1
EXHIBIT 1.1
4,000,000 Shares
Rexall Sundown, Inc.
Common Stock
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UNDERWRITING AGREEMENT
St. Petersburg, Florida
_______________, 1996
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXX, XXXXXXXX & XXXX, INC.
XXXXXXXXXX SECURITIES
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Rexall Sundown, Inc., a Florida corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell 2,000,000 authorized and unissued shares (the "Company Firm Shares") of
the Company's common stock, par value $.01 per share (the "Common Stock"),
to the several Underwriters named in Schedule I hereto (the "Underwriters").
Certain shareholders of the Company, named in Schedule II hereto (the
"Selling Shareholders"), acting severally and not jointly, propose, subject to
the terms and conditions stated herein, to sell to the Underwriters an
aggregate of 2,000,000 authorized and outstanding shares (the "Shareholder
Firm Shares") of Common Stock in the respective amounts set forth opposite
their names in Schedule II. The Company Firm Shares and the Shareholder
Firm Shares are hereafter collectively referred to as the "Firm Shares."
In addition, the Company and the Selling Shareholders have agreed to sell
to the Underwriters, at the election of the Underwriters and subject to the
terms and conditions set forth herein, up to an aggregate of 600,000 additional
shares of Common Stock (the "Additional Shares"), solely to cover
over-allotments by the Underwriters, if any. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the
"Shares." Xxxxxxx Xxxxx & Associates, Inc., Xxxxxxxxxx Securities and Xxxxx,
Xxxxxxxx & Xxxx, Inc. are acting as the representatives of the several
Underwriters and in such capacity are hereinafter referred to as the
"Representatives." Each of the Company and each Selling Shareholder agrees with
the several Underwriters as follows:
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company
has prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 (File No.
333-13379), including a prospectus subject to completion, relating to the
Shares. Such registration statement (including all financial schedules and
exhibits), as amended at the time when it becomes effective and as thereafter
amended by any post-effective amendment, together with any documents
incorporated by reference
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therein and any registration statement filed by the Company with respect to the
foregoing pursuant to Rule 462(b) under the Act, is referred to in this
Agreement as the "Registration Statement." The term "Prospectus" as used
in this Agreement means (i) the prospectus in the form included in the
Registration Statement, or (ii) if the prospectus included in the
Registration Statement omits information in reliance upon Rule 430A under the
Act and such information is included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Act or as part of a
post-effective amendment to the Registration Statement after the Registration
Statement becomes effective, the prospectus as first so filed, or (iii) if
the prospectus included in the Registration Statement omits information in
reliance upon Rule 430A under the Act and such information is included in a
term sheet (as described in Rule 434 under the Act) filed with the
Commission pursuant to Rule 424(b) under the Act, the prospectus
included in the Registration Statement and such term sheet, taken
together, in each case together with any documents incorporated by
reference therein. The prospectus subject to completion in the form
included in the Registration Statement at the time of the initial filing
of such Registration Statement with the Commission and as such prospectus
is amended from time to time until the date upon which the Registration
Statement was declared effective by the Commission, together with any
documents incorporated by reference therein, is referred to in this Agreement
as the "Prepricing Prospectus."
SECTION 2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby
agrees to sell the Company Firm Share number of Shareholder Firm Shares as is
set forth opposite such Selling Shareholder's name on Schedule II hereto, to
the Underwriters and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Shareholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company and the
Selling Shareholders the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number of Firm Shares
as adjusted pursuant to Section 10 hereof), at a purchase price of $_____ per
Share (the "purchase price per Share").
Upon the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and conditions set
forth herein, the Underwriters shall have the right for 30 days from the date
upon which the Registration Statement is declared effective by the
Commission to purchase from the Company or the Selling Shareholders, from
time to time, and the Company and the Selling Shareholders agree to sell to
the Underwriters subject to the conditions set forth below, any or all of
the Additional Shares at the purchase price per Share for the Firm Shares.
The Additional Shares shall, if purchased, be purchased solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments as you may determine to avoid fractional
shares) which bears the same proportion to the total number of
Additional Shares to be purchased by the Underwriters as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto
(or such number of Firm Shares as adjusted pursuant to Section 10 hereof)
bears to the total number of Firm Shares. Of the Additional Shares, the
Selling Shareholders will, at their sole discretion, sell up to 200,000
shares and the Company will sell up to 400,000 shares, plus any of the
200,000 shares that the Selling Shareholders elect not to sell. The
exercise of the Underwriters over-allotment option as to only a portion of
the Additional Shares will not affect the right of the Selling Shareholders to
elect to sell up to 200,000 such Additional Shares.
SECTION 3. TERMS OF PUBLIC OFFERING. The Company and the
Selling Shareholders have been advised by you that the Underwriters propose
to make a public offering of their respective portions
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of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR.
Certificates for the Shares to be purchased by the Underwriters hereunder,
in definitive form and in such denominations and registered in such names
as Xxxxxxx Xxxxx & Associates, Inc. may request upon at least 48 hours prior
notice to the Company, shall be delivered by or on behalf of the Company
and the Selling Shareholders to the Underwriters for their respective
accounts, against payment by the Underwriters as provided herein. Payment
shall be made (i) with respect to the purchase price for the Firm Shares
and any Additional Shares purchased from the Company, to the Company by
wire transfer of same-day funds against delivery of the certificates for the
Firm Shares or Additional Shares purchased from the Company, as the case may
be, and (ii) with respect to the purchase price for the Firm Shares and any
Additional Shares sold by the Selling Shareholders, to each such Selling
Shareholder by wire transfer of same-day funds against delivery of the
certificates for the Firm Shares or Additional Shares purchased from each
such Selling Shareholder, as the case may be.
Delivery to the Underwriters of and payment for the Firm Shares
shall be made at the offices of Xxxxxxx Xxxxx & Associates, Inc., 000
Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx, at 10:00 a.m., St. Petersburg,
Florida time, four business days after the date hereof (the "Closing Date").
The place of closing for the Firm Shares and the Closing Date may be varied by
agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at the offices of
Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx,
Xxxxxxx, at 10:00 a.m., St. Petersburg, Florida time, on such date or dates
(the "Additional Closing Date") (which may be the same as the Closing Date
but shall in no event be earlier than the Closing Date nor earlier than
three nor later than ten business days after the giving of the notice
hereinafter referred to), as shall be specified in a written notice from you
on behalf of the Underwriters to the Company and the Selling Shareholders,
of the Underwriters' determination to purchase a number, specified in such
notice, of Additional Shares. Such notice may be given to the Company and
the Selling Shareholders by you at any time within 30 days after the date
upon which the Registration Statement is declared effective by the
Commission. The place of closing for the Additional Shares and the
Additional Closing Date may be varied by agreement between you and the Company
and the Selling Shareholders.
SECTION 5. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company
covenants and agrees with the several Underwriters as follows:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereto to become effective, if
it has not already become effective, and will advise you promptly and, if
requested by you, will confirm such advice in writing (i) when the
Registration Statement has become effective and when any post-effective
amendment to the Registration Statement or any registration statement
filed pursuant to Rule 462(b) under the Act relating to the Registration
Statement is filed or becomes effective, (ii) if information is omitted from
the Registration Statement pursuant to Rule 430A under the Act, when the
Prospectus or term sheet (as described in Rule 434(b) under the Act) has been
timely filed pursuant to Rule 424(b) under the Act, (iii) of any request
by the Commission for amendments or supplements to the Registration
Statement, any Prepricing Prospectus or the Prospectus or for additional
information, (iv) of the issuance by the Commission of any stop order
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suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction or the initiation (or threatened initiation) of any proceeding
for such purposes, and (v) within the period of time referred to in Section
5(e) below, of any change in the Company's condition (financial or other),
business, prospects, properties, net worth or results of operations, or of
any event that comes to the attention of the Company that makes any statement
made in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue in any material respect or that requires the making of
any additions thereto or changes therein in order to make the statements
therein not misleading in any material respect, or of the necessity to amend
or supplement the Prospectus to comply with the Act or any other law. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) The Company will furnish to you, without charge, two signed
copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements
and all exhibits thereto, and will also furnish to you, without charge,
such number of conformed copies of the Registration Statement as originally
filed and of each amendment thereto as you may reasonably request.
(c) The Company will not file any amendment to the
Registration Statement, file any registration statement pursuant to Rule
462(b) under the Act or make any amendment or supplement to the Prospectus
of which you shall not previously have been advised (with a reasonable
opportunity to review such amendment, registration statement or supplement) or
to which you have reasonably objected after being so advised, or which is
not in compliance with the Act. The Company will prepare and file with
the Commission any amendments or supplements to the Registration Statement or
Prospectus which, in the opinion of counsel of the several Underwriters, may
be necessary or advisable in connection with the distribution of the Shares by
the Underwriters.
