documents, reports and information furnished by the
Company to its stockholders or filed with any securities exchange pursuant to
the requirements of such exchange or with the Commission pursuant to the Act
or the Exchange Act. The Company will deliver to the Representatives similar
reports with respect to significant subsidiaries, as that term is defined in
the Rules and Regulations, which are not consolidated in the Company's
financial statements.
(viii) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other securities convertible into or
exchangeable or exercisable for shares of Common Stock or derivative of Common
Stock (or agreement for such) will be made for a period of one year after the
date of this Agreement, directly or indirectly, by the Company otherwise than
hereunder or pursuant to the Company's Omnibus Stock Plan or Employee Stock
Purchase Plan or with the prior written consent of BT Alex. Xxxxx
Incorporated.
(ix) The Company will use its best efforts to list the Common
Stock on The Nasdaq Stock Market.
(x) The Company has caused each outside director to furnish to
you, on or prior to the date of this agreement, a letter or letters, in form
and substance satisfactory to the Underwriters, pursuant to which each such
person shall agree not to offer, sell, sell short or otherwise dispose of any
shares of Common Stock of the Company or other capital stock of the Company,
or any other securities convertible, exchangeable or exercisable for Common
Stock or derivative of Common Stock owned by such person or
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request the registration for the offer or sale of any of the foregoing (or as
to which such person has the right to direct the disposition of) for a period of
one year after the date of this Agreement, directly or indirectly, except with
the prior written consent of BT Alex. Xxxxx Incorporated ("Lockup Agreements")
and except upon death of a Selling Stockholder or upon transfer to members of
his or her family or to trusts for him, her or their benefit, that are subject
to the same restrictions.
(xi) The Company will maintain a transfer agent for the Common
Stock.
(xii) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
(b) Each of the Selling Stockholders covenants and agrees with the several
Underwriters that:
(i) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other capital stock of the Company or
other securities convertible, exchangeable or exercisable for Common Stock or
derivative of Common Stock owned by the Selling Stockholder or request the
registration for the offer or sale of any of the foregoing (or as to which the
Selling Stockholder has the right to direct the disposition of) will be made
for a period of one year after the date of this Agreement, directly or
indirectly, by such Selling Stockholder otherwise than hereunder or with the
prior written consent of BT Alex. Xxxxx Incorporated and except upon death of
a Selling Stockholder or upon transfer to members of his or her family or to
trusts for him, her or their benefit that take subject to the same
restrictions.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act of
1983 with respect to the transactions herein contemplated, each of the Selling
Stockholders has delivered 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).
(iii) Such Selling Stockholder will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
-13-
5. Costs and Expenses.
------------------
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company and the Selling Stockholders under
this Agreement, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of
counsel for the Company and the Selling Stockholders; the cost of printing and
delivering to, or as requested by, the Underwriters copies of the Registration
Statement, Preliminary Prospectuses, the Prospectus, this Agreement, the Listing
Application, the Blue Sky Survey and any supplements or amendments thereto; the
filing fees of the Commission; the filing fees and expenses (including legal
fees and disbursements) incident to securing any required review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Shares; the listing fee of The Nasdaq Stock Market; and the expenses,
including the fees and disbursements of counsel for the Underwriters, incurred
in connection with the qualification of the Shares under state securities or
Blue Sky laws. To the extent, if at all, that any of the Selling Stockholders
engage special legal counsel to represent them in connection with this offering,
the fees and expenses of such counsel shall be borne by such Selling
Stockholder. Any transfer taxes imposed on the sale of the Shares to the
several Underwriters will be paid by the Selling Stockholders pro rata. The
Company and the Selling Stockholders shall not, however, be required to pay for
any of the Underwriters expenses (other than those related to qualification
under NASD regulation) except that, if this Agreement shall not be consummated
because the conditions in Section 6 hereof are not satisfied, or because this
Agreement is terminated by the Representatives pursuant to Section 11(b)(i)
hereof, or by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholders to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure to satisfy said condition or to comply
with said terms be due to the default or omission of any Underwriter, then the
Company shall reimburse the several Underwriters for reasonable out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred in
connection with investigating, marketing and proposing to market the Shares or
in contemplation of performing their obligations hereunder; but the Company and
the Selling Stockholders shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.
