Exhibit 1.1
4,200,000 Shares1
AZTEC TECHNOLOGY PARTNERS, INC.
Common Stock
[Form of]
UNDERWRITING AGREEMENT
June __, 1998
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXX XXXXX XXXXXX & COMPANY, LLC
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
as Representatives of the several Underwriters
(the "Representatives")
c/o BancAmerica Xxxxxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Aztec Technology Partners, Inc., a Delaware corporation (the
"Company"), addresses you as the Representatives of each of the persons, firms
and corporations listed in Schedule A hereto (hereinafter collectively called
the "Underwriters") and hereby confirms its respective agreements with the
several Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell
4,200,000 shares of its authorized and unissued Common Stock, par value $0.001
per share, to the several Underwriters. The 4,200,000 shares of the Company's
Common Stock, par value $0.001 per share, to be sold by the Company are
hereinafter collectively called the "Firm Shares". The Company also proposes to
grant to the Underwriters an option to purchase up to 630,000 additional shares
of the Company's Common Stock, par value $0.001 per share, respectively, as
provided in Section 7 hereof. The up to 630,000 additional shares of the
Company's Common Stock, par value $0.001 per share, to be sold by the Company if
the Underwriters exercise such option pursuant to Section 7 are hereinafter
collectively called the "Option Shares". As used in this Agreement, the term
"Shares" shall include
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1 Plus an option to purchase up to 630,000 additional shares from the
Company to cover over-allotments, if any.
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the Firm Shares and the Option Shares. All shares of the Company's Common Stock,
par value $0.001 per share, to be outstanding after giving effect to the sales
contemplated hereby, including the Shares, are hereinafter referred to as
"Common Stock".
2. Representations, Warranties and Agreements of the Company.
The Company represents and warrants to and agrees with each of
the Underwriters that:
(a) A registration statement on Form S-1 (File
No. 333-47501) with respect to the Shares, including a prospectus subject to
completion, has been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Act"), and the applicable rules
and regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Act and has been filed with the
Commission; such amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration statements
pursuant to Rule 462(b) of the Rules and Regulations as may have been required
prior to the date hereof have been similarly prepared and filed with the
Commission; and the Company will file such additional amendments to such
registration statement, such amended prospectuses subject to completion and such
abbreviated registration statements as may hereafter be required. Copies of such
registration statement and amendments, of each related prospectus subject to
completion (the "Preliminary Prospectuses") and of any abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations have been
delivered to you.
If the registration statement relating to the Shares
has been declared effective under the Act by the Commission, the Company will
prepare and promptly file with the Commission the information omitted from the
registration statement pursuant to Rule 43OA(a) or, if BancAmerica Xxxxxxxxx
Xxxxxxxx, on behalf of the several Underwriters, shall agree to the utilization
of Rule 434 of the Rules and Regulations, the information required to be
included in any term sheet filed pursuant to Rule 434(b) or (c), as applicable,
of the Rules and Regulations pursuant to subparagraph (1), (4) or (7) of Rule
424(b) of the Rules and Regulations or as part of a post-effective amendment to
the registration statement (including a final form of prospectus). If the
registration statement relating to the Shares has not been declared effective
under the Act by the Commission, the Company will prepare and promptly file an
amendment to the registration statement, including a final form of prospectus,
or, if BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several Underwriters,
shall agree to the utilization of Rule 434 of the Rules and Regulations, the
information required to be included in any term sheet filed pursuant to Rule
434(b) or (c), as applicable, of the Rules and Regulations. The term
"Registration Statement" as used in this Agreement shall mean such registration
statement, including financial statements, schedules and exhibits, in the form
in which it became or becomes, as the case may be, effective (including, if the
Company omitted information from the registration statement pursuant to Rule
43OA(a) or files a term sheet pursuant to Rule 434 of the Rules and Regulations,
the information deemed to be a part of the registration statement at the time it
became effective pursuant to Rule 43OA(b) or Rule 434(d)
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of the Rules and Regulations) and, in the event of any amendment thereto or the
filing of any abbreviated registration statement pursuant to Rule 462(b) of the
Rules and Regulations relating thereto after the effective date of such
registration statement, shall also mean (from and after the effectiveness of
such amendment or the filing of such abbreviated registration statement) such
registration statement as so amended, together with any such abbreviated
registration statement. The term "Prospectus" as used in this Agreement shall
mean the prospectus relating to the Shares as included in such Registration
Statement at the time it becomes effective (including, if the Company omitted
information from the Registration Statement pursuant to Rule 43OA(a) of the
Rules and Regulations, the information deemed to be a part of the Registration
Statement at the time it became effective pursuant to Rule 43OA(b) of the Rules
and Regulations); provided, however, that if in reliance on Rule 434 of the
Rules and Regulations and with the consent of BancAmerica Xxxxxxxxx Xxxxxxxx, on
behalf of the several Underwriters, the Company shall have provided to the
Underwriters a term sheet pursuant to Rule 434(b) or (c), as applicable, prior
to the time that a confirmation is sent or given for purposes of Section
2(10)(a) of the Act, the term "Prospectus" shall mean the "prospectus subject to
completion" (as defined in Rule 434(g) of the Rules and Regulations) last
provided to the Underwriters by the Company and circulated by the Underwriters
to all prospective purchasers of the Shares (including the information deemed to
be a part of the Registration Statement at the time it became effective pursuant
to Rule 434(d) of the Rules and Regulations). Notwithstanding the foregoing, if
any revised prospectus shall be provided to the Underwriters by the Company for
use in connection with the offering of the Shares that differs from the
prospectus referred to in the immediately preceding sentence (whether or not
such revised prospectus is required to be filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Underwriters for such use. If in reliance on Rule 434 of the Rules and
Regulations and with the consent of BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of
the several Underwriters, the Company shall have provided to the Underwriters a
term sheet pursuant to Rule 434(b) or (c), as applicable, prior to the time that
a confirmation is sent or given for purposes of Section 2(10)(a) of the Act, the
Prospectus and the term sheet, together, will not be materially different from
the prospectus in the Registration Statement.
(b) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus or, to the
knowledge of the Company, instituted proceedings for that purpose, and each such
Preliminary Prospectus has conformed in all material respects to the
requirements of the Act and the Rules and Regulations and, as of its date, has
not included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and at the time the
Registration Statement became or becomes, as the case may be, effective and at
all times subsequent thereto up to and on the Closing Date (as hereinafter
defined) and on any later date on which Option Shares are to be purchased, (i)
the Registration Statement and the Prospectus, and any amendments or supplements
thereto, contained and will contain all material information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, (ii) the Registration Statement, and any amendments or supplements
thereto, did not and will not include any untrue
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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 and
(iii) the Prospectus, and any amendments or supplements thereto, did not and
will not include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that none of the representations and warranties contained in this subparagraph
(b) shall apply to information contained in or omitted from the Registration
Statement or the Prospectus, or any amendments or supplements thereto, in
reliance upon, and in conformity with, written information relating to any
Underwriter furnished to the Company by or on behalf of such Underwriter
specifically for use in the preparation thereof.
(c) Each of the Company and its subsidiaries
that have been incorporated has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, and each subsidiary organized as a limited liability company has
been duly organized and is validly existing as a limited liability company and
is in good standing under the laws of the jurisdiction of its organization, with
full power and authority (corporate or other) to own, lease and operate its
properties and conduct its business as described in the Prospectus; the Company
owns all of the outstanding capital stock of its subsidiaries free and clear of
any pledge, lien, security interest, encumbrance, claim or equitable interest,
except as may be pledged as security for the $150.0 million credit facility from
Bankers Trust Company (the "BT Credit Facility") or as otherwise disclosed in
the Prospectus; each of the Company and its subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified or be in good standing would not have a material adverse effect on the
condition (financial or otherwise), earnings, operations or business of the
Company and its subsidiaries considered as one enterprise (a "Material Adverse
Effect"); no proceeding is pending or to the Knowledge of the Company has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification;
each of the Company and its subsidiaries is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents, orders and
permits from state, federal and other regulatory authorities which are material
to the conduct of its business or where failure to possess or operate in
compliance therewith would not have a Material Adverse Effect, all of which are
valid and in full force and effect; neither the Company nor any of its
subsidiaries is in violation of its respective charter or bylaws in the case of
a corporation or certificate of organization or operating agreement in the case
of a limited liability company, or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in any
material bond, debenture, note or other evidence of indebtedness, or in any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of its subsidiaries or their
respective properties may be bound, except such as would not have a Material
Adverse Affect; and neither the Company nor any of its subsidiaries is in
material violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective properties of which it has knowledge,
except as contemplated by the Prospectus or
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where any such violation or default would not have a Material Adverse Effect.
