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EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
2,200,000 SHARES
SPR INC.
COMMON STOCK
UNDERWRITING AGREEMENT
May ___, 1998
XXXXX XXXXXX INC.
XXXXXX X. XXXXX & CO. INCORPORATED
XXXXX XXXXX XXXXXX & COMPANY, LLC
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
SPR Inc., a Delaware corporation (the "Company"), proposes to issue and
sell an aggregate of 900,000 shares of its common stock, $0.01 par value per
share, to the several Underwriters named in Schedule II hereto (the
"Underwriters"), and the persons named in Part A of Schedule I hereto (the
"Selling Stockholders") propose to sell to the several Underwriters an
aggregate of 1,300,000 shares of common stock of the Company. The Company and
the Selling Stockholders are hereinafter sometimes referred to as the
"Sellers." The Company's common stock, $0.01 par value, is hereinafter
referred to as the "Common Stock" and the 900,000 shares of Common Stock to be
issued and sold to the Underwriters by the Company and the 1,300,000 shares of
Common Stock to be sold to the Underwriters by the Selling Stockholders are
hereinafter referred to as the "Firm Shares." The Selling Stockholders listed
in Part B of Schedule I hereto also propose to sell to the Underwriters, upon
the terms and conditions set forth in Section 2 hereof, up to an additional
330,000 shares (the "Additional Shares") of Common Stock. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "Shares."
All references to the "Company" refer to SPR Inc. or its predecessors, SPR
Chicago, Inc., SPR-Wisconsin, Inc., Systems and Programming Resources of Tulsa,
Inc., Systems and Programming Resources, Inc. and Consulting Acquisition, Inc.
d/b/a Data Flex, Inc., as appropriate (collectively, the "Constituent
Corporations").
The Company and the Selling Stockholders wish to confirm as follows their
respective agreements with you (the "Representatives") and the other several
Underwriters on whose behalf you are acting, in connection with the several
purchases of the Shares by the Underwriters.
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1. Registration Statement and Prospectus. The Company has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Act"), a
registration statement on Form S-1 (Reg. No. 333-_____) under the Act (the
"Registration Statement"), including a prospectus subject to completion
relating to the Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules,
if any, and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must
be declared effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If an abbreviated
registration statement is prepared and filed with the Commission in accordance
with Rule 462(b) under the Act (an "Abbreviated Registration Statement"), the
term "Registration Statement" as used in this Agreement includes the
Abbreviated Registration Statement. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement, or, if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Act and such information is
included in a prospectus filed with the Commission pursuant to Rule 424(b)
under the Act, the term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement, as supplemented
by the addition of the Rule 430A information contained in the prospectus filed
with the Commission pursuant to Rule 424(b). The term "Prepricing Prospectus"
as used in this Agreement means the prospectus subject to completion in the
form included in the registration statement at the time of the initial filing
of the registration statement with the Commission, and as such prospectus shall
have been amended from time to time prior to the date of the Prospectus.
2. Agreements to Sell and Purchase. Subject to such adjustments as you may
determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $_______ per Share (the "purchase price per share"), the number of
Firm Shares which bears the same proportion to the aggregate number of Firm
Shares to be issued and sold by the Company as the number of Firm
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Shares set forth opposite the name of such Underwriter in Schedule II hereto
(or such number of Firm Shares increased as set forth in Section 12 hereof)
bears to the aggregate number of Firm Shares to be sold by the Company and the
Selling Stockholders.
Subject to such adjustments as you may determine in order to avoid fractional
shares, each Selling Stockholder agrees, subject to all the terms and
conditions set forth herein, to sell to each Underwriter and, upon the basis of
the representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, each Underwriter, severally and not jointly, agrees to purchase
from each Selling Stockholder at the purchase price per share that number of
Firm Shares which bears the same proportion to the number of Firm Shares set
forth opposite the name of such Selling Stockholder in Schedule I hereto as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto (or such number of Firm Shares increased as set forth in
Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by
the Company and the Selling Stockholders.
Those Selling Stockholders identified in Part B of Schedule I hereto also
agree, subject to all the terms and conditions set forth herein, to sell to the
Underwriters, and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from such Selling Stockholders identified in
Part B of Schedule I hereto, at the purchase price per share, pursuant to a
one-time option (the "over-allotment option") which may be exercised at any
time prior to 9:00 P.M., New York City time, on the 30th day after the date of
the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange
is open for trading), up to an aggregate of 330,000 Additional Shares (the
maximum number of Additional Shares which each such Selling Stockholder agrees
to sell upon the exercise by the Underwriters of the over-allotment option is
set forth opposite their respective names in Part B of Schedule I). Additional
Shares may be purchased only for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The number of Additional
Shares which the Underwriters elect to purchase upon exercise of the
over-allotment option shall be provided by each Selling Stockholder who has
agreed to sell Additional Shares in proportion to the respective maximum
numbers of Additional Shares which each such Selling Stockholder has agreed to
sell. Upon exercise of the over-allotment option, each Underwriter, severally
and not jointly, agrees to purchase from each Selling Stockholder who has
agreed to sell Additional Shares that number of Additional Shares (subject to
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such adjustments as you may determine in order to avoid fractional shares)
which bears the same proportion to the number of Additional Shares to be sold
by such Selling Stockholder as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule II hereto (or such number of Firm Shares
increased as set forth in Section 12 hereof) bears to the aggregate number of
Firm Shares to be sold by the Company and the Selling Stockholders.
