1
EXHIBIT 1.1
W&C DRAFT
Oct. 16, 1996
===============================================================================
2,000,000 SHARES
ARISTO INTERNATIONAL CORPORATION
COMMON STOCK
---------------
UNDERWRITING AGREEMENT
SELECTED DEALER AGREEMENT
---------------
October __, 1996
===============================================================================
2
2,000,000 SHARES
ARISTO INTERNATIONAL CORPORATION
COMMON STOCK
----------------------
UNDERWRITING AGREEMENT
----------------------
October __, 1996
XXXXX & COMPANY INCORPORATED
As Representative of the Several
Underwriters
c/o Allen & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
ARISTO INTERNATIONAL CORPORATION, a Delaware corporation (the
"Company"), hereby confirms its agreement with the several Underwriters named in
schedule A hereto (the "Underwriters"), for which you are acting as
representative (the "Representative"), as follows:
1. DESCRIPTION OF SECURITIES. The Company has authorized by
appropriate corporate action and proposes to issue and sell to the Underwriters
its shares of Common Stock, $0.001 par value. As further described in Section 3
hereof, 2,000,000 of such shares (the "Purchased Shares") are being sold by the
Company to the Underwriters and the Company is granting to the Underwriters an
option to purchase up to 300,000 additional shares (the "Option Shares"). The
Purchased Shares and Option Shares are herein collectively referred to as the
"Shares".
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
The Company represents and warrants to and agrees with each Underwriter that:
3
(a) A registration statement on Form S-1 (File
No. 33-________) with respect to the Shares, including
a preliminary form of prospectus, copies of which have
heretofore been delivered to you, 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") under the Act, and
has been filed with the Commission under the Act; such
amendment or amendments to such registration statement, copies
of which have heretofore been delivered to you, as may have
been made prior to the date of this Agreement have been so
prepared and filed; and the Company has so prepared and
proposes so to file in a timely manner after the effective
date of such registration statement the final form of
prospectus. Such registration statement (including all
exhibits thereto), as finally amended and revised as of the
time the Underwriters first offer the Shares for sale to the
public together with information, if any, which is permitted
to be, and is, subsequently filed pursuant to Rule 430A of the
Rules and Regulations, is herein referred to as the
"Registration Statement". Such prospectus in the form filed
pursuant to Rule 424(b) of the Rules and Regulations, or, if
no final prospectus is filed with the Commission pursuant to
Rule 424(b), in such form as such final prospectus is included
in the Registration Statement, is herein referred to as the
"Prospectus". Each preliminary form of prospectus is herein
referred to as a "Preliminary Prospectus".
(b) The Commission has not issued any order
preventing or suspending the use of any Preliminary
Prospectus. At the time of filing of each Preliminary
Prospectus, such prospectus 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. When the Registration
Statement becomes effective and at all times subsequent
thereto up to and at each Closing Date (hereinafter defined)
(i) the Registration Statement and Prospectus and any
amendments or supplements thereto will contain as of their
respective dates all material statements and information which
are required to be included therein in accordance with the Act
and Rules and Regulations and will in all material respects
conform to the requirements of the Act and the Rules and
Regulations, and (ii) neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, will
include as of their respective dates any untrue
2
4
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; provided, however, that the
foregoing representations and warranties shall not apply to
information contained in or omitted from the Registration
Statement or the Prospectus or any such amendment or
supplement in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter
through you specifically for use in the preparation thereof.
(c) Set forth on Schedule B hereto is the name of
each subsidiary of the Company which holds assets or conducts
operations which are material to the condition (financial or
otherwise), results of operations, business or prospects of
the Company and each such subsidiary taken as a whole and,
unless otherwise indicated thereon, the Company holds all
right, title and interest in and to the entire equity interest
in each such subsidiary. Except as described in the
Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company, nor any entity which is
either identified in the Prospectus as a subsidiary of the
Company or listed on Schedule B hereto (each individually a
"Subsidiary" and collectively the "Subsidiaries"), taken as a
whole, has incurred any direct or, to the best of the
Company's knowledge, contingent material liabilities or
material obligations, or entered into any material
transactions or contracts not in the ordinary course of
business, and there has not been any change in its capital
shares, options or warrants, nor any material increase or
decrease in the amount thereof outstanding or in any of its
long-term debt outstanding, except pursuant to the terms of
the instruments governing the same, or any material adverse
change in the condition (financial or otherwise), results of
operations, business or prospects of the Company and the
Subsidiaries taken as a whole.
(d) Except as set forth in the Prospectus, there is
not now pending or, to the knowledge of the Company,
threatened, any action, suit or proceeding to which the
Company or any Subsidiary is a party before any court or
governmental agency or body which might result in any material
adverse change in the condition (financial or otherwise),
results of operations, business or prospects of the Company
and the Subsidiaries taken as a whole, or might materially and
adversely affect the properties, assets or ability to do
business as
3
5
contemplated in the Prospectus of the Company and the
Subsidiaries taken as a whole; and there are no contracts or
documents required to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which
have not been filed as exhibits to the Registration Statement.
(e) This Agreement has been duly authorized, executed
and delivered on behalf of the Company and constitutes a valid
and binding agreement of the Company, enforceable in
accordance with its terms, except (1) that such enforcement
may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights, (2) that the remedy of specific
performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought
and (3) as rights to indemnity or contribution hereunder may
be limited by federal or state securities laws; the execution,
delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not
result in a breach or violation of any term or provision of,
or constitute a default under, any currently existing statute,
any indenture, mortgage, deed of trust, note agreement or
other agreement or instrument to which the Company or any
Subsidiary is a party or by which it or its property is bound,
the charter or by-laws of the Company or any Subsidiary or any
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or over their
properties; no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part
herein contemplated, except such as may be required under the
Act or as may be required under state or other securities or
blue sky laws in connection with the purchase and distribution
of the Shares by the Underwriters; and neither the Company nor
any of the Subsidiaries is now in default, and no event has
occurred which with the giving of notice or lapse of time or
both would be a default, under any contract, agreement,
indenture, mortgage or other undertaking to which such entity
is a party and which is material to the condition (financial
or otherwise), results of operations, business or prospects of
the Company and the Subsidiaries taken as a whole.