6. Conditions of Obligations of the Underwriters.
---------------------------------------------
The several obligations of the Underwriters to purchase the Firm
Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the Option
Closing Date, as the case may be, of the representations and warranties of the
Company and the Selling Stockholders contained herein, and to the performance
by the Company and the Selling Stockholders of their
-14-
covenants and obligations hereunder and to the following additional
conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule
424 and Rule 430A of the Rules and Regulations shall have been made, and any
request of the Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to the
Representatives and complied with to their reasonable satisfaction. No stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that purpose
shall have been taken or, to the knowledge of the Company or the Selling
Stockholders, shall be contemplated by the Commission and no injunction,
restraining order, or order of any nature by a Federal or state court of
competent jurisdiction shall have been issued as of the Closing Date which
would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of Xxxxxx &
Whitney LLP, counsel for the Company and the Selling Stockholders, dated the
Closing Date or the Option Closing Date, as the case may be, addressed to the
Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power to own or lease its properties and conduct its
business as described in the Registration Statement; each of the Subsidiaries
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with
corporate power to own or lease its properties and conduct its business as
described in the Registration Statement.
(ii) The Company has authorized capital stock as set forth
under the caption "Capitalization" in the Prospectus; and the authorized
shares of the Company's Common Stock have been duly authorized; the outstanding
shares of the Company's Common Stock, including the Shares to be sold by the
Selling Stockholders, to the extent set forth under the caption
"Capitalization" in the Prospectus, have been duly authorized and validly
issued and are fully paid and non-assessable; all of the Shares conform to the
description thereof contained in the Prospectus.
(iii) The Registration Statement has become effective under
the Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(iv) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all material respects
with the
-15-
requirements of the Act and the applicable rules and regulations thereunder
(except that such counsel need express no opinion as to the financial statements
and related schedules therein).
(v) The statements under the captions "Business-Legal
Proceedings," "Management-Executive Compensation," "Management-New Incentive
Plans," "Certain Transactions," "Description of Capital Stock" and "Shares
Eligible for Future Sale" in the Prospectus, insofar as such statements
constitute a summary of documents referred to therein or matters of law,
fairly summarize in all material respects the information called for with
respect to such documents and matters.
(vi) Such counsel does not know of any contracts or
documents required to be filed as exhibits to in the Registration Statement or
described in the Registration Statement or the Prospectus which are not so
filed or described as required, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly
summarized in all material respects.
(vii) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the Company or any of
the Subsidiaries except as set forth in the Prospectus.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Charter or by-laws of the Company, or any
agreement or instrument filed as an exhibit to the Registration Statement.
(ix) This Agreement has been duly authorized, executed and
delivered by the Company.
(x) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and delivery
of this Agreement and the consummation of the transactions herein contemplated
(other than as may be required by the NASD or as required by State securities
and Blue Sky laws as to which such counsel need express no opinion) except
such as have been obtained or made, specifying the same.
(xi) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement, and
application of the net proceeds therefrom as described in the Prospectus,
required to register as an investment company under the 1940 Act.
-16-
(xii) This Agreement has been duly executed and delivered on
behalf of the Selling Stockholders.
(xiii) The Selling Shareholder Authorization executed and
delivered by each Selling Stockholder is valid and binding.
(xiv) The Underwriters (assuming that they are protected
purchasers within the meaning of the Uniform Commercial Code) have acquired
all the rights of each Selling Stockholder in the Shares free of any adverse
claim, and the Company is required to register transfer to the Underwriters on
the Closing Date, and the Option Closing Date, as the case may be.
In rendering such opinion Xxxxxx & Xxxxxxx LLP may rely as to matters
governed by the laws of states other than Minnesota and Delaware or Federal laws
on local counsel in such jurisdictions and as to the matters set forth in
subparagraph (i) on opinions of other counsel representing the respective
Subsidiary, provided that in each case Xxxxxx & Whitney LLP shall state that
they believe that they and the Underwriters are justified in relying on such
other counsel. In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that (i) the Registration Statement, at
the time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) and as
of the Closing Date or the Option Closing Date, as the case may be, 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,
and (ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are made, not
misleading (except that such counsel need express no view as to financial
statements, schedules and statistical information therein). With respect to
such statement, Xxxxxx & Xxxxxxx LLP may state that their belief is based upon
the procedures set forth therein, but is without independent check and
verification.
