2,200,000 Shares
XXXXXX XXXXXX INTERNATIONAL INC.
Common Stock
UNDERWRITING AGREEMENT
December __, 1996
UBS Securities LLC
Xxxxxx Xxxx LLC
As Representatives of the Several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Xxxxxx Xxxxxx International Inc., a Delaware corporation (the
"Company"), proposes to issue and sell 1,800,000 shares of its authorized but
unissued Common Stock, $1.00 par value per share (the "Common Stock"), and the
stockholder of the Company listed on Schedule B hereto (the "Selling
Securityholder") proposes to sell an aggregate of 400,000 shares of Common Stock
(collectively, such 2,200,000 shares of Common Stock are hereinafter referred to
as the "Firm Shares") to the several underwriters listed on Schedule A to this
Agreement (collectively, the "Underwriters"). The Company also proposes to grant
to the Underwriters an option to purchase up to 330,000 additional shares (the
"Option Shares") of Common Stock on the terms and for the purposes set forth in
Section 3(c). The Firm Shares and the Option Shares are hereinafter collectively
referred to as the "Shares."
The Company and the Selling Securityholder severally wish to
confirm as follows their agreements with you (the "Representatives") and the
other Underwriters on whose behalf you are acting in connection with the several
purchases by the Underwriters of the Shares.
1. REGISTRATION STATEMENT. A registration statement
on Form S-2 (File No. 333-14227) including a prospectus
relating to the Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, has been filed
with the Commission and either (i) has been declared effective under the Act and
is not proposed to be amended or (ii) is proposed to be amended by amendment or
post-effective amendment. There have been delivered to you three signed copies
of such registration statement and each amendment thereto, together with three
copies of each exhibit filed therewith. Copies of such registration statement
and amendments (but without exhibits) and of the related preliminary prospectus
have been delivered to you in such reasonable quantities as you have requested
for each of the Underwriters. If such registration statement (the "initial
registration statement") has been declared effective, either (i) an additional
registration statement (the "additional registration statement") relating to the
Shares may have been filed with the Commission pursuant to Rule 462(b) ("Rule
462(b)") under the Act and, if so filed, has become effective upon filing
pursuant to such Rule and the Shares all have been duly registered under the Act
pursuant to the initial registration statement and, if applicable, the
additional registration statement or (ii) such an additional registration
statement is proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing pursuant to such Rule and upon such filing
the Shares will all have been duly registered under the Act pursuant to the
initial registration statement and such additional registration statement. If
the Company does not propose to amend the initial registration statement or if
an additional registration statement has been filed and the Company does not
propose to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the execution
and delivery of this Agreement, the most recent amendment (if any) to each such
registration statement has been declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the
Act or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and delivery of this
Agreement, the additional registration statement means (i) if the Company has
advised the Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or the
most recent post-effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c), or (ii)
if the Company has advised the Representatives that it proposes to file an
amendment or post-effective amendment to such registration statement, the date
and time as of which such registration statement, as
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amended by such amendment or post-effective amendment, as the case may be, is
declared effective by the Commission. If an additional registration statement
has not been filed prior to the execution and delivery of this Agreement but the
Company has advised the Representatives that it proposes to file one, "Effective
Time" with respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes effective
pursuant to Rule 462(b). "Effective Date" with respect to the initial
registration statement or the additional registration statement (if any) means
the date of the Effective Time thereof. The initial registration statement, as
amended at its Effective Time, including all material incorporated by reference
therein, including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial registration statement
as of the Effective Time of the additional registration statement pursuant to
the General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration statement
as of its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the
Act, is hereinafter referred to as the "Initial Registration Statement". The
additional registration statement, as amended at its Effective Time, including
the contents of the initial registration statement incorporated by reference
therein and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration Statement".
The Initial Registration Statement and the Additional Registration Statement are
hereinafter referred to collectively as the "Registration Statements" and
individually as a "Registration Statement". The form of prospectus relating to
the Shares, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, including all material
incorporated by reference in such prospectus, is hereinafter referred to as the
"Prospectus". The term "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in the preceding paragraph and any preliminary prospectus
included in the Registration Statement at the time it becomes effective that
omits Rule 430A Information. The term "Rule 430A Information" means information
with respect to the Shares and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule 430A of
the Rules and Regulations. The term "Offering Memorandum" as used in this
Agreement shall mean the Offering Memorandum consisting of the Prospectus and a
Canadian wrap-around used in connection with the offering of
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the Shares in Canada. No document has been or will be
prepared or distributed in reliance on Rule 434 under the
Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE SELLING SECURITYHOLDER.
(a) Each of the Company and the Selling
Securityholder hereby represents and warrants as follows:
(i) The Company has not received, and has no
notice of, any order of the Commission preventing or suspending the use of any
Preliminary Prospectus, or instituted proceedings for that purpose, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Rules and Regulations. If the
Effective Time of the Initial Registration Statement is prior to the execution
and delivery of this Agreement: (i) on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement conformed in all
respects to the requirements of the Act and the Rules and Regulations and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed, or will
conform, in all respects to the requirements of the Act and the Rules and
Regulations and did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (iii) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional Registration Statement is
prior to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in which the Prospectus
is included, each Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading. If
the Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement: on the Effective Date of the
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Initial Registration Statement, the Initial Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act and the
Rules and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading,
and no Additional Registration Statement has been or will be filed. The
foregoing representations and warranties in this section 2(a) do not apply to
any statements made in, or omissions from, a Registration Statement or the
Prospectus based upon written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information is that described as such
in Section 9(b). The Company has not distributed any offering material in
connection with the offering or sale of the Shares other than the Registration
Statement, the Preliminary Prospectus, the Prospectus, the Offering Memorandum
or any other materials, if any, permitted by the Act.
(ii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the Registration
Statement. The Company is duly qualified to do business as a foreign corporation
in good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to so qualify would not have a material adverse effect on the
business, properties, financial condition or results of operations or business
prospects of the Company and its Subsidiaries (as hereinafter defined) taken as
a whole (a "Material Adverse Effect"). The Company has no subsidiaries (as
defined in the Rules and Regulations) that are currently engaged in any business
activity other than the subsidiaries set forth on Schedule 2(a)(ii)(A)
(collectively, the "Subsidiaries"). The Company owns directly or indirectly 100%
of the outstanding capital stock of each of the Subsidiaries, other than Xxxxxx
Xxxxxx Botswana (Pty) Ltd., of which the Company owns 60% of the outstanding
common stock. Other than (i) the Subsidiaries, (ii) the subsidiaries of the
Company listed on Schedule 2(a)(ii)(B) hereto and as set forth on such Schedule
2(a)(ii)(B) and (iii) the other entities listed on Schedule 2(a)(ii)(C) hereto
and as set forth on such Schedule 2(a)(ii)(C), the Company does not own,
directly or indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in any firm,
partnership, joint venture,
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association or other entity. Complete and correct copies of the certificates of
incorporation and of the bylaws of the Company and the Subsidiaries and all
amendments thereto have been delivered to the Representatives, and except as set
forth in the exhibits to the Registration Statement no changes therein will be
made subsequent to the date hereof and prior to the Closing Date or, if later,
the Option Closing Date. No subsidiary of the Company listed on Schedule
2(a)(ii)(B) hereto currently conducts any business activity or has any
liabilities or assets (other than the initial cash capitalization of such
subsidiary). Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement. Each Subsidiary is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of the properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a Material Adverse Effect.
All of the outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and non-assessable and
(except as otherwise described in this Section 2(a)) are owned directly or
indirectly by the Company subject to no security interest, other encumbrance or
adverse claims. No options, warrants or other rights to purchase, agreements or
other obligation to issue or other rights to convert any obligation into shares
of capital stock or ownership interests in the Subsidiaries are outstanding.
(iii) The Company has full power and authority
(corporate and otherwise) to enter into this Agreement and to perform the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company. The performance of this Agreement by the
Company and the consummation by the Company of the transactions herein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any indenture, mortgage, deed
of trust, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to which
the Company or any Subsidiary is a party or by which its properties are bound,
or (ii) the certificate of incorporation or bylaws of the Company or any
Subsidiary or (iii) any law, order, rule, regulation, writ, injunction or decree
of any court or governmental agency or body to which the Company or any
Subsidiary is subject. The Company is
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not required to obtain or make (as the case may be) any consent, approval,
authorization, order, designation or filing by or with any court or regulatory,
administrative or other governmental agency or body as a requirement for the
consummation by the Company of the transactions herein contemplated, except such
as may be required under the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or under state securities or blue sky ("Blue Sky")
laws or under the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD"), or under applicable Canadian securities laws.