The Company does not own or control, directly or indirectly, any corporation,
association or other entity other than Aztec International, Bay State Computer
Group, Compel Corporation, Digital Network Associates, Inc., Entra Computer
Corp., Fortran Corp., Xxxxx Communications Corporation, Office Equipment
Services, Inc., Professional Computer Solutions, Inc., and Professional Network
Services, Inc., and all references in this Agreement to "subsidiaries" refer to
the foregoing entities.
(d) The Company has full corporate right, power
and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of the
Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law, including federal or
state securities law, or the public policy underlying such laws, and except as
the enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; the performance
of this Agreement and the consummation of the transactions herein contemplated
will not result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any material bond, debenture,
note or other evidence of indebtedness, or under any material lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of its subsidiaries or their respective properties
may be bound, (ii) the charter or bylaws of the Company or any of its
subsidiaries in the case of a corporation or the certificate of organization or
operating agreement in the case of a limited liability company or (iii) any law,
order, rule, regulation, writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or over their
respective properties, except as contemplated by the Prospectus or where any
such breach or violation would not have a Material Adverse Effect. No consent,
approval, authorization or order of or qualification with any court, government
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or over their respective properties is
required for the execution and delivery of this Agreement and the consummation
by the Company or any of its subsidiaries of the transactions herein
contemplated, except such as may be required under the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), applicable Candadian
securities laws or state or other securities or Blue Sky laws or by the National
Association of Securities Dealers, Inc. (the "NASD"), all of which requirements
have been satisfied in all material respects.
(e) There is not any pending or, to the best of
the Company's knowledge, threatened action, suit, claim or proceeding against
the Company, any of its subsidiaries or any of their respective properties,
assets or rights or, to the Company's knowledge, any of their respective
officers or directors before any court, government or governmental agency or
body, domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective officers or properties or otherwise which
(i) if adversely determined would have a Material Adverse Effect, (ii) if
adversely determined would reasonably prevent consummation of the transactions
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contemplated hereby or (iii) is required to be disclosed in the Registration
Statement or the Prospectus and is not so disclosed; and there are no
agreements, contracts, leases or documents of the Company or any of its
subsidiaries of a character required to be described or referred to in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement by the Act or the Rules and Regulations which have not
been accurately described in all material respects in the Registration Statement
or the Prospectus or filed as exhibits to the Registration Statement.
(f) All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities (other than such
preemptive rights or other rights to subscribe for or purchase securities as
were fully complied with or expressly waived or with respect to the violation of
which the right to make a claim is barred by the applicable statute of
limitations), and the authorized and outstanding capital stock of the Company
conforms in all material respects as is set forth in the Prospectus under the
caption "Capitalization" and conforms in all material respects to the statements
relating thereto contained in the Registration Statement and the Prospectus (and
such statements correctly state in all material respects the substance of the
instruments defining the capitalization of the Company); the Firm Shares and the
Option Shares to be purchased from the Company hereunder have been duly
authorized for issuance and sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Company against payment therefor in
accordance with the terms of this Agreement, will be duly and validly issued and
fully paid and nonassessable, and will be sold free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest; and no
preemptive right, co-sale right, registration right, right of first refusal or
other similar right of stockholders exists with respect to any of the Firm
Shares or the Option Shares to be purchased from the Company hereunder or the
issuance and sale thereof other than those that have been expressly waived prior
to the date hereof and those that will automatically expire upon and will not
apply to the consummation of the transactions contemplated on the Closing Date.
No further approval or authorization of any stockholder, the Board of Directors
of the Company or others is required for the issuance and sale or transfer of
the Shares except as may be required under the Act, the Exchange Act or state or
other securities or Blue Sky laws or the NASD. All issued and outstanding shares
of capital stock of each subsidiary of the Company which are owned by the
Company have been duly authorized and validly issued and are fully paid and
nonassessable, and were not issued in violation of or subject to any preemptive
right, or other rights to subscribe for or purchase shares (other than such
preemptive rights or other rights to subscribe for or purchase securities as
were fully complied with or expressly waived or with respect to the violation of
which the right to make a claim is barred by the applicable statute of
limitations) and are owned by the Company free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest, except as secutity
for the BT Credit Facility or as otherwise disclosed in the Prospectus. Except
as disclosed in the Prospectus and the financial statements of the Company, and
the related notes thereto, included in the Prospectus, neither the Company nor
any subsidiary has outstanding any options to purchase, or any preemptive rights
or other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any
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contracts or commitments to issue or sell, shares of its capital stock or any
such options, rights, convertible securities or obligations. The description of
the Company's stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted and exercised thereunder, set forth in
the Prospectus accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights.
(g) Each of the accounting firms that has
examined certain of the financial statements that are filed with the Commission
as a part of the Registration Statement and are included in the Prospectus, are
to the Company's knowledge, independent accountants within the meaning of the
Act and the Rules and Regulations; the financial statements (including the
related notes) included in the Registration Statement and the Prospectus (and
any amendments or supplements thereto) present fairly, in all material respects,
the financial position, the results of operations and cash flows of the
applicable company at the dates and for the periods indicated in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated except as may otherwise be stated therein. The
interim financial statements set forth in the Registration Statement and the
Prospectus (and any amendments and supplements thereto) have been prepared, to
the extent such information relates to the Company, on a basis consistent with
the audited financial statements and reflect all adjustments that are necessary
to a fair statement of the results for the interim periods presented. All pro
forma financial information required to be included in the Prospectus has been
included and such required information has been prepared, in all material
respects, in accordance with the Commission's rules and guidelines with respect
to pro forma financial information. No financial statements or schedules, other
than the financial statements or schedules that are included in the Registration
Statement, are required to be included in the Registration Statement.
(h) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus and
except as described in the Prospectus, there has not been (i) any material
adverse change in the condition (financial or otherwise), earnings, operations
or business of the Company and its subsidiaries considered as one enterprise,
and, except as described in the Prospectus, (ii) any transaction that is
material to the Company and its subsidiaries considered as one enterprise,
except transactions entered in the ordinary course of business, (iii) any
obligation, direct or contingent, that is material to the Company and its
subsidiaries that would have a Material Adverse Effect, except obligations
incurred in the ordinary course of business, (iv) any change in the capital
stock or outstanding indebtedness of the Company or any of its subsidiaries that
would have a Material Adverse Effect, (v) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or any of its
subsidiaries or (vi) any loss or damage (whether or not insured) to the property
of the Company or any of its subsidiaries which has been sustained or will have
been sustained that would have a Material Adverse Effect..
(i) Except as set forth in the Registration
Statement and the Prospectus, (i) each of the Company and its subsidiaries has
good and marketable title to all properties and assets described in the
Registration Statement and the Prospectus as owned by it, free and clear of any
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pledge, lien, security interest, encumbrance, claim or equitable interest, other
than such as would not have a Material Adverse Effect, (ii) the agreements to
which the Company or any of its subsidiaries is a party described in the
Registration Statement and the Prospectus are valid agreements, to the Company's
knowledge, enforceable by the Company and its subsidiaries (as applicable),
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles, and,
to the Company's knowledge, the other contracting party or parties thereto are
not in material breach or material default under any of such agreements and
(iii) each of the Company and its subsidiaries has, to the Company's knowledge,
valid and enforceable leases for all properties described in the Registration
Statement and the Prospectus as leased by it, except as the enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or by
general equitable principles. Except as set forth in the Registration Statement
and the Prospectus, the Company owns or leases all such properties as are
necessary to its operations as now conducted or as proposed to be conducted.
(j) The Company and its subsidiaries have timely
filed all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes shown thereon as due, and there is no tax deficiency
that has been or, to the Company's knowledge, might be asserted against the
Company or any of its subsidiaries that might have a Material Adverse Effect;
and all tax liabilities are adequately provided for on the books of the Company
and its subsidiaries.
(k) The Company and its subsidiaries maintain
insurance with insurers of recognized financial responsibility of the types and
in the amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company or any of its subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect; neither the
Company nor any such subsidiary, since the date of its acquisition, has been
refused any insurance coverage sought or applied for; and neither the Company
nor any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Materially Adverse Effect.
(l) To the Company's knowledge, no labor
disturbance by the employees of the Company or any of its subsidiaries exists or
is imminent; and, except as provided in the Prospectus, to the Company's
knowledge, there is no existing or imminent labor disturbance by the employees
of any of its principal suppliers, subassemblers, value added resellers,
subcontractors, original equipment manufacturers, authorized dealers or
international distributors that would reasonably be expected to result in a
Material Adverse Effect.