Certificates in transferable form for the Shares (including any Additional
Shares) which each of the Selling Stockholders agrees, severally and solely
with respect to the Shares to be sold by such Selling Stockholder hereunder, to
sell pursuant to this Agreement have been placed in custody with First Chicago
Trust Company of New York (the "Custodian") for delivery under this Agreement
pursuant to a Custody Agreement and Power of Attorney (the "Custody Agreement")
executed by each of the Selling Stockholders appointing Xxxxxx X. Xxxxxxxx and
Xxxxx X. Xxxxxxxx as agents and attorneys-in-fact (the "Attorneys-in-Fact").
Each Selling Stockholder so agrees that (i) the Shares represented by the
certificates held in custody pursuant to the Custody Agreement are subject to
the interests of the Underwriters, the Company and each other Selling
Stockholder, (ii) the arrangements made by the Selling Stockholders for such
custody are, except as specifically provided in the Custody Agreement,
irrevocable, and (iii) the obligations of the Selling Stockholders hereunder
and under the Custody Agreement shall not be terminated by any act of such
Selling Stockholder or by operation of law, whether by the death or incapacity
of any Selling Stockholder or the occurrence of any other event. If any
Selling Stockholder shall die or be incapacitated or if any other event shall
occur before the delivery of the Shares hereunder, certificates for the Shares
of such Selling Stockholder shall be delivered to the Underwriters by the
Attorneys-in-Fact in accordance with the terms and conditions of this Agreement
and the Custody Agreement as if such death or incapacity or other event had not
occurred, regardless of whether or not the Attorneys-in-Fact or any Underwriter
shall have received notice of such death, incapacity or other event. Each
Attorney-in-Fact is authorized, on behalf of each of the Selling Stockholders,
to execute this Agreement and any other documents necessary or desirable in
connection with the sale of the Shares to be sold hereunder by such Selling
Stockholder, to make delivery of the certificates for such Shares, to receive
the proceeds of the sale of such Shares, to give receipts for such proceeds, to
pay therefrom any expenses to be borne by such Selling Stockholder in
connection with the sale and public offering of such Shares, to distribute the
balance thereof to such Selling Stockholder, and to take such other action as
may be necessary or desirable in connection with the transactions contemplated
by this Agreement.
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Each Attorney-in-Fact agrees to perform his duties under the Custody Agreement.
3. Terms of Public Offering. The Sellers have been advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the Underwriters
of and payment for the Firm Shares shall be made at the offices of Wildman,
Harrold, Xxxxx & Xxxxx, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000-0000, at 9:00 A.M., Chicago time, on May ___, 1998 (the "Closing Date").
The place of closing for the Firm Shares and the Closing Date may be varied by
agreement among you, the Company and the Attorneys-in-Fact.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at the aforementioned office of
Wildman, Harrold, Xxxxx & Xxxxx at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company and the Attorneys-in-Fact of the Underwriters' determination to
purchase a number, specified in such notice, of Additional Shares. The place
of closing for any Additional Shares and the Option Closing Date for such
Shares may be varied by agreement among you, the Company and the
Attorneys-in-Fact.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you in New York City on
the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor in immediately available funds.
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5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement, a post-effective amendment thereto or
any Abbreviated Registration Statement to be declared effective before the
offering of the Shares may commence, the Company will endeavor to cause the
Registration Statement, or such post-effective amendment or Abbreviated
Registration Statement, to become effective as soon as possible and will advise
you promptly and, if requested by you, will confirm such advice in writing,
when the Registration Statement, or such post-effective amendment or
Abbreviated Registration Statement has become effective.
(b) The Company will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction or the initiation of any proceeding
for such purpose; and (iii) within the period of time referred to in paragraph
(f) below, of any change, or any development involving a prospective change, in
the Company's condition (financial or other), business, properties, net worth
or results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a material fact
required by the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, three signed copies
of the Registration Statement as originally filed with the Commission and of
each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto, but without exhibits, as you may request.
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(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which you
shall not previously have been advised or to which you shall reasonably object
after being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a Prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), without delivering a copy of such information, documents or reports to
you, as Representatives of the Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the Company has
delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Company consents to the
use, in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as possible
and thereafter from time to time for such period as in the opinion of counsel
for the Underwriters a prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may request; provided, however, that in the event 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 date of the Prospectus, the Company
will expeditiously deliver to such Underwriter, upon request of such
Underwriter but at such Underwriter's expense, as many copies of the Prospectus
(and of any amendment or supplement thereto) as such Underwriter may request.
The Company consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by all dealers to whom Shares may be
sold, both in connection with the offering and sale of the Shares and for such
period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer. If during
such period of time any event shall occur that, in the opinion of counsel for
the Underwriters and counsel for the Company, is required to be set forth in
the Prospectus (as then amended or supplemented) or should be set forth therein
in order to make the statements therein, in
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the light of the circumstances under which they were made, not misleading, or
if it is necessary to supplement or amend the Prospectus to comply with the Act
or any other law, the Company will forthwith prepare and, subject to the
provisions of paragraph (d) above, file with the Commission an appropriate
supplement or amendment thereto, and will expeditiously furnish to the
Underwriters and dealers a reasonable number of copies thereof, subject to the
proviso to the first sentence of this Section 5(f). In the event that the
Company and you, as Representatives of the several Underwriters, agree that the
Prospectus should be amended or supplemented, the Company, if requested by you,
will promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided
that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to service of process in suits, other than those arising out
of the offering or sale of the Shares, in any jurisdiction where it is not now
so subject.