(iv) Except as disclosed in the Prospectus,
there is not pending or, to the Company's knowledge, threatened, any action,
suit, claim, proceeding or investigation against the Company or its Subsidiaries
or any of their respective officers or any of their respective properties,
assets or rights before any court or governmental agency or body or otherwise
which might result in a Material Adverse Effect, or prevent consummation of the
transactions contemplated hereby. There are no statutes, rules, regulations,
agreements, contracts, leases or documents that are required to be described in
the Prospectus, or to be filed as exhibits to the Registration Statement by the
Act or by the Rules and Regulations that have not been accurately described in
all material respects in the Prospectus or filed as exhibits to the Registration
Statement.
(v) All outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right. The authorized and outstanding
capital stock of the Company conforms in all material respects to the
description thereof contained in the Registration Statement, the Offering
Memorandum and the Prospectus (and such description correctly states the
substance of the provisions of the instruments defining the capital stock of the
Company).
(vi) The Shares to be sold by the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Company against payment
therefor in accordance with the terms of this Agreement, will be duly and
validly issued and fully paid and nonassessable. The Shares to be sold by the
Selling Securityholder are duly authorized, are duly and validly issued, fully
paid and nonassessable. The Shares conform to the description
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thereof in the Prospectus. Except as set forth in the Prospectus, no preemptive
right, co-sale right, right of first refusal or other similar rights of
securityholders exists with respect to any of the Shares or the issue and sale
thereof other than those that have been expressly waived prior to the date
hereof. No holder of securities of the Company has the right to cause the
Company to include such holder's securities in the Registration Statement. No
further approval or authorization of any security holder, the Board of Directors
or any duly appointed committee thereof or others is required for the issuance
and sale or transfer of the Shares, either by the Company or the Selling
Securityholder, except as may be required under the Act, the Exchange Act or
under state securities or Blue Sky laws. Except as disclosed in or contemplated
by the Prospectus, the Offering Memorandum and the financial statements of the
Company, and the related notes thereto, included in the Prospectus and the
Offering Memorandum, the Company does not have outstanding any options or
warrants to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. The description of the
Company's stock option and other plans or arrangements, and the options or other
rights granted and exercised thereunder, incorporated by reference in the
Prospectus and the Offering Memorandum accurately and fairly presents, in all
material respects, as of the date of such information, the information required
to be shown with respect to such plans, arrangements, options and rights.
(vii) The Shares to be sold by the Selling
Securityholder are listed on the American Stock Exchange, and prior to the
Closing Date the Shares to be issued and sold by the Company will be authorized
for listing by the American Stock Exchange upon official notice of issuance. 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 American Stock Exchange, nor has the Company
received any notification that the Commission or the American Stock Exchange is
contemplating terminating such registration or listing.
(viii) Ernst & Young LLP and Deloitte & Touche LLP (the
"Accountants"), each of whom has examined certain of the financial statements,
together with the related schedules and notes, of the Company filed with the
Commission as a part of the Registration Statement, which are included in the
Prospectus, are, or were at the time of
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such examination, respectively, independent public accountants within the
meaning of the Act and the Rules and Regulations. The financial statements of
the Company, together with the related schedules and notes, forming part of the
Registration Statement, the Offering Memorandum and the Prospectus, fairly
present the financial position and the results of operations of the Company at
the respective dates and for the respective periods to which they apply. All
financial statements, together with the related schedules and notes, filed with
the Commission as part of the Registration Statement have been prepared in
accordance with generally accepted accounting principles as in effect in the
United States consistently applied throughout the periods involved except as may
be otherwise stated in the Registration Statement. The selected and summary
financial and statistical data included in the Registration Statement present
fairly the information shown therein and have been compiled on a basis
consistent with the financial statements presented therein. No other financial
statements or schedules are required by the Act or the Rules and Regulations to
be included in the Registration Statement.
(ix) Subsequent to the respective dates as of
which information is given in the Registration Statement, the Offering
Memorandum and the Prospectus, there has not been (i) any material adverse
change, or any development which is likely to cause a material adverse change,
in the business, properties or assets described or referred to in the
Registration Statement, or the results of operations, financial condition,
business or operations of the Company and its Subsidiaries taken as a whole,
(ii) any transaction which is material to the Company or its Subsidiaries,
except transactions in the ordinary course of business, (iii) any obligation,
direct or contingent, which is material to the Company and its Subsidiaries
taken as a whole, incurred by the Company or its Subsidiaries, except
obligations incurred in the ordinary course of business, (iv) any change in the
capital stock (other than shares of Common Stock issued pursuant to stock
options issued pursuant to stock option plans that the Prospectus indicates are
outstanding) or outstanding indebtedness of the Company or its Subsidiaries or
(v) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company. Neither the Company nor its Subsidiaries has any
material contingent obligation which is not disclosed in the Registration
Statement.
(x) Except as set forth in the Prospectus
and the Offering Memorandum, (i) the Company and each Subsidiary have good and
marketable title to all material properties and assets described in the
Prospectus and the
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Offering Memorandum as owned by them, free and clear of any pledge, lien,
security interest, charge, encumbrance, claim, equitable interest, or
restriction that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them or that would have a
Material Adverse Effect, (ii) the agreements to which the Company or any
Subsidiary is a party described in the Prospectus and the Offering Memorandum
are valid agreements, enforceable against the Company or such Subsidiary in
accordance with their terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles, and, to the Company's knowledge, the other contracting party or
parties thereto are not in material breach or default under any of such
agreements and (iii) the Company and each Subsidiary have valid and enforceable
leases for the properties described in the Prospectus and the Offering
Memorandum as leased by it, and such leases conform in all material respects to
the description thereof, if any, set forth in the Registration Statement.
(xi) The Company and each Subsidiary now hold
and at the Closing Date and any later Option Closing Date, as the case may be,
will hold, all licenses, certificates, approvals and permits from all state,
United States, foreign and other regulatory authorities that are material to the
conduct of the business of the Company (as such business is currently
conducted), except for such licenses, certificates, approvals and permits the
failure of which to hold would not have a Material Adverse Effect), all of which
are valid and in full force and effect (and there is no proceeding pending or,
to the knowledge of the Company, threatened which may cause any such license,
certificate, approval or permit to be withdrawn, cancelled, suspended or not
renewed). Neither the Company nor any Subsidiary is in violation of its
certificate of incorporation or bylaws, or, except for defaults or violations
which would not have a Material Adverse Effect, in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
bond, debenture, note or other evidence of indebtedness or in any contract,
indenture, mortgage, loan agreement, joint venture or other agreement or
instrument to which it is a party or by which it or any of its properties are
bound, or in violation of any law, order, rule, regulation, writ, injunction or
decree of any court or governmental agency or body. All of the descriptions in
the Registration Statement and Prospectus of the legal and governmental
proceedings by or before any foreign, state or local government body exercising
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comparable authority are true, complete and accurate in all
material respects.
(xii) The Company and each Subsidiary have
filed on a timely basis all necessary federal, state and foreign income,
franchise and other tax returns and has paid all taxes shown thereon as due, and
the Company has no knowledge of any tax deficiency which has been or might be
asserted against the Company or any Subsidiary which might have a Material
Adverse Effect. All material tax liabilities are adequately provided for within
the financial statements of the Company.
(xiii) The Company and its Subsidiaries maintain insurance
of the types and in the amounts adequate for their business and consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering product liability and real and
personal property owned or leased against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(xiv) Neither the Company nor its Subsidiaries
are involved in any labor dispute or disturbance nor, to the knowledge of the
Company, is any such dispute or disturbance threatened.
(xv) Except as described in the Prospectus
and the Offering Memorandum, the Company and each Subsidiary own or possess
adequate licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service xxxx applications,
trade names, copyrights, manufacturing processes, formulae, trade secrets,
know-how, franchises, and other material intangible property and assets
(collectively, "Intellectual Property") necessary to the conduct of their
businesses as conducted and as proposed to be conducted as described in the
Prospectus and the Offering Memorandum. The Company has no knowledge of any
facts which would preclude it from having rights to its patent applications
referenced in the Prospectus and the Offering Memorandum. The Company has no
knowledge that it or any Subsidiary lacks or will be unable to obtain any rights
or licenses to use any of the Intellectual Property necessary to conduct the
business now conducted or proposed to be conducted by it as described in the
Prospectus and the Offering Memorandum, except as described in the Prospectus
and the Offering Memorandum. The Prospectus and the Offering Memorandum fairly
and accurately describe the Company's rights with respect to the Intellectual
Property. The Company has not received any
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notice of infringement or of conflict with rights or claims of others with
respect to any Intellectual Property. The Company is not aware of any patents of
others which are infringed upon by potential products or processes referred to
in the Prospectus and the Offering Memorandum in such a manner as to materially
and adversely affect the Company and its Subsidiaries taken as a whole, except
as described in the Prospectus and the Offering Memorandum.