(m) Except as described in the Prospectus or as
would not have a Material Adverse Effect, each of the Company and its
subsidiaries owns or possesses adequate rights to use
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all material patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights described or referred to
in the Prospectus as owned or used by it or which are necessary to conduct its
businesses as described in the Registration Statement and the Prospectus; the
expiration of any patents, patent rights, trademarks, service marks, or
copyrights would not have a Material Adverse Effect; neither the Company nor any
of its subsidiaries has received any notice of, or the Company has any knowledge
of, any infringement of or conflict with asserted rights of the Company or any
of its subsidiaries by others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights; and neither the Company nor any of its subsidiaries has received any
notice of, or the Company has any knowledge of, any infringement of or conflict
with valid rights of others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights which, singly or in the aggregate, would or could reasonably be
expected to have a Material Adverse Effect.
(n) The Common Stock has been approved for
quotation on the Nasdaq National Market, subject to official notice of issuance.
(o) The Company has been advised concerning the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and has in the past conducted, and intends in the
future, to conduct its affairs in such a manner as to ensure that it will not
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and regulations.
(p) The Company has not distributed and will not
distribute prior to the later of (i) the Closing Date, or any date on which
Option Shares are to be purchased, as the case may be, and (ii) the completion
of the distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectuses, the
Prospectus, the Registration Statement and other materials, if any, permitted
by the Act.
(q) Neither the Company nor any of its
subsidiaries has since the date of its acquisition, or to the Company's
Knowledge, has at any time during the last five (5) years (i) made any unlawful
contribution to any candidate for foreign office or failed to disclose fully any
contribution in violation of law or (ii) made any payment to any federal or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof or by the laws of Canada
or any province or jurisdiction thereof.
(r) The Company has not taken and will not take,
directly or indirectly, any action resulting in a violation of Rule 102 of
Regulation M under the Exchange Act or designed to, or that might reasonably be
expected to, cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
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(s) Each officer and director of the Company,
and each of certain other beneficial owners of Common Stock named in Schedule B
hereto have agreed in writing that such person will not, for a period of 180
days from the date that the Registration Statement is declared effective by the
Commission (the "Lock-up Period"), offer to sell, contract to sell, or otherwise
sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition"), any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, the "Securities")
now owned or hereafter acquired directly by such person or with respect to which
such person has or hereafter acquires the power of disposition, other than (i)
as a bona fide gift or gifts, provided the donee or donees thereof agree in
writing to be bound by this restriction, (ii) the exercise of stock options or
(iii) with the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx. The
persons listed on Schedule B hereto agree that the foregoing restriction
precludes the holder of the Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than such holder. Such prohibited hedging
or other transactions would include, without limitation, any short sale (whether
or not against the box) or any purchase, sale or grant of any right (including,
without limitation, any put or call option) with respect to any Securities or
with respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from
Securities. Furthermore, such person has also agreed and consented to the entry
of stop transfer instructions with the Company's transfer agent against the
transfer of the Securities held by such person except in compliance with this
restriction. The Company has provided to counsel for the Underwriters a complete
and accurate list of all securityholders of the Company and the number and type
of securities held by each securityholder. The Company has provided to counsel
for the Underwriters true, accurate and complete copies of all of the agreements
pursuant to which certain of its officers and directors and certain of its
stockholders have agreed to such or similar restrictions (the "Lock-up
Agreements") presently in effect or effected hereby. The Company hereby
represents and warrants that it will not release any of its officers or
directors or other stockholders from any Lock-up Agreements currently existing
or hereafter effected without the prior written consent of BancAmerica Xxxxxxxxx
Xxxxxxxx.
(t) Except as set forth in the Registration
Statement and the Prospectus, (i) the Company and its subsidiaries are in
compliance in material respects with all material rules, laws and regulations
relating to the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("Environmental Laws") which are
applicable to their businesses, except where such noncompliance would not have a
Material Adverse Effect, (ii) neither the Company nor any of its subsidiaries
has received notice from any governmental authority or third party of an
asserted claim under Environmental Laws, which claim would have a Material
Adverse Effect or is required to be disclosed in the Registration Statement and
the Prospectus, (iii) to the Knowledge of the Company, neither the Company nor
any of its subsidiaries will be required to make during the foreseeable future
material capital expenditures to comply with Environmental Laws as currently in
effect and (iv) no property which is owned, leased or occupied by the Company or
any of its subsidiaries has been designated as a Superfund site pursuant to the
Comprehensive
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Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. ss.
9601, et seq.), or otherwise designated as a contaminated site under applicable
state or local law.
(u) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (i) material transactions are executed in accordance
with management's general or specific authorizations, (ii) material 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.
(v) There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of the members of the
families of any of them required to be disclosed in the Registration Statement
and Prospectus, except as disclosed in the Registration Statement and the
Prospectus.
(w) The Company has entered into the
Distribution Agreement, the Tax Allocation Agreement, the Employee Benefits
Agreement, and the Tax Indemnification Agreement (all as defined in the
Registration Statement and the Prospectus), and such agreements constitute valid
and binding agreements of the Company, enforceable in accordance with their
terms, except as rights to indemnification thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles. The descriptions of such agreements contained in the
Prospectus accurately summarize the material terms of such agreements.
3. Purchase Sale and Delivery of Shares. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters, and
each of the Underwriters agrees, acting severally and not jointly, to purchase
from the Company at a purchase price of $______ per share, the Firm Shares. The
obligation of each the Underwriters to the Company shall be to purchase from the
Company that number of Firm Shares which is set forth opposite the name of such
Underwriter in Schedule A hereto (subject to adjustment as provided in Section
10).
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 shall be made against
payment of the purchase price therefor by the several Underwriters by wire
transfer of immediately available funds to the Company. Such delivery and
payment shall take place at the Washington, D.C. office of Xxxxxx, Xxxxxx &
Xxxxxxxxx (or at such other place as may be agreed upon among the
Representatives, the Company and the Attorneys), at 9:00 A.M. (EDST time) on the
fourth (4th) full business day following the date of this Agreement or at such
other time and date not later than seven (7) full business days following the
-11-
first day that Shares are traded as the Representatives, the Company and the
Attorneys may determine (or at such time and date to which payment and delivery
shall have been postponed pursuant to Section 10 hereof), such time and date of
payment and delivery being herein called the "Closing Date"; provided, however,
that if the Company has not made available to the Representatives copies of the
Prospectus within the time provided in Section 4(d) hereof, the Representatives
may, in their sole discretion, postpone the Closing Date until no later than two
(2) full business days following delivery of copies of the Prospectus to the
Representatives. The certificates for the Firm Shares to be so delivered will be
made available to you at such office or such other location, including, without
limitation, in New York City, as you may reasonably request for checking at
least one (1) full business day prior to the Closing Date and will be in such
names and denominations as you may request, such request to be made at least two
(2) full business days prior to the Closing Date. If the Representatives so
elect, delivery of the Firm Shares may be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by the
Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment of the purchase price on behalf of any Underwriter or Underwriters
whose check or checks shall not have been received by you prior to the Closing
Date for the Firm Shares to be purchased by such Underwriter or Underwriters.
Any such payment by you shall not relieve any such Underwriter or Underwriters
of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the
several Underwriters intend to make an initial public offering (as such term is
described in Section 11 hereof) of the Firm Shares at an initial public offering
price of $_____ per share. After the initial public offering, the several
Underwriters may, in their discretion, vary the public offering price.
The information set forth in the last paragraph on the front
cover page, the two bold legends on the bottom of the inside fron cover and
under the caption "Underwriting" (insofar as such information relates to the
Underwriters) in any Preliminary Prospectus and in the Prospectus constitutes
the only information furnished by the Underwriters to the Company for inclusion
in any Preliminary Prospectus, the Prospectus or the Registration Statement, and
you, on behalf of the respective Underwriters, represent and warrant to the
Company that the statements made therein do not include any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
4. Further Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to
cause the Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the parties
hereto, to become effective as promptly as possible; the
-12-
Company will use its best efforts to cause any abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations as may be
required subsequent to the date the Registration Statement is declared effective
to become effective as promptly as possible; the Company will notify you,
promptly after it shall receive notice thereof, of the time when the
Registration Statement, any subsequent amendment to the Registration Statement
or any abbreviated registration statement has become effective or any supplement
to the Prospectus has been filed; if the Company omitted information from the
Registration Statement at the time it was originally declared effective in
reliance upon Rule 43OA(a) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules and
Regulations or as part of a post-effective amendment to such Registration
Statement as originally declared effective which is declared effective by the
Commission; if the Company files a term sheet pursuant to Rule 434 of the Rules
and Regulations, the Company will provide evidence satisfactory to you that the
Prospectus and the term sheet meeting the requirements of Rule 434(b) or (c), as
applicable, of the Rules and Regulations, have been filed, within the time
period prescribed, with the Commission pursuant to subparagraph (7) of Rule
424(b) of the Rules and Regulations; if for any reason the filing of the final
form of the Prospectus is required under Rule 424(b)(3) of the Rules and
Regulations, it will provide evidence satisfactory to you that the Prospectus
contains such information and has been filed with the Commission within the time
period prescribed; it will notify you promptly of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; promptly upon your request, it will
prepare and file with the Commission any amendments or supplements to the
Registration Statement or the Prospectus which, in the reasonable opinion of
Winston & Xxxxxx, counsel for the several Underwriters ("Underwriters'
Counsel"), may be necessary or advisable in connection with the distribution of
the Shares by the Underwriters; it will promptly prepare and file with the
Commission, and promptly notify you of the filing of, any amendments or
supplements to the Registration Statement or the Prospectus which may be
necessary to correct any statements or omissions, if, at any time when a
prospectus relating to the Shares is required to be delivered under the Act, any
event shall have occurred as a result of which the Prospectus or any other
Prospectus relating to the Shares as then in effect would include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; in case any Underwriter is required to deliver a
prospectus nine (9) months or more after the effective date of the Registration
Statement in connection with the sale of the Shares, it will prepare promptly
upon request, but at the expense of such Underwriter, such amendment or
amendments to the Registration Statement and such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Act; and it will file no amendment or supplement to the Registration
Statement or the Prospectus which shall not previously have been submitted to
you a reasonable time prior to the proposed filing thereof or to which you shall
reasonably object in writing, subject, however, to compliance with the Act and
the Rules and Regulations, the Exchange Act and the rules and regulations of the
Commission thereunder and the provisions of this Agreement.