(f) Each of the Company and the Subsidiaries has been
duly incorporated and is validly existing as a
4
6
corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and
authority, corporate or otherwise, to own its properties and
conduct is business as described and contemplated in the
Registration Statement, and is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions where its operations or ownership of property
requires such qualifications and where failure so to qualify
would impair title to any material properties of the Company
or its rights to enforce contracts against others or expose it
to liabilities material to the Company and the Subsidiaries
taken as a whole in such jurisdictions.
(g) The Company has the authorized and outstanding
capital stock set forth in the Prospectus; the outstanding
capital stock of the Company conforms, and the Shares when
issued and sold as herein contemplated will conform, in all
material respects, to all statements in relation thereto
contained in the Registration Statement and the Prospectus and
all such stock has been duly authorized and the outstanding
capital stock has been and the Shares, when issued and
delivered against payment therefor as provided herein, will be
validly issued, fully-paid and nonassessable; except as stated
in the Prospectus, the stockholders of the Company have no
preemptive rights with respect to the Shares and there are no
outstanding rights, options or warrants to acquire any
securities of the Company; to the extent that any rights,
options or warrants to acquire any securities of the Company
are outstanding, except as otherwise set forth in the
Prospectus, the issuance of the Shares as described in the
Prospectus will not result in an adjustment of the exercise
price or number of shares issuable upon the exercise in
respect of any such rights, options or warrants; and, except
as otherwise set forth in the Prospectus, the Company owns
(directly or indirectly) under valid title the respective
outstanding shares of capital stock of the Subsidiaries, free
and clear of any material liens, encumbrances or claims.
(h) Except as otherwise set forth in the Prospectus,
to the best of its knowledge, each of the Company and the
Subsidiaries owns or possesses, or can acquire on reasonable
terms, adequate patents, patent licenses, trademarks, service
marks and trade names necessary to carry on its business as
presently conducted, and except as set forth in the
Prospectus, neither the Company nor any of the Subsidiaries
has received any notice of infringement of or conflict with
5
7
asserted rights of others with respect to any patents, patent
licenses, trademarks, service marks or trade names which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could materially and adversely
affect the condition (financial or otherwise), earnings,
affairs, business or prospects of the Company and the
Subsidiaries taken as a whole.
(i) Except as stated in the Prospectus, the Company
holds in good standing or has applied for all licenses,
permits, authorizations, franchises, consents and orders of
all federal, state, local, and foreign governmental bodies
necessary to carry on its business as reflected or
contemplated in the Prospectus; except as stated in the
Prospectus the Company has good and marketable title in fee
simple to all real property and good and marketable title to
all personal property owned by it, in each case free and clear
of all liens, encumbrances and defects with such exceptions as
are not material to the Company and the Subsidiaries taken as
a whole; and the real property and personal property referred
to in the Prospectus as held under lease by the Company is
held by it under valid, subsisting and enforceable leases with
only such exceptions as in the aggregate are not material and
do not materially interfere with the conduct of the business
of the Company and the Subsidiaries taken as a whole as
contemplated by the Prospectus.
(j) To the best of its knowledge, the Company is
conducting and proposes to conduct its business so as to
comply in all material respects with all applicable federal,
state, local and foreign governmental statutes, rules and
regulations; and except as set forth in the Prospectus,
neither the Company nor any Subsidiary is charged with, or, to
the best of the knowledge of the Company, is under
investigation with respect to, any violation of any of such
statutes, rules or regulations or is the subject of any
pending or threatened proceeding by an governmental body or
regulatory authority relating to any such violation.
(k) The Company and each of the Subsidiaries are
insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are
prudent and customary in the business in which they are
engaged; and neither the Company nor any of the Subsidiaries
has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as
may
6
8
be necessary to continue its business at a cost that would not
materially and adversely affect the business or financial
condition of the Company and the Subsidiaries taken as a
whole, except as described or contemplated in the Prospectus.
(l) Coopers & Xxxxxxx, LLP, which has examined and
expressed its opinion on certain of the financial statements
of the Company filed with the Commission as a part of the
Registration Statement, are, to the Company's best knowledge,
independent accountants with respect to the Company within the
meaning of the Act and the Rules and Regulations; the
financial statements, together with the related notes, forming
part of the Registration Statement and Prospectus fairly
present the financial condition of the Company and its results
of operations as of the dates and for the periods described in
such opinion in the Prospectus; and such financial statements
have been prepared in accordance with the requirements of the
Commission.
(m) The Company and each of the Subsidiaries maintain
a system of internal accounting controls sufficient to provide
reasonable assurances that transactions are executed in
accordance with management's general or specific
authorizations and are recorded as necessary to permit
preparation of financial statements in conformity with
generally accepted accounting principles.
(n) Except as stated in the Prospectus, the Company
knows of no outstanding claims for services, either in the
nature of a finder's fee or origination fee, with respect to
the transactions contemplated hereby, and the Company agrees
to indemnify and hold the Underwriters harmless from any such
claim for any such services of such nature arising from the
act of any person other than any Underwriter.
(o) No person holds a right to require or participate
in the registration under the Act of the Common Stock of the
Company to be effected by the Registration Statement, which
right has not been effectively waived by the holder thereof as
of the date hereof.
(p) The Company has obtained from each of its
officers and directors, from each of its shareholders owning
in excess of 5% of the shares of the Company's Common Stock
outstanding as of the date hereof, and from [friends and
affiliates of Xxxxx Xxxxx -- to be
7
9
discussed] an executed agreement that they will not, without
the prior written consent of Xxxxx & Company Incorporated on
behalf of the Underwriters, sell, offer for sale, contract to
sell or otherwise dispose of any shares of the Company's
Common Stock or any securities exercisable for or convertible
into its Common Stock for a period of 180 days from the date
of the final Prospectus.