(c) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxx X. Xxxxxxx, General
Counsel of the Company, dated the Closing Date or the Option Closing Date, as
the case may be, addressed to the Underwriters (and stating that it may be
relied upon by counsel to the Underwriters) to the effect that:
(i) The Company and each of the Subsidiaries are duly
qualified to transact business in all jurisdictions in which the conduct of
their business requires such
-17-
qualification, or in which the failure to qualify would have a materially
adverse effect upon the business of the Company and the Subsidiaries taken as a
whole; and the outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued and are fully paid and non-
assessable and are registered in the name of the Company or a Subsidiary; and,
to the best of such counsel's knowledge, the outstanding shares of capital stock
of each of the Subsidiaries is owned free and clear of all liens, encumbrances
and equities and claims, and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership interests in the
Subsidiaries are outstanding.
(ii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no outstanding
securities of the Company convertible or exchangeable into or evidencing the
right to purchase or subscribe for any shares of capital stock of the Company
and there are no outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its capital stock or
any securities convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of such stock; and except as described in
the Prospectus, to the knowledge of such counsel, no holder of any securities
of the Company or any other person has the right, contractual or otherwise,
which has not been satisfied or effectively waived, to cause the Company to
sell or otherwise issue to them, or to permit them to underwrite the sale of,
any of the Shares or the right to have any Common Shares or other securities
of the Company included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require registration
under the Act of any shares of Common Stock or other securities of the
Company.
(d) The Representatives shall have received from Piper & Marbury L.L.P.,
counsel for the Underwriters, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, substantially to the effect specified in
subparagraphs (ii), (iii), (ix) and (xii) of Paragraph (b) of this Section 6,
and that the Company is a duly organized and validly existing corporation under
the laws of the State of Delaware. In rendering such opinion Piper & Marbury
L.L.P. may rely as to all matters governed other than by the laws of states
other than Maryland and Delaware or Federal laws on the opinion of counsel
referred to in Paragraph (b) of this Section 6. In addition to the matters set
forth above, such opinion shall also include a statement to the effect that
nothing has come to the attention of such counsel which leads them to believe
that (i) the Registration Statement, or any amendment thereto, as of the time it
became effective under the Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Act) as of the Closing Date
or the Option Closing Date, as the case may be, 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, and (ii) the
Prospectus,
-18-
or any supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the case
may be, contained an untrue statement of a material fact or omitted to state a
material fact, necessary in order to make the statements, in the light of the
circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Piper &
Marbury L.L.P. may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.
(e) You shall have received, on each of the date hereof, the Closing Date
and the Option Closing Date, as the case may be, a letter dated the date hereof,
the Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to you, of Xxxxxx Xxxxxxxx LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating that in their opinion the
financial statements and schedules examined by them and included in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; and containing such other statements and information as is
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) The Registration Statement has become effective under
the Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been taken
or are, to his knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing Date or
the Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to
Rules 424 or 430A under the Act have been made;
(iv) He or she has carefully examined the Registration
Statement and the Prospectus and, in his or her opinion, as of the effective
date of the Registration
-19-
Statement, the statements contained in the Registration Statement were true
and correct, and such Registration Statement and Prospectus did not omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, and since the effective date of
the Registration Statement, no event has occurred which should have been set
forth in a supplement to or an amendment of the Prospectus which has not been
so set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been 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 taken as a whole or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(g) The Company and the Selling Stockholders shall have furnished to the
Representatives such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein and
related matters as the Representatives may reasonably have requested.
(h) The Common Stock has been approved for listing on The Nasdaq Stock
Market.
(i) The Lockup Agreements described in Section 4(x) are in full force and
effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Piper & Marbury L.L.P.,
counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 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 the
Representatives by notifying the Company and the Selling Stockholders of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.
In such event, the Selling Stockholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. Conditions of the Obligations of the Selling Stockholders.