(h) The Company will make generally available to its security holders a
consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings statement
shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will furnish to
you (i) as soon as available, a copy of each report of the Company mailed to
stockholders or filed with the Commission, and (ii) from time to time such
other information concerning the Company as you may request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you, as
Representatives of the several Underwriters, terminating this Agreement
pursuant to Section 12 or Section 13 hereof), or if this Agreement shall be
terminated by the Underwriters because of any failure or refusal on the part of
the Company or the Selling Stockholders to comply with the terms or
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fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the Representatives for all reasonable out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by you
in connection herewith. In no event following termination of this Agreement
for any reason will the Underwriters seek to recover lost profits or
consequential damages from the Sellers, or any of them.
(k) The Company will apply the net proceeds from the sale of the Shares
to be sold by it hereunder substantially in accordance with the description set
forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely file the
Prospectus pursuant to Rule 424(b) under the Act and will advise you of the
time and manner of such filing.
(m) Except as provided in this Agreement, the Company will not, sell,
contract to sell or otherwise dispose of any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or grant any
options, warrants or any other instrument convertible, exchangeable or granting
any right to purchase Common Stock, for a period of 90 days after the date of
the Prospectus, without the prior written consent of Xxxxx Xxxxxx Inc.;
provided, however, that the Company may grant options under its Combined
Incentive and Non-Statutory Stock Option Plan (and may issue shares of Common
Stock, in accordance with the terms of such Plan and applicable option
agreements executed in connection therewith, upon exercise of any such options)
and sell shares of Common Stock under the Employee Stock Purchase Plan, in each
case as described in the Prospectus.
(n) The Company has furnished or will furnish to you "lock-up" letters as
described in Section 6(d) hereof, in the form previously delivered by you (the
"Lock-Up Letter"), signed by each of its current executive officers and
directors and each Selling Stockholder.
(o) Except as stated in this Agreement and in the Prepricing Prospectus
and Prospectus, the Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
6. Agreements of the Selling Stockholders. Each of the Selling Stockholders
agrees, severally and solely with respect to such Selling Stockholder and the
Shares to be sold by such Selling Stockholder, with the several Underwriters as
follows:
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(a) Such Selling Stockholder will cooperate to the extent necessary to
cause the Registration Statement or any post-effective amendment thereto or any
Abbreviated Registration Statement to become effective at the earliest possible
time.
(b) Such Selling Stockholder will pay all Federal and other taxes, if any
on the transfer or sale of the Shares being sold by the Selling Stockholder to
the Underwriters.
(c) Such Selling Stockholder will do or perform all things required to be
done or performed by the Selling Stockholder prior to the Closing Date or any
Option Closing Date, as the case may be, to satisfy all conditions precedent to
the delivery of the Shares pursuant to this Agreement.
(d) Such Selling Stockholder has executed or will execute a Lock-Up Letter
agreeing not to sell, contract to sell or otherwise dispose of any Common
Stock, except for the sale of Shares to the Underwriters pursuant to this
Agreement and as otherwise provided in the Lock-Up Letter, prior to the
expiration of 90 days after the date of the Prospectus, without the prior
written consent of Xxxxx Xxxxxx Inc.
(e) Except as stated in this Agreement and in the Prepricing Prospectus
and the Prospectus, such Selling Stockholder will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(f) Such Selling Stockholder will advise you promptly, and if requested by
you, will confirm such advice in writing, within the period of time referred to
in Section 5(f) hereof, of (i) any change, or any development involving a
prospective change, in the Company's condition (financial or other), business,
properties, net worth or results of operations, or in information contained in
the Prospectus, or any amendment or supplement thereto, relating to the
Company, which comes to the attention of such Selling Stockholder, or (ii) any
new information relating to the Company, or relating to any matter stated in
the Prospectus or any amendment or supplement thereto, which comes to the
attention of such Selling Stockholder, or (iii) any change in information
contained in the Prospectus, or any amendment or supplement thereto, under the
heading "Principal and Selling Stockholders" relating to such Selling
Stockholder, any of which suggests that any statement made in the Registration
Statement or the Prospectus (as then amended or supplemented, if
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amended or supplemented) is or may be untrue in any material respect or that
the Registration Statement or Prospectus (as then amended or supplemented, if
amended or supplemented) omits or may omit to state a material fact or a fact
necessary to be stated therein in order to make the statements therein not
misleading in any material respect, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented, if amended or supplemented) in
order to comply with the Act or any other law.
7. Representations and Warranties of the Company. The Company represents and
warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424 under the Act, complied as to form when
so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto or any Abbreviated Registration Statement shall become effective and
the Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and did not or will not at any
such times 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, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding shares of Common Stock of the Company (including
the Shares to be sold by the Selling Stockholders) have been duly authorized
and validly issued, are fully paid and nonassessable and are free of any
preemptive or similar rights; the Shares to be issued and sold by the Company
have been duly authorized and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights; and the capital stock of the Company conforms to the description
thereof in the Registration Statement and the Prospectus.
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(d) The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing
in each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth or results
of operations of the Company. The Company does not own or control, directly or
indirectly, any subsidiary (as defined in the rules and regulations promulgated
under the Act).
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or to which the
Company or any of its properties is subject, that are required to be described
in the Registration Statement or the Prospectus but are not described as
required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement that
are not described or filed as required by the Act.