(d) The Company has delivered or will deliver to you, without
charge, in such quantities as you have requested or may hereafter reasonably
request, copies of each form of the Prepricing Prospectus. The Company
consents to the use, in accordance with the Act and the securities or "blue
sky" laws of the jurisdictions in which the Shares are offered by the several
Underwriters and by dealers, prior to the date of the Prospectus, of each
Prepricing Prospectus so furnished by the Company.
(e) As soon after the execution and delivery of this
Agreement as is practicable and thereafter from time to time for such
period as in the reasonable opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection with sales
by any Underwriter or a dealer, and for so long a period as you may request
for the distribution of the Shares, the Company will deliver to each
Underwriter and each dealer, without charge, as many copies of the Prospectus
(and of any amendment or supplement thereto) as they may reasonably request.
The Company consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the Act and the securities or blue sky
laws of the jurisdictions in which the Shares are offered by the several
Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of
time thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If at any time prior
to the later of (i) the completion of the distribution of the Shares
pursuant to the offering contemplated by the Registration Statement or (ii) the
expiration of prospectus delivery requirements with respect to the Shares
under Section 4(3) of the Act and Rule 174 thereunder, any event shall occur
that in the judgment of the Company or in the
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opinion of counsel for the Underwriters is required to be set forth in the
Prospectus (as then amended or supplemented) or should be set forth therein
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with the Act or any other law,
the Company will promptly prepare and, subject to Sections 5(a) and 5(c),
file with the Commission an appropriate supplement or amendment thereto, and
will furnish to each Underwriter and to each dealer who has previously
requested Prospectuses, without charge, a reasonable number of copies thereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or blue sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other
documents as may be reasonably necessary in order to effect and maintain
such registration or qualification for so long as required to complete
the distribution of the Shares; provided that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to service of
process in suits, other than those arising out of the offering or sale of the
Shares, in any jurisdiction where it is not now so subject. 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. In the event
that the qualification of the Shares in any jurisdiction is suspended, the
Company shall so advise you promptly in writing.
(g) The Company will make generally available to its security
holders a consolidated earnings statement (in form complying with the
provisions of Rule 158 under the Act), which need not be audited, covering a
12 month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
(h) During the period ending five years from the date hereof, the
Company will furnish to you and, upon your request, to each of the other
Underwriters, (i) as soon as available, a copy of each report or definitive
proxy statement of the Company filed with the Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the National
Association of Securities Dealers, Inc. (the "NASD"), the Nasdaq Stock
Market or any securities exchange, or mailed to shareholders, and (iii)
from time to time such other information concerning the Company as you may
reasonably request.
(i) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provision hereof (except Section 11), or if
this Agreement shall be terminated by the Underwriters because of any
inability, failure or refusal on the part of the Company or any Selling
Shareholder to perform any agreement herein or to comply with any of the
terms or provisions hereof or to fulfill any of the conditions of this
Agreement, the Company agrees to reimburse you and the other Underwriters for
all out- of-pocket expenses (including travel expenses and reasonable
fees and expenses of counsel for the Underwriters but excluding wages and
salaries paid by you) incurred by you in connection herewith.
(j) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder substantially in accordance with the
statements set forth under the caption "Use of Proceeds" in the Prospectus.
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(k) If information is omitted from the Registration Statement
pursuant to Rule 430A under the Act, the Company will timely file the
Prospectus or term sheet (as described in Rule 434(b) under the Act) pursuant
to Rule 424(b) under the Act.
(l) For a period of 180 days after the date of the
Prospectus as first filed with the Commission pursuant to Rule 424(b) under
the Act, without the prior written consent of Xxxxxxx Xxxxx & Associates,
Inc., the Company will not, directly or indirectly, issue, sell, contract to
sell, offer or otherwise dispose of or transfer any shares of Common Stock or
securities convertible into or exchangeable or exercisable for shares of
Common Stock (collectively, "Company Securities") or any rights to purchase
Company Securities, except (i) to the Underwriters pursuant to this
Agreement, (ii) pursuant to and in accordance with the Company's stock
option plans described in the Prospectus, or (iii) pursuant to the exercise
or conversion of warrants, stock options, preferred stock or convertible
debentures issued and outstanding at the time of effectiveness of the
Registration Statement and described in the Registration Statement.
(m) Prior to the Closing Date or the Additional Closing Date, as
the case may be, the Company will furnish to you, as promptly as possible,
copies of any unaudited interim consolidated financial statements of the
Company and its Subsidiaries (defined below) for any period subsequent to
the periods covered by the financial statements appearing in the Prospectus.
(n) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
(o) The Company will not, directly or indirectly, take any
action that would constitute or any action designed, or which might reasonably
be expected to cause or result in or constitute, under the Act or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(p) The Company will use its best efforts to qualify or register
its Common Stock for sale in non-issuer transactions under (or obtain
exemptions from the application of ) the blue sky laws of each state where
necessary to permit market making transactions and secondary trading, and
will comply with such blue sky laws and will continue such qualifications,
registrations and exemptions in effect for a period of five years after the
date hereof.
(q) For so long as the Company's Common Stock is listed
therewith, the Company will comply with the filing and other requirements of
the Nasdaq National Market.
(r) The Company hereby agrees that this Agreement shall be
deemed, for all purposes, to have been made and entered into in Pinellas
County, Florida. The Company agrees that any dispute hereunder shall be
litigated solely in the Circuit Court of the State of Florida in Pinellas
County, Florida or in the United States District Court for the Middle District
of Florida, Tampa Division, and further agrees to submit itself to the personal
jurisdiction of such courts.
SECTION 5A. COVENANTS AND AGREEMENTS OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder covenants and agrees with the several
Underwriters as follows:
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(a) For a period of 180 days after the date of the
Prospectus as first filed with the Commission pursuant to Rule 424(b)
under the Act, without the prior written consent of Xxxxxxx Xxxxx &
Associates, Inc., such Selling Shareholder will not, directly or indirectly,
sell, contract to sell, offer or otherwise dispose of or transfer any Company
Securities or any rights to purchase Company Securities, except in accordance
with that certain Securities Loan Agreement to be entered into on or before
the date hereof between CDD Partners, Ltd., a Texas limited partnership, and
such Selling Shareholder (each, a Securities Loan Agreement).
(b) Such Selling Shareholder will review the Prospectus and will
comply with all agreements and satisfy all conditions on its part to be
complied with or satisfied pursuant to this Agreement on or prior to the
Closing Date and will advise the Representatives prior to the Closing Date if
any statement to be made on behalf of such Selling Shareholder in the
certificate contemplated by Section 9(i) would be inaccurate if made as of the
Closing Date.
(c) On the Closing Date, all stock transfer and other taxes
(other than income taxes) which are required to be paid in connection with
the sale and transfer of the Shares to be sold by such Selling Shareholder to
the several Underwriters hereunder will have been fully paid for by
such Selling Shareholder and all laws imposing such taxes will have been fully
complied with.
(d) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Shareholders severally agree to deliver to you at
least two days prior to the Closing Date a properly completed and executed
United States Treasury Department Form W-9.
SECTION6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to, and agrees with, each of the
Underwriters that:
(a) Each Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424(a) under the Act, complied
when so filed in all material respects with the provisions of the Act,
except that this representation and warranty does not apply to statements in
or omissions from such Prepricing Prospectus (or any supplement or amendment
thereto) made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein. The Commission has not
issued any order preventing or suspending the use of any Prepricing
Prospectus. The Company has satisfied all conditions to the use of Form S-3
with respect to the offering of the Shares for sale to the public.
(b) The Registration Statement, in the form in which it became
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective, and any registration statement
filed pursuant to Rule 462(b) under the Act, complies and will comply in all
material respects with the provisions of the Act and does not and will not at
any such times contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement (or any amendment or supplement thereto) made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by or on behalf of any Underwriter through you expressly
for use therein. The Prospectus, and any supplement or amendment thereto,
when filed with the Commission under Rule
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424(b) under the Act, complies and will comply in all material respects with
the provisions of the Act and does not and will not at any such times contain
an untrue statement of a material fact or omit 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, except that this
representation and warranty does not apply to statements in or omissions
from the Prospectus (or any amendment or supplement thereto) made in reliance
upon and in conformity with information relating to any Underwriter furnished
to the Company in writing by or on behalf of any Underwriter through you
expressly for use therein.
(c) The capitalization of the Company is as set forth in the
Prospectus as of the date set forth therein. All the outstanding shares of
Common Stock (including without limitation the Shareholder Firm Shares) have
been, and on the Closing Date and any Additional Closing Date will be, duly
authorized and validly issued, fully paid and nonassessable and free of any
preemptive or similar rights to subscribe for or purchase any shares of
capital stock issued by the Company; except as described in the Prospectus,
there are no outstanding securities or obligations of the Company
convertible into, exercisable for or exchangeable for any capital stock of
the Company; the Shares to be issued and sold to the Underwriters by the
Company hereunder have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and free of any
preemptive or similar rights to subscribe for or purchase any shares of
capital stock issued by the Company; the securities of the Company
conform to the description thereof in the Registration Statement and the
Prospectus (or any amendment or supplement thereto); and the delivery of
certificates for the Shares to be issued and sold by the Company pursuant to
the terms of this Agreement and payment for such Shares will pass valid
title to such shares, free and clear of any voting trust arrangements,
liens, encumbrances, equities, claims or defects in title, to the several
Underwriters purchasing such Shares in good faith and without notice of
any lien, claim or encumbrance. The certificates for the Shares are in
valid and sufficient form. All offers and sales of the Company's capital
stock or other securities prior to the date hereof were made in compliance
with the registration provisions of the Act and all other applicable state
and federal securities laws or regulations, or applicable exemptions
therefrom.