---------------------------------------------------------
-20-
The obligations of the Selling Stockholders to sell and deliver the
portion of the Shares required to be delivered as and when specified in this
Agreement are subject to the conditions that at the Closing Date or the Option
Closing Date, as the case may be, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and in effect or
proceedings therefor initiated or threatened.
8. Indemnification.
---------------
(a) The Company and, to the extent that indemnification from the Company
is not available or is inadequate, the Selling Stockholders, severally and not
jointly, agree 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
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or (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; and will reimburse each Underwriter and each such
controlling person upon demand for any legal or other 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; 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. In no event, however, shall the liability of any
Selling Stockholder for indemnification under this Section 8(a) exceed the
lesser of (i) the proceeds received by such Selling Stockholder from the
Underwriters in the offering or (ii) the proportion of the total proceeds equal
to the proportion of the total shares sold by such Selling Stockholder. This
indemnity agreement will be in addition to any liability which the Company or
the Selling Stockholders may otherwise have.
(b) 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 the Selling Stockholders within the meaning of
the Act, against any losses, claims, damages or liabilities to which the Company
or any such director, officer, Selling
-21-
Stockholder 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 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.
(c) 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) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 8(c) 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) or (b). 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
-22-
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) and by the Company and the Selling Stockholders in
the case of parties indemnified pursuant to Section 8(b). 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.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under Section 8(a) or
(b) 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
-23-
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(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 Section
8(d). 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 to above in this Section 8(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), (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, and (iii) no Selling Stockholder
shall be required to contribute any amount in excess of the lesser of (A) that
proportion of the total of such losses, claims, damages or liabilities
indemnified or contributed against equal to the proportion of the total Shares
sold hereunder which is being sold by such Selling Stockholder, or (B) the
proceeds received by such Selling Stockholder from the Underwriters in the
offering. The Underwriters' obligations in this Section 8(d) to contribute are
several in proportion to their respective underwriting obligations and not
joint.
(e) 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.
(f) 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
-24-
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. Default by Underwriters.
-----------------------
If on the Closing Date or the Option Closing Date, as the case may be, any
Underwriter shall fail to purchase and pay for the portion of the Shares which
such Underwriter has agreed to purchase and pay for on such date (otherwise than
by reason of any default on the part of the Company or a Selling Stockholder),
you, as Representatives of the Underwriters, shall use your reasonable efforts
to procure within 36 hours thereafter one or more of the other Underwriters, or
any others, to purchase from the Company and the Selling Stockholders such
amounts as may be agreed upon and upon the terms set forth herein, the Firm
Shares or Option Shares, as the case may be, which the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours you, as such
Representatives, shall not have procured such other Underwriters, or any others,
to purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be,
which they are obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting Underwriter or
Underwriters failed to purchase, or (b) if the aggregate number of shares of
Firm Shares or Option Shares, as the case may be, with respect to which such
default shall occur exceeds 10% of the Firm Shares or Option Shares, as the case
may be, covered hereby, the Company and the Selling Stockholders or you as the
Representatives of the Underwriters will have the right, by written notice given
within the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting Underwriters
or of the Company or of the Selling Stockholders except to the extent provided
in Section 8 hereof. In the event of a default by any Underwriter or
Underwriters, as set forth in this Section 9, the Closing Date or Option Closing
Date, as the case may be, may be postponed for such period, not exceeding seven
days, as you, as Representatives, may determine in order that the required
changes in the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter" includes any
person substituted for a defaulting
-25-
Underwriter. Any action taken under this Section 9 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Notices.
-------
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to BT Alex.
Xxxxx Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention:
Xx. Xxxxxxx X. Xxxx; with a copy to BT Alex. Xxxxx Incorporated, Xxx Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000. Attention: General Counsel; if to the
Company or the Selling Stockholders, to X.X. Xxxxxxxx Worldwide, Inc., 0000
Xxxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000-0000, Attention: Xxxx X. Xxxxxxx;
with a copy to Xxxxxx & Xxxxxxx LLP, Xxxxxxxxx Center South, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Xxxxxxx X. Xxxxx.