(f) The Company is not (i) in violation of its certificate of
incorporation or by-laws, or other organizational documents, (ii) in violation
of any law, ordinance, administrative or governmental rule or regulation
applicable to the Company, or of any decree of any court or governmental agency
or body having jurisdiction over the Company, except any such violation(s)
that, individually or in the aggregate, could not have a material adverse
effect on the condition (financial or other), business, net worth or results of
operations of the Company, or (iii) in default in any material respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which it is a party or by
which the Company or any of its properties may be bound.
(g) Neither the issuance and sale of the Shares, the execution, delivery
or performance of this Agreement by the Company nor the consummation by the
Company of the transactions contemplated hereby (A) requires any consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body,
agency or official (except such as have been obtained under the Act and
compliance with the securities or Blue Sky laws of
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various jurisdictions) or conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, the certificate of
incorporation or bylaws, or other organizational documents, of the Company or
(B) conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, any agreement, indenture, lease or other instrument to
which the Company is a party or by which its properties may be bound, or (C)
violates or will violate any statute, law, rule, regulation, judgment,
injunction, order or decree applicable to the Company or any of its properties,
or will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to the terms of any
agreement or instrument to which it is a party or by which it may be bound, or
to which any of its property or assets is subject, except any such violations
that, individually or in the aggregate, could not have a material adverse
effect on the condition (financial or other), business, net worth or results of
operations of the Company.
(h) The accountants, Xxxxxx Xxxxxxxx LLP, who have certified the Company's
balance sheets as of December 31, 1996 and 1997 and the related statements of
operations, stockholders' equity and cash flow for each of the three fiscal
years in the period ending on December 31, 1997 (which include the financial
statements of the Constituent Corporations), and any related supplementary
schedule, included in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), are independent public accountants as
required by the Act.
(i) The financial statements (including the pro forma data included
therein) (whether for a full fiscal year or any interim period thereof),
together with the related notes and any schedules, included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) comply
as to form in all material respects with the requirements of the Act. Such
financial statements, together with the related notes and any schedules, (i)
present fairly the financial position, results of operations and changes in
financial position of the Company on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which they
apply and (ii) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein. The pro forma data included in the financial
statements (A) have been prepared on a basis consistent with such historical
financial statements, except for the pro forma adjustments specified therein,
and (B) give effect to the pro forma adjustments specified therein, which
adjustments are based on reasonable assumptions and have been properly applied
to the historical financial statements. The other financial and statistical
information and data included in the Registration
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14
Statement and the Prospectus (and any amendment or supplement thereto),
historical and pro forma, are, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and the books
and records of the Company.
(j) The execution and delivery of, and the performance by the Company of
its obligations under, this Agreement have been duly and validly authorized by
the Company, and this Agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability thereof may be limited by applicable bankruptcy,
insolvency or other similar laws relating to or affecting creditors' rights and
remedies generally and except to the extent that rights to indemnity and
contribution under this Agreement may be limited by federal or state securities
laws or by general equitable principles.
(k) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), (i) the Company has not
incurred any liability or obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, that in any of such cases
is material, individually or in the aggregate, to the Company, and (ii) there
has not been any change in the capital stock, or material increase in the
short-term debt or long-term debt, of the Company, or any material adverse
change, or any development involving or which may involve, a prospective
material adverse change, in the condition (financial or other), business, net
worth or results of operations of the Company.
(l) The Company owns no real property. The Company has good and
marketable title to all personal property described in the Prospectus as being
owned by it, free and clear of all liens, claims, security interests or other
encumbrances, except the following: (i) the Company's line of credit as
described in the Prospectus, which is secured by substantially all of the
Company's assets, (ii) office furniture leased by the Company, as described in
the Notes to the audited Financial Statements contained in the Prospectus,
(iii) such liens, claims, security interests or other encumbrances that are
described in the Registration Statement and the Prospectus, or in any document
filed as an exhibit to the Registration Statement, (iv) liens for taxes not yet
due and payable, or (v) any liens, claims, security interests or other
encumbrances that, individually or in the aggregate, could not have a material
adverse effect on the condition (financial or other), business, net worth or
results of operations of the Company. All
- 14 -
15
of the property described in the Prospectus as being held under lease by the
Company is held by it under leases that are valid, subsisting and enforceable
against the Company, except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency or other similar laws relating to
or affecting creditors' rights and remedies generally or by general equitable
principles, and, to the best knowledge of the Company, are valid, subsisting
and enforceable against the other parties thereto.
(m) The Company has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectus, the Prospectus or other materials, if any, permitted by the Act.
(n) The Company has such permits, licenses, franchises and authorizations
of governmental or regulatory authorities ("permits") as are necessary to own
its respective properties and to conduct its business in the manner described
in the Prospectus, subject to such qualifications as may be set forth in the
Prospectus and except such permits the lack of which, individually or in the
aggregate, could not have a material adverse effect on the condition (financial
or other), business, net worth or results of operations of the Company; the
Company has fulfilled and performed all its material obligations with respect
to such permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results in any
other material impairment of the rights of the holder of any such permit,
subject in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, none of such permits
contains any restriction that is materially burdensome to the Company.
(o) 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.
(p) To the Company's knowledge, neither the Company nor any of its
employees or agents has made any payment of funds of the
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16
Company or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(q) The Company has filed all tax returns required to be filed, which
returns are complete and correct in all material respects, and the Company has
paid all taxes required to be paid by it.
(r) No holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the Company (i)
because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement or (ii) subsequent to the
consummation of the transactions contemplated by this Agreement.