-13-
(b) The Company will advise you, promptly after it
shall receive notice or obtain knowledge, of the issuance of any stop order by
the Commission suspending the effectiveness of the Registration Statement or of
the initiation or threat of any proceeding for that purpose; and it will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued.
(c) The Company will use its best efforts to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as you may reasonably designate and to continue such
qualifications in effect for so long as may be required for purposes of the
distribution of the Shares, except that the Company shall not be required in
connection therewith or as a condition thereof to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction in which it is not otherwise required to be so qualified or to so
execute a general consent to service of process or to take any action which
would subject it to taxation in such state or jurisidiction solely on account of
registration of the Shares. In each jurisdiction in which the Shares shall have
been qualified as above provided, the Company will make and file such statements
and reports in each year as are or may be required by the laws of such
jurisdiction.
(d) The Company will furnish to you, as soon as
available, and, in the case of the Prospectus and any term sheet or abbreviated
term sheet under Rule 434, in no event later than the first (1st) full business
day following the first (1st) day that Shares are traded, copies of the
Registration Statement (three of which will be signed and which will include
all exhibits), each Preliminary Prospectus, the Prospectus and any amendments
or supplements to such documents, including any prospectus prepared to permit
compliance with Section 10(a)(3) of the Act, all in such quantities as you may
from time to time reasonably request. Notwithstanding the foregoing, if
BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several Underwriters, shall
agree to the utilization of Rule 434 of the Rules and Regulations, the
Company shall provide to you copies of a Preliminary Prospectus updated in all
respects through the date specified by you in such quantities as you may from
time to time reasonably request.
(e) The Company will make generally available to
its securityholders as soon as practicable, but in any event not later than the
45th day following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statement (which will be in reasonable detail but need not be audited) complying
with the provisions of Section 11(a) of the Act and covering a twelve (12) month
period beginning after the effective date of the Registration Statement.
(f) During a period of five (5) years after the date
hereof, the Company will furnish to its stockholders as soon as practicable
after the end of each respective period, annual reports (including financial
statements audited by independent certified public accountants) and such
unaudited quarterly reports of operations for each of the first three quarters
of the fiscal year as may be required by applicable law or the rules of
NASDAQ/NMS to be sent to stockholders, and will furnish to you and the other
several Underwriters hereunder, upon request (i) concurrently with furnishing
such reports to its stockholders, statements of operations of the Company for
each of the
-14-
first three (3) quarters in the form furnished to the Company's stockholders,
(ii) concurrently with furnishing to its stockholders, a balance sheet of the
Company as of the end of such fiscal year, together with statements of
operations, stockholders' equity and cash flows of the Company for such fiscal
year, accompanied by a copy of the certificate or report thereon of independent
certified public accountants, (iii) as soon as they are available, copies of all
reports (financial or other) mailed to stockholders, (iv) as soon as they are
available, copies of all reports and financial statements furnished to or filed
with the Commission, any securities exchange or the NASD, (v) every material
press release and every material news item or article in respect of the Company
or its affairs which was generally released to stockholders or prepared by the
Company or any of its subsidiaries and (vi) any additional material information
of a public nature concerning the Company or any of its subsidiaries or their
businesses which you may reasonably request. During such five (5) year period,
if the Company shall have active subsidiaries, the foregoing financial
statements shall be on a consolidated or combined basis to the extent that the
accounts of the Company and its subsidiaries are consolidated or combined and
shall be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated or combined.
(g) The Company will apply the net proceeds from
the sale of the Shares being sold by it in the manner set forth under the
caption "Use of Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and,
if necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Stock.
(i) The Company will use its best efforts to
comply with all criteria to have its Common Stock listed on the NASDAQ National
Market or any other national securities exchange on which the Common Stock is
then listed.
(j) If the transactions contemplated hereby are
not consummated by reason of any failure, refusal or inability on the part of
the Company to perform any agreement on their respective parts to be performed
hereunder or to fulfill any condition of the Underwriters' obligations
hereunder, or if the Company shall terminate this Agreement pursuant to Section
11(a) hereof, or if the Underwriters shall terminate this Agreement pursuant to
Section 11(b)(i), the Company shall reimburse the several Underwriters for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of Underwriters' Counsel) incurred by the Underwriters in investigating or
preparing to market or marketing the Shares.
(k) If at any time during the 90-day period
after the Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of which in
your opinion the market price of the Common Stock has been or is likely to be
materially adversely affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus), the Company
will, after written notice from you advising the Company to the effect set forth
above, forthwith prepare, consult with you
-15-
concerning the substance of and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(l) Except as disclosed in the Prospectus and
the financial statements of the Company, and the related notes thereto,
included in the Prospectus, during the Lock-up Period, the Company will not,
without the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx, effect the
Disposition of, directly or indirectly, any Securities other than (i) the sale
of Firm Shares and Option Shares, (ii) the Company's granting of options with
respect to, and the issuance and registration of shares of Common Stock by the
Company in connection with, the Stock Option Plan, (iii) the distribution of
its Securities to stockholders of U.S. Office Products Company pursuant to the
Registration Statement on Form S-1 (File No. 333-46533) (the "Aztec
Distribution") and (iv) the issuance of securities in connection with
acquisitions.
(m) The Company will file Form SR in conformity with
the requirements of the Act and the Rules and Regulations.
5. Expenses.
(a) The Company agrees with each of the
Underwriters that:
(i) The Company will pay and bear all
costs and expenses in connection with the preparation, printing and filing of
the Registration Statement (including financial statements, schedules and
exhibits), Preliminary Prospectuses and the Prospectus, and any amendments or
supplements thereto; the printing of this Agreement, the Agreement Among
Underwriters, the Selected Dealers Agreement, the Preliminary Blue Sky Survey
and any Supplemental Blue Sky Survey, the Underwriters' Questionnaire and Power
of Attorney, other than the fees and expenses of Underwriters counsel and any
instruments related to any of the foregoing; the issuance and delivery of the
Shares hereunder to the several Underwriters, including transfer taxes, if any,
the cost of all certificates representing the Shares and transfer agent's and
registrar's fees; the fees and disbursements of counsel for the Company; all
fees and other charges of the Company's independent certified public
accountants; the cost of furnishing to the several Underwriters copies of the
Registration Statement (including appropriate exhibits), Preliminary Prospectus
and the Prospectus, and any amendments or supplements to any of the foregoing;
NASD filing fees and the cost of qualifying the Shares under the laws of such
jurisdictions as you may designate (including filing fees and fees and
disbursements of Underwriters' Counsel in connection with such NASD filings and
Blue Sky qualifications); and all other expenses directly incurred by the
Company in connection with the performance of its obligations hereunder;
(ii) In addition to its other obligations
under Section 8(a) hereof, the Company agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 8(a) hereof, it will reimburse the Underwriters
on a monthly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding,
-16-
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse the Underwriters for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Underwriters
shall promptly return such payment to the Company together with interest,
compounded daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) listed from time to
time in The Wall Street Journal which represents the base rate on corporate
loans posted by a substantial majority of the nation's 30 largest banks (the
"Prime Rate"). Any such interim reimbursement payments which are not made to the
Underwriters within 30 days of a request for reimbursement shall bear interest
at the Prime Rate from the date of such request; and
(b) In addition to their other obligations under
Section 8(b) hereof, the Underwriters, acting severally and not jointly, agree
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding described in Section 8(b) hereof,
they will reimburse the Company on a monthly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Underwriters' obligation to reimburse the Company for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company shall
promptly return such payment to the Underwriters together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request.