11. Termination.
-----------
This Agreement may be terminated by you by notice to the Company and the
Attorneys-In-Fact as follows:
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m. on
the first business day of this Agreement;
(b) at any time prior to the Closing Date 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 taken as
a whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, 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 in financial
markets would, in your judgment, make it impracticable to market the Shares or
to enforce contracts for the sale of the Shares, (iii) suspension of trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or The Nasdaq Stock Market or limitation on prices (other than limitations on
hours or numbers of days of trading) for securities thereon, (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
-26-
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 on the Nasdaq Stock Market 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 makes it impracticable to market the
Shares or to enforce contracts for the sale of the Shares; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. Successors.
----------
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
13. Information Provided by Underwriters.
------------------------------------
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.
14. Miscellaneous.
-------------
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants
in this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of
any Underwriter or controlling person thereof, or by or on behalf of the
Company or its directors or officers and (c) delivery of and payment for the
Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Maryland; provided, however, that any matter
within the scope of Article 8 of the Uniform Commercial Code shall be governed
by the laws of the State of
-27-
Delaware.
If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Stockholders,
the Company and the several Underwriters in accordance with its terms.
-28-
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,
X.X. XXXXXXXX WORLDWIDE, INC.
By _________________________________
X.X. Xxxxxxxx, President
Selling Stockholders listed on Schedule II
By __________________________________
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. XXXXX INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXX XXXXXXX INC.
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Xxxxx Incorporated
By: _________________________________
Authorized Officer
-29-
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- --------------------------
BT Alex. Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Piper & Jaffray Inc.
__________
Total 10,578,396
==========
-30-
SCHEDULE II
Schedule of Selling Stockholders
Number of Firm Number of Option
Selling Stockholder Shares Shares
----------------------- -------------- ----------------
X.X. Xxxxxxxx 1,564,774 234,716
Xxxxxx Xxxxxx 1,862,140 279,320
Xxxx X. Xxxxxx 724,879 108,731
Xxxxx Xxxx 718,003 107,699
Looe Xxxxx III 712,452 106,868
Xxxxxx X. Fair 507,152 76,072
Xxxxx Xxxxxx 465,597 69,839
Xxxxx X. XxXxxxxx 429,000 64,349
Xxxx Xxxxxxx 415,350 50,563
Xxxxxxx X. Xxxxxxxxx 370,092 55,514