(d) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Florida, with full
corporate power and authority to own, lease and operate its properties and
to conduct its business as presently conducted and as described in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), and is duly registered and qualified to conduct its business and
is in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify does not
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company and
its Subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) Except for Rexall Showcase International, Inc., a Florida
corporation (the "Significant Subsidiary"), Rexall Showcase International
de Mexico, S.A. de C.V., Importadora Rexall Showcase International de
Mexico, S.A. de C.V., Servicios Rexall Showcase International de Mexico,
S.A. de C.V., Asociacion de Vendedores Independientes en Rexall, A.C.,
Rexall Korea Limited and RSL Holdings, Inc. (collectively, the
"Subsidiaries"), the Company does not own a material interest in or control,
directly or indirectly, any other corporation, partnership, joint venture,
association, trust or other business organization. The Significant
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida with full corporate power and
authority to own, lease and
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operate its properties and to conduct its business as presently conducted
and as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its businesses and is in good
standing in each jurisdiction or place where the nature of its properties or
the conduct of its business requires such registration or qualification,
except where the failure to so register or qualify does not have a Material
Adverse Effect. All of the equity interests of each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable, and are
owned by the Company directly, free and clear of any lien, adverse claim,
security interest, equity or other encumbrance.
(f) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened, against the Company or any
Subsidiary, or to which the Company or any Subsidiary, or to which its
respective properties, is subject, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or any document required to be incorporated by reference therein
but are not described as required. Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding, or investigation
by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the knowledge of the
Company, threatened against or involving the Company or any Subsidiary
(including without limitation any such action, suit, inquiry, proceeding or
investigation relating to any product alleged to have been manufactured or
sold by the Company or any Subsidiary and alleged to have been unreasonably
hazardous, defective, or improperly designed or manufactured), the adverse
resolution of which could have a Material Adverse Effect, nor is there any
basis for any such action, suit, inquiry, proceeding, or investigation.
There are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement
or the Prospectus (or any amendment or supplement thereto) or to be filed as
an exhibit to the Registration Statement that are not described or filed
as required or incorporated by reference as permitted by the Act. All
such contracts to which the Company or any Subsidiary is a party have been
duly authorized, executed and delivered by the Company or the respective
Subsidiary, constitute valid and binding agreements of the Company or the
respective Subsidiary and are enforceable against the Company or the
respective Subsidiary in accordance with the terms thereof, except as
enforceability thereof may be limited by (A) the application of bankruptcy,
reorganization, insolvency and other laws affecting creditors' rights
generally, and (B) equitable principles being applied at the discretion of a
court before which any proceeding may be brought
(g) Neither the Company nor any Subsidiary is in violation of
its articles of incorporation or bylaws or other charter documents. Neither
the Company nor any Subsidiary is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the Company
or any Subsidiary or of any decree of any court or governmental agency or
body having jurisdiction over the Company or any Subsidiary, or in default
in any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other
instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or any of their respective properties may be bound,
which violation or default would have a Material Adverse Effect.
(h) The execution and delivery of this Agreement, and the
performance by the Company of its obligations under this Agreement, have been
duly and validly authorized by the Company, and this Agreement has been duly
executed and delivered by the Company and constitutes the valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms.
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10
(i) None of the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby (i) is or may be
void or voidable by any person or entity, (ii) requires any consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may be required for the registration of the
Shares under the Act and compliance with the securities or blue sky laws of
various jurisdictions, all of which will be, or have been, effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
articles of incorporation or bylaws or other charter documents, of the
Company or any Subsidiary, or (iii) conflicts or will conflict with or
constitutes a breach of, or a default under, any agreement, indenture, lease
or other instrument to which the Company or any Subsidiary is a party or
by which the Company or any Subsidiary or any of their respective properties
may be bound, or violates any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any Subsidiary or
any of their respective properties, or results in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to the terms of any agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary may be bound or to which the property or assets of
the Company or any Subsidiary is subject, which conflict, violation or
default in this clause (iii) would have a Material Adverse Effect.
(j) No person or entity has any right, not effectively satisfied
or waived, to require the Company to include any securities with the Common
Stock registered pursuant to the Registration Statement; and except as
described in the Prospectus, no person or entity has any right to require
the Company to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or to
require the Company to include such securities with securities to be
registered pursuant to any other registration statement filed by the Company
under the Act.
(k) Coopers & Xxxxxxx, the certified public accountants who have
certified the consolidated financial statements filed as part of the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), are independent public accountants as required by the Act.
The consolidated financial statements, together with related schedules
and notes, forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial
position of the Company and the Subsidiaries on the bases stated therein
at the respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved and all adjustments necessary for a
fair presentation of the results for such period have been made; and the other
financial and statistical information and data set forth in the Registration
Statement and Prospectus (and any amendment or supplement thereto) is
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company. No financial
statements or schedules are required to be included in or incorporated by
reference into the Registration Statement that have not been so included or
incorporated.
(l) Subsequent to the respective dates as of which such
information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), neither the Company nor any Subsidiary
has incurred any liability or obligation, direct or contingent, or entered
into any transaction, whether or not in the ordinary course of business,
that is material to the Company and the Subsidiaries, taken as a whole, and
there has not been any material change in or dividend paid on the
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11
capital stock, or material increase in the short-term debt or long-term
debt, of the Company or any Subsidiary, or any event resulting in, or any
development involving or which may reasonably be expected to involve a
potential future, Material Adverse Effect.
(m) The Company and the Subsidiaries have good and marketable
title to all property (real and personal) described in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) or
any document required to be incorporated by reference therein as being owned
by the Company or such Subsidiary, free and clear of all liens, claims,
security interests or other encumbrances except such as are described in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) or such as are not materially burdensome and do not interfere in any
material respect with the use of the property or the conduct of the business
of the Company and the Subsidiaries, taken as a whole, and the property
(real and personal) held under lease by the Company or any Subsidiary, as
applicable, is held by them under valid, subsisting and enforceable leases
with only such exceptions as in the aggregate are not materially burdensome
and do not interfere in any material respect with the conduct of the business
of the Company and the Subsidiaries, taken as a whole.
(n) The Company has not distributed and will not distribute prior
to the Closing Date (or the Additional Closing Date, if any) any offering
material in connection with the offering and sale of the Shares other than
the Prepricing Prospectus and the Registration Statement, the Prospectus
or other materials permitted by the Act and distributed with the prior
written approval of the Underwriters. The Company has not taken, directly
or indirectly, any action which constituted or any action designed, or which
might reasonably be expected to cause or result in or constitute, under
the Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares. The
Company acknowledges that the Underwriters may engage in passive market
making transactions in the Common Stock on The Nasdaq Stock Market in
accordance with Rule 10b-6A under the Exchange Act.
(o) Neither the Company nor any Subsidiary is an "investment
company," an "affiliated person" of, or "promoter" or "principal underwriter"
for an investment company within the meaning of the Investment Company Act of
1940, as amended.
(p) The Company and the Significant Subsidiary have all
permits, licenses, franchises, approvals, consents and authorizations of
governmental or regulatory authorities or private persons or entities
(hereinafter "permit or "permits") as are necessary to own their respective
properties and to conduct their respective businesses in the manner
described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), subject to such qualifications as may be
set forth therein, except where the failure to have obtained any such
permit has not had and will not have a Material Adverse Effect; the
Company and the Significant Subsidiary have fulfilled and performed all of
their material obligations with respect to each such permit and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination of any such permit or result in any other material
impairment of the rights of the holder of any such permit, subject in each
case to such qualification as may be set forth in the Prospectus; and,
except as described in the Prospectus, such permits contain no restrictions
that are materially burdensome to the Company and the Subsidiaries, taken as a
whole.
(q) The Company and the Significant Subsidiary are insured
by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary
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12
in the business in which they are engaged; and the Company has no reason to
believe that the Company and the Significant Subsidiary will not be able to
renew their existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue their respective businesses as a comparable cost.
(r) The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorizations; 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.
(s) To the Company s knowledge, neither the Company nor any
Subsidiary has, directly or indirectly, at any time during the past five years
(i) made any unlawful contribution to any candidate for political office, or
failed to disclose fully any contribution in violation of law, or (ii)
made any payment to any federal, state or foreign governmental 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 applicable foreign jurisdictions.