(c) It is agreed that any controversy arising
out of the operation of the interim reimbursement arrangements set forth in
Sections 5(a)(ii) and 5(b) hereof, including the amounts of any requested
reimbursement payments, the method of determining such amounts and the basis on
which such amounts shall be apportioned among the reimbursing parties, shall be
settled by arbitration conducted under the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc. or pursuant
to the Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or a written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the event
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Any such arbitration will be limited to the
operation of the interim reimbursement provisions contained in Sections 5(a)(ii)
and 5(b) and will not resolve the ultimate propriety or enforceability of the
obligation to indemnify for expenses which is created by the provisions of
Sections 8(a) and 8(b) hereof or the obligation to contribute to expenses which
is created by the provisions of Section 8(d) hereof.
-17-
6. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein shall
be subject to the accuracy, as of the date hereof and the Closing Date and any
later date on which Option Shares are to be purchased, as the case may be, of
the representations and warranties of the Company herein, to the performance by
the Company of their respective obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become
effective not later than 2:00 P.M., San Francisco time, on the date following
the date of this Agreement, or such later date as shall be consented to in
writing by you; and no stop order suspending the effectiveness thereof shall
have been issued and no proceedings for that purpose shall have been initiated
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 the reasonable satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal
matters in connection with this Agreement, the form of the Registration
Statement and the Prospectus, and the registration, authorization, issue, sale
and delivery of the Shares, shall have been reasonably satisfactory to
Underwriters' Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them to
pass upon the matters referred to in this Section 6.
(c) Subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, or any later date on which Option
Shares are to be purchased, as the case may be, there shall not have been any
change in the condition (financial or otherwise), earnings, operations or
business of the Company and its subsidiaries considered as one enterprise from
that set forth in the Registration Statement or the Prospectus, which, in your
reasonable judgment, is material and adverse and that makes it, in your
reasonable judgment, impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Prospectus.
(d) (i) You shall have received on the Closing
Date and on any later date on which Option Shares are to be purchased, as the
case may be, the following opinion of counsel for the Company as to the Company
and all United States subsidiaries, Xxxxxx, Xxxxxx & Xxxxxxxxx, and of Canadian
counsel as to opinions (A), (B), (C), (D), (E), (G), (O), (P), (Q), (R) below,
for all Canadian subsidiaries, each dated the Closing Date or such later date on
which Option Shares are to be purchased addressed to the Underwriters and with
reproduced copies or signed counterparts thereof for each of the Underwriters,
to the effect that:
(A) Each of the Company and its
subsidiaries organized as a corporation has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation;
-18-
(B) Each subsidiary organized as a limited
liability company has been duly organized and is in good standing under the
laws of its jurisdiction of organization;
(C) Each of the Company and its
subsidiaries organized as a corporation has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus;
(D) Each subsidiary organized as a limited
liability company has the power and authority to own, lease and operate its
properties and to conduct its business as now conducted as described in the
Prospectus;
(E) Each of the Company and its
subsidiaries is duly qualified to do business as a foreign corporation and
is in good standing in each state specified on Schedule C hereto. To such
counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries;
(F) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus under the
caption "Capitalization" as of the dates stated therein, the issued and
outstanding shares of capital stock of the Company have been duly and
validly issued and are fully paid and nonassessable, and, to such counsel's
knowledge, will not have been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first refusal
or other similar right (other than such preemptive rights or other rights
to subscribe for or purchase securities as were fully complied with or
expressly waived or with respect to the violation of which the right to
make a claim is barred by the applicable statute of limitations);
(G) All issued and outstanding shares of
capital stock of each subsidiary of the Company organized as a corporation
have been duly authorized and validly issued and are fully paid and
nonassessable, and, to such counsel's knowledge, have not been issued in
violation of or subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar right and are
owned by the Company free and, except pursuant to the BT Credit Facility or
as described in the Prospectus clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest (other than such
preemptive rights or other rights to subscribe for or purchase securities
as were fully complied with or expressly waived or with respect to the
violation of which the right to make a claim is barred by the applicable
statute of limitations);
(H) The Firm Shares or the Option Shares, as
the case may be, to be issued by the Company pursuant to the terms of this
Agreement have been duly authorized and, upon issuance and delivery against
payment therefor in accordance with the terms hereof, will be duly and
validly issued and fully paid and nonassessable, and, to such counsel's
Knowledge will not have been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first refusal
or other similar right (other than
-19-
such preemptive rights or other rights to subscribe for or purchase
securities as were fully complied with or expressly waived or with respect
to the violation of which the right to make a claim is barred by the
applicable statute of limitations);
(I) The Company has the corporate power
and authority to enter this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder;
(J) This Agreement has been duly
authorized by all necessary corporate action on the part of the Company and
has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of the Company, enforceable in accordance with its terms, except
insofar as indemnification provisions may be limited by applicable law or
public policy and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by general equitable principles;
(K) The Commission has advised the
Company that the Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are currently pending
or overtly threatened under the Act;
(L) The information in the Prospectus
under the captions "Description of Capital Stock", "Risk Factors -
Potential Liability for Taxes Related to the Distributions", "Risk Factors
- Possible Limitations on Issuances of Common Stock", and "The Spin-Offs
from U.S. Office Products", to the extent that it constitutes matters of
law or legal conclusions, has been reviewed by such counsel and is a fair
summary of such matters and conclusions in all material respects; and the
form of certificates evidencing the Common Stock and filed as exhibits to
the Registration Statement comply with Delaware law;
(M) The descriptions in the Registration
Statement and the Prospectus of the charter and bylaws of the Company and
of statutes are accurate and fairly present the information required to be
presented by the Act and the applicable Rules and Regulations; the
descriptions of the Distribution Agreement, the Tax Allocation Agreement,
the Employee Benefits Agreement, and the Tax Indemnification Agreement in
the Registration Statement and the Prospectus accurately summarize in all
material respects the material terms of such agreements;
(N) To such counsel's knowledge, there are
no agreements, contracts, leases or documents to which the Company is a
party of a character required to be described or referred to in the
Registration Statement or the Prospectus or to be filed as an
-20-
exhibit to the Registration Statement which are not described or referred
to therein or filed as required;
(O) The performance of this Agreement
and the consummation of the transactions herein contemplated (other than
performance of the Company's indemnification and contribution obligations
hereunder, concerning which no opinion need be expressed) will not (a)
result in any violation of the Company's charter or bylaws or (b) to such
counsel's knowledge, result in a material breach or violation of any of the
terms and provisions of, or constitute a default under, any material bond,
debenture, note or other evidence of indebtedness, or any material lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture
or other agreement or instrument known to such counsel to which the Company
is a party or by which its properties are bound, (c) any applicable
statute, rule or regulation known to such counsel or, (d) to such counsel's
knowledge, any order, writ or decree of any court, government or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or over any of their properties or operations; provided,
however, that no opinion need be rendered concerning state securities laws,
Canadian securities laws, or Blue Sky laws or the rules and regulations of
NASD;
(P) No consent, approval, authorization or
order of or qualification with any court, government or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or
over any of their properties or operations is necessary in connection with
the consummation by the Company of the transactions herein contemplated,
except such as have been obtained under the Act or the Exchange Act or such
as may be required under state or other securities or Blue Sky laws or the
NASD in connection with the purchase and the distribution of the Shares by
the Underwriters;
(Q) To such counsel's knowledge, there are
no legal or governmental proceedings pending or threatened against the
Company or any of its subsidiaries of a character required to be disclosed
in the Registration Statement or the Prospectus by the Act or the Rules and
Regulations or by the Exchange Act or the applicable rules and regulations
of the Commission thereunder, other than those described therein;
(R) To such counsel's knowledge, neither the
Company nor any of its subsidiaries is presently (a) in material violation
of its respective charter or bylaws in the case of corporations or
certificate of organizaation or operating agreement in the case of limited
liability companies or (b) in material breach of any applicable statute,
rule or regulation known to such counsel or, to such counsel's knowledge,
any order, writ or decree of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or over any
of their properties or operations, except in the case of clause (b) for
such breach which individually or in the aggregate would not have a
Material Adverse Effect;
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(S) To such counsel's knowledge, except
as described in the Prospectus no holders of shares of Common Stock or
other securities of the Company have registration rights with respect to
securities of the Company and, except as set forth in the Registration
Statement and the Prospectus, all holders of securities of the Company
having rights known to such counsel to registration of such shares of
Common Stock or other securities, because of the filing of the Registration
Statement by the Company have, with respect to the offering contemplated
thereby, waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the
Registration Statement or have included securities in the Registration
Statement pursuant to the exercise of and in full satisfaction of such
rights; and
(T) For U.S. federal income tax purposes,
the Workflow Distribution (as defined in the Registration Statement and
Prospectus) will qualify as a tax-free spin-off under Section 355 of the
Internal Revenue Code (the "Code") and will be taxable under Section 355(e)
of the Code.