(s) The Company owns or possesses rights to use all patents, trademarks,
trademark registrations, service marks, service xxxx registrations, trade
names, copyrights, licenses, inventions, trade secrets and rights (i) described
in the Prospectus as being owned or possessed by it or (ii) necessary for the
conduct of its business, except any of such rights the lack of which,
individually or in the aggregate, could not have a material adverse effect on
the condition (financial or other), business, net worth or results of
operations of the Company, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company with
respect to the foregoing.
(t) The Company is not now, and after sale of the Shares to be sold by it
hereunder and application of the net proceeds from such sale as described in
the Prospectus under the caption "Use of Proceeds" will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(u) The Company has complied with all provisions of Section 1 of Laws of
Florida, Chapter 92-198, An Act Relating to Disclosure of Doing Business with
Cuba.
8. Representations and Warranties of the Selling Stockholders. Each Selling
Stockholder severally represents and warrants to each Underwriter, and in each
case solely with respect to such Selling Stockholder and the Shares to be sold
by such Selling Stockholder hereunder, that:
(a) Such Selling Stockholder now has, and on the Closing Date and any
Option Closing Date will have, valid and marketable title to the Shares to be
sold by such Selling Stockholder, free and clear of any lien, claim, community
property right, voting
- 16 -
17
trust agreement, security interest or other encumbrance, including, without
limitation, any restriction on transfer.
(b) Such Selling Stockholder now has, and on the Closing Date and any
Option Closing Date will have, full legal right, power and authorization, and
any approval required by law, to sell, assign, transfer and deliver such Shares
in the manner provided in this Agreement, and upon delivery of and payment for
such Shares hereunder, the several Underwriters will acquire valid and
marketable title to such Shares, free and clear of any lien, claim, community
property right, voting trust agreement, security interest, or other
encumbrance.
(c) This Agreement and the Custody Agreement have been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder and are the
valid and binding agreements of such Selling Stockholder enforceable against
such Selling Stockholder in accordance with their terms, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency or
other similar laws relating to or affecting creditors' rights and remedies
generally and except to the extent that rights to indemnity and contribution
under this Agreement may be limited by federal or state securities laws or by
principles of public policy.
(d) Neither the execution and delivery of this Agreement or the Custody
Agreement by or on behalf of such Selling Stockholder nor the consummation of
the transactions herein or therein contemplated by or on behalf of such Selling
Stockholder (i) requires any consent, approval, authorization or order of, or
filing or registration with, any court, regulatory body, administrative agency
or other governmental body, agency or official (except such as may be required
under the Act or such as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Shares) or (ii) conflicts
or will conflict with or constitutes or will constitute a breach of, or default
under, or violates or will violate (A) any agreement, indenture or other
instrument to which such Selling Stockholder is a party, by which such Selling
Stockholder is or may be bound or to which any of such Selling Stockholder's
property or assets is subject, or (B) any statute, law, rule, regulation,
ruling, judgment, injunction, order or decree applicable to such Selling
Stockholder or to any property or assets of such Selling Stockholder, except
any such statutes, laws, rules, regulations, rulings, judgments, injunctions,
orders or decrees the violation of which, individually or in the aggregate,
could not (1) have a material adverse effect on such Selling Stockholder's
ability to consummate the transactions contemplated in this Agreement or in the
Custody Agreement or (2) result in the breach by such Selling
- 17 -
18
Stockholder of any representation or warranty contained herein or therein.
(e) The Registration Statement and the Prospectus, insofar as they relate
to such Selling Stockholder, do not and will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(f) Although such Selling Stockholder has not undertaken (and has no duty
to undertake) to determine independently, and does not assume any
responsibility for information contained in the Registration Statement or the
Prospectus (except for information contained therein under the heading
"Principal and Selling Stockholders" relating to such Selling Stockholder),
nothing has come to the attention of such Selling Stockholder that has caused
such Selling Stockholder to believe, and such Selling Stockholder does not have
any knowledge or any reason to believe, that the Registration Statement or the
Prospectus (or any amendment or supplement thereto) contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
(g) The representations and warranties of such Selling Stockholder in the
Custody Agreement are, and on the Closing Date and any Option Closing Date will
be, true and correct in all material respects.
(h) Such Selling Stockholder has not taken, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares, except for the lock-up arrangements described
in the Prospectus.
9. Indemnification and Contribution.
(a) The Company and each Selling Stockholder, jointly and severally, agree
to indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation and reasonable fees and disbursements of counsel) arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Prepricing Prospectus or in the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact
- 18 -
19
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
such Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of
any such loss, claim, damage, liability or expense arising from the sale of the
Shares by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the Act
and the regulations thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the
Company has delivered the Prospectus to the several Underwriters in requisite
quantity on a timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which the Company or
any Selling Stockholder may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company or any Selling Stockholder, such
Underwriter or such controlling person shall promptly notify the parties
against whom indemnification is being sought (the "indemnifying parties"), and
such indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Underwriter
or any such controlling person shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (i) the indemnifying parties
have agreed in writing to pay such fees and expenses, (ii) the indemnifying
parties have failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling person and the
indemnifying parties and such Underwriter or such controlling person shall have
been advised in writing by its counsel that representation of such indemnified
party and any indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests
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20
between them (in which case the indemnifying party shall not have the right to
assume the defense of such action, suit or proceeding on behalf of such
Underwriter or such controlling person). It is understood, however, that the
indemnifying parties shall, in connection with any one such action, suit or
proceeding, or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Underwriters and controlling persons, which firm shall be
designated in writing by Xxxxx Xxxxxx Inc., and that all such reasonable fees
and expenses shall be reimbursed as they are incurred. The indemnifying
parties shall not be liable for any settlement of any such action, suit or
proceeding effected without their written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) The aggregate liability of each Selling Stockholder under this
Agreement, including with respect to the indemnification and contribution
provisions contained in Section 9, shall be limited to the aggregate proceeds
received by such Selling Stockholder from the Underwriters for the sale of the
Shares sold by such Selling Stockholder hereunder.