(xvi) Neither the Company nor any of its
Subsidiaries has incurred any liability for a fee, commission, or other
compensation on account of the employment of a broker or finder in connection
with the transactions contemplated by this Agreement other than the underwriting
discounts and commissions contemplated hereby.
(xvii) Except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance that
is subject to any environmental laws (to the knowledge of the Company after
reasonable investigation), is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation which might lead to such a claim.
(xviii) Neither the Company nor any of its Subsidiaries has
at any time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any foreign, United States or
state governmental officer or official, or other person charged with similar
public of quasi-public duties, other than payments required or permitted by the
laws of the United States.
(xix) The Company has timely and properly
filed with the Commission all reports and other documents required to have been
filed by it with the Commission pursuant to the Act and the Rules and
Regulations. True and complete copies of all such reports and other documents
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filed with the Commission since January 1, 1993 have been delivered to you.
(xx) Neither the Company nor any of its
affiliates has any asset located in Cuba. In addition, neither the Company nor
any of its affiliates does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes, and the Company agrees to comply with such Section if prior to
the completion of the distribution of the Shares it commences doing such
business.
(b) The Selling Securityholder hereby represents
and warrants as follows:
(i) The Selling Securityholder has good and
marketable title to all of the Shares to be sold by the Selling Securityholder
hereunder, free and clear of all liens, encumbrances, equities, security
interests and claims whatsoever, with full right and authority to deliver the
same hereunder, and that upon the delivery of and payment for such Shares
hereunder, the several Underwriters will receive good and marketable title
thereto, free and clear of all liens, encumbrances, equities, security interests
and claims whatsoever.
(ii) The Selling Securityholder specifically
agrees that the Shares represented by the certificates held by the Selling
Securityholder are subject to the interests of the several Underwriters and the
Company, and that the obligations of the Selling Securityholder shall not be
terminated by any act of the Selling Securityholder or by operation of law,
whether by the death or incapacity of the Selling Securityholder or the
occurrence of any other event; if any such death, incapacity, dissolution,
liquidation or other such event should occur before the delivery of such Shares
hereunder, certificates for such Shares shall be delivered by the Selling
Securityholder or his estate in accordance with the terms and conditions of this
Agreement as if such death, incapacity, dissolution, liquidation or other event
had not occurred.
(iii) The Selling Securityholder has reviewed
the Registration Statement and Prospectus and, although the Selling
Securityholder has not independently verified the accuracy or completeness of
all the information contained therein, nothing has come to the attention of the
Selling Securityholder that would lead the Selling Securityholder to believe
that (i) on the Effective Date, the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated
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therein or necessary in order to make the statements therein not misleading or
(ii) on the Effective Date the Prospectus contained and, on the Closing Date and
any later date on which Option Shares are to be purchased, contains any untrue
statement of a material fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell the Firm Shares to the several Underwriters, the Selling
Securityholder agrees to sell to the several Underwriters the number of Firm
Shares set forth in Schedule B opposite the name of the Selling Securityholder,
and each of the Underwriters agrees to purchase from the Company and the Selling
Securityholder the respective aggregate number of Firm Shares set forth opposite
its name on Schedule A, plus such additional number of Firm Shares which such
Underwriter may become obligated to purchase pursuant to Section 3(b) hereof.
The price at which such Firm Shares shall be sold by the Company and purchased
by the several Underwriters shall be $_____ per share. The price at which such
Firm Shares shall be sold by the Selling Securityholder and purchased by the
several Underwriters shall be $_____ per share. The obligation of each
Underwriter to the Company and the Selling Securityholder shall be to purchase
from the Company and the Selling Securityholder that number of the Firm Shares
which represents the same proportion of the total number of the Firm Shares to
be sold by each of the Company and the Selling Securityholder pursuant to this
Agreement as the number of the Firm Shares set forth opposite the name of such
Underwriter in Schedule A hereto represents of the total number of the Firm
Shares to be purchased by all Underwriters pursuant to this Agreement, as
adjusted by you in such manner as you deem advisable to avoid fractional shares.
In making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraphs (b) and (c) of this Section 3, the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares specified on Schedule A.
(b) If for any reason one or more of the Underwriters shall
fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 10 hereof) to
purchase and pay for the number of Firm Shares or Option Shares agreed to be
purchased by such Underwriter or
-14-
Underwriters, the Company or the Selling Securityholder shall immediately give
notice thereof to you and the non-defaulting Underwriters shall have the right
within 24 hours after such default to purchase, or procure one or more other
Underwriters or substitute Underwriters to purchase, in such proportions as may
be agreed upon between you and such purchasing Underwriter or Underwriters or
substitute Underwriters and upon the terms herein set forth, all or any part of
the Firm Shares or Option Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such Firm
Shares or Option Shares, as the case may be, the number of Firm Shares or Option
Shares, as the case may be, which each non-defaulting Underwriter is otherwise
obligated to purchase under this Agreement shall be automatically increased on a
pro rata basis (as adjusted by you in such manner as you deem advisable to avoid
fractional shares) to absorb the remaining Firm Shares or Option Shares, as the
case may be, which the defaulting Underwriter or Underwriters agreed to
purchase; provided, however, that the non-defaulting Underwriters shall not be
obligated to purchase the Firm Shares or Option Shares, as the case may be,
which the defaulting Underwriter or Underwriters agreed to purchase if the
aggregate number of such Firm Shares or Option Shares, as the case may be,
exceeds 10% of the total number of Firm Shares or Option Shares, as the case may
be, which all Underwriters agreed to purchase hereunder. If the total number of
Firm Shares or Option Shares, as the case may be, which the defaulting
Underwriter or Underwriters agreed to purchase shall not be purchased or
absorbed in accordance with the two preceding sentences, the Company and the
Selling Securityholder shall have the right, within 24 hours next succeeding the
24-hour period referred to above, to make arrangements with other underwriters
or purchasers reasonably satisfactory to you for purchase of such Firm Shares or
Option Shares, as the case may be, on the terms herein set forth. In any such
case, either you or the Company and the Selling Securityholder shall have the
right to postpone the Closing Date determined as provided in Section 5 hereof
for not more than seven business days after the date originally fixed as the
Closing Date pursuant to said Section 5 in order that any necessary changes in
the Registration Statement, the Offering Memorandum, the Prospectus or any other
documents or arrangements may be made. If the aggregate number of Firm Shares or
Option Shares, as the case may be, which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Firm Shares
or Option Shares, as the case may be, which all Underwriters agreed to purchase
hereunder, and (i) if neither the non-defaulting Underwriters nor the Company
-15-
and the Selling Securityholder shall make arrangements within the 24-hour
periods stated above for the purchase of all the Firm Shares which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall be terminated without further act or deed and without any
liability on the part of the Company or the Selling Securityholder to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company or the Selling Securityholder and (ii)
if, in connection with the election by the Underwriters to purchase Option
Shares in accordance with the terms of this Agreement, neither the
non-defaulting Underwriters nor the Company and the Selling Securityholder shall
make arrangements within the 24-hour periods stated above for the purchase of
all the Option Shares for which such election has been made, the provisions of
Section 3(c) and 5(b) of this Agreement shall terminate with respect to such
Option Shares but this Agreement shall otherwise remain in full force and
effect. Nothing in this paragraph (b), and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the several Underwriters to purchase all
or any portion of the Option Shares from the Company at the same price per share
as the Underwriters shall pay for the Firm Shares purchased from the Company.
Said option may be exercised only to cover over-allotments in the sale of the
Firm Shares by the Underwriters and may be exercised in whole or in part at any
time (but not more than once) on or before the 30th day after the date of this
Agreement upon written notice (including notice by telecopy if confirmed in
writing delivered by hand or courier no later than 5:00 p.m. on the business day
next following the date of such delivery by telecopy) by you to the Company
setting forth the aggregate number of the Option Shares as to which the several
Underwriters are exercising the option. Delivery of certificates for the Option
Shares, and payment therefor, shall be made as provided in Section 5 hereof.
Each Underwriter will purchase such percentage of the Option Shares as is equal
to the percentage of Firm Shares that such Underwriter is purchasing, the exact
number of shares to be adjusted by you in such manner as you deem advisable to
avoid fractional shares.