3. PURCHASE, SALE AND DELIVERY OF SHARES. On the
basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter and each
Underwriter agrees, severally and not jointly, to purchase from
the Company, at a purchase price of $______ per Share, the number
of Shares set forth opposite the name of such Underwriter in
Schedule A hereto.
The Company will deliver the Purchased Shares to you for the
accounts of the several Underwriters at the office of Xxxxx & Company
Incorporated, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, against payment of the
purchase price therefor by certified or official bank check or checks in New
York Clearing House funds, payable to the order of Aristo International
Corporation, at 10:00 A.M., New York Time, on ____________________, 1996, or at
such other time and date not later than five full business days thereafter as
you and the Company may determine, such time and date of delivery and payment
being herein called the "First Closing Date". The certificates for the Purchased
Shares to be so delivered will be made available to you at such office for
checking at least one full business day prior to such Closing Date and will be
in such names and denominations as you may request not less than two full
business days prior to such Closing Date.
On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company grants to the Underwriters an option to purchase up to 300,000 Option
Shares at the same price per share as the Underwriters shall pay for the
Purchased Shares. Such option may be exercised only to cover over-allotments
arising in connection with the sale of Purchased Shares by the Underwriters,
such exercise to be upon written notice by you to the Company within 30 days of
the date hereof setting forth the number of Options Shares as to which the
Underwriters are exercising the option, the denominations and names in which
certificates for such Shares should be registered and the time and place at
which such certificates are to be delivered. Such time and place (unless such
time is the First Closing Date), herein referred to as the "Second Closing
Date", shall be determined by you but shall not be earlier than the First
Closing Date, nor earlier than three full business days or
8
10
later than ten full business days after the exercise of such option. The Company
will deliver Option Shares to you for the accounts of the several Underwriters
against payment of the purchase price therefor by certified or official bank
check or checks in New York Clearing House funds payable to the order of Aristo
International Corporation. The number of Option Shares to be purchased by each
Underwriter shall be in the same proportion to the aggregate number of Option
Shares purchased as the number of Purchased Shares set forth opposite the name
of such Underwriter in Schedule A hereto bears to 2,000,000.
It is understood that you, individually and not as the
Representative of the several Underwriters, may (but shall not be obligated to)
make payment on behalf of any Underwriter or Underwriters for Shares to be
purchased by such Underwriter or Underwriters. Any such payment by you shall not
relieve any such Underwriter or Underwriters of any of its or their obligations
hereunder.
After the Registration Statement becomes effective, the
several Underwriters propose to offer the Shares to the public as set forth in
the Prospectus.
4. COVENANTS OF THE COMPANY. The Company covenants
and agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause
the Registration Statement and any subsequent amendment
thereto to become effective as promptly as possible; it will
notify you, promptly after it shall receive notice thereof, of
the time when the Registration Statement or any subsequent
amendment to the Registration Statement has become effective
or any supplement to the Prospectus has been filed; it will
notify you promptly of any request by the Commission for the
amending or supplementing of the Registration Statement or
Prospectus or for additional information; it will prepare and
file with the Commission, promptly upon your request, any
amendments or supplements to the Registration Statement or
Prospectus which, in your reasonable opinion, may be necessary
or advisable in connection with the distribution of the Shares
by the Underwriters; it will promptly prepare and file with
the Commission, and promptly notify you of the filing of, any
amendments or supplements to the Registration Statement or
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
9
11
fact or omit to state any material fact necessary to make the
statements therein not misleading; in case any Underwriter is
required to deliver a prospectus after the nine-month period
referred to in Section 10(a)(3) of the Act in connection with
sales of the Shares, it will prepare promptly upon request,
but at the expense of such Underwriter, such amendment or
amendments to the Registration Statement and such prospectus
or prospectuses as may be necessary to permit compliance with
the requirements of Section 10(a)(3) of the Act; and it will
file no amendment or supplement to the Registration Statement
or Prospectus that shall not previously have been submitted to
you in writing a reasonable time prior to the proposed filing
thereof or to which you shall reasonably object in writing.
(b) The Company will advise you, promptly after it
shall receive notice or obtain knowledge thereof, of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order
suspending trading in the Shares or other of the Company's
securities or of the initiation or threat of any proceeding
for that purpose; and it will use promptly its best efforts to
prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued.
(c) The Company will use its best efforts to qualify
the Shares for sale under the blue sky or securities laws of
such jurisdictions as you may reasonably designate and to
continue such qualifications in effect for so long as may be
required for purposes of the distribution of the Shares,
except that the Company shall not be required in connection
therewith or as a condition thereof to qualify as a foreign
corporation or to execute a general consent to service of
process in any state.
(d) The Company will furnish to you, as soon as
available, copies of the Registration Statement (two of which
will be signed and will include all exhibits), each
Preliminary Prospectus, the Prospectus, and any amendments or
supplements to such documents, including any prospectus
prepared to permit compliance with Section 10(a)(3) of the
Act, all in such quantities as you may from time to time
reasonably request.
(e) The Company will make generally available to its
securityholders as soon as practicable, a financial statement
(which will be in reasonable detail but need not be audited)
covering a 12-month period beginning after the effective date
of the Registration Statement
10
12
which shall satisfy the provisions of Section 11(a) of the
Act.