(d) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, each Selling Stockholder, and any person who controls
the Company or any Selling Stockholder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Selling Stockholders to each Underwriter,
but only with respect to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in
the Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer, any
Selling Stockholder, or any such controlling person based on the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (d), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above
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21
(except that if the Company shall have assumed the defense thereof such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company, its
directors, any such officer, the Selling Stockholder, and any such controlling
person shall have the rights and duties given to the Underwriters by paragraph
(b) above. The foregoing indemnity agreement shall be in addition to any
liability which any Underwriter may otherwise have.
(e) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under paragraphs (a) or (d) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other hand
from the offering of the Shares, or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders
on the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, 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; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Stockholders or the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling Stockholders, and
the underwriting discounts and commissions received by the Underwriters, from
the sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged
- 21 -
22
omission to state a material fact relates to information supplied by the
Company or the Selling Stockholders on the one hand or by the Underwriters on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(f) The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
were determined by a pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (e)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (e)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule II hereto (or such numbers of
Firm Shares increased as set forth in Section 12 hereof) and not joint.
(g) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
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23
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Stockholders or any person 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 any person
controlling 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 9.
10. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase the Firm Shares hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
(or an Abbreviated Registration Statement) to be declared effective before the
offering of the Shares may commence, the Registration Statement or such
post-effective amendment or Abbreviated Registration Statement shall have
become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you; all filings, if any, required by Rules 424 and 430A under the Act shall
have been timely made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your reasonable
satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company not contemplated
by the Prospectus, which in your reasonable opinion, as Representatives of the
several Underwriters, would materially, adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the Company
or any officer or director of the Company or any Selling Stockholder which
makes any statement made in the Prospectus untrue or which, in the reasonable
opinion of the Company and its counsel or the Underwriters and their counsel,
requires the making of any addition to or change in the Prospectus in order to
state a material fact required by the Act or any other
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24
law to be stated therein or necessary in order to make the statements therein
not misleading, if amending or supplementing the Prospectus to reflect such
event or development, in your reasonable opinion, as Representatives of the
several Underwriters, would materially adversely affect the market for the
Shares.
(c) You shall have received on the Closing Date, an opinion of Wildman,
Harrold, Xxxxx & Xxxxx, counsel for the Company and the Selling Stockholders,
dated the Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify does not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company. The Company does not own or control, directly or
indirectly, any subsidiary (as defined in Rule 405 promulgated under the Act).
(ii) The authorized and outstanding capital stock of the Company is
as set forth under the caption "Capitalization" in the Prospectus; and the
authorized capital stock of the Company conforms in all material respects as to
legal matters to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock."
(iii) All the shares of capital stock of the Company outstanding prior
to the issuance of the Shares to be issued and sold by the Company hereunder,
have been duly authorized and validly issued, and are fully paid and
nonassessable.
(iv) The Shares to be issued and sold to the Underwriters by the
Company hereunder have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and the Underwriters will
acquire good and marketable title to such Shares free and clear of any adverse
claim, assuming the each Underwriter purchases such Shares in good faith
without notice of any adverse claim.
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25
(v) The form of certificates for the Shares conforms to the
requirements of the Delaware General Corporation Law.
(vi) The Registration Statement and all post-effective amendments, if
any, have become effective under the Act and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are pending
before or contemplated by the Commission; and any required filing of the
Prospectus pursuant to Rule 424(b) has been made in accordance with Rule
424(b).
(vii) The Company has corporate power and authority to enter into this
Agreement and to issue, sell and deliver the Shares to be sold by it to the
Underwriters as provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and is a valid, legal and binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as enforcement of rights to indemnity and contribution
hereunder may be limited by Federal or state securities laws or principles of
public policy and subject to the qualification that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally or by general equitable principles.
(viii) The Company is not in violation of its certificate of incorporation
or bylaws, or other organizational documents, or to the best knowledge of such
counsel, is not in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other evidence
of indebtedness, except as may be disclosed in the Prospectus.
(ix) None of the offer, sale or delivery of the Shares by the Company,
the execution, delivery or performance of this Agreement, compliance by the
Company with the provisions hereof, or consummation by the Company of the
transactions contemplated hereby (A) conflicts with or constitutes a breach of,
or a default under, the certificate of incorporation or bylaws, or other
organizational documents, of the Company, or any agreement, indenture, lease or
other instrument to which the Company is a party or by which it or any of its
properties is bound that is an exhibit to the Registration Statement, or that
is material and that is known to such counsel, (B) will result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company under any agreement, indenture, lease or other instrument to which
the Company is a party or by which it or
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26
any of its properties is bound that is an exhibit to the Registration
Statement, or that is material and that is known to such counsel, or (C) will
result in any violation of any existing law, regulation, ruling (assuming
compliance with all applicable state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel, applicable to the Company or
any of its properties, except for any violation which, individually or in the
aggregate, would not have a material adverse effect on the condition (financial
or other), business, net worth or results of operations of the Company.