(t) Except as set forth in the Registration Statement and the
Prospectus, to the knowledge of the Company neither the Company nor any
Subsidiary has violated any safety or similar law applicable to their
respective businesses, nor any federal or state law relating to discrimination
in the hiring, promotion or pay of employees nor any applicable federal or
state wages and hours laws, nor any provisions of the Employee Retirement
Income Security Act or the rules and regulations promulgated thereunder, which
in each case might result in a Material Adverse Effect. To the best of the
Company's knowledge, no labor disturbance by the employees of the Company or
any of the Subsidiaries exists or is imminent; and the Company is not aware of
any existing or imminent labor disturbances by the employees of any of its
principal suppliers that might be expected to result in a Material Adverse
Effect. No collective bargaining agreement exists with any of the Company's
or any Subsidiary's employees and, to the Company's knowledge, no such
agreement is imminent. To the Company s knowledge, neither the employment by
the Company or any Subsidiary of their key personnel nor the activities of such
individuals at the Company or any Subsidiary conflicts with, constitutes
a breach of, or otherwise violates any employment, noncompetition,
nondisclosure or similar agreement or covenant by which such individuals may be
bound.
(u) The Company and the Subsidiaries own and have full right,
title and interest in and to, or have the right to use, each material trade
name, trademark, service xxxx, patent, copyright, license, and other rights
and all know-how (including trade secrets and other unpatented and/or
proprietary or confidential information, systems, or procedures)
(collectively, "Intellectual Property Rights") under which the Company and
such Subsidiaries conduct all or any portion of their respective businesses,
which Intellectual Property Rights are adequate to conduct such businesses
as conducted or as proposed to be conducted or as described in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto); except as otherwise disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), neither the Company nor
its Subsidiaries has created any lien or encumbrance on, or granted any right
or license with respect to, its respective Intellectual Property
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13
Rights; there is no claim pending against the Company or any Subsidiary
with respect to any of their respective Intellectual Property Rights; neither
the Company nor any Subsidiary has received notice that, nor is the Company
aware that, any Intellectual Property Right which they use or have used in the
conduct of their respective businesses infringed or infringes upon or
conflicted or conflicts with the rights of any third party, which infringement
of conflict could have a Material Adverse Effect; and the Company is not
aware of any facts which, with the passage of time or otherwise, would
cause the Company or any Subsidiary to infringe upon or otherwise violate the
Intellectual Property Rights of any third party.
(v) The Company and the Subsidiaries have filed with the U. S.
Food and Drug Administration (the "FDA"), and all applicable foreign, state
and local regulatory bodies, for and received approval of, all
registrations; applications, licenses, requests for exemptions, permits
and other regulatory authorizations material to the conduct of the
respective businesses of the Company and the Significant Subsidiary as they
are now conducted except for such registrations, applications, licenses,
requests for exemptions, permits and other regulatory authorizations of which
the failure to so obtain would not have a Material Adverse Effect; the
Company and the Significant Subsidiary are in compliance in all material
respects with all such registrations, applications, licenses, requests for
exemptions, permits and other regulatory authorizations, and all applicable
FDA, foreign, state and local rules and regulations; and the Company has no
reason to believe that any party granting any such registration,
application, license, request for exemption, permit or other authorization is
considering limiting, suspending or revoking the same.
(w) The Common Stock is registered pursuant to Section 12(g)
of the Exchange Act. The Company has timely and properly filed with the
Commission all reports and other documents required to have been filed with
the Commission. The documents incorporated by reference in the Registration
Statement or the Prospectus (or any amendment or supplement thereto), when
the Registration Statement became effective under the Act and when such
documents were filed with the Commission under the Exchange Act, conformed in
all material respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder. The
Common Stock has been and continues to be listed on the Nasdaq National
Market ("NNM") under the symbol "RXSD" and the Company has complied and will
continue to comply with the maintenance and designation criteria applicable
to NNM issuers. The Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under
the Exchange Act or delisting the Common Stock from the NNM, nor has the
Company received any notification that the Commission or the NASD is
contemplating terminating such registration or listing.
(x) All federal, state, local and foreign tax returns required to
be filed by or on behalf of the Company and the Significant Subsidiary with
respect to all periods ended prior to the date of this Agreement have been
filed (or are the subject of valid extension) with the appropriate federal,
state, local and foreign authorities and all such tax returns, as filed, are
accurate in all material respects. All federal, state, local and foreign
taxes (including estimated tax payments) required to be shown on all such tax
returns or claimed to be due from or with respect to the respective businesses
of the Company and the Subsidiaries have been paid or reflected as a
liability on the consolidated financial statements of the Company for
appropriate periods. All deficiencies asserted as a result of any federal,
state, local or foreign tax audits have been paid or finally settled and no
issue has been raised in any such audit which, by application of the same
or similar principles, reasonably could be expected to result in a proposed
deficiency for any other period not so audited. No state of facts exist or
has existed which would constitute grounds for the assessment of any tax
liability with respect to the periods that have not been
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14
audited by appropriate federal, state local or foreign authorities. There
are no outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax return for
any period.
(y) The Company and the Subsidiaries have obtained all required
permits, licenses, and other authorizations, if any, which are required under
federal, state, local and foreign statutes, ordinances and other laws
relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, chemicals, or industrial, hazardous, or toxic
materials or wastes into the environment (including, without limitation,
ambient air, surface water, ground water, land surface, or subsurface strata)
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, hazardous, or toxic materials or
wastes, or any regulation rule, code, plan, order, decree, judgment,
injunction, notice, or demand letter issued, entered, promulgated, or
approved thereunder ("Environmental Laws") the failure of which to obtain
would have a Material Adverse Effect. The Company and the Subsidiaries are
in material compliance with all terms and conditions of all required
permits, licenses and authorizations, and are also in material compliance
with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables contained
in the Environmental Laws. There is no pending or, to the knowledge of
the Company, threatened, civil or criminal litigation, notice of
violation, or administrative proceeding relating in any way to the
Environmental Laws (including notices, demand letters, or claims under the
Resource Conservation and Recovery Act of 1976, as amended ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), and similar foreign, state, or local laws) involving
the Company or any Subsidiary. There have not been and there are not any
past, present, or foreseeable future events, conditions, circumstances,
activities, practices, incidents, actions, or plans which may interfere with or
prevent continued compliance, or which may give rise to any common law or
legal liability, or otherwise form the basis of any claim, action, demand,
suit, proceeding, hearing, study, or investigation, based on or related
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge, release, or
threatened release into the environment, of any pollutant, contaminant,
chemical, or industrial, hazardous, or toxic material or waste, including,
without limitation, any liability arising, or any claim, action, demand, suit,
proceeding, hearing, study, or investigation which may be brought, under RCRA,
CERCLA, or similar foreign, state or local laws, in each case which
individually or in the aggregate would have a Material Adverse Effect.
(z) The Company and the Subsidiaries are in compliance with all
provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act Relating
to Disclosure of doing Business with Cuba; if the Company or any Subsidiary
commences engaging in business with the government of Cuba or with any
person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever date is
later, or if the information reported or incorporated by reference in the
Prospectus, if any, concerning the business of the Company or any Subsidiary
with Cuba or with any person or affiliate located in Cuba changes in any
material way, the Company will provide the Department notice of such business
or change, as appropriate in a form acceptable to the Department.
SECTION 6A. REPRESENTATIONS AND WARRANTIES OF THE SELLING
SHAREHOLDERS. Each Selling Shareholder, severally and not jointly,
represents and warrants to each Underwriter and the Company on
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15
the date hereof, and shall be deemed to represent and warrant to each
Underwriter and the Company on the Closing Date and the Additional Closing
Date, that:
(a) Such Selling Shareholder is the owner of the Shareholder
Firm Shares to be sold by him for purposes of Section 16(c) under the Exchange
Act; CDD Partners, Ltd., a Texas limited partnership ("CDD Partners") has,
and immediately prior to the consummation of the transactions contemplated
hereby on the Closing Date will have, good and valid title to the Shares to
be sold by such Selling Shareholder, free and clear of all pledges, liens,
security interests, encumbrances, claims or equitable interests (except those
of such Selling Shareholder pursuant to the Securities Loan Agreement
between such Selling Shareholder and CDD Partners); and upon delivery of
such Shares hereunder and payment of the purchase price as herein
contemplated, each of the Underwriters will obtain good and valid title to
the Shares purchased by it from such Selling Shareholder, free and clear of
all pledges, liens, security interests, encumbrances, claims, equitable
interests or adverse claims (or claims of any adverse party), including any
liability to or claims of any creditor of such Selling Shareholder.
(b) All authorizations, approvals, consents and orders
necessary for the execution and delivery by or on behalf of such Selling
Shareholder of this Agreement and the sale and delivery of the Shares to be
sold by such Selling Shareholder under this Agreement (other than such
authorizations, approvals or consents as may be necessary under state or
other securities or blue sky laws) have been obtained and are in full force
and effect; such Selling Shareholder, if other than a natural person, has
been duly organized and is validly existing and in good standing under the laws
of the jurisdiction of its organization as the type of entity that it
purports to be; and such Selling Shareholder has full right, power, and
authority to enter into and perform its obligations under this Agreement, and
to sell, assign, transfer and deliver the Shares to be sold by such Selling
Shareholder under this Agreement.