(f) The Company agrees, during each fiscal year for a
period of five years from the date hereof, to furnish to its
stockholders as promptly as may be practicable an annual
report (including financial statements audited by independent
public accountants) and to furnish quarterly financial
statements (which need not be audited) for each of the first
three quarters of each fiscal year, and to furnish, upon
request, to each Underwriter hereunder (i) as soon as
practicable after the end of each of the first three quarters
of each fiscal year, statements of operations and surplus of
the Company for such quarter in reasonable detail and
certified by the Company's principal financial or accounting
officer or the Company's quarterly report on Form 10-Q; (ii)
as soon as practicable after the end of each fiscal year,
financial statements of the Company as at the end of such
fiscal year, including statements of operations, retained
earnings and changes in financial position of the Company for
such fiscal year, all in reasonable detail and accompanied by
a copy of the report thereon of independent public accountants
or the Company's annual report on Form 10-K; and (iii) as soon
as they are available, copies of all reports and financial
statements furnished to or filed with the Commission. During
such period, if and so long as the Company shall have active
subsidiaries, the foregoing financial statements shall be on a
combined or consolidated basis to the extent that the accounts
of the Company and its subsidiaries are combined or
consolidated.
(g) The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the
following: (i) the fees, disbursements, and expenses of the
Company's counsel and accountants in connection with the
registration of the Shares under the Act; (ii) all other
expenses in connection with the preparation, printing, and
filing of the Registration Statement, each Preliminary
Prospectus, and the Prospectus and amendments and supplements
thereto, and the mailing and delivering of copies thereof to
the Underwriters and dealers; (iii) the cost of printing this
Agreement, the Selected Dealer Agreement, the Blue Sky
Memorandum, and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iv) all
costs and expenses in connection with the issuance and
delivery of the Shares hereunder to the Underwriters,
including related transfer taxes, if any; (v) all expenses in
connection with the
11
13
qualification of the Shares for offering and sale under the
securities laws of various jurisdictions, including the fees
and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the
Blue Sky Survey; (vi) the filing fees incident to securing any
required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares; (vii)
the costs of preparing stock certificates; (viii) the cost and
charges of any transfer agent or registrar; and (ix) all other
costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically
provided for in this Section 4. In addition, the Company shall
bear the legal, travel, roadshow and syndicate expenses of the
Underwriters up to a maximum of $150,000, except that the
Company shall reimburse the Underwriters for all of their
itemized out-of-pocket expenses, including their legal fees
and expenses, if the Company determines not to proceed with
the offering for any reason, other than the Underwriters'
unwillingness to proceed on the terms and conditions set forth
in this Agreement, or if the Representative exercises its
right to terminate this Agreement pursuant to Section 10(b)(i)
hereof.
(h) The Company agrees that it will not, without the
prior written consent of Xxxxx & Company Incorporated on
behalf of the Underwriters, sell, offer for sale, contract to
sell or otherwise dispose of any shares of its Common Stock or
any securities exercisable for or convertible into shares of
its Common Stock, other than shares issuable pursuant to
currently outstanding rights, options and warrants, for a
period of 180 days after the date of the final Prospectus. In
addition, the Company also agrees to obtain the written
agreement of each officer and director of the Company, and
each of its shareholders owning in excess of 5% of the shares
of the Company's Common Stock outstanding as of the date
hereof [and of each of the friends and affiliates of Xxxxx
Xxxxx -- to be discussed] that such person will not, without
such prior written consent, sell, offer for sale, contract to
sell or otherwise dispose of any of such Common Stock held by
such holder for a period of ___ days after the date of the
final Prospectus.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Purchased Shares on the
First Closing Date and the Option Shares on the Second Closing Date, as provided
herein shall be subject to the accuracy, as of the date hereof and such Closing
Date (as if made on and as of such Closing Date), of the
12
14
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder, and to the following additional
conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M., New York City Time, on the
date of this Agreement, or such later date as shall be
consented to in writing by you; if required, the Prospectus
and any amendment or supplement thereto shall have been filed
with the Commission in the manner and within the time period
required by Rule 424(b) under the Act; and no stop order
suspending the effectiveness thereof shall have been issued
and no proceedings for that purpose shall have been initiated
or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the
Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) Prior to such Closing Date, except as
contemplated in the Prospectus, there shall not have been any
change in the capital shares, nor the issuance of any rights,
options, or warrants to purchase any capital shares, nor any
material increase or decrease in any long-term debt of the
Company or any of the Subsidiaries or any material adverse
change in the condition (financial or otherwise), results of
operations, business or prospects of the Company or any of the
Subsidiaries which in your reasonable judgment renders it
inadvisable to proceed with the offering and sale of the
Shares.