In addition to their opinions set forth above, Xxxxxx, Xxxxxx
& Xxxxxxxxx shall include in its opinion the following statements. Because the
primary purpose of its engagement was not to establish factual matters and
because of the wholly or partially nonlegal character of many determinations
involved in the preparation of the Registration Statement and the Prospectus, it
is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (except to the extent expressly set forth above)
and makes no representation that it has independently checked, investigated or
verified the accuracy, completeness or fairness of such statements (except as
aforesaid). However, it met with and participated in conferences with
representatives of the Company, representatives of the Underwriters,
Underwriters' Counsel and representatives of the independent accountants for the
Company, during which the contents of the Registration Statement and the
Prospectus and related matters were discussed. Based on its participation in the
above-mentioned conferences, its review of the documents described above, and
relying as to materiality upon the opinions and statements of officers of the
Company, it advises the Underwriters that nothing has come to its attention that
causes it to believe that the Registration Statement (other than the financial
statements and notes thereto and supporting schedules and other financial and
statistical data derived therefrom, set forth therein
-22-
or omitted therefrom, as to which no advice is given), at the time it was
declared effective by the Commission, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus (other than the financial statements and notes thereto and supporting
schedules and other financial and statistical data derived therefrom, set forth
therein or omitted therefrom, as to which no advice is given), as of the date of
the Prospectus, included an 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.
Counsel rendering the foregoing opinion may rely as to
questions of law not involving the laws of the United States of America or the
State of Delaware upon opinions of local counsel, and as to questions of fact
upon representations or certificates of officers of the Company, and of
government officials, in which case their opinion is to state that they are so
relying and that they have no knowledge of any material misstatement or
inaccuracy in any such opinion, representation or certificate. Copies of any
opinion, representation or certificate so relied upon shall be delivered to you,
as Representatives of the Underwriters, and to Underwriters' Counsel.
(e) You shall have received on the Closing Date
and on any later date on which Option Shares are to be purchased, as the case
may be, an opinion of Winston & Xxxxxx, in form and substance satisfactory to
you, with respect to the sufficiency of all such corporate proceedings and other
legal matters relating to this Agreement and the transactions contemplated
hereby as you may reasonably require, and the Company shall have furnished to
such counsel such documents as they may have requested for the purpose of
enabling them to pass upon such matters.
(f) (i) You shall have received on the Closing
Date and on any later date on which Option Shares are to be purchased, as the
case may be, a letter from Price Waterhouse LLP addressed to the Company and the
Underwriters, dated the Closing Date or such later date on which Option Shares
are to be purchased, as the case may be, confirming that they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the applicable published Rules and Regulations and based upon the
procedures described in such letter delivered to you concurrently with the
execution of this Agreement (hereinafter called the "Original Letter"), but
carried out to a date not more than five (5) business days prior to the Closing
Date or such later date on which Option Shares are to be purchased, as the case
may be, (i) confirming, to the extent true, that the statements and conclusions
set forth in the Original Letter are accurate as of the Closing Date or such
later date on which Option Shares are to be purchased, as the case may be, and
(ii) setting forth any revisions and additions to the statements and conclusions
set forth in the Original Letter which are necessary to reflect any changes in
the facts described in the Original Letter since the date of such letter, or to
reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change in the condition
(financial or otherwise), earnings, operations or business of the Company and
its subsidiaries considered as one enterprise from that set forth in the
Registration Statement or the Prospectus, which, in your reasonable
judgment, is material and adverse and that makes it, in your reasonable
judgment, impracticable or inadvisable to proceed with the public offering of
the Shares as contemplated by the Prospectus. The Original Letter from Price
Waterhouse LLP shall be addressed to or for the use of the Underwriters in form
and substance satisfactory to the Underwriters and shall (i) represent, to the
extent true, that they are independent certified public accountants with respect
to the Company within the meaning of the Act and the applicable published Rules
and Regulations, (ii) set forth their opinion with
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respect to their examination of the consolidated balance sheet of the Company as
of April 30, 1996, and April 26, 1997 and the related consolidated statements of
income, stockholders' equity and cash flows for the fiscal years ended March 31,
1995, March 31, 1996 and April 26, 1997, (iii) state that Price Waterhouse LLP
has performed the procedures set forth in Statement on Auditing Standards No. 71
("SAS 71") for a review of interim financial information and provide the report
of Price Waterhouse LLP described in SAS 71 on the financial statements for the
nine month period ended January 24, 1998 (the "Nine Month Period Financial
Statements"), (iv) state that in the course of such review, nothing came to
their attention that leads them to believe that any material modifications need
to be made to any of the Nine Month Period Financial Statements in order for
them to be in compliance with generally accepted accounting principles
consistently applied across the period presented and (v) address other matters
agreed upon by Price Waterhouse LLP and you.
(ii) You shall have received on the date
hereof a letter from each of the accounting firms that has examined certain of
the financial statements that are filed with the Commission as a part of the
Registration Statement and are included in the Prospectus addressed to the
Company and the Underwriters, dated the date hereof, confirming that (i) they
are independent certified public accountants with respect to the applicable
subsidiary of the Company within the meaning of the Act and the applicable
published Rules and Regulations and (ii) the financial statements audited by
such independent certified public accountants and included in the Registration
Statement and the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the applicable published Rules
and Regulations.
(g) You shall have received on the Closing Date
and on any later date on which Option Shares are to be purchased, as the case
may be, a certificate of the Company, dated the Closing Date or such later date
on which Option Shares are to be purchased, as the case may be, signed by the
Chief Executive Officer and Chief Financial Officer of the Company, to the
effect that, and you shall be satisfied that:
(i) The representations and
warranties of the Company in this Agreement are true and
correct, as if made on and as of the Closing Date or any
later date on which Option Shares are to be purchased, as
the case may be, and the Company has complied with all the
agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date or
any later date on which Option Shares are to be purchased,
as the case may be;
(ii) No stop order suspending the
effectiveness of the Registration Statement has been issued
and, to the Knowledge of the Company, no
proceedings for that purpose have been instituted or are
pending or threatened under the Act;
(iii) When the Registration
Statement became effective and at all times subsequent
thereto up to the delivery of such certificate, the
Registration Statement and the Prospectus, and any
amendments or supplements thereto,
-24-
contained all material information required to be
included therein by the Act and the Rules and Regulations
and in all material respects conformed to the
requirements of the Act and the Rules and Regulations,
the Registration Statement, and any amendment or
supplement thereto, did not and does not include any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary
to make the statements therein not misleading, the
Prospectus, and any amendment or supplement thereto, did
not and does not include any untrue statement of a
material fact or omit to state a material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and, since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amended or supplemented Prospectus which has
not been so set forth; and
(iv) Subsequent to the respective
dates as of which information is given in the Registration
Statement and the Prospectus and except as described in the
Prospectus, there has not been (a) any material adverse
change in the condition (financial or otherwise), earnings,
operations or business of the Company and its subsidiaries
considered as one enterprise, (b) any transaction that is
material to the Company and its subsidiaries considered as
one enterprise, except transactions entered in the ordinary
course of business, (c) any obligation, direct or
contingent, that is material to the Company and its
subsidiaries that would have a Material Adverse Effect,
except obligations incurred in the ordinary course of
business, (d) any change in the capital stock or outstanding
indebtedness of the Company or any of its subsidiaries that
is material to the Company and its subsidiaries (e) any
dividend or distribution of any kind declared, paid or made
on the capital stock of the Company or any of its
subsidiaries or (f) any loss or damage (whether or not
insured) to the property of the Company or any of its
subsidiaries which has been sustained or will have been
sustained which has a Material Adverse Effect.
(h) The Company shall have obtained and delivered
to you an agreement from each officer and director of the Company, and each
of other certain beneficial owners of Securities named in Schedule B hereto
in writing prior to the date hereof that such person will not, during the
Lock-up Period, effect the Disposition of any Securities now owned or
hereafter acquired directly by such person or with respect to which such
person has or hereafter acquires the power of disposition, other than (i) as
a bona fide gift or gifts, provided the donee or donees thereof agree in
writing to be bound by this restriction, (ii) the exercise of stock options
or (iii) with the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx.
The foregoing restriction shall have been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction
which is designed to or reasonably expected to lead to or result in a
Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than the such holder. Such prohibited
hedging or other transactions would include, without limitation, any short
sale (whether or not against the box) or any purchase, sale or grant of any
right (including, without limitation, any put or call option) with respect to
any Securities or with respect
-25-
to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from
Securities. Furthermore, such person will have also agreed and consented to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of the Securities held by such person except in
compliance with this restriction.