(c) (i) This Agreement has been duly executed and delivered by
or on behalf of such Selling Shareholder and constitutes the valid and
binding agreement of each Selling Shareholder, enforceable against such
Selling Shareholder in accordance with its terms; (ii) the performance of
this Agreement and the consummation of the transactions herein contemplated
will not: (A) conflict with or result in a breach of or default under any
material bond, debenture, note or other evidence of indebtedness, or any
material contract, indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which such Selling Shareholder or CDD
Partners is a party or by which such Selling Shareholder, CDD Partners or
any Selling Shareholder Shares hereunder may be bound or (B) to the best
of such Selling Shareholder's knowledge, result in the violation of any law,
order, rule or regulation applicable to such Selling Shareholder or CDD
Partners, or the violation of any writ, injunction or decree of any court or
governmental agency or body having jurisdiction over the Selling Shareholders
or CDD Partners, or result in the violation of any provisions of the
charter, bylaws or other organizational documents of CDD Partners.
(d) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Shares.
(e) Such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
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16
(f) The information furnished by or on behalf of such Selling
Shareholder relating to such Selling Shareholder and the Shares to be sold
by such Selling Shareholders under this Agreement that is set forth in the
Registration Statement and the Prospectus is, and on the Closing Date will
be, true, correct and complete, and does not, and on the Closing Date will
not, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make such
statements not misleading. Such Selling Shareholder is familiar with the
Registration Statement, the Prepricing Prospectus and the Prospectus and has
no knowledge of any material fact or condition not set forth in the
Registration Statement, the Prepricing Prospectus or the Prospectus which
has adversely affected, or may adversely affect, the condition (financial or
other) of the business, properties, results of operations or prospects of the
Company, and the sale of the Shares proposed to be sold by such Selling
Shareholder is not prompted by any such knowledge.
(g) Such Selling Shareholder does not have, or has waived
prior to the date hereof, any preemptive right, co-sale right or right of
first refusal or other similar right to purchase any of the Shares that are
to be sold by the Company or any of the other Selling Shareholders to the
Underwriters pursuant to this Agreement; and such Selling Shareholder does not
own any capital stock of the Company or warrants, options or similar rights to
acquire, and does not have any right or arrangement to acquire, any capital
stock, rights, warrants, options or other securities from the Company, other
than those described in the Registration Statement and the Prospectus.
(h) To the best knowledge of each Selling Shareholder, none of
the representations and warranties of the Company set forth in Section 6 above
is untrue or inaccurate.
SECTION 7. EXPENSES. The Company and the Selling Shareholders
hereby agree with the several Underwriters that the Company will pay or cause
to be paid the costs and expenses associated with the following: (1) the
preparation, printing or reproduction, and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto),
each Prepricing Prospectus, the Prospectus, each registration statement
filed pursuant to Rule 462(b) under the Act, and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Prepricing
Prospectus, the Prospectus, each registration statement filed pursuant to
Rule 462(b) under the Act, and all amendments or supplements to any of them,
as may be reasonably requested for use in connection with the offering and
sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp
taxes in connection with the offering of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Shares; (v) the listing of the Shares on the Nasdaq National Market;
(vi) the registration or qualification of the Shares for offer and sale
under the securities or Blue Sky laws of the several states as provided
in Section 5(f) hereof (including the reasonable fees and expenses of
counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification); (vii) the filing fees in
connection with any filings required to be made with the National
Association of Securities Dealers, Inc. in connection with the
offering; (viii) the transportation and other expenses incurred by or on
behalf of representatives of the Company in connection with the presentations
to prospective purchasers of the Shares; (ix) the fees and expenses of
the Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company; (x) the preparation, printing and
distribution of bound volumes of the relevant
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17
transaction documents for the Representatives and their counsel; and (xi) the
performance by the Company of its other obligations under this
Agreement. 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 its part to be performed hereunder or to
fulfill any condition of the Underwriters' obligations hereunder, the
Company will reimburse the several Underwriters for all reasonable out-of-
pocket expenses (including fees and disbursements of counsel for the several
Underwriters) incurred by the Underwriters in investigating, preparing to
market or marketing the Shares. The provisions of this Section 7 are intended
to relieve the Underwriters from the payment of the expenses and costs which
the Company hereby agrees to pay, but shall not affect any agreement which
the Selling Shareholders and the Company may make, or may have made, for the
sharing of such expenses and costs.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION. The Company agrees
to indemnify and hold harmless you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation) arising out of or based upon any breach of any
representation, warranty, agreement or covenant of the Company contained
herein or any untrue statement or alleged untrue statement of a material
fact contained in any Prepricing Prospectus the Registration Statement, the
Prospectus, any amendment or supplement thereto, or in any Registration
Statement filed pursuant to Rule 462(b) under the Act, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities
or expenses arise out of or are based upon an untrue statement or omission
or alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating
to an Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith or arise
out of materials prepared solely by the Underwriters based upon material
information obtained from sources other than, directly or indirectly,
the Company or its representatives. This indemnification shall be in
addition to any liability that the Company may otherwise have.
Each Selling Shareholder, severally and not jointly, agrees to
indemnify and hold harmless you and each other Underwriter and each person, if
any, who controls any underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any breach of any representation,
warranty, agreement or covenant of such Selling Shareholder contained herein
or any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus the Registration Statement, the
Prospectus, any amendment or supplement thereto, or in any Registration
Statement filed pursuant to Rule 462(b) under the Act, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon an untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating
to an Underwriter furnished in writing to the Company by or on behalf
of any Underwriter through you expressly for use in connection therewith
or arise out of materials prepared solely by the Underwriters based upon
material information obtained from sources other than, directly or
indirectly, the Company or its representatives. This indemnification
shall be in addition to any liability that the Selling Shareholders or
any Selling Shareholder may otherwise have. Notwithstanding anything to the
contrary herein, in no event shall any Selling Shareholder's obligation
- 17 -
18
under this Section exceed the total net proceeds from the offering received
by such Selling Shareholder (computed without deduction for any taxes).
If any action or claim shall be brought against any Underwriter or
any person controlling any Underwriter in respect of which indemnity may be
sought against the Company or any Selling Shareholder, such Underwriter or
such controlling person shall promptly notify in writing the party(s)
against whom indemnification is being sought (the "indemnifying party"
or "indemnifying parties"), and such indemnifying party(s) shall assume
the defense thereof, including the employment of counsel reasonably
acceptable to such Underwriter or such controlling person and payment of
all fees and expenses. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person
unless (i) the indemnifying party(s) has (have) agreed in writing to pay
such fees and expenses, (ii) the indemnifying party(s) has (have) failed
to assume the defense and employ counsel reasonably acceptable to the
Underwriter or such controlling person, or (iii) the named parties to any
such action (including any impleaded parties) include both such
Underwriter or such controlling person and the indemnifying party(s), and
such Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and any indemnifying
party(s) by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party(s) shall not
have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person). The indemnifying party(s) shall
not be liable for any settlement of any such action effected without its
(their) written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, the
indemnifying party(s) agrees to indemnify and hold harmless any Underwriter
and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment, but in
the case of a judgment only to the extent stated in the immediately preceding
paragraph.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and each Selling Shareholder, to the same extent as the foregoing indemnity
from the Company and each Selling Shareholder to each Underwriter, but only
with respect to information relating to such Underwriter furnished in
writing by or on behalf of such underwriter through you expressly for use in
the Registration Statement, the Prospectus or any Prepricing Prospectus, any
amendment or supplement thereto, or any Registration Statement filed
pursuant to Rule 462(b) under the Act. If any action or claim shall be
brought or asserted against the Company, any of its directors, any such
officers, or any such controlling person or any Selling Shareholder based on
the Registration Statement, the Prospectus or any Prepricing Prospectus, any
amendment or supplement thereto, or any Registration Statement filed pursuant
to Rule 462(b) under the Act, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph, such Underwriter shall
have the rights and duties given to the Company and the Selling Shareholders
by the preceding paragraph (except that if the Company or any Selling
Shareholder shall have assumed the defense thereof such Underwriter shall not
be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such
counsel shall be at such Underwriter's expense), and the Company, its
directors, any such officers, and any such controlling persons and the
Selling Shareholders shall have the rights and duties given to the Underwriters
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19
by the immediately preceding paragraph. This indemnification shall be in
addition to any liability the Underwriters or any Underwriter may otherwise
have.