-16-
4. OFFERING BY UNDERWRITERS.
The terms of the public offering of the Shares in the United
States by the Underwriters shall be as set forth in the Prospectus. The terms of
the private placement of the Shares in Canada by the Underwriters shall be as
set forth in the Offering Memorandum. The Underwriters may from time to time
change the public offering and private placement prices after the closing of the
public offering and the private placement, respectively, and increase or
decrease the concessions and discounts to dealers as they may determine.
5. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) Delivery of certificates for the Firm Shares and the
Option Shares (if the option granted pursuant to Section 3(c) hereof shall have
been exercised not later than 1:00 p.m., New York time, on the date at least two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
at 9:00 a.m., New York City time, on the [FOURTH] business day after the date of
this Agreement, or at such time on such other day, not later than seven full
business days after such [FOURTH] business day, as shall be agreed upon in
writing by the Company, the Selling Securityholder and you (the "Closing Date").
For purposes of Rule 15c6-1 under the Exchange Act, the Closing Date (if later
than the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Shares sold pursuant to
the offering.
(b) If the option granted pursuant to Section 3(c) hereof
shall be exercised after 1:00 p.m., New York City time, on the date two business
days preceding the Closing Date, and on or before the 30th day after the date of
this Agreement, delivery of certificates for the Option Shares, and payment
therefor, shall be made at the office of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 9:00 a.m., New York City time, on the third business
day after the exercise of such option.
(c) Payment for the Shares purchased from the Company shall be
made to the Company or its order and payment for the Shares purchased from the
Selling Securityholder shall be made to the Selling Securityholder, in each case
by one or more certified or official bank check or checks or wire transfers in
same day funds. Such payment shall be made upon delivery of certificates for the
Shares to you for the respective accounts of the several
-17-
Underwriters against receipt therefor signed by you. Certificates for the Shares
to be delivered to you shall be registered in such name or names and shall be in
such denominations as you may request at least three business days before the
Closing Date, in the case of Firm Shares, and at least two business days prior
to the Option Closing Date, in the case of the Option Shares. Such certificates
will be made available to the Underwriters for inspection, checking and
packaging at a location in New York, New York, designated by the Underwriters
not less than one full business day prior to the Closing Date or, in the case of
the Option Shares, by 3:00 p.m., New York time, on the business day preceding
the Option Closing Date.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholder for shares to be purchased by any Underwriter
whose check shall not have been received by you on the Closing Date or any later
Option Closing Date. Any such payment by you shall not relieve such Underwriter
from any of its obligations hereunder.
(d) As compensation for the Underwriters' commitments, the
Selling Securityholder will pay to the Representatives for the Underwriters'
proportionate accounts the sum of $__________ per share times the total number
of Firm Shares purchased by the Underwriters from the Selling Stockholder on the
Closing Date. Such payment will be made on the Closing Date by certified or
official bank check or wire transfer in same day funds.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING
SECURITYHOLDER. Each of the Company and the Selling
Securityholder respectively covenants and agrees as follows:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by UBS Securities LLC
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the second
business day following the execution and delivery of this Agreement or (B) the
fifteenth business day after the Effective Date of the Initial Registration
Statement. The Company will advise UBS Securities LLC promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this Agreement
and an additional registration statement is necessary to register a portion of
the Shares
-18-
under the Act but the Effective Time thereof has not occurred as of such
execution and delivery, the Company will file the additional registration
statement or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or, if earlier, on or prior
to the time the Prospectus is printed and distributed to any Underwriter, or
will make such filing at such later date as shall have been consented to by UBS
Securities LLC. The Company will advise UBS Securities LLC promptly of any
proposal to amend or supplement the initial or any additional registration
statement as filed or the related prospectus or the Initial Registration
Statement, the Additional Registration Statement (if any) or the Prospectus and
will not effect such amendment or supplementation without UBS Securities LLC's
consent; and the Company will also advise UBS Securities LLC promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any amendment
or supplementation of a Registration Statement or the Prospectus. The Company
will notify UBS Securities LLC promptly of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information. Promptly upon the request of UBS Securities LLC, the
Company will prepare and file with the Commission any amendments or supplements
to the Registration Statement or Prospectus which, in the reasonable opinion of
the Representatives, may be necessary or advisable in connection with the
distribution of the Shares by the Underwriters. The Company will promptly
prepare and file with the Commission, and promptly notify UBS Securities LLC of
the filing of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions, if, at
any time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which the Prospectus
or any other prospectus relating to the Shares as then in effect would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. In case any Underwriter is required to
deliver a prospectus within the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the Company will
prepare promptly upon request, but at the expense of such Underwriter, such
amendment or amendments to the Registration Statement and such prospectus or
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act. The Company
-19-
will file no amendment or supplement to the Registration Statement or Prospectus
that shall not previously have been submitted to UBS Securities a reasonable
time prior to the proposed filing thereof or to which the Representatives shall
reasonably object in writing or which is not in compliance with the Act and
Rules and Regulations or the provisions of this Agreement.
(b) The Company will advise the Representatives, promptly
after it shall receive notice or obtain knowledge thereof of the issuance of any
stop order by the Commission suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the initiation or threat of any
proceeding for that purpose; and the Company and the Selling Securityholder will
promptly use their best efforts to prevent the issuance of any such stop order
or to obtain its withdrawal at the earliest possible moment if such stop order
should be issued.
(c) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for offering and sale under the securities
laws of such jurisdictions as the Representatives may designate and to continue
such qualifications in effect for so long as may be required for purposes of the
distribution of the Shares, except that the Company shall not be required in
connection therewith or as a condition thereof to qualify as a foreign
corporation, or to execute a general consent to service of process in any
jurisdiction, or to make any undertaking with respect to the conduct of its
business. In each jurisdiction in which the Shares shall have been qualified,
the Company will make and file such statements, reports and other documents in
each year as are or may be reasonably required by the laws of such jurisdictions
so as to continue such qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the Shares, or as
otherwise may be required by law.
(d) The Company will furnish to the Representatives, as soon
as available, copies of the Registration Statement (three of which will be
signed and which will include all exhibits), each Preliminary Prospectus, the
Prospectus, the Offering Memorandum and any amendments or supplements to such
documents, including any prospectus prepared to permit compliance with Section
10(a)(3) of the Act, all in such quantities as the Representatives may from time
to time reasonably request.
(e) The Company will make generally available to
its stockholders as soon as practicable, but in any event
not later than the 45th day following the end of the fiscal
-20-
quarter first occurring after the first anniversary of the effective date of the
Registration Statement, an earnings statement (which will be in reasonable
detail but need not be audited) complying with the provisions of Section 11(a)
of the Act and Rule 158 of the Rules and Regulations and covering a twelve-month
period beginning after the effective date of the Registration Statement, and
will advise the Representatives in writing when such statement has been made
available.
(f) During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a copy
of its annual report to stockholders for such year; and the Company will furnish
to the Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Securities Exchange Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other "non-confidential" information concerning the Company as UBS
Securities LLC may reasonably request.
(g) Prior to or simultaneously with the execution and delivery
of this Agreement, the Company will obtain agreement from each beneficial owner
of the Company's Common Stock listed on Schedule C to this Agreement providing
that such person will not, for a period of 180 days after the date of the
Prospectus, without the prior written consent of UBS Securities LLC, directly or
indirectly, offer to sell, sell, contract to sell, grant any option to purchase,
or otherwise dispose of, any shares of Common Stock beneficially owned as of the
date such lockup agreement is executed (including, without limitation, shares of
Common Stock which may be deemed to be beneficially owned in accordance with the
Rules and Regulations and shares of Common Stock which may be issued upon
exercise of a stock option or warrant) or any securities convertible into or
exercisable or exchangeable for such Common Stock except, (a) by operation of
law, (b) pursuant to a bona fide gift to any person or other entity which agrees
in writing to be bound by this restriction or (c) pursuant to a pledge of Common
Stock to secure a bona fide loan to such beneficial owner. Each such person or
entity shall also agree and consent to the entry of stop transfer instructions
with the Company's transfer agent against the transfer of shares of Common Stock
held by such person or entity, except in compliance with the foregoing
restriction.
(h) The Company shall not, during the 180 days
following the effective date of the Registration Statement,
-21-
except with your prior written consent as Representatives, file a registration
statement covering any of its shares of capital stock, except that one or more
registration statements on Form S-8 may be filed at any time following the
effective date of the Registration Statement.