(c) You shall have received the opinion of Xxxxxx
Xxxxxx Flattau & Kimpl, LLP, counsel for the Company, in form
and substance satisfactory to you and dated such Closing Date,
to the effect that:
(i) each of the Company and its Subsidiaries
has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its
jurisdiction of incorporation with full corporate or
other power and authority to own its properties and
to conduct its business as described in the
Registration Statement and is duly qualified to do
business as a foreign corporation in each state or
jurisdiction where its operations and the ownership
of its properties requires such qualification, except
with respect to qualification as a foreign
corporation in such jurisdictions in which the
failure to so qualify
13
15
has not had and will not have a material adverse
effect on the business of the Company and the
Subsidiaries taken as a whole;
(ii) the Company has authorized capital stock as
set forth in the Prospectus; all shares of Common
Stock, including the Shares, conform as to legal
matters in all material respects to the appropriate
descriptions thereof under the heading "Description
of Capital Stock" in the Prospectus; all outstanding
shares of Company capital stock have been duly
authorized and are validly issued, fully paid and
non-assessable; and the issuance of the Shares has
been duly authorized and, when issued and delivered
in accordance with this Agreement, the Shares will be
validly issued, fully paid and non-assessable; and,
except as described in the Prospectus, the issuance
of the Shares as described in the Prospectus will not
result in any adjustment of the exercise price or
number of shares issuable upon exercise in respect of
any outstanding options or warrants of the Company;
and, except as otherwise set forth in the
Registration Statement, the Company owns (directly or
indirectly) under valid title all of the respective
outstanding shares of capital stock of each of the
Subsidiaries, to the best of the knowledge of such
counsel, free and clear of any material liens,
encumbrances or claims;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company and constitutes
a valid and binding agreement of the Company,
enforceable in accordance with its terms, except that
(1) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to
creditors' rights, (2) the remedy of specific
performance and injunctive and other forms of
equitable relief may be subject to equitable defenses
and to the discretion of the court before which any
proceeding therefor may be brought, and (3) rights to
indemnity or contribution hereunder may be limited by
federal or state securities laws; the sale of the
Shares under this Agreement and the consummation of
the transactions herein contemplated do not result in
a breach or violation of any terms or provisions of,
or constitute a default under, any presently existing
statute, or to the best of such counsel's knowledge,
any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument
14
16
known to such counsel to which the Company is a party
or by which it or its properties are bound or
affected, or to which any of the material property or
assets of the Company or the Subsidiaries is subject,
the Company's certificate of incorporation or
by-laws, or, to the best of such counsel's knowledge,
any order, rule or regulation of any court or
governmental agency or body having jurisdiction over
the Company or the Subsidiary or over their
respective properties;
(iv) no consent, approval, authorization or order
of any court or governmental agency or body is
required for the consummation by the Company of the
transactions contemplated by this Agreement, except
such as may be required under the Act or as may be
required under state securities or blue sky laws in
connection with the purchase and distribution of the
Shares by the Underwriters;
(v) the Registration Statement has become
effective under the Act and to the best of such
counsel's knowledge no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the
Act;
(vi) except as stated in the Prospectus, to the
best of such counsel's knowledge, the Company and the
Subsidiaries hold all material licenses, permits,
authorizations, franchises, consents and orders, in
each case valid and in good standing, of Federal,
State or local, and foreign governmental bodies
necessary to carry on their respective businesses as
reflected in the Registration Statement;
(vii) the provisions of the agreements to which
the Company or the Subsidiaries are a party which are
summarized in the Prospectus conform in all material
respects to such summaries;
(viii) to the best of such counsel's knowledge,
there are no legal or governmental proceedings
pending or threatened to which the Company or any
Subsidiary is a party or to which any properties of
the Company or the Subsidiaries are subject which is
required to be described in the Registration
Statement or the Prospectus and is not so described;
15
17
(ix) the Registration Statement and the
Prospectus, and each amendment or supplement thereto,
as of their respective effective or issue dates,
comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations
(except that such counsel need express no opinion as
to the financial statements, notes to financial
statements, related schedules or other financial data
contained in the Registration Statement or the
Prospectus);
(x) to the best of such counsel's knowledge, all
contracts and documents pertaining to the Company
required to be filed as Exhibits to the Registration
Statement have been filed as required or have been
appropriately incorporated by reference and all
contracts and documents required to be described in
the Prospectus have been accurately described therein
in all material respects;
(xi) nothing has come to the attention of such
counsel which caused them to believe that either the
Registration Statement or the Prospectus, or any
amendment or supplement thereto, as of their
respective effective or issue dates, 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.
In rendering the foregoing opinions, such counsel may
rely as to factual matters on certificates of officers and
representatives of the Company or any Subsidiary and of public
officials, and will not be required to independently verify
the accuracy or completeness of information or documents
furnished to it in respect to the Registration Statement or
the Prospectus. To the extent that such counsel's opinion
relates to the laws of jurisdictions other than New York and
Delaware, such counsel shall be permitted to rely on the
opinion of local counsel reasonably satisfactory to counsel
for the several Underwriters.
(d) You shall have received from Xxxxxx & Carnelutti,
A Professional Corporation, counsel for the several
Underwriters, an opinion or opinions, dated such Closing Date,
in form and substance satisfactory to you, with respect to the
sufficiency of all such corporate proceedings and other legal
matters relating to this Agreement and the transactions
contemplated hereby as you may reasonably require, and the
Company
16
18
shall have furnished to such counsel such documents as they
may have requested for the purpose of enabling them to pass
upon such matters.
(e) You shall have received, at the time of execution
of this Agreement and on such Closing Date from Coopers &
Xxxxxxx, LLP, independent public accountants, a letter or
letters, dated the date of delivery thereof, substantially in
the form and substance heretofore approved by you.
(f) You shall have received a certificate, dated such
Closing Date, of each of the President and Chief Executive
Officer and the Chief Financial Officer of the Company,
delivered on behalf of the Company, to the
effect that:
(i) the representations and warranties of
the Company in this Agreement are true and correct as
if made on and as of such Closing Date; and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing
Date;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for that purpose have been instituted or,
to their knowledge, are contemplated by the
Commission; and
(iii) except as contemplated in the Prospectus,
neither the Company nor any Subsidiary taken as a
whole has incurred any direct or, to the best of the
Company's knowledge, contingent material liabilities
or obligations, or entered into any material
transactions or contracts not in the ordinary course
of business, and there has not been any change in its
capital shares, nor the issuance of any rights,
options, or warrants to purchase any capital shares,
nor any material increase or decrease in any thereof
or in any long-term debt or any material adverse
change in the condition (financial or otherwise)
results of operations, business or prospects of the
Company and the Subsidiaries taken as a whole.
(g) The Company shall have furnished to you such
certificates, in addition to those specifically mentioned
herein, as you may have reasonably requested, as to the
accuracy and completeness at such Closing Date of any
statement in the Registration Statement or
17
19
Prospectus, as to the accuracy at such Closing Date of the
representations and warranties of the Company herein, as to
the performance by the Company of its obligations hereunder,
and as to the fulfillment of the conditions concurrent and
precedent to the obligations of the Underwriters hereunder.
(h) The Company shall have furnished to you the
agreements described in Section 2(p) of this Agreement.