If the indemnification provided for in this Section 8 is unavailable to
an indemnified party under the first, second or fourth paragraph hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company or the Selling Shareholders, as applicable, on the
one hand and the Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company or the Selling Shareholders, as applicable, on
the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company or the Selling
Shareholders, as applicable, on the one hand and the Underwriters on the
other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares (before deducting expenses) received
by the Company or the Selling Shareholders, as applicable, bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus; provided
that, in the event that the Underwriters shall have purchased any Additional
Shares hereunder, any determination of the relative benefits received by
the Company or the Selling Shareholders, as applicable, or the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company, and the underwriting discounts
and commissions received by the Underwriters, from the sale of such
Additional Shares, in each case computed on the basis of the respective
amounts set forth in the notes to the table on the over page of the
Prospectus. The relative fault of the Company or the Selling Shareholders,
as applicable on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling
Shareholders, as applicable, on the one hand or by the Underwriters on the
other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
In any event, neither the Company nor the Selling Shareholders will,
without the prior written consent of the Representatives, settle or
compromise or consent to the entry of any judgment in any proceeding or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Representatives or
any person who controls the Representatives within the meaning of Section 15
of the Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of all Underwriters and such controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 8 was determined by a pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in the fifth paragraph of this Section 8. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and
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20
expenses referred to in the fifth paragraph of this Section 8 shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price of the
Shares underwritten by it and distributed to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 8 are several
in proportion to the respective numbers of Firm Shares set forth opposite
their names in Schedule I hereto (or such numbers of Firm Shares increased as
set forth in Section 10 hereof) and not joint.
In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus, any supplement or amendment thereto,
or any registration statement filed pursuant to Section 462(b) of the Act,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any
other contributing party, agrees that process issuing from such court may be
served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may
join him or it as an additional defendant in any such proceeding in which such
other contributing party is a party.
Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company and the Selling Shareholders
set forth in this Agreement, as well as in any certificate delivered pursuant
hereto, shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
person controlling the Company or any Selling Shareholder, (ii) acceptance of
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, to the Company, its directors or officers, or any person
controlling the Company, or any Selling Shareholder, shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 8.
SECTION 9. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) The Registration Statement shall have become effective not
later than 12:00 noon, New York City time, on the date hereof, or at such
later date and time as shall be consented to in writing by you, and all
filings required by Rules 424(b) and 430A under the Act shall have been timely
made; and any request of the Commission for additional information (to be
included in the Registration Statement or otherwise) shall have been
disclosed to the Representatives and complied with to their reasonable
satisfaction.
(b) Subsequent to the effective date of the Registration
Statement there shall not have occurred any change, or any development
involving, or which might reasonably be expected to involve, a potential
future material adverse change, in the condition (financial or other),
business, properties, net
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21
worth or results of operations of the Company and the Subsidiaries, taken as a
whole, not contemplated by the Prospectus (or any supplement thereto), that
in your reasonable opinion, as Representatives of the several Underwriters,
would materially and adversely affect the market for the Shares.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxxxxxx Xxxxxxx Xxxxxxx
Xxxxxx Xxxxx & Xxxxxxx, P.A., counsel for the Company, dated the Closing
Date (and the Additional Closing Date, if any), satisfactory to you and
your counsel, to the effect that:
(i) The Company is a corporation duly incorporated under
the laws of the State of Florida, and validly existing in good
standing, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct
its business as a foreign corporation and is in good standing in
each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure to so register or qualify does not have a
Material Adverse Effect.
(ii) The Significant Subsidiary is a corporation duly
organized and validly existing in good standing under the laws of the
State of Florida, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where
the failure to so register or qualify does not have a Material
Adverse Effect. All issued and outstanding equity interests of the
Significant Subsidiary have been validly issued and are fully paid
and nonassessable and are owned by the Company directly, free and
clear of all liens, encumbrances, equities and claims. 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.
(iii) The authorized capital stock and other securities of
the Company conform in all material respects as to legal matters to
the description thereof contained in the Prospectus under the caption
"Description of Capital Stock."
(iv) All shares of capital stock or other securities of
the Company outstanding prior to the issuance of the Shares to be
issued and sold by the Company hereunder have been duly authorized
and validly issued, are fully paid and nonassessable and have not
been issued in violation of any registration right, right of first
refusal, preemptive right, or other similar right.
(v) To such counsel's knowledge, all offers and sales of
the Company's capital stock or other securities prior to the date
hereof were made in compliance with the registration provisions of
the Act and all other applicable state and federal securities laws
or regulations, or applicable exemptions therefrom.
(vi) The Shares to be issued and sold to the
Underwriters by the Company, and the Shares to be sold by the Selling
Shareholders, hereunder have been duly authorized and, when
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22
issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and free and clear of all liens,
encumbrances, equities and claims and will not have been issued in
violation of any co-sale right, registration right, right of first
refusal, preemptive right, or other similar right.
(vii) The form of certificates for the Shares conforms
to the requirements of the applicable corporate laws of the State of
Florida.
(viii) The Registration Statement has become effective
under the Act and, to the knowledge of such counsel after
reasonable inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose are pending before or threatened by the Commission.
(ix) The Company has all requisite corporate power and
authority to enter into this Agreement and to issue, sell and
deliver the Shares to be sold by it to the Underwriters as
provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and is a valid, legal and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as enforceability thereof may
be limited by (A) the application of bankruptcy, reorganization,
insolvency and other laws affecting creditors' rights generally, and
(B) equitable principles being applied at the discretion of a court
before which any proceeding may be brought; and the Company has
adequate authorization and has taken all action necessary to authorize
the indemnification provisions contained in Section 8 herein,
provided, however that such counsel may specifically refrain from
opining as to the validity of the indemnification provisions
hereof insofar as they are or may be held to be violative of public
policy (under either state or federal law) against such types of
provisions in the context of the offer, offer for sale, or sale of
securities.
(x) Neither the Company nor any Subsidiary is in
violation of its respective articles of incorporation or bylaws or
other charter documents, and to the knowledge of such counsel after
reasonable inquiry, neither the Company nor any Subsidiary is in
default in the performance of any material obligation, agreement or
condition contained in any bond, indenture, note or other evidence
of indebtedness or in any other agreement material to the Company and
the Subsidiaries, taken as a whole, known to such counsel after
reasonable inquiry.
(xi) Neither the offer, sale or delivery of the Shares,
the execution, delivery or performance of this Agreement,
compliance by the Company with all provisions hereof nor
consummation by the Company of the transactions contemplated hereby
conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, articles of incorporation or bylaws or
other charter documents, of the Company or any Subsidiary, or
any agreement, indenture, lease or other instrument to which the
Company or any Subsidiary, or any of their respective properties,
is bound, that is or was required to be filed by the Company with
the Commission, or is known to such counsel after reasonable inquiry,
or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
Subsidiary under any such document, nor will any such action
result in any violation of any existing law (other than Section
16 of the Securities Exchange Act of 1934, as to which such
counsel need express no opinion), regulation, ruling (assuming
compliance with all applicable state securities and blue sky laws),
judgment, injunction, order or decree known to
- 22 -
23
such counsel after reasonable inquiry, applicable to the Company or
any Subsidiary, or any of their respective properties.
(xii) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or
official is required on the part of the Company (except such as have
been obtained under the Act or such as may be required under state
securities or blue sky laws governing the purchase and distribution
of the Shares) for the valid issuance and sale of the Shares to
the Underwriters under this Agreement.
(xiii) The Registration Statement and the Prospectus and
any supplements or amendments thereto (except for the financial
statements and the notes thereto and the schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not express any opinion)
comply as to form in all material respects with the requirements
of the Act, and the conditions to the use of Form S-3 have been
satisfied by the Company.
(xiv) To the knowledge of such counsel after reasonable
inquiry, (A) there are no legal or governmental proceedings pending
or threatened against the Company or any Subsidiary, or to which the
Company or any Subsidiary, or any of their respective properties, are
subject, that are required to be described in the Registration
Statement or Prospectus (or any amendment or supplement thereto) or
any document incorporated by reference therein that are not
described as required therein, and (B) there are no agreements,
contracts, indentures, leases or other instruments, that are
required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) or any document
incorporated by reference therein or to be filed as an exhibit to
the Registration Statement or incorporated by reference therein that
are not described or filed as required, as the case may be.
(xv) To the knowledge of such counsel after reasonable
inquiry, neither the Company nor any Subsidiary is in violation of
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any Subsidiary or of any decree
of any court or governmental agency or body having jurisdiction over
the Company or any Subsidiary, except where such violation does not
and will not have a Material Adverse Effect.
(xvi) To the knowledge of such counsel after reasonable
inquiry, the Company and the Significant Subsidiary have such
permits, licenses, franchises, approvals, consents and
authorizations of governmental or regulatory authorities
("permits"), as are necessary to own their respective properties and
to conduct their respective businesses in the manner described in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), subject to such qualifications as may be set
forth therein; the Company and the Significant Subsidiary have
fulfilled and performed all of their respective material obligations
with respect to such permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or
termination thereof or result in any other material impairment of the
rights of the holder of any such permit, subject in each case to
such qualification as may be set forth in the Registration
Statement and the Prospectus (or any amendment or supplement thereto);
and except as described in the Registration Statement and the
Prospectus (or any amendment or supplement
- 23 -
24
thereto), such permits contain no restrictions that are materially
burdensome to the Company and its Subsidiaries, taken as a whole.