(i) The Company shall not, during the 180 days following the
effective date of the Registration Statement, except with your prior written
consent as Representatives, issue, sell, offer or agree to sell, grant,
distribute or otherwise dispose of, directly or indirectly, any shares of Common
Stock, or any options, rights or warrants with respect to shares of Common
Stock, or any securities convertible into or exchangeable for Common Stock,
other than (i) the sale of Shares hereunder, (ii) the grant of options or the
issuance of shares of Common Stock under the Company's stock option plans or
stock purchase plan, as the case may be, existing on the date hereof, and (iii)
the issuance of shares of Common Stock upon exercise of the currently
outstanding options or warrants described in the Registration Statement.
(j) The Company will apply the net proceeds from the sale of
the Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(k) The Company will use its best efforts to maintain listing
of its shares of Common Stock on the American Stock Exchange for a period of
five years after the Closing Date; provided, that the Company may, at its
election, terminate the listing of its shares of Common Stock on the American
Stock Exchange if, prior to any such termination, its shares of Common Stock are
approved for listing on The New York Stock Exchange, Inc.
7. EXPENSES.
The Company and the Selling Securityholder agree with each Underwriter
that:
(a) The Company and the Selling Securityholder will pay and
bear all costs, fees and expenses (other than, except as specified herein, fees
of counsel to the Underwriters) in connection with the preparation, printing and
filing of the Registration Statement (including financial statements, schedules
and exhibits), the Offering Memorandum (including fees relating to the filing of
reports in Canada) Preliminary Prospectuses and the Prospectus and any
amendments or supplements thereto; the reproduction of this Agreement, the
Agreement Among Underwriters, the Selected Dealer Agreement, the Blue Sky
Memorandum and any
-22-
instruments related to any of the foregoing; the issuance and delivery of the
Shares hereunder to the several Underwriters, including transfer taxes, if any;
the cost of all stock certificates representing the Shares and Transfer Agents'
and Registrars' fees; the fees and disbursements of counsel for the Company; all
fees and other charges of the Company's independent public accountants; the cost
of furnishing to the several Underwriters copies of the Registration Statement
(including appropriate exhibits), the Offering Memorandum, Preliminary
Prospectuses and the Prospectus, and any amendments or supplements to any of the
foregoing; NASD filing fees and expenses incident to securing any required
review and the cost of qualifying the Shares under the laws of such
jurisdictions within the United States as you may designate (including filing
fees and fees and disbursements of legal counsel to the Underwriters in
connection with such NASD filings and Blue Sky qualifications); listing
application fees of the American Stock Exchange; and all other expenses directly
incurred by the Company or the Selling Securityholder in connection with the
performance of their obligations hereunder. The Selling Securityholder will pay
any transfer taxes incident to the transfer to the Underwriters of the Shares
being sold by the Selling Securityholder.
(b) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company or the Selling Securityholder to perform any agreement on either of
their part to be performed hereunder or to fulfill any condition of the
Underwriters' obligations hereunder, the Company or the Selling Securityholder
will, in addition to paying the expenses described in clause (a) above,
reimburse the several Underwriters for all actual out-of-pocket expenses
(including reasonable fees and disbursements of legal counsel to the
Underwriters) incurred by the Underwriters in reviewing the Registration
Statement and the Prospectus and in preparing the Offering Memorandum in
otherwise investigating, preparing to market or marketing the Shares. Neither
the Company nor the Selling Securityholder will in any event be liable to any of
the several Underwriters for any loss of anticipated profits from the sale by
them of the Shares.
(c) The provisions of paragraphs (a) and (b) of this Section
are intended to relieve the Underwriters from the payment of the expenses and
costs which the Company and the Selling Securityholder hereby agree to pay and
shall not affect any agreement which the Company and the Selling Securityholder
make, or may have made, for the sharing of any such expenses and costs.
-23-
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the several Underwriters to purchase and pay for the
Shares, as provided herein, shall be subject to the accuracy, as of the date
hereof and the Closing Date and any later Option Closing Date, as the case may
be, of the representations and warranties of the Company and the Selling
Securityholder herein, to the performance by the Company and the Selling
Securityholder of their obligations hereunder and to the following additional
conditions:
(a) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York time, on
the date of this Agreement or such later date as shall have been consented to by
UBS Securities LLC. If the Effective Time of the Additional Registration
Statement (if any) is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus is
printed and distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by UBS Securities LLC. If the Effective
Time of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 6(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated or, to the knowledge of the Company, the Selling Securityholder
or any Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Underwriters.
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement, the Offering
Memorandum and the Prospectus, and the registration, authorization, issue, sale
and delivery of the Shares shall have been reasonably satisfactory to the
Representatives, and the Representatives shall have been furnished with such
papers and information as they may reasonably have requested to enable them to
pass upon the matters referred to in this subsection.
(c) You shall have received, at no cost to you,
on the Closing Date and on any later Option Closing Date, as
-24-
the case may be, the opinion of Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP,
counsel to the Company and the Selling Securityholder, dated the Closing Date or
such later Option Closing Date, in the form attached hereto on Appendix A,
addressed to the Underwriters and with reproduced copies of signed counterparts
thereof for each of the Representatives.
(d) You shall have received from Xxxxxxxx & Xxxxxxxx, legal
counsel to the Underwriters, an opinion and letter, dated the Closing Date or on
any later Option Closing Date, as the case may be, in form and substance
reasonably satisfactory to you, with respect to the sufficiency of all corporate
proceedings undertaken by the Company and other legal matters relating to this
Agreement and the transactions contemplated hereby as you may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may have reasonably requested for the purpose of enabling them to pass upon
such matters.
(e) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this Agreement,
shall be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and delivery
of this Agreement, shall be prior to the filing of the amendment or
post-effective amendment to the registration statement to be filed shortly prior
to such Effective Time), of Ernst & Young LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included in the Registration
Statements comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;
-25-
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements
included in the Registration Statements do not comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) the unaudited consolidated net sales,
net operating income, net income and net income per
share amounts for the three month periods ended
August 31, 1996 and August 31, 1995 included in the
Prospectus do not agree with the amounts set forth in
the unaudited consolidated financial statements for
those same periods or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the audited statements of
income;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or,
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated net assets, as compared with amounts
shown on the latest balance sheet included in the
Prospectus; or
(D) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as
-26-
compared with the corresponding period of the
previous year and with the period of corresponding
length ended the date of the latest income statement
included in the Prospectus, in consolidated net
sales, or net operating income, or in the total or
per share amounts of consolidated net income;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "Registration Statements"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "Prospectus" shall mean the prospectus
included in the Registration Statements. All financial statements and
schedules included in material
-27-
incorporated by reference into the Prospectus shall be deemed included
in the Registration Statements for purposes of this subsection.
[Additional clauses will be added for other data included in
the Registration Statements, including the pro forma computations of
earnings per share and the adjusted balance sheet information or
earnings statements and for the financial statements from which the
capsule information is derived.].
(f) You shall have received on the Closing Date and on any
later Option Closing Date, as the case may be, a certificate of the President
and the Chief Financial Officer of the Company, dated the Closing Date or such
later date, to the effect that as of such date (and you shall be satisfied that
as of such date):
(i) The representations and warranties of the Company
in this Agreement are true and correct, as if made on and as of the Closing
Date or any later Option Closing Date, as the case may be; and the Company has
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied under this Agreement at or prior to the
Closing Date or any later Option Closing Date, as the case may be;
(ii) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Prospectus has been issued,
and no proceedings for that purpose have been instituted or are pending or, to
the best of their knowledge, threatened under the Act;
(iii) The Additional Registration Statement (if any)
satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was
filed pursuant to Rule 462(b), including payment of the applicable filing fee
in accordance with Rule 111(a) or (b) under the Act, prior to the time the
Prospectus was printed and distributed to any Underwriter;
(iv) They have carefully reviewed the Registration
Statement, the Offering Memorandum and the Prospectus; and, when the
Registration Statement became effective and at all times subsequent thereto
up to the delivery of such certificate, the Registration Statement and the
Prospectus and any amendments or supplements thereto contained all statements
and information required to be included therein or necessary to make the
statements therein not misleading; and when the Registration Statement became
-28-
effective, and at all times subsequent thereto up to the delivery of such
certificate, none of the Registration Statement, the Prospectus or the Offering
Memorandum or any amendment or supplement thereto included any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and, since
the effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented Prospectus or Offering
Memorandum that has not been so set forth; and
(v) Subsequent to the respective dates as of
which information is given in the Registration Statement, the Offering
Memorandum and the Prospectus, there has not been (A) any material adverse
change in the properties or assets described or referred to in the Registration
Statement, the Offering Memorandum and the Prospectus or in the condition
(financial or otherwise), operations, business or prospects of the Company and
its Subsidiaries, (B) any transaction which is material to the Company and its
Subsidiaries, except transactions entered into in the ordinary course of
business, (C) any obligation, direct or contingent, incurred by the Company or
its Subsidiaries, which is material to the Company and its Subsidiaries taken as
a whole, (D) any change in the capital stock or outstanding indebtedness of the
Company or its Subsidiaries which is material to the Company and its
Subsidiaries taken as a whole or (E) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company.