6. INDEMNIFICATION. (a) The Company will
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending against any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, such Preliminary Prospectus, the Prospectus
or such amendment or such supplement in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through you
specifically for use therein; and provided further, that the foregoing indemnity
with respect to Preliminary Prospectuses shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) if
such untrue statement or omission or alleged untrue statement or omission made
in any Preliminary Prospectus is eliminated or remedied in the Prospectus and a
copy of the Prospectus has not been furnished to the person asserting any such
losses, claims, damages, or liabilities at or prior to the written confirmation
of the sale of such Shares to such person. Such indemnity obligation will be in
addition to any liability which the Company may otherwise have. The indemnity
agreement of the Company contained in this paragraph (a) and the representations
and warranties of the Company contained in Section 2 hereof shall remain
operative and in full force and effect regardless of any
18
20
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Shares.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director,
officer or controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon 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, 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 any Underwriter through you specifically
for use therein; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending against any such loss, claim, damage,
liability or action. Such indemnity obligation will be in addition to any
liability which such Underwriter may otherwise have. The indemnity agreement of
each Underwriter contained in this paragraph (b) 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 and payment for the
Shares.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section , notify the indemnifying party of the commencement thereof.
Indemnification shall not be available to any party who shall fail so to give
notice, if the party to whom notice was required to be given was unaware of the
action, suit, investigation, inquiry or proceeding to which the notice would
have related, to the extent that such party was prejudiced by the failure to
give notice; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section . In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish jointly with any other
19
21
indemnifying party similarly notified, to assume the defense thereof, with
counsel chosen by such indemnifying party which is reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that (i) if the indemnified party
reasonably determines that there may be a conflict between the positions of the
indemnifying party and of the indemnified party in conducting the defense of
such action, suit, investigation, inquiry or proceeding or that there may be
legal defenses available to such indemnified party different from or in addition
to those available to the indemnifying party, then counsel for the indemnified
party 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 and (ii) in any event, the indemnified party shall be entitled
to have counsel chosen by such indemnified party participate in, but not
conduct, the defense. No indemnifying party shall be liable to any indemnified
party in respect to any settlement effected without its prior written consent,
which consent shall not be unreasonably withheld. In addition, the indemnifying
party will not, without the prior written consent of an indemnified party,
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 indemnified party is a party to
such claim, action or suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit or proceeding.
7. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6(a) or 6(b)
hereof is for any reason, other than the first proviso to Section 6(a), held to
be unavailable, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities of the nature contemplated by
such indemnification provisions (including any investigation, legal and other
expenses incurred in connection with, any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting any
contribution received by the Company from persons other than the Underwriters,
such as persons who control the Company within the meaning of Section 15 of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who may also be liable for contribution) to which the Company
and one or more of the Underwriters may be subject, in such proportions so that
the Underwriters are responsible for that
20
22
portion in each case represented by the percentage that the respective
underwriting discounts appearing on the cover page of the Prospectus bear to the
public offering price of the Shares, and the Company is responsible for the
remaining portion; provided, however, that (i) except as may be provided in its
Master Agreement Among Underwriters provided to Xxxxx & Company Incorporated, in
no case shall any Underwriter be responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act shall have the same rights to contribution as
such Underwriter, and each person, if any, who controls the Company within the
meaning of Section 15 of the Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same right to contribution as the Company, subject in each case to clauses
(i) and (ii) of this Section 7. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 7, notify such party
or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 7. No party shall be liable for
contribution with respect to any action or claim settled without its consent,
which consent shall not be unreasonably withheld.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company or of the Underwriters
herein or in certificates delivered pursuant hereto shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person, the Company, or any of its officers,
directors, or controlling persons, and shall survive delivery of the Shares to
the several Underwriters hereunder.
9. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or
Underwriters shall fail to take up and pay for the number of Shares to be
purchased by such Underwriter or Underwriters hereunder upon tender of such
Shares in accordance with the terms hereof, and if the aggregate number of
Shares which such defaulting Underwriter or Underwriters so agreed but failed to
purchase does not exceed 10% of the Shares, the remaining Underwriters shall be
obligated severally in proportion to their respective commitments hereunder to
take up and pay for the Shares of such defaulting Underwriter or Underwriters.
If one or
21
23
more of the Underwriters shall fail or refuse (other than for a reason
sufficient to justify the termination of this Agreement) to purchase on any
Closing Date the aggregate number of Shares agreed to be purchased by such
Underwriter or Underwriters and the aggregate number of Shares agreed to be
purchased by such Underwriter or Underwriters shall exceed 10% of the aggregate
number of Shares to be sold on any Closing Date hereunder by the Company to the
Underwriters, then the other Underwriters shall have the right to purchase or
procure one or more other underwriters to purchase, in such proportions as they
may agree upon and upon the terms herein set forth, the Shares which such
defaulting Underwriter or Underwriters agreed to purchase, and this Agreement
shall be carried out accordingly. If such other Underwriters do not exercise
such right within thirty-six hours after receiving notice of any such default,
which notice the Representative shall have also promptly delivered to the
Company, then the Company shall have the right to procure another party or
parties reasonably satisfactory to the Representative to purchase or agree to
purchase such Shares on the terms herein set forth. If the Company is unable to
procure another such party, the Company may notify the Representatives that the
non-defaulting Underwriters are, by the giving of such notice, released from
their obligations to purchase such number of Shares being sold hereunder by the
Company as are indicated in such notice as, when subtracted from the total
number of Shares originally agreed to be purchased by all of the Underwriters
hereunder, shall leave a reduced number of Shares to be purchased by the
non-defaulting Underwriters not in excess of 110% of the aggregate number of
Shares originally contracted to be purchased hereunder by the non-defaulting
Underwriters, and each of them, in which event such non-defaulting Underwriters
shall purchase such reduced number of Shares. In any such case, either the
Representative or the Company shall have the right to postpone any Closing Date
for a period of not more than seven business days in order that necessary
changes and arrangements may be effected by the Representative and the Company.