(xvii) The property described in the Registration Statement
and the Prospectus (or any amendment or supplement thereto) as held
under lease by the Company or any Subsidiary is held under valid,
subsisting and enforceable leases, with only such exceptions as in
the aggregate are not material and do not interfere in any material
respect with the conduct of the business of the Company and the
Subsidiaries, taken as a whole.
(xviii) Such counsel has reviewed all agreements, contracts,
indentures, leases or other documents or instruments referred to in
the Registration Statement and the Prospectus (or any amendment or
supplement thereto) (other than routine contracts entered into by the
Company or any Subsidiary for the purchase of materials or the
sale of products, entered into in the normal course of business)
and such agreements, contracts, indentures, leases or other
documents or instruments are fairly summarized or disclosed
therein, and filed as exhibits thereto or incorporated by
reference therein as required, and such counsel does not know, after
reasonable inquiry, of any agreements, contracts, indentures,
leases or other documents or instruments required to be so summarized
or disclosed or filed which have not been so summarized or disclosed
or filed.
(xix) Such counsel has no reason to believe that the
descriptions in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) of statutes, regulations or legal or
governmental proceedings are other than accurate or fail to
present fairly the information required to be shown.
(xx) Neither the Company nor any Subsidiary is, nor
will any of them become, as a result of the consummation of the
transactions contemplated hereby and the application of the net
proceeds therefrom as set forth in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) under the
caption "Use of Proceeds," an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(xxi) The delivery by or on behalf of the Selling
Shareholders to the several Underwriters of certificates for the
shares of Common Stock being sold by the Selling Shareholders pursuant
to this Agreement againt payment therefor as provided herein will
convey good and valid title to such shares of Common Stock to the
several Underwriters, free and clear of all security interests,
pledges, liens, encumbrances, equitable interests and adverse claims.
CDD Partners is not an "adverse person," and has no adverse claim
with respect to the sale of Shares by the Selling Shareholders, for
purposes of Section 678.303(2) of the Florida Statutes. For purposes
of such opinion, such counsel shall be entitled to assume that (a)
the several Underwriters are without notice of any "adverse claim,"
as such term is defined in Section 678.302(2) of the Florida
Statutes (except that no such assumption may be made by such counsel
with respect to CDD Partners), (b) the several Underwriters are
purchasers for value in good faith for purposes of Section 678.302
of the Florida Statutes, and (c) the rights of the several
Underwriters are not limited by the provisions of Section 678.302(4) of
the Florida Statutes.
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25
In rendering such opinion, counsel may rely upon an opinion or
opinions, each dated the Closing Date (and the Additional Closing Date, if
applicable), of other counsel as to the laws of a jurisdiction other than
the State of Florida or the United States, or as to matters involving
regulation of the Company by the United States Food and Drug Administration,
provided that (1) each such local counsel is acceptable to you, (2) each
such opinion so relied upon is addressed to counsel and you, (3) such
reliance is expressly authorized by each opinion so relied upon and a copy
of each such opinion is delivered to you and is in form and substance
satisfactory to you, and (4) counsel shall state in their opinion that they
believe that they and you are justified in relying thereon. In rendering such
opinion, local counsel may rely, to the extent they deem such reliance proper,
as to matters of fact upon certificates of officers of the Company and of
government officials. Copies of all such certificates shall be furnished to
you and your counsel on the Closing Date (and the Additional Closing Date, if
applicable).
In rendering such opinion, in each case where such opinion is
qualified by "the knowledge of such counsel after reasonable inquiry," such
counsel may rely as to matters of fact upon certificates of executive and
other officers and employees of the Company as you and such counsel
shall deem are appropriate and such other procedures as you and such counsel
shall mutually agree; provided, however, in each such case, such counsel shall
state that it has no knowledge contrary to the information contained in such
certificates or developed by such procedures and knows of no reason why you
should not reasonably rely upon the information contained in such
certificates or developed by such procedures. Such counsel may state in
such opinion that their knowledge is limited to the knowledge of their
attorneys and other representatives and employees that have given attention to
the matters involving the Company.
In addition to the opinion set forth above, such counsel shall state
that during the course of the preparation of the Registration Statement and
the Prospectus, and any amendments or supplements thereto, nothing has come
to the attention of such counsel which has caused it to believe that the
Registration Statement, as of the time it became effective under the Act, the
Prospectus or any amendment or supplement thereto, on the date it was filed
pursuant to Rule 424(b), as of the respective dates when such documents were
filed with the Commission, and the Registration Statement and the
Prospectus, or any amendment or supplement thereto, as of the Closing Date
(except for the financial statements and other financial and statistical
information contained therein or omitted therefrom as to which no opinion
need be expressed), 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. With respect to such
statement, counsel shall state that although such counsel did not undertake
to determine independently the accuracy, completeness and fairness of the
statements contained in the Registration Statement or in the Prospectus and
takes no responsibility therefor (except to the extent specifically set forth
herein), such counsel did participate in discussions and meetings with
officers and other representatives of the Company and discussions with the
auditor for the Company in connection with the preparation of the
Registration Statement and the Prospectus, and it is on the basis of the
foregoing (relying as to certain factual matters on the information
provided to such counsel and not on an independent investigation) that such
counsel is making such statement.
(d) You shall have received on the Closing Date (and the
Additional Closing Date, if any Additional Shares of the Selling Shareholders
are to be sold on such Additional Closing Date) an opinion of Xxxxxxx Xxxxxx
Xxxxx Xxxxxx & Xxxxxx, P.A., counsel for the Selling Shareholders, dated
the Closing Date (and the Additional Closing Date, if any), to the effect that:
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(i) This Agreement has been duly executed and delivered
by the Selling Shareholders and constitutes the legal, valid and
binding agreement of each of the Selling Shareholders, enforceable
against each of them in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles; provided, however that such counsel may specifically
refrain from opining as to the validity of the indemnification
provisions hereof insofar as they are or may be held to be violative of
public policy (under either state or federal law) against such types of
provisions in the context of the offer, offer for sale, or sale of
securities.
(ii) Each of the Selling Shareholders has full right,
power and authority to enter into and to perform its obligations
under this Agreement and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Shareholder hereunder.
(iii) The delivery by or on behalf of the Selling
Shareholders to the several Underwriters of certificates for the
shares of Common Stock being sold by the Selling Shareholders pursuant
to this Agreement againt payment therefor as provided herein will
convey good and valid title to such shares of Common Stock to
the several Underwriters, free and clear of all security interests,
pledges, liens, encumbrances, equitable interests and adverse claims.
CDD Partners is not an "adverse person," and has no adverse claim with
respect to the sale of Shares by the Selling Shareholders, for purposes
of Section 678.303(2) of the Florida Statutes. For purposes of such
opinion, such counsel shall be entitled to assume that (a) the several
Underwriters are without notice of any "adverse claim," as such term is
defined in Section 678.302(2) of the Florida Statutes (except that no
such assumption may be made by such counsel with respect to CDD
Partners), (b) the several Underwriters are purchasers for value in
good faith for purposes of Section 678.302 of the Florida Statutes, and
(c) the rights of the several Underwriters are not limited by the
provisions of Section 678.302(4) of the Florida Statutes.
(iv) The Securities Loan Agreements entered into among CDD
Partners and each Selling Shareholder have been duly authorized,
executed and delivered by CDD Partners and each Selling Shareholder
and constitute the legal, valid and binding agreement of each of the
parties thereto, enforceable against each of them in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles.
(v) Neither the execution, delivery and performance of
this Agreement by the Selling Shareholders nor the lending to the
Selling Shareholders by CDD Partners pursuant to the Securities
Loan Agreements of the Shares to be sold by the Selling Shareholders
hereunder will: (A) conflict with or result in a breach of or default
under any material bond, debenture, note or other evidence of
indebtedness, or any material contract, indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument known
to such counsel to which such Selling Shareholder or CDD Partners
is a party or by which such Selling Shareholder, CDD Partners or any
Selling Shareholder Shares hereunder may be bound or (B) to the best
of such counsel's knowledge, result in the violation of any law,
order, rule or regulation applicable to the Selling Shareholders
(except for any violation of the Act or the Exchange Act, to be
addressed in the opinion delivered pursuant to Section 9(c);
provided that matters under Section 16 of the Act shall be addressed
solely in the opinion to be delivered pursuant to this Section 9(d) or
in a separate legal opinion of counsel satisfactory to Xxxxxxx Xxxxx &
- 26 -
27
Associates, Inc.) or CDD Partners or the violation of any writ,
injunction or decree of any court or governmental agency or body
having jurisdiction over the Selling Shareholders or CDD Partner, or
result in the violation of any provisions of the charter, bylaws
or other organizational documents of CDD Partners.