(g) The Company and the Selling Securityholder shall have
furnished to you such further certificates and documents as you shall reasonably
request as to the accuracy of the representations and warranties of the Company
and the Selling Securityholder herein, as to the performance by the Company and
the Selling Securityholder of their obligations hereunder and as to the other
conditions concurrent and precedent to the obligations of the Underwriters
hereunder.
(h) The Firm Shares and the Option Shares, if any, shall have
been approved for listing upon notice of issuance on the American Stock
Exchange.
(i) The Representatives shall have received a letter, dated
such Closing Date, of Ernst & Young LLC which meets the requirements of
subsection (e) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
-29-
All such opinions, certificates, letters and documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory to the Representatives. The Company or the Selling Securityholder,
as the case may be, will furnish you with such number of conformed copies of
such opinions, certificates, letters and documents as you shall reasonably
request.
In case any of the conditions specified in this Section 8
shall not be fulfilled, this Agreement may be terminated by you by giving notice
to the Company and to the Selling Securityholder. Any such termination shall,
except as provided in Section 7(b), be without liability of the Company or the
Selling Securityholder to the Underwriters and without liability of the
Underwriters to the Company or the Selling Securityholder; provided, however,
that in the event of such termination, the Company and the Selling
Securityholder agree, jointly and severally, to indemnify and hold harmless the
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Securityholder under this Agreement.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Selling Securityholder jointly and
severally agree to indemnify and hold harmless each Underwriter and each person
(including each partner or officer thereof) who controls any Underwriter within
the meaning of Section 15 of the Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which such indemnified
parties or any of them may become subject under the Act, the Exchange Act, or
the common law or otherwise, and the Company and the Selling Securityholder
jointly and severally agree to reimburse each such Underwriter and controlling
person for any legal or other actual out-of-pocket expenses (including, except
as otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any post-effective amendment
thereto or in the Offering Memorandum, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (ii) any untrue statement or alleged
untrue statement of a
-30-
material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or in the Offering Memorandum or
the omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that (1) the indemnity
agreements of the Company and the Selling Securityholder contained in this
paragraph (a) shall not apply to any such losses, claims, damages, liabilities
or expenses that arise out of or are based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of such documents
in reliance upon and in conformity with written information furnished to the
Company by an Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in subsection
(b) below and (2) the indemnity agreement contained in this paragraph (a) with
respect to any Preliminary Prospectus or Offering Memorandum shall not inure to
the benefit of any Underwriter from whom the person asserting any such losses,
claims, damages, liabilities or expenses purchased the Shares which is the
subject thereof (or to the benefit of any person controlling such Underwriter)
if at or prior to the written confirmation of the sale of such Shares a copy of
the Prospectus (or the Prospectus as amended or supplemented or, in the case of
purchasers resident in Ontario, Canada, the revised Offering Memorandum) was not
sent or delivered to such person and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented or, in the case of
purchasers resident in Ontario, Canada, the revised Offering Memorandum) unless
the failure is the result of noncompliance by the Company with paragraph (a) of
Section 6 hereof. The indemnity agreements of the Company and the Selling
Securityholder contained in this paragraph (a) and the representations and
warranties of the Company and the Selling Securityholder contained in Section 2
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of any payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its executive officers, each of its directors, and
each person (including each partner or officer thereof) who controls the Company
within the meaning of Section 15 of the Act, and the Selling Securityholder from
and against any and all losses,
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claims, damages or liabilities, joint or several, to which such indemnified
parties or any of them may become subject under the Act, the Exchange Act, or
the common law or otherwise and to reimburse each of them for any legal or other
actual out-of-pocket expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof) or any
post-effective amendment thereto or in the Offering Memorandum or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or in the Offering Memorandum or the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other actual out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by the indemnified parties in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the following information in the Prospectus and the Offering Memorandum
furnished on behalf of each Underwriter: the last paragraph at the bottom of the
cover page of the Prospectus concerning the terms of the offering by the
Underwriters, the legend concerning over-allotments and stabilizing on the
inside front cover page of the Prospectus, the concession and reallowance
figures appearing in the third paragraph under the caption "Underwriting" in the
Prospectus and the information appearing under the caption "Representation by
Purchasers" in the Offering Memorandum. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect
-32-
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the delivery of and payment for the Shares.
(c) Each party indemnified under the provision of paragraphs
(a) and (b) of this Section 9 agrees that, upon the service of a summons or
other initial legal process upon it in any action or suit instituted against it
or upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against it, in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (a "Notice") of such service or
notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be available
to any party who shall fail so to give the Notice if the party to whom such
Notice was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which the Notice would have related and was prejudiced by the
failure to give the Notice, but the omission so to notify such indemnifying
party or parties of any such service or notification shall not relieve such
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of such
indemnity agreement. Any indemnifying party shall be entitled at its own expense
to participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified party. Any indemnifying party shall
be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (the "Notice of Defense") to the indemnified
party, to assume (alone or in conjunction with any other indemnifying party or
parties) the entire defense of such action, suit, investigation, inquiry or
proceeding, in which event such defense shall be conducted, at the expense of
the indemnifying party or parties, by counsel chosen by such indemnifying party
or parties and reasonably satisfactory to the indemnified party or parties;
provided, however, that (i) if the indemnified party or parties reasonably
determine that there may be a conflict between the positions of the indemnifying
party or parties and of the indemnified party or parties in conducting the
defense of such action, suit, investigation, inquiry or proceeding or that there
may be legal defenses available to such indemnified party or parties different
from or in addition to those available to the indemnifying party or parties,
then counsel for the indemnified party or parties shall be entitled to conduct
the defense to the extent reasonably determined by such counsel to be necessary
to protect the interests of the indemnified party or parties and (ii) in any
event, the
-33-
indemnified party or parties shall be entitled, at its or their own expense to
have counsel chosen by such indemnified party or parties participate in, but not
conduct, the defense. It is understood that the indemnifying parties shall not,
in respect of the legal defenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all of the Underwriters and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, and (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Act. If, within a reasonable time after receipt of the Notice, an
indemnifying party gives a Notice of Defense and the counsel chosen by the
indemnifying party or parties is reasonably satisfactory to the indemnified
party or parties, the indemnifying party or parties will not be liable under
paragraphs (a) through (c) of this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding, except that
(A) the indemnifying party or parties shall bear the legal and other expenses
incurred in connection with the conduct of the defense as referred to in clause
(i) of the proviso to the second preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding. The
indemnifying party or parties shall not be liable for any settlement of any
proceeding effected without its or their written consent, provided such consent
has not been unreasonably withheld.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 9, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 10 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the
-34-
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 each indemnifying party in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, or
actions in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Securityholder, on the one hand, and the Underwriters, on the other, shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Shares (before deducting expenses) received by the Company
and the Selling Securityholder and the total underwriting discount and
commissions received by the Underwriters, as set forth in the table on the cover
page of the Prospectus, bear to the aggregate public offering price of the
Shares. Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by each indemnifying party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparation to defend or defense against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount and commissions applicable to the Shares
purchased by such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
-35-
Each party entitled to contribution agrees that upon the
service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
of any such service shall not relieve the party from whom contribution may be
sought from any obligation it may have hereunder or otherwise (except as
specifically provided in paragraph (c) of this Section 9).
(e) Neither the Company nor the Selling Securityholder will,
without the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not such Underwriter or any person who controls such Underwriter
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 such Underwriter and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding.