(x) No consent, approval, authorization or other order of, or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency, or official is required on the part of the Company
(except as have been obtained under the Act or such as may be required under
state securities or Blue Sky laws governing the purchase and distribution of
the Shares) for the valid issuance and sale of the Shares by the Company to the
Underwriters as contemplated by this Agreement.
(xi) The Registration Statement and the Prospectus and any supplements or
amendments thereto (except for the financial statements and the notes thereto
and any schedules and other financial data included therein, as to which such
counsel need not express any opinion) comply as to form in all material
respects with the requirements of the Act.
(xii) To the best knowledge of such counsel, (A) other than as described or
contemplated in the Prospectus (or any supplement thereto), there are no legal
or governmental proceedings pending or threatened against the Company, or to
which the Company or any of its property, is subject, which are required to be
described in the Registration Statement or Prospectus (or any amendment or
supplement thereto) and (B) there are no agreements, contracts, indentures,
leases or other instruments, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that are
not described or filed as required, as the case may be.
(xiii) To the best knowledge of such counsel, the Company is not in violation
of any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or of any decree of any court or governmental agency
or body having jurisdiction over the Company, except for any violation which,
individually or in the aggregate, would not have a material adverse effect on
the condition (financial or other), business, net worth or results of
operations of the Company.
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27
(xiv) The statements in the Registration Statement and Prospectus,
insofar as they are descriptions of contracts, agreements or other legal
documents, or refer to statements of law or legal conclusions, are accurate and
present fairly the information required to be shown.
(xv) This Agreement and the Custody Agreement have each been duly
executed and delivered by or on behalf of each of the Selling Stockholders and
are valid and binding agreements of each Selling Stockholder enforceable
against each Selling Stockholder in accordance with their terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency
or other similar laws relating to or affecting creditors' rights and remedies
generally or by general equitable principles and except as enforcement of
rights to indemnity and contribution hereunder may be limited by Federal or
state securities laws or by principles of public policy.
(xvi) Each Selling Stockholder has full legal right, power and
authorization, and any approval required by law (except as may be required
under state securities or Blue Sky laws governing the purchase and distribution
of the Shares), to sell, assign, transfer and deliver valid and clear title to
the Shares which such Selling Stockholder has agreed to sell pursuant to this
Agreement.
(xvii) The execution and delivery of this Agreement and the Custody
Agreement by the Selling Stockholders and the consummation of the transactions
contemplated hereby and thereby will not conflict with, violate, result in a
breach of or constitute a default under the terms or provisions of any
agreement, indenture, mortgage or other instrument known to such counsel to
which any Selling Stockholder is a party or by which any of them or any of
their assets or property is bound, or any court order or decree known to such
counsel, or any law, rule, or regulation applicable to any Selling Stockholder
or to any of the property or assets of any Selling Stockholder.
(xviii) Upon delivery of the Shares to be sold by the Selling
Stockholders pursuant to this Agreement against payment therefor as
contemplated herein the Underwriters will acquire good and marketable title to
such Shares free and clear of any adverse claim, assuming that each Underwriter
purchases such Shares in good faith without notice of any adverse claim.
(xix) Such counsel shall further state that, based upon such counsel's
participation in the preparation of the Registration Statement and the
Prospectus, and any amendment or supplement thereto, and upon such counsel's
review and discussion
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of the contents thereof, but without independent check or verification or the
accuracy or completeness thereof except as specified, nothing has come to the
attention of such counsel that has caused them to believe that the Registration
Statement at the time the Registration Statement became effective, or the
Prospectus, as of its date and as of the Closing Date or the Option Closing
Date, as the case may be (except for financial statements and the notes thereto
and any schedules and other financial data included therein), 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 any amendment or supplement to the Prospectus (except for
financial statements and the notes thereto and any schedules and other
financial data included therein), as of its respective date, and as of the
Closing Date or the Option Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering their opinion as aforesaid, counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them or the
Company as to laws of any jurisdiction other than the United States or the
States of Illinois, Delaware or Wisconsin, provided that (1) each such local
counsel is acceptable to the Representatives, (2) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to the Representatives and is, in form and substance, satisfactory to
them and their counsel, and (3) counsel shall state in their opinion that they
believe that they and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of Xxxx, Gerber
& Xxxxxxxxx, counsel for the Underwriters, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, with respect to the
matters referred to in clauses (iv), (vi), (vii), (xi) and (xix) of the
foregoing paragraph (c) and such other related matters as you may request.
(e) You shall have received letters addressed to you, as Representatives
of the several Underwriters, and dated the date hereof and the Closing Date,
from Xxxxxx Xxxxxxxx LLP, independent certified public accountants,
substantially in the forms heretofore approved by you. If (i) the letter from
Xxxxxx Xxxxxxxx LLP dated the date hereof discloses any material adverse
decreases or increases, as the case may be, in the specified items that are not
disclosed in the Prospectus, or (ii) the letter from Xxxxxx Xxxxxxxx LLP dated
the Closing Date discloses any material adverse decreases or increases, as the
case may be, in the specified items
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29
from its letter dated the date hereof or that are not disclosed in the
Prospectus, then the Company shall explain and substantiate such decreases or
increases to the reasonable satisfaction of the Underwriters. If, in the
reasonable judgment of the Underwriters, such increases or decreases make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated by the
Prospectus, the Representatives may terminate this Agreement.
(f) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the ordinary course
of business) from that set forth or contemplated in the Registration Statement
or the Prospectus (or any amendment or Supplement thereto); (iii) there shall
not have been, since the respective dates as of which information is given in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse
change in the condition (financial or other), business, properties, net worth
or results of operations of the Company; (iv) the Company shall not have any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company, other than
those reflected in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); and (v) all the representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects on and as of the date hereof and on and as of the
Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company (or such other
officers as are acceptable to you), to the effect set forth in this Section
10(f) and in Section 10(g) hereof.