(vi) No consent, approval, authorization or order of, or
filing with, any court or governmental agency or bodies is required
for the consummation of the transactions contemplated by this
Agreement or by the Securities Loan Agreement in connection with the
sale of the Shares by the Selling Shareholders hereunder except such
as have been obtained under the Act and such as may be required under
state securities laws in connection with the purchase and distribution
of such Shares by the Underwriters.
(e) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of King & Spalding, counsel for
the Underwriters, dated the Closing Date (and the Additional Closing Date,
if any), with respect to the issuance and sale of the Firm Shares, the
Registration Statement and other related matters as you may reasonably
request, and the Company and its counsel shall have furnished to your counsel
such documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(f) You shall have received letters addressed to you and dated the
date hereof and the Closing Date (and the Additional Closing Date, if any)
from Coopers & Xxxxxxx, independent certified public accountants,
substantially in the forms heretofore approved by you.
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capital stock or other securities of the
Company nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth
or contemplated in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); (iii) there shall not have been since the
respective dates as of which information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any development
involving, or which may reasonably be expected to involve a potential
future, Material Adverse Effect; and (iv) all of the representations and
warranties of the Company contained in this Agreement shall be true and
correct in all material respects on and as of the date hereof and on and as of
the Closing Date as if made on and as of the Closing Date, and you shall
have received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company (or such
other officers as are acceptable to you) to the effect set forth in this
Section 9(g) and in Section 9(h) hereof.
(h) The Company shall not have failed in any material respect at
or prior to the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied with by
it hereunder at or prior to the Closing Date.
(i) You shall be satisfied that, and you shall have received a
certificate dated the Closing Date, from each Selling Shareholder to the
effect that, as of the Closing Date, they have not been informed that:
(i) the representations and warranties made by such Selling Shareholder herein
are not
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28
true or correct in any material respect on the Closing Date; or (ii) such
Selling Shareholder has not complied with any obligation or satisfied any
condition which is required to be performed or satisfied on his or its part at
or prior to the Closing Date.
(j) The Company and the Selling Shareholders shall have
furnished or caused to have been furnished to you such further certificates
and documents as you shall be reasonably requested.
(k) At or prior to the Closing Date, you shall have received the
written commitment of each of the Company's directors, executive officers and
shareholders set forth on Schedule III hereto, not to offer, sell or
otherwise dispose of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for, or any rights to
purchase or acquire, Common Stock, during the period beginning on date on
which the Prospectus is first filed with the Commission pursuant to Rule
424(b) under the Act and ending 180 days thereafter, inclusive, without the
prior written consent of Xxxxxxx Xxxxx & Associates, Inc. (except in
accordance with the Securities Loan Agreements), which commitments shall be in
full force and effect as of the Closing Date (and the Additional Closing Date,
if any).
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if
the Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (j) shall be
dated in the Additional Closing Date and the opinions and letters referred to
in paragraphs (c) through (f) shall be revised to reflect the sale of
Additional Shares.
SECTION 10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall
become effective upon the later of (a) the execution and delivery hereof by
the parties hereto, or (b) release of notification of the effectiveness of
the Registration Statement by the Commission.
If any one or more of the Underwriters shall fail or refuse to
purchase Firm Shares which it or they have agreed to purchase hereunder, and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule I hereto bears
to the aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares which such
defaulting Underwriter or Underwriters agreed, but failed or refused to
purchase. If any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Firm Shares and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares are not made with 36 hours after such default,
this Agreement will terminate without liability on the part of any non-
defaulting Underwriter or the Company or any Selling Shareholder. In any
such case that does not result in termination of this Agreement, either you
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven (7) days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or any other documents
or arrangements
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29
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement.
SECTION 11. TERMINATION OF AGREEMENT. This Agreement shall be
subject to termination in your absolute discretion, without liability on the
part of any Underwriter to the Company, by notice to the Company, if prior to
the Closing Date or the Additional Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be,
(i) trading in securities generally on the New York Stock Exchange, American
Stock Exchange or The Nasdaq Stock Market shall have been suspended or
materially limited, (ii) trading of any securities of the Company, including
the Shares, on the New York Stock Exchange, American Stock Exchange or The
Nasdaq Stock Market shall have been suspended or materially limited,
whether as the result of a stop order by the Commission or otherwise, (iii) a
general moratorium on commercial banking activities in New York or Florida
shall have been declared by either federal or state authorities, (iv) there
shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in political,
financial or economic conditions or other material event the effect of which
on the financial markets of the United States is such as to make it, in your
judgment, impracticable or inadvisable to market the Shares or to enforce
contracts for the sale of the Shares, or (v) the Company or any
Subsidiary shall have, in the sole judgment of the Representatives,
sustained any loss or interference, material to the Company and the
Subsidiaries, taken as a whole, with their respective businesses or properties
from fire, flood, hurricane, accident, or other calamity, whether or not
covered by insurance, or from any labor disputes or any legal or
governmental proceeding, or there shall have been any material adverse
change (including, without limitation, a material change in management or
control of the Company) in the condition (financial or otherwise),
business prospects, net worth, or results of operations of the Company and
the Subsidiaries, taken as a whole, except in each case as described in, or
contemplated by, the Prospectus (excluding any amendment or supplement
thereto). Notice of such cancellation shall be promptly given to the Company
and its counsel by telegraph, telecopy or telephone and shall be subsequently
confirmed by letter.
SECTION 12. INFORMATION FURNISHED BY THE UNDERWRITERS. The
statements set forth under the caption "Underwriting" in any Prepricing
Prospectus and in the Prospectus, constitute all the information furnished
by or on behalf of the Underwriters through you or on your behalf as such
information is referred to in Sections 6(a), 6(b) and 8 hereof.
SECTION 13. NOTICES; SUCCESSORS AND ASSIGNS. Except as otherwise
provided herein, notice given pursuant to any of the provisions of this
Agreement shall be in writing and shall be delivered (i) if to the Company,
at the office of the Company at 000 Xxxxxx Xxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxxx,
00000, Attention: Xxxxxxx Xxxxxx, Esq. (with a copy to Greenberg, Traurig,
Hoffman, Lipoff, Xxxxx & Xxxxxxx, P.A. at 0000 Xxxxxxxx Xxxxxx, Xxxxx,
Xxxxxxx 00000; Attn: Xxxx Xxxxxxxxx, Esq.); or (ii) if to you, as the
Underwriters, to (A) Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx,
Xx. Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx; (B)
Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxx X. Xxxxxxx; and (C) Xxxxx, Xxxxxxxx & Xxxx, Inc.,
00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx
(with a copy to King & Spalding, 000 Xxxxxxxxx Xxxxxx XX, Xxxxxxx, Xxxxxxx
00000-0000, Attn: Xxxxxxx X. Xxxxx, Esq.); or (iii) if to one or more of the
Selling Shareholders, to Xxxx XxXxxxxx, at 000 Xxxxxx Xxxxx Xxxxxxx, Xxxx
Xxxxx, Xxxxxxx, 00000 (with a copy to Xxxxxxx Xxxxxx Xxxxx Xxxxxx & Xxxxxx,
P.A., Attn: Xxxxxxx Xxxxxx, Esq.).
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30
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers and the other
controlling persons referred to in Section 8 hereof, and the Selling
Shareholders, and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under
or by virtue of this Agreement. Neither of the terms "successor" and
"successors and assigns" as used in this Agreement shall include a purchaser
from you of any of the Shares in his status as such purchaser.
SECTION 14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Florida without reference to choice of law principles thereunder. This
Agreement may be signed in various counterparts which together shall
constitute one and the same instrument. This Agreement shall be effective
when, but only when, at least one counterpart hereof shall have been executed
on behalf of each party hereto.
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31
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
The Company: REXALL SUNDOWN, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
The Selling Shareholders: XXXX XxXXXXXX
-------------------------------------
XXXX XxXXXXXX
-------------------------------------
CONFIRMED as of the date first
above mentioned, on behalf of
itself and the other several
Underwriters named in Schedule I
hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXX, XXXXXXXX & XXXX, INC.
XXXXXXXXXX SECURITIES
By: XXXXXXX XXXXX & ASSOCIATES, INC.
By:
------------------------------
Authorized Representative
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32
SCHEDULE I
UNDERWRITERS
Number of
Name Firm Shares
---- -----------
Xxxxxxx Xxxxx & Associates Inc. . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxx, Xxxxxxxx & Xxxx, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxxxxxxx Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000
==========
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33
SCHEDULE II
SELLING SHAREHOLDERS
Number of
Number of Additional
Name Firm Shares Shares(1)
---- ----------- -------------
Xxxx XxXxxxxx 1,500,000 Up to 150,000
Xxxx XxXxxxxx 500,000 Up to 50,000
----------- -------------
TOTAL 2,000,000 Up to 200,000
=========== =============
-------------------
(1) See Section 2.
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34
SCHEDULE III
LOCK-UP AGREEMENTS
Names
-----
Xxxxxxxxx Xxxx
Xxxxx XxXxxxxx
Xxxxxxxx Palin
Xxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxx
CDD Partners, Ltd.
Xxxxxx XxXxxxxx
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