(f) The liability of the Selling Securityholder under the
Selling Securityholder's representations and warranties contained in Section 2
hereof and under the indemnity and reimbursement agreements contained in the
provisions of this Section 9 and Section 11 hereof shall be limited to an amount
equal to the initial public offering price of the stock sold by the Selling
Securityholder to the Underwriters. The Company and the Selling Securityholder
may agree, as among themselves and without limiting the rights of the
Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
10. TERMINATION. This Agreement may be terminated by you at any time on
or prior to the Closing Date or on or prior to any later Option Closing Date, as
the case may be, by giving written notice to the Company and the Selling
Securityholder (i) if the Company or the Selling Securityholder shall have
failed, refused or been unable, at or prior to the Closing Date, or on or prior
to any later Option Closing Date, as the case may be, to perform any agreement
on its part to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company or the Selling
Securityholder is not fulfilled, or (ii) if trading on the New York Stock
Exchange, the American Stock Exchange or the
-36-
Nasdaq National Market shall have been suspended, or minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market, by such trading exchanges or by order of
the Commission or any other governmental authority having jurisdiction, or if a
banking moratorium shall have been declared by federal or New York authorities,
or (iii) if the Company shall have sustained a loss by strike, fire, flood,
accident or other calamity of such character as to have a Material Adverse
Effect regardless of whether or not such loss shall have been insured, or (iv)
if there shall have been a material adverse change in the general political or
economic conditions or financial markets in the United States as in the
reasonable judgment of the Representatives makes it inadvisable or impracticable
to proceed with the offering, sale and delivery of the Shares, or (v) if there
shall have occurred an outbreak or escalation of hostilities between the United
States and any foreign power or of any other insurrection or armed conflict
involving the United States or other national or international calamity,
hostilities or crisis or the declaration by the United States of a national
emergency which, in the reasonable judgment of the Representatives, adversely
affects the marketability of the Shares, or (vi) if since the respective dates
as of which information is given in the Registration Statement, the Offering
Memorandum and the Prospectus, there shall have occurred any material adverse
change or any development involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the Company or the business
affairs, management, or business prospects of the Company, whether or not
arising in the ordinary course of business, or (vii) if any foreign, federal or
state statute, regulation, rule or order of any court or other governmental
authority shall have been enacted, published, decreed or otherwise promulgated
which in the reasonable judgment of the Representatives materially and adversely
affects or will materially and adversely affect the business or operations of
the Company, or trading in the Common Stock shall have been suspended, or (viii)
there shall have occurred a material adverse decline in the value of securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market or (ix) action shall be taken by any foreign, federal,
state or local government or agency in respect of its monetary or fiscal affairs
which, in the reasonable judgment of the Representatives, has a material adverse
effect on the securities markets in the United States. If this Agreement shall
be terminated in accordance with this Section 10, there shall be no liability of
the Company or the Selling Securityholder to the
-37-
Underwriters and no liability of the Underwriters to the Company or the Selling
Securityholder; provided, however, that in the event of any such termination the
Company and the Selling Securityholder agree to indemnify and hold harmless the
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Securityholder under this Agreement,
including all costs and expenses referred to in Section 7.
If you elect to terminate this Agreement as provided in this Section
10, the Company shall be notified promptly by you by telephone or telecopy,
confirmed by letter within 24 hours of such notice by telephone or telecopy.
11. REIMBURSEMENT OF CERTAIN EXPENSES.
(a) In addition to their other obligations under Section 9 of
this Agreement (and subject to the limitation on reimbursement of expenses set
forth in Section 9(c) and subject, in the case of Selling Securityholder, to the
provisions of paragraph (f) of Section 9), the Company and the Selling
Securityholder hereby jointly and severally agree to reimburse on a quarterly
basis the Underwriters for all reasonable legal and other expenses incurred in
connection with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in paragraph (a) of
Section 9 of this Agreement, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 11 and the possibility that such payments might later be held to be
improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
(b) In addition to their other obligations under Section 9 of
this Agreement (and subject to the limitation on reimbursement of expenses set
forth in Section 9(c)), the Underwriters hereby agree to reimburse on a
quarterly basis the Company and the Selling Securityholder for all reasonable
legal and other expenses incurred in connection with investigating or defending
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in paragraph (b) of Section 9 of this Agreement, notwithstanding the
absence of a judicial determination as to the propriety and
-38-
enforceability of the obligations under this Section 11 and the possibility that
such payments might later be held to be improper; provided, however, that (i) to
the extent any such payment is ultimately held to be improper, the Company and
the Selling Securityholder shall promptly refund it and (ii) the Company and the
Selling Securityholder shall provide to the Underwriter, upon request,
reasonable assurances of its ability to effect any refund, when and if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Selling Securityholder and the several
Underwriters and, with respect to the provisions of Section 9 hereof, the
several parties (in addition to the Company, the Selling Securityholder and the
several Underwriters) indemnified under the provisions of said Section 9, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Shares from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all
communications hereunder shall be in writing and, if to the Underwriters, shall
be mailed or delivered by hand or telecopy to UBS Securities LLC, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xx. Xxxxxxx Xxxxxxx, Telecopy No. (212)
__________, with a copy to Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxx X. Xxxxxx, Esq., Telecopy No. (000) 000-0000; and if
to the Company or the Selling Security Holder, shall be mailed or delivered by
hand or telecopy to it or him at the Company's office, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Executive Vice President and Chief Financial
Officer, Telecopy No. (000) 000-0000, with a copy to Xxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxxxxx & Kuh, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxxx X. Xxxxxxxx, Esq., Telecopy No. (000) 000-0000. All notices given by
telecopy shall be confirmed by letter delivered by hand or courier no later than
5:00 p.m. on the business day next following the day of delivery of such notice
by telecopy.
14. AMENDMENTS AND WAIVERS. Any provisions of this Agreement
may be amended or waived prior to the Closing Date if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement, or in the case of a waiver, by the party
-39-
against whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
16. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(i) any investigation made by or on behalf of any Underwriter or controlling
person thereof, or by or on behalf of the Company or the Selling Securityholder
or the Company's respective directors or officers, and (ii) delivery of and
payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
You will act as Representatives of the several Underwriters in all
dealings with the Company under this Agreement, and any action under or in
respect of this Agreement taken by you jointly or by UBS Securities LLC, as
Representatives, will be binding upon all of the Underwriters, and the Company
and the Selling Securityholder shall be entitled to rely on any such action
taken by you jointly or by UBS Securities.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to the conflicts of laws
principles thereof.
[INTENTIONALLY LEFT BLANK]
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Please sign and return to the Company and to the Selling Securityholder
in care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholder and the several Underwriters in accordance with its terms.
Very truly yours,
XXXXXX XXXXXX INTERNATIONAL INC.
By:_________________________
Name:
Title:
SELLING SECURITYHOLDER
Xxxxxxx Xxxxxxxxxx
______________________
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
UBS SECURITIES LLC
XXXXXX XXXX LLC
By: UBS SECURITIES LLC
for itself and as attorney-in-fact
for Xxxxxx Xxxx LLC
By: ______________________________
Title:
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
-41-
SCHEDULE A
UNDERWRITERS
Number of
Shares
to be
Underwriters Purchased
------------ ---------
UBS Securities LLC............................................................
Xxxxxx Xxxx LLC ..............................................................
Total [ ]
==========
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SCHEDULE B
SELLING SECURITYHOLDER
Xxxxxxx Xxxxxxxxxx
c/o Xxxxxx Xxxxxx International Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
400,000 shares
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SCHEDULE C
STOCKHOLDERS TO ENTER INTO LOCK-UP AGREEMENTS
Xxxxxxx Xxxxxxxxxx
Xxxx Xxxxxxxxxx
Xxxx Xxxxxxxxxx & Son
c/o Xxxxxx Xxxxxx International Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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APPENDIX A
FORM OF OPINION OF COUNSEL TO THE COMPANY AND THE
SELLING SECURITYHOLDERS
Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP shall opine to
the effect that:
(A) The Company has been duly organized and is validly
existing as a corporation, and is in good standing under, the laws of the State
of Delaware;
(B) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus; the Company is duly qualified to do business as a foreign
corporation and is in good standing in all jurisdictions in which the ownership
or leasing of its properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a Material
Adverse Effect;
(C) Other than the Subsidiaries, the Company does not own or
control, directly or indirectly, any corporation, association or other entity.
Each Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement. Each Subsidiary is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of the properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a Material Adverse Effect.