(g) The Company shall not have failed at or prior to the Closing Date to
have performed or complied, in all material respects, with any of its
agreements herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(h) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date as if made on
and as of the Closing
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30
Date, and you shall have received a certificate, dated the Closing Date and
signed by or on behalf of the Selling Stockholders to the effect set forth in
this Section 10(h) and in Section 10(i) hereof.
(i) The Selling Stockholders shall not have failed at or prior to the
Closing Date to have performed or complied, in all material respects, with any
of their agreements herein contained and required to be performed or complied
with by them hereunder at or prior to the Closing Date.
(j) You shall have received a Lock-Up Letter executed by each of the
current executive officers and directors of the Company and by the Selling
Stockholders.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer of the Company or any
Attorney-in-Fact or any Selling Stockholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company, the Selling
Stockholders or the particular Selling Stockholder, as the case may be, to each
Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of any Option Closing Date
of the conditions set forth in this Section 10, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (i) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d) and
(e) shall be revised to reflect the sale of Additional Shares.
11. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, each
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Shares, subject to the nine month limitation set forth in the
first sentence of
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31
Section 5(f) hereof; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Shares, including any stamp taxes in
connection with the original issuance and sale of the Shares; (iv) the printing
(or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares;
(v) the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the several states as provided in Section
5(g) hereof (including the reasonable fees, expenses and disbursements of
counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification); (vi) the filing fees and
the fees and expenses of counsel for the Underwriters in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc.; (vii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; and (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company and the Selling Stockholders. Except as
otherwise provided elsewhere in this Agreement, the Underwriters will pay their
own costs and expenses in connection with the offering contemplated hereby,
including fees and disbursements of their counsel, travel and entertainment
expenses, stock transfer taxes payable on resale of any of the Shares by them
and any advertising expenses connected with any offers they may make,
including, but not limited to, the "tombstone" advertisement and expenses
associated with the preparation of prospectus memorabilia, if any.
12. Effective Date of Agreement. This Agreement shall become effective upon
the execution and delivery hereof by the parties hereto; provided, however,
that if, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement, or a post-effective amendment thereto, or an
Abbreviated Registration Statement to be declared effective before the offering
of the Shares may commence, then the effectiveness of this Agreement shall be
delayed until (a) notification of the effectiveness of the Registration
Statement or such post-effective amendment has been released by the Commission,
or (b) confirmation has been received that the Abbreviated Registration
Statement was transmitted to and accepted by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by (i) the
Company, by notifying you, or (ii) by you, as Representatives of the several
Underwriters, by notifying the Company and the Selling Stockholders.
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If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing
Date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non- defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter, the Company or any Selling Stockholder. In
any such case which does not result in termination of this Agreement, either
you or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such
default of any such Underwriter under this Agreement. The term "Underwriter"
as used in this Agreement includes, for all purposes of this Agreement, any
party not listed in Schedule II hereto who, with your approval and the approval
of the Company, purchases Shares which a defaulting Underwriter is obligated,
but fails or refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or any Selling Stockholder (and without liability on
the part of the Company or any Selling Stockholder to any Underwriter), by
notice
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to the Company, if prior to the Closing Date or any Option Closing Date (if
different from the Closing Date and then only as to the Additional Shares), as
the case may be, (i) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market shall have been
suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York or Illinois shall have been declared by either
federal or state authorities, or (iii) there shall have occurred any outbreak
or escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial or economic conditions, the effect of
which on the financial markets of the United States is such as to make it, in
your reasonable judgment, impracticable or inadvisable to commence or continue
the offering of the Shares at the offering price to the public set forth on the
cover page of the Prospectus or to enforce contracts for the resale of the
Shares by the Underwriters. Notice of such termination may be given to the
Company by telegram, telecopy or telephone and shall be subsequently confirmed
by letter.
14. Information Furnished by the Underwriters. The statements set forth in
the last paragraph on the cover page, the stabilization and passive market
making legends on the inside cover page, and the statements in the first, third
and final two paragraphs under the caption "Underwriting" in any Prepricing
Prospectus and in the Prospectus, constitute the only information furnished by
or on behalf of the Underwriters through you as such information is referred to
in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and 13
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx 00000-0000,
Attention: Xxxxxx X. Xxxxxxxx, Chief Executive Officer; or (ii) if to the
Selling Stockholders, to Xxxxxx X. Xxxxxxxx, as Attorney-in-Fact, at the office
of the Company at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx 00000-0000,
or (iii) if to you, as Representatives of the several Underwriters, care of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the term "successors and assigns" as used in this
Agreement shall
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include a purchaser from any Underwriter of any of the Shares in his status as
such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois applicable to
contracts made and to be performed within the State of Illinois.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
SPR Inc.
By:__________________________________
Xxxxxx X. Xxxxxxxx,
Chief Executive Officer
Each of the Selling Stockholders
named in Schedule I hereto
By:__________________________________
Xxxxxx X. Xxxxxxxx, as
Attorney-in-Fact
By:_________________________________
Xxxxx X. Xxxxxxxx, as
Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
XXXXXX X. XXXXX & CO. INCORPORATED
XXXXX XXXXX XXXXXX & COMPANY, LLC
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By:____________________________
Xxxxx X. Xxxxxxxx,
Managing Director
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