If neither the non-defaulting Underwriters nor the Company shall make
arrangements within the period stated for the purchase of the Shares which such
defaulting Underwriter or Underwriters agreed to purchase, including such
arrangements for the purchase of a reduced number of Shares as are provided for
in this Section 9, then this Agreement shall terminate without liability on the
part of any non-defaulting Underwriters to the Company and without liability on
the part of the Company to the Underwriters.
In the event of any termination of this Agreement pursuant to
the preceding paragraph of this Section , the Company shall not be under any
liability to any Underwriter (except as provided in Section 4(g) and 6 hereof)
nor shall any Underwriter (other than an Underwriter who shall have failed,
otherwise than for some reason permitted under this Agreement, to purchase the
number of Shares to be purchased by such Underwriter hereunder,
22
24
which Underwriter shall remain liable to the Company and the other Underwriters
for damages resulting from such default) be under any liability to the Company
(except as provided in Section 6 hereof).
The term "Underwriter" in this Agreement shall include any
person substituted for an Underwriter under this Section 9.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION. (a) This
Agreement shall become effective at such time after the declaration by the
Commission of the effectiveness of the Registration Statement as you in your
discretion shall first release the Shares for sale to the public. For the
purposes of this Section the Shares shall be deemed to have been released for
sale to the public upon release by you for publication of a newspaper
advertisement relating to the Shares or upon release by you of letters or
telegrams offering the Shares for sale to securities dealers, whichever shall
first occur. By giving notice as hereinafter specified before the time this
Agreement becomes effective, you, as Representative of the several Underwriters,
or the Company may prevent this Agreement from becoming effective without
liability on the part of the Company to any Underwriter or of any Underwriter to
the Company, other than as provided in Sections 4(g) and 6 hereof.
(b) You, as Representative of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as hereinafter
specified at any time at or prior to the First Closing Date if (i) the Company
shall have failed, refused or been unable, at or prior to the First Closing
Date, to perform any material agreement on its part to be performed, or because
any other material condition of the Underwriters' obligations hereunder required
to be fulfilled by the Company is not fulfilled; (ii) trading on the New York
Stock Exchange 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 by the New York Stock
Exchange or by order of the Commission or any other governmental authority
having jurisdiction, since the execution of this Agreement; (iii) a banking
moratorium shall have been declared by Federal or New York authorities since the
execution of this Agreement; or (iv) an outbreak of major hostilities or other
national calamity shall have occurred. Any such termination shall be without
liability on the part of the Company to any Underwriter or of any Underwriter to
the Company other than as provided in Sections 4(g) and 6 hereof.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section , the
Company shall be notified promptly by you by telephone or telegram, confirmed by
letter. If the Company shall
23
25
elect to prevent this Agreement from becoming effective, you shall be notified
promptly by the Company by telephone or telegram, confirmed by letter.
11. NOTICES. All notices or communications hereunder, except
as herein otherwise specifically provided, shall be in writing and if sent to
you shall be mailed, delivered or telecopied and confirmed to you c/o Allen &
Company Incorporated, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with copy to
Xxxxxx XxXxxxxx & Carnelutti, a Professional Corporation, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq., or if sent to the
Company shall be mailed, delivered or telecopied and confirmed to the Company at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with a copy to Xxxxxx Xxxxxx
Flattau & Kimpl, LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxxx, Esq. Notice to any Underwriter pursuant to Section
6 shall be mailed, delivered or telecopied and confirmed to such Underwriter's
address as set forth in its Master Agreement Among Underwriters furnished to
Xxxxx & Company Incorporated.
12. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the several Underwriters and the Company and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person or corporation, other than the
parties hereto and their respective successors and assigns and the controlling
persons, officers and directors referred to in Section 6, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and assigns and said controlling persons
and said officers and directors, and for the benefit of no other person or
corporation. No purchaser of any of the Shares from any Underwriter shall be
construed a successor or assign merely by reason of such purchase.
In all dealings with the Company under this Agreement, you
shall be and are authorized to act on behalf of each of the several
Underwriters, and the Company shall be entitled to act and rely upon any
statement request, notice or agreement on behalf of each of the several
Underwriters if the same shall have been made or given in writing by you.
13. APPLICABLE LAW. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the
State of New York applicable to agreements made, and to be fully
performed, therein.
If the foregoing correctly sets forth the understanding
between the Company and the several Underwriters, please so
24
26
indicate in the space provided below for that purpose whereupon this letter
shall constitute a binding agreement between the Company and the several
Underwriters.
Very truly yours,
ARISTO INTERNATIONAL CORPORATION,
By:___________________________
President
Accepted as of the date
first above written:
XXXXX & COMPANY INCORPORATED
By: Xxxxx & Company Incorporated
By: ______________________________
Vice President
On behalf of each of the several
Underwriters named in Schedule A hereto.
25
27
SCHEDULE A
NUMBER
NAME AND ADDRESS OF UNDERWRITER OF SHARES
Xxxxx & Company Incorporated . . . . . . . . . . . . .
000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000
----------
Total . . . . . . . . . . . . . . . ==========
26
28
SCHEDULE B
SUBSIDIARIES OF THE COMPANY
Borta, Inc.
27
29
2,000,000 SHARES
ARISTO INTERNATIONAL CORPORATION
COMMON STOCK
-----------------------
SELECTED DEALER AGREEMENT
October __, 1996
Dear Sirs:
1. PURCHASE OF SECURITIES BY THE SEVERAL UNDERWRITERS. The several
Underwriters named in the enclosed Prospectus, on whose behalf we are acting as
Representative, have severally agreed to purchase from Aristo International
Corporation (the "Company") an offering of 2,000,000 Shares of the Company's
Common Stock (the "Shares"), as set forth in the Prospectus and subject to the
terms of the Underwriting Agreement between the several Underwriters and the
Company. The Shares are described in the Prospectus, additional copies of which
will be supplied in reasonable quantities upon request to us.