(i) You shall have received from U.S. Office
Products Company ("USOP") a certificate to the effect that the self-tender offer
by USOP to its shareholders has been completed and certifying the number of
shares of USOP common stock purchased pursuant to the tender offer and the
number of shares of USOP common stock issued and outstanding immediately after
the completion of the tender offer transaction.
(j) The Company shall have furnished to you such
further certificates and documents as you shall reasonably request (including
certificates of officers of the Company) as to the accuracy of the
representations and warranties of the Company herein, as to the performance by
the Company of their respective obligations hereunder and as to the other
conditions concurrent and precedent to the obligations of the Underwriters
hereunder.
All such opinions, certificates, letters and documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory to Underwriters' Counsel. The Company will furnish you with such
number of conformed copies of such opinions, certificates, letters and documents
as you shall reasonably request.
7. Option Shares.
On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants to the several Underwriters, for the purpose of
covering over-allotments in connection with the distribution and sale of the
Firm Shares only, a nontransferable option to purchase up to 630,000 Company
Option Shares at the purchase price per share for the Firm Shares set forth in
Section 3 hereof. Such option may be exercised by the Representatives on behalf
of the several Underwriters on one (1) or more occasions in whole or in part
during the period of 30 days after the date on which the Firm Shares are
initially offered to the public, by giving written notice to the Company. The
number of Option Shares to be purchased by each Underwriter upon the exercise of
such option shall be the same proportion of the total number of Option Shares to
be purchased by the several Underwriters pursuant to the exercise of such option
as the number of Firm Shares purchased by such Underwriter (set forth in
Schedule A hereto) bears to the total number of Firm Shares purchased by the
several Underwriters (set forth in Schedule A hereto), adjusted by the
Representatives in such manner as to avoid fractional shares.
Delivery of definitive certificates for the Option
Shares to be purchased by the several Underwriters pursuant to the exercise of
the option granted by this Section 7 shall be made against payment of the
purchase price therefor by the several Underwriters by wire transfer of
immediately available funds to the Company with regard to the Option Shares.
Such delivery and
-26-
payment shall take place at the Washington, D.C. office of Xxxxxx, Xxxxxx &
Xxxxxxxxx (or at such other place as may be agreed upon among the
Representatives and the Company) (i) on the Closing Date, if written notice of
the exercise of such option is received by the Company at least two (2) full
business days prior to the Closing Date or (ii) on a later date which shall not
be later than the third (3rd) full business day following the date the Company
receives written notice of the exercise of such option, if such notice is
received by the Company less than two (2) full business days prior to the
Closing Date.
The certificates for the Option Shares to be so
delivered will be made available to you at such office or such other location,
including, without limitation, in New York City, as you may reasonably request
for checking at least one (1) full business day prior to the date of payment and
delivery and will be in such names and denominations as you may request, such
request to be made at least two (2) full business days prior to such date of
payment and delivery. If the Representatives so elect, delivery of the Option
Shares may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as
the Representatives of the several Underwriters, may (but shall not be obligated
to) make payment of the purchase price on behalf of any Underwriter or
Underwriters whose check or checks shall not have been received by you prior to
the date of payment and delivery for the Option Shares to be purchased by such
Underwriter or Underwriters. Any such payment by you shall not relieve any such
Underwriter or Underwriters of any of its or their obligations hereunder.
Upon exercise of any option provided for in Section
7(a) hereof, the obligations of the several Underwriters to purchase such Option
Shares will be subject (as of the date hereof and as of the date of payment and
delivery for such Option Shares) to the accuracy of and compliance with the
representations, warranties and agreements of the Company herein, to the
accuracy of the statements of the Company and officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, to the conditions set forth in Section 6 hereof, and to
the condition that all proceedings taken at or prior to the payment date in
connection with the sale and transfer of such Option Shares shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and you
shall have been furnished with all such documents, certificates and opinions as
you may reasonably request in order to evidence the accuracy and completeness of
any of the representations, warranties or statements, the performance of any of
the covenants or agreements of the Company or the satisfaction of any of the
conditions herein contained.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject (including,
without limitation, in its capacity as an Underwriter or as a "qualified
independent underwriter" pursuant to Rule 2720 of the NASD Conduct Rules), under
the Act, the Exchange Act or otherwise, specifically including, but not limited
to, losses,
-27-
claims, damages or liabilities (or actions in respect thereof) arising out of or
based upon (i) any breach of any representation, warranty, agreement or covenant
of the Company herein contained, (ii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
such Preliminary Prospectus or the Prospectus, or any such amendment or
supplement thereto, in reliance upon, and in conformity with, written
information relating to any Underwriter furnished to the Company by such
Underwriter, directly or through you, specifically for use in the preparation
thereof and, provided further, that the indemnity agreement provided in this
Section 8(a) with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any losses, claims,
damages, liabilities or actions based upon any untrue statement or alleged
untrue statement of material fact or omission or alleged omission to state
therein a material fact purchased Shares, if a copy of the Preliminary
Prospectus or Prospectus in which such untrue statement or alleged untrue
statement or omission or alleged omission was corrected had not been sent or
given to such person within the time required by the Act and the Rules and
Regulations, unless such failure is the result of noncompliance by the Company
with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall
extend upon the same terms and conditions to, and shall inure to the benefit of,
each person, if any, who controls any Underwriter within the meaning of the Act
or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly,
agrees to indemnify and hold harmless the Company against any losses, claims,
damages or liabilities, joint or several, to which the Company may become
subject under the Act or otherwise, specifically including, but not limited to,
losses, claims, damages or liabilities (or actions in respect thereof) arising
out of or based upon (i) any breach of any representation, warranty, agreement
or covenant of such Underwriter herein contained, (ii) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or the omission or alleged omission to state therein a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not
-28-
misleading, in the case of subparagraphs (ii) and (iii) of this Section 8(b) to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter, directly or through you, specifically for use in the preparation
thereof, and agrees to reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action.
The indemnity agreement in this Section 8(b) shall
extend upon the same terms and conditions to, and shall inure to the benefit of,
each officer of the Company who signed the Registration Statement and each
director of the Company, and each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act. This indemnity agreement
shall be in addition to any liabilities which each Underwriter may otherwise
have.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it shall elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of the indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, which approval will not
be unreasonably withheld, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with appropriate local counsel)
approved by the indemnifying party representing all the indemnified parties
under Section 8(a) or 8(b) hereof who are parties to such action), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. In no event shall any indemnifying party be
liable in respect of
-29-
any amounts paid in settlement of any action unless the indemnifying party shall
have approved the terms of such settlement; provided that such consent shall not
be unreasonably withheld. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnification could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on all claims that are the subject
matter of such proceeding.
(d) In order to provide for just and equitable
contribution in any action in which a claim for indemnification is made pursuant
to this Section 8 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 8 provides for indemnification in such case, all the parties hereto
shall contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject in such proportion so that the Underwriters, acting
severally and not jointly, are responsible pro rata for the portion represented
by the percentage that the underwriting discount bears to the initial public
offering price, and the Company is responsible for the remaining portion,
provided, however, that (i) no Underwriter shall be required to contribute any
amount in excess of the amount by which the underwriting discount applicable to
the Shares purchased by such Underwriter exceeds the amount of damages which
such Underwriter has otherwise required to pay and (ii) no person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. The contribution agreement in this Section 8(d)
shall extend upon the same terms and conditions to, and shall inure to the
benefit of, each person, if any, who controls any Underwriter or the Company
within the meaning of the Act or the Exchange Act and each officer of the
Company who signed the Registration Statement and each director of the Company.
This subparagraph (d) shall not be operative as to any Underwriter to the extent
that the Company or each person who controls the Company and each officer of the
Company who signed the Registration Statementand each director of the Company
has received indemnity under this Section 8.
(e) The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof, including,
without limitation, the provisions of this Section 8, and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 8 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and the Prospectus as required
by the Act and the Exchange Act. The parties hereto are hereby advised that
federal or state public policy, as interpreted by courts in certain
jurisdictions, may be contrary to certain of the provisions of this Section 8,
and the parties hereto hereby expressly waive and relinquish any right or
ability to assert such public policy as a defense to a claim under this Section
8 and hereby further agree not to attempt to assert any such defense.
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9. Representations, Warranties, Covenants and Agreements to Survive
Delivery. All representations, warranties, covenants and agreements of the
Company and the Underwriters herein or in certificates delivered pursuant
hereto, and the indemnity and contribution agreements contained in Section 8
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter within the meaning of the Act or the Exchange Act, or by or on
behalf of the Company, or any of its officers, directors or controlling persons
within the meaning of the Act or the Exchange Act, and shall survive the
delivery of the Shares to the several Underwriters hereunder or termination of
this Agreement.