Xxxxxxx Xxxxx 278,770 41,815
Xxxxxxx Xxxxxxxxxx 271,565 40,735
X.X. XxxXxxxxx 246,261 36,939
Xxx X. Xxxxxxxx 227,202 34,080
Xxxxxxx X. Xxxxxxx 227,045 34,057
Xxxxxxx Xxxxx 219,114 32,867
Xxxxxxx X. Xxxxxx 176,087 26,413
Xxxxxxx X. Xxxxxxxxx 148,842 22,326
Xxxx Xxxxxx 127,083 30,802
Xxxxx Xxxxxx 90,173 13,526
Xxxx X. Xxxxxx 76,474 11,471
Xxxxxxx Xxxxx 63,403 9,510
Xxxxxx Xxxxxx 45,199 6,780
Xxxx Xxxxxxxxxx 34,720 5,208
Xxxxxxxx X. Xxxx 30,742 4,611
Xxxx X. Xxxxxxx 27,719 4,158
Xxxxxxxxxxx Xxxxxx 24,226 3,634
Xxxxxx X. Xxxx 23,281 3,492
Xxxxxx X. Xxxxxxxxx 23,281 3,492
Xxxxxx X. Xxxxxxx 23,281 3,492
Xxxxxx Xxxxxx 20,324 3,049
Xxxxx X. Xxxxxxxxxx 20,227 3,034
Xxxxxx X. Xxxxx 20,141 3,021
Xxxxxx X. Xxxxxxxxx 18,923 2,838
-31-
Number of Firm Number of Option
Selling Stockholder Shares Shares
----------------------- -------------- ----------------
Xxxx X. Xxxxxxxxx 18,140 2,721
Xxxxx X. Xxxxxx 17,455 2,618
Xxxxxxx Xxxxxxxxxx 15,678 2,352
Xxxxxx X. Xxxxx 15,368 2,305
Xxxxx X. Xxxxx 14,491 2,174
Xxxxx X. Xxxxxx 14,097 2,115
Xxxxx X. Xxxxx 12,130 1,819
Xxxx X. Xxxxxx 11,189 1,678
J. Xxxxx Xxxxxx 11,189 1,678
Xxxxx X. Xxxxx 11,282 1,692
Xxxxxxx X. Xxxxxxxx 10,962 1,644
Xxxxxx X. Xxxxxx 10,243 1,537
Xxxxxxx Xxxxxxxxx 10,238 1,536
Xxxxxxx Xxxxxxx 9,717 1,457
Xxxxxx X. Xxxxxxx 8,501 1,275
Xxxxxxx X. Xxxxxxxxx 8,353 1,253
Xxxxx X. Xxxxx 8,151 1,223
Xxxxxx X. Xxxxxx 8,151 1,223
Xxxx X. Xxxxx 7,826 1,174
Xxxxxx Xxxx XxXxxxxx 7,678 1,152
Xxxxxxx X. Xxxxx 7,678 1,152
Xxxxx X. Xxxxxxxx 7,678 1,152
Xxxxxxx X. Xxxxxxx 7,457 1,119
Xxxxxxx X. Begin 7,206 1,081
Xxxxxxx X. Xxxxxxxxx 6,261 939
Xxx X. Xxxxxxx Xx. 5,591 839
Xxxxxxx X. Xxxxxxxx 5,543 831
Xxxxxx Xxxxxx 4,447 667
Xxxxxx X. Xxxxxx 4,376 000
Xxxxx X. Xxxxxxx 3,913 587
Xxxxx X. Xxxxxx 3,195 479
Xxxxxxx Xxxxxxx 2,836 425
Xxxxx X. Xxxxxx 2,461 369
Xxxxx X. Xxxxxxxxxx 2,348 352
Xxxxxx X Xxxxx 2,348 352
Xxxxx Xxxxxxxx 2,087 313
Xxxx X. Xxxxxxxxx 2,087 313
-32-
Number of Firm Number of Option
Selling Stockholder Shares Shares
----------------------- -------------- ----------------
Xxxx X. Xxxxxx 1,890 284
Xxxxx X.Xxxxxxxx 1,826 274
Xxxxxxx X. Xxxxx III 1,565 235
Xxxxx X. Xxxxxx 1,565 000
Xxxxxx X. Xxxxxx 1,565 235
Xxxxx X. Xxxxxxx 1,565 235
Xxxxx X. Xxxxxxxx 1,565 000
Xxxxxx Xxxxxxx III 1,565 235
Xxxxxxx X. Xxxxxxx 1,565 235
Xxxx X. Xxxxxx 1,565 235
Xxxxx X. Xxxxxx 1,565 235
Xxxxxxx Xxxxxx 1,417 213
Xxxxxx X. Xxxxxxxx 1,304 196
Xxxxxx X. Xxxxxxxxx 1,304 196
Xxxxxxx X. Xxxxxxx 1,304 196
Xxxx X. Xxxxx 1,304 196
Xxxxxxxxx Xxxxxxxxx 1,043 157
Xxx X. Xxxxxxx 1,043 157
Xxxx X. Xxxxxxxx 1,043 000
Xxxxx Xxxxx III 1,043 157
Xxxxx X. Xxxxxxx Xx. 1,043 157
Xxxx X. Xxxxxxxxx 1,043 157
Xxxxxxx X. Xxxxxx 945 142
Xxxxxxx X. Xxxxxxx 945 142
Xxxxx X. Xxxx 900 135
Xxxxxx X. Xxxxx 870 130
Xxxxxxx X. Xxxxxx 783 117
Xxxx X. Xxxxxx 522 78
Xxxxxxx X. Xxxxx 522 78
Xxxxxx X. Xxxxxx 344 52
---------- ---------
Total 10,578,396 1,586,759
========== =========
-33-
EXHIBIT A
CHRW Holdings, Inc.
X.X. Xxxxxxxx Company
X.X. Xxxxxxxx Company (Canada) Ltd.
X.X. Xxxxxxxx International, Inc.
X.X. Xxxxxxxx de Mexico, S.A. de C.V.
CHR Aviation, Inc.
Xxxxx-Xxxxxxxx Ingredient, Inc.
Payment & Logistics Services, LLC
T-Chek Systems, LLC
-34-