All of the outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and non-assessable and,
except as otherwise stated in the Registration Statement, are owned by the
Company, in each case subject to no security interest, other encumbrance or
adverse claim; to the best of such counsel's knowledge, no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligation into shares of capital stock or ownership
interests in the Subsidiaries are outstanding;
(D) The authorized capital stock of the Company
consists of 10,000,000 shares of Common Stock, $1.00 par
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value, of which there are outstanding __ shares (including the Firm Shares plus
the number of Option Shares issued on the date hereof); the authorized shares of
the Company's Common Stock have been duly authorized; the issued and outstanding
shares of the Company's capital stock have been duly authorized and validly
issued and are fully paid and nonassessable, and have not been issued in
violation of any preemptive right, co-sale right, registration right, right of
first refusal or other similar right known to such counsel;
(E) The Shares to be issued by the Company pursuant to this
Agreement have been duly authorized and will be, upon issuance and delivery
against payment therefor in accordance with the terms hereof, validly issued,
fully paid and nonassessable, and, to the knowledge of such counsel, the
stockholders of the Company do not have any preemptive right, co-sale right,
registration right, right of first refusal or other similar right, which rights
have not previously been waived, in connection with the purchase or sale of any
of the Shares;
(F) Good and marketable title to the shares of the Shares sold
by the Selling Securityholders under the Underwriting Agreement, free and clear
of all liens, encumbrances, equities, security interests and claims, have been
transferred to the Underwriters who have severally purchased such Shares under
the Underwriting Agreement, assuming for the purpose of this opinion that the
Underwriters purchased the same in good faith without notice of any adverse
claims;
(G) The Company has full corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the Underwriters the
Firm Shares or the Option Shares, as the case may be, to be issued and sold by
it hereunder;
(H) The Underwriting Agreement has been duly
executed and delivered by or on behalf of the Selling
Securityholder;
(I) The Underwriting Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been duly executed
and delivered by the Company and the Selling Securityholders;
(J) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the Additional
Registration Statement (if any) was filed and became effective under the
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Act as of the date and time (if determinable) specified in such opinion, the
Prospectus either was filed with the Commission pursuant to the subparagraph of
Rule 424(b) specified in such opinion on the date specified therein or was
included in the Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of a Registration Statement
or any part thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Act;
(K) The Registration Statement, all Preliminary Prospectuses,
the Prospectus, and each amendment or supplement thereto (other than the
financial statements, financial data and supporting schedules included therein,
as to which such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the applicable Rules and
Regulations and to such counsel's knowledge, there are no agreements, contracts,
leases or documents of a character required to be described in, or filed as an
exhibit to, the Registration Statement which are not described or filed as
required by the Act and the applicable Rules and Regulations;
(L) The terms and provisions of the capital stock of the
Company conform to the description thereof contained in the Registration
Statement and the Prospectus, and the information in the Prospectus under the
caption "Description of Capital Stock", to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such counsel and is
correct, and the form of certificate evidencing the Common Stock complies with
the applicable provisions of Delaware law;
(M) The statements in the Registration Statement and the
Prospectus summarizing statutes, rules and regulations, including the Delaware
corporation law and the description of the certificate of incorporation and
bylaws are accurate and fairly and correctly present the information required to
be presented by the Act or the Rules and Regulations in all material respects;
and such counsel does not know of any statutes, rules or regulations required to
be described in the Registration Statement or the Prospectus that are not
described or referred to therein as required;
(N) The statements under the caption "Description of Capital
Stock" in the Prospectus, insofar as such statements constitute a summary of
documents referred to therein or matters of law, are accurate summaries and
fairly
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and correctly present, in all material respects, the information called for with
respect to such documents and matters; provided that such counsel shall be
entitled to rely on representations of the Company with respect to certain
factual matters contained in such statements, and provided further that such
counsel shall state that nothing has come to the attention of such counsel which
leads them to believe that such representations are not true and correct in all
material respects;
(O) The information required to be set forth in the
Registration Statement in answer to Items 9 and 10 (insofar as it relates to
such counsel) of Form S-2 is to the best of such counsel's knowledge accurately
and adequately set forth therein in all material respects or no response is
required with respect to such Items;
(P) The execution, delivery and performance of this Agreement
and the consummation of the transactions therein contemplated do not and will
not (a) conflict with or result in a breach of any of the terms or provisions of
or, constitute a default under, the certificate of incorporation or bylaws of
the Company, any agreement or document filed as an exhibit to the Registration
Statement, or any statute, rule or regulation applicable to the Company or the
Selling Securityholders (except that no opinion need to be expressed with
respect to compliance with federal and state securities laws) or (b) to the
knowledge of such counsel, result in the creation or imposition of any lien or
encumbrance upon any of the assets of the Company or the Selling Securityholders
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default or result in the
acceleration of any obligation under, any indenture, mortgage, deed of trust,
loan agreement, bond, debenture, note agreement, other evidence of indebtedness,
lease, contract or other agreement or instrument to which the Company is a party
or by which its property is bound or (c) to the knowledge of such counsel,
conflict with or result in a violation or breach of, or constitute a default
under, any applicable license, authorization, approval, permit, judgment,
franchise, order, writ or decree of any court or governmental agency or body;
(Q) The Company has the corporate power and authority to own
or lease all of the assets owned or leased by it and to conduct its business, in
each case as described in the Registration Statement and the Prospectus, and has
all licenses, permits, consents, orders, approvals and authorizations of any
federal or state government authority that are necessary to conduct its business
as described in
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the Registration Statement and the Prospectus, except where failure to have such
licenses, permits, consents, orders, approvals and authorizations would not have
a Material Adverse Effect.
(R) Based insofar as factual matters with respect to the
Shares to be sold by the Selling Securityholders are concerned solely upon
certificates of the Selling Securityholders, the accuracy of which counsel has
no reason to question no authorization, approval, consent, order, designation or
declaration of or filing by or with any governmental authority or agency is
necessary in connection with the execution and delivery of this Agreement by the
Company and the Selling Securityholders and the consummation of the transactions
therein contemplated, except such as may have been obtained under the Act and
the Rules and Regulations or such as may be required under state securities or
Blue Sky laws or by the bylaws and rules of the NASD in connection with the
purchase and distribution of the Shares by the Underwriters;
(S) The Company is not in violation of its certificate of
incorporation or bylaws, and to the best of such counsel's knowledge, the
Company is not in breach of or default with respect to any provision of any
agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument by which it or any of its properties may be bound or
affected, except where such default would not materially adversely affect the
Company and, to the best of such counsel's knowledge, the Company is in
compliance with all laws, rules, regulations, judgments, decrees, orders and
statutes of any court or jurisdiction to which it is subject, except where
noncompliance would not materially adversely affect the Company;
(T) To such counsel's knowledge, there are no pending or
threatened actions, suits, claims, proceedings or investigations that, if
successful, would have a Material Adverse Effect or would limit, revoke, cancel,
suspend, or cause not to be renewed any existing license, certificate,
registration, approval or permit, known to such counsel, from any state,
federal, or regulatory authority that is material to the conduct of the business
of the Company as presently conducted, or that is of a character otherwise
required to be disclosed in the Registration Statement or the Prospectus under
the Act or the applicable Rules and Regulations;
(U) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of shares of Common Stock or
other securities of the
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Company have registration rights with respect to securities of the Company and,
except as set forth in the Registration Statement and Prospectus, all holders of
securities of the Company having registration rights with respect to shares of
Common Stock or other securities have, with respect to the offering contemplated
hereby, waived such rights or such rights have otherwise been waived or such
rights have expired by reason of lapse of time following notification of the
Company's intent to file the Registration Statement.
(V) No transfer taxes are required to be paid in connection
with the sale or delivery to the Underwriters of the Firm Shares or the Option
Shares;
(W) The Shares sold by the Selling Securityholders are listed
and duly admitted to trading on the American Stock Exchange, and the Shares
issued and sold by the Company will have been duly authorized for listing by the
American Stock Exchange upon official notice of issuance.
In addition, such counsel shall include a statement to the
effect that such counsel has participated in conferences with officials and
other representatives of the Company, the Selling Securityholders, the
Representatives, Underwriters' Counsel and the independent public accountants of
the Company, at which conferences the contents of the Registration Statement and
the Prospectus and related matters were discussed, and although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention of
such counsel which caused them to believe that, at the time the Registration
Statement became effective the Registration Statement (except as to financial
statements, financial and statistical data and supporting schedules contained
therein, as to which such counsel need express no opinion) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or at
the Closing Date or any later Option Closing Date, as the case may be, the
Registration Statement or the Prospectus (except as aforesaid) contained any
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, in light of
the circumstances under,which they were made, not misleading.
Counsel rendering the foregoing may rely (i) as to questions
of law not involving the laws of the State of New York, the United States or the
General Corporation Law of
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the State of Delaware upon opinions of local counsel, and (ii) as to questions
of fact upon representations of the Selling Securityholders and representations
or certificates of officers of the Company and of governmental officials, as the
case may be, in which case its opinion is to state that it is so doing and that
it has no actual knowledge of any material misstatement or inaccuracy in such
opinions, representations or certificates, and that they believe that they and
the Underwriters are justified in relying on such opinions or certificates.
Copies of any opinion, representation or certificate so relied upon shall be
delivered to you, as Representatives of the Underwriters, and to Underwriters'
Counsel.
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