10. Substitution of Underwriters. If any Underwriter or Underwriters
shall fail to take up and pay for the number of Firm Shares agreed by such
Underwriter or Underwriters to be purchased hereunder upon tender of such Firm
Shares in accordance with the terms hereof, and if the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters so agreed but failed to
purchase does not exceed 10% of the Firm Shares, the remaining Underwriters
shall be obligated, severally in proportion to their respective commitments
hereunder, to take up and pay for the Firm Shares of such defaulting Underwriter
or Underwriters.
If any Underwriter or Underwriters so defaults and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed to take up and pay for exceeds 10% of the Firm
Shares, the remaining Underwriters shall have the right, but shall not be
obligated, to take up and pay for (in such proportions as may be agreed upon
among them) the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase. If such remaining Underwriters do not, at the
Closing Date, take up and pay for the Firm Shares which the defaulting
Underwriter or Underwriters so agreed but failed to purchase, the Closing Date
shall be postponed for 24 hours to allow the several Underwriters the privilege
of substituting within 24 hours (including non-business hours) another
underwriter or underwriters (which may include any nondefaulting Underwriter)
reasonably satisfactory to the Company. If no such underwriter or underwriters
shall have been substituted as aforesaid by such postponed Closing Date, the
Closing Date may, at the option of the Company, be postponed for a further 24
hours, if necessary, to allow the Company the privilege of finding another
underwriter or underwriters, reasonably satisfactory to you, to purchase the
Firm Shares which the defaulting Underwriter or Underwriters so agreed but
failed to purchase. If it shall be arranged for the remaining Underwriters or
substituted underwriter or underwriters to take up the Firm Shares of the
defaulting Underwriter or Underwriters as provided in this Section 10, (i) the
Company shall have the right to postpone the time of delivery for a period of
not more than seven (7) full business days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees promptly to
file any amendments to the Registration Statement, supplements to the Prospectus
or other such documents which may thereby be made necessary, and (ii) the
respective number of Firm Shares to be purchased by the remaining Underwriters
and substituted underwriter or underwriters shall be taken as the basis of their
underwriting obligation. If the remaining Underwriters shall not take up and pay
for all such Firm Shares so agreed to be purchased by the defaulting Underwriter
or Underwriters or substitute another underwriter or underwriters as aforesaid
and the Company shall not find or shall not elect to seek
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another underwriter or underwriters for such Firm Shares as aforesaid, then this
Agreement shall terminate.
In the event of any termination of this Agreement pursuant to
the preceding paragraph of this Section 10, the Company shall not be liable to
any Underwriter (except as provided in Sections 5 and 8 hereof) nor shall any
Underwriter (other than an Underwriter who shall have failed, other than for
some reason permitted under this Agreement, to purchase the number of Firm
Shares agreed by such Underwriter to be purchased hereunder, which Underwriter
shall remain liable to the Company and the other Underwriters for damages, if
any, resulting from such default) be liable to the Company (except to the extent
provided in Sections 5 and 8 hereof).
The term "Underwriter" in this Agreement shall include any
person substituted for an Underwriter under this Section 10.
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the
earlier of (i) 6:30 A.M., San Francisco time, on the first full business day
following the effective date of the Registration Statement, or (ii) the time of
the initial public offering of any of the Shares by the Underwriters after the
Registration Statement becomes effective. The time of the initial public
offering shall mean the time of the release by you, for publication, of the
first newspaper advertisement relating to the Shares, or the time at which the
Shares are first generally offered by the Underwriters to the public by letter,
telephone, telegram or telecopy, whichever shall first occur. By giving notice
as set forth in Section 12 hereof before the time this Agreement becomes
effective, you, as Representatives of the several Underwriters, or the Company,
may prevent this Agreement from becoming effective without liability of any
party to any other party, except as provided in Sections 4(j) (to the extent
Section 4(j) by its terms applies), 5 and 8 hereof.
(b) You, as Representatives of the several
Underwriters, shall have the right to terminate this Agreement by giving notice
as hereinafter specified at any time on or prior to the Closing Date or on or
prior to any later date on which Option Shares are to be purchased, as the case
may be, (i) if the Company shall have failed, refused or been unable to perform
any agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled is not fulfilled,
including, without limitation, any change in the condition (financial or
otherwise), earnings, operations or business of the Company and its subsidiaries
considered as one enterprise from that set forth in the Registration Statement
or the Prospectus, which, in your reasonable judgment, is material and adverse,
(ii) if additional material governmental restrictions, not in force and effect
on the date hereof, shall have been imposed upon trading in securities generally
or minimum or maximum prices shall have been generally established on the New
York Stock Exchange or on the American Stock Exchange or in the over the counter
market by the NASD, or trading in securities generally shall have been suspended
on either such exchange or in the over the counter market by the NASD, or if a
banking moratorium shall have been declared by federal, New York or California
authorities, (iii) if the
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Company shall have sustained a loss by strike, fire, flood, earthquake, accident
or other calamity of such character as to interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured, (iv) if there shall have been a material adverse
change in the general political or economic conditions or financial markets as
in your reasonable judgment makes it inadvisable or impracticable to proceed
with the offering, sale and delivery of the Shares or (v) if there shall have
been an outbreak or escalation of hostilities or of any other insurrection or
armed conflict or the declaration by the United States of America of a national
emergency which, in the reasonable opinion of the Representatives, makes it
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus. In the event of termination pursuant to
subparagraph (i) above, the Company shall remain obligated to pay costs and
expenses pursuant to Sections 4(j), 5 and 8 hereof. Any termination pursuant to
any of subparagraphs (ii) through (v) above shall be without liability of any
party to any other party except as provided in Sections 5 and 8 hereof.
If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section 11, you shall
promptly notify the Company by telephone, telecopy or telegram, in each case
confirmed by letter. If the Company shall elect to prevent this Agreement from
becoming effective, the Company shall promptly notify you by telephone, telecopy
or telegram, in each case, confirmed by letter.
12. Notices. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to you
shall be mailed, delivered, telegraphed (and confirmed by letter) or telecopied
(and confirmed by letter) to you c/o BancAmerica Xxxxxxxxx Xxxxxxxx, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, telecopier
number (000) 000-0000, Attention: General Counsel; if sent to the Company, such
notice shall be mailed, delivered, telegraphed (and confirmed by letter) or
telecopied (and confirmed by letter) to Aztec Technology Partners, Inc., 00
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Chief Executive Officer,
telecopier number (000) 000-0000, with a copy to Xxxxxx X. Xxxxxx, Esq., Xxxxxx,
Xxxxxx & Xxxxxxxxx, 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, telecopier
number (000) 000-0000.
13. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters and the Company and their respective
executors, administrators, successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
or entity, other than the parties hereto and their respective executors,
administrators, successors and assigns, and the controlling persons within the
meaning of the Act or the Exchange Act, officers and directors referred to in
Section 8 hereof, any legal or equitable right, remedy or claim in respect of
this Agreement or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective executors,
administrators, successors and assigns and said controlling persons and said
officers and directors, and for the benefit of no other person or entity. No
purchaser of any of the Shares from any Underwriter shall be construed a
successor or assign by reason merely of such purchase.
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In all dealings with the Company under this Agreement, you
shall act on behalf of each of the several Underwriters, and the Company shall
be entitled to act and rely upon any statement, request, notice or agreement
made or given by you jointly or by BancAmerica Xxxxxxxxx Xxxxxxxx on behalf of
you.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York.
15. Counterparts. This Agreement may be signed in several
counterparts, each of which will constitute an original.
[signature page follows]
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If the foregoing correctly sets forth the understanding among
the Company and the several Underwriters, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among the Company and the several Underwriters.
Very truly yours,
AZTEC TECHNOLOGY PARTNERS, INC.
By:______________________
Xxxxx X. Xxxxxxxxx
President, Chairman of the Board
and Chief Executive Officer
Accepted as of the date
first above written:
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXX XXXXX XXXXXX & COMPANY, LLC
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
On their behalf and on behalf of each
of the several Underwriters named in
Schedule A hereto:
By BANCAMERICA XXXXXXXXX XXXXXXXX
By: ______________________________
Authorized Signatory
SCHEDULE A
Number of
Firm Shares
To Be
Underwriters Purchased
------------ ---------
BancAmerica Xxxxxxxxx Xxxxxxxx ......................
Xxxxx Xxxxx Xxxxxx & Company, LLC ...................
Friedman, Billings, Xxxxxx & Co., Inc. ..............
Total ...............................................
SCHEDULE B
Name
----
Xxxxx X. Xxxxxxxxx
Xxx Xxxxx
Xxxxxxxxx X. Xxxxxxxxx
Xxxxxxxx X. Xxxxxxx