2. OFFERING TO SELECTED DEALERS. One or more of the several
Underwriters acting through us are severally offering a portion of the Shares to
certain dealers ("Selected Dealers") as principals, subject to the terms and
conditions of their purchase, to the terms and conditions hereof, and to the
modification or cancellation of the offering without notice, at the public
offering price set forth in the Prospectus, less a concession not in excess of
$____ per Share. Shares purchased by the several Underwriters, and not sold to
the Selected Dealers as aforesaid, may be sold by the several Underwriters. Any
of the several Underwriters may be included among the Selected Dealers.
The offering of a portion of the Shares to Selected Dealers may be made
on the basis of reservations or allotments against subscription. We are advising
you by telegram of the method and terms of the offering. Acceptance of any
reserved Shares received by us at the office of Xxxxx & Company Incorporated,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, after the time specified therefor in
the telegrams, and any subscriptions for additional Shares, will be subject to
prior sale and allotment. Subscription books may be closed by us at any time
without notice, and the right is reserved to reject any subscriptions in whole
or in part.
3. OFFERING TO PUBLIC BY SELECTED DEALERS. Upon receipt of the
aforementioned telegram, the Shares purchased by you hereunder may be re-offered
to the public in conformity with the
1
30
terms of offering set forth in the Prospectus. You may, in accordance with the
rules of the National Association of Securities Dealers, Inc., reallow a
concession of $_____ per Share sold by you to any other dealer or broker who is
a member of the National Association of Securities Dealers, Inc., provided such
discount is retained.
Neither you nor any other person is or has been authorized by the
Company, any of the several Underwriters or us to give information or make any
representations in connection with the sale of the Shares other than those
contained in the Prospectus.
In the event that during the term of this agreement we, as
Representative for the account of the several Underwriters, shall purchase or
contract to purchase, at or below the original public offering price set forth
in the Prospectus, any of the Shares purchased by you hereunder (which Shares
theretofore were not effectively placed for investment by you, including Shares
represented by transfers), we may, at our election, either (a) require you to
repurchase such Shares at a price equal to the total cost of such Shares
purchased by us, including brokerage commissions, if any, and transfer taxes on
the redelivery, or (b) charge you with and collect from you an amount equal to
the selling concession with respect to the Shares so purchased by us.
4. PAYMENT AND DELIVERY. Payment for the Shares which you have agreed
to purchase hereunder shall be made by you on _________, 1996, or such later
date as we may advise you, at 9:00 a.m., New York Time, at Xxxxx & Company
Incorporated's office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, by
certified or bank cashier's check payable in New York Clearing House funds to
the order of Xxxxx & Company Incorporated, against delivery of such Shares.
Delivery instructions must be in our hands at said address as such time as we
request.
Additional Shares confirmed to you shall be delivered on such date or
dates as we shall advise you.
5. BLUE SKY MATTERS. Neither we nor any of the several Underwriters
shall have any obligation or responsibility with respect to the right of any
dealer to sell the Shares in any jurisdiction, notwithstanding any information
which may be furnished as to the states under the securities laws of which it is
believed the Shares may be sold.
6. TERMINATION. This agreement shall terminate 20 full days after the
First Closing Date (as defined in the Underwriting Agreement) but may be
extended for a period or periods not exceeding in the aggregate 20 days as we
may determine. We may terminate this Agreement at any time without prior notice.
Notwithstanding the termination of this agreement, you shall remain liable for
your portion of any transfer tax or other
2
31
liability which may be asserted or assessed against us or any one or more of the
several Underwriters or Selected Dealers based upon the claim that the Selected
Dealers or any of them constitute a partnership, an association, an
unincorporated business or other separate entity.
7. OBLIGATIONS OF SELECTED DEALERS. Your acceptance hereof will
constitute an obligation on your part to purchase, upon the terms and conditions
hereof, the aggregate amount of the Shares reserved for and accepted by you and
to perform and observe all the terms and conditions hereof.
You are not authorized to act as agent for any of the several
Underwriters in offering Shares to the public or otherwise. Nothing contained
herein shall constitute the Selected Dealers an association, or partners with
the several Underwriters, with us, or with each other.
8. POSITION OF THE REPRESENTATIVE. We shall have full authority to take
such action as we may deem advisable in respect of all matters pertaining to the
offering or arising hereunder, but shall act only as Representatives of the
several Underwriters. Neither we nor any of the several Underwriters shall be
under any liability to you, except for our own want of good faith, obligations
assumed in this agreement, or any liabilities arising under the Securities Act
of 1933. No obligation not expressly assumed by us in this agreement shall be
implied hereby or inferred herefrom.
9. NOTICES. All communications from you should be addressed to us, c/o
Allen & Company Incorporated, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any
notice from us to you shall be deemed to have been duly given if mailed or
telegraphed to you at the address to which this letter is mailed.
3
32
Please confirm the foregoing by signing the duplicate copy of this
agreement enclosed herewith and returning it to us at the address in Section 9
above.
Very truly yours,
XXXXX & COMPANY INCORPORATED
By: Xxxxx & Company Incorporated
By: ______________________________
Vice President
4
33
XXXXX & COMPANY INCORPORATED
As Representative of the several Underwriters
c/o Allen & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Sirs:
We hereby confirm our agreement to purchase _____ Shares of
Aristo International Corporation (the "Shares"), subject to your acceptance or
rejection in whole or in part in the case of a subscription subject to allotment
or in excess of any reservation, and subject to all the other terms and
conditions stated in the foregoing letter.
We hereby acknowledge receipt of the prospectus relating to
the above described Shares (the "Prospectus") and we further state that in
purchasing the Shares confirmed to us we have relied upon such Prospectus and on
no other statements whatsoever, written or oral.
We hereby represent that we are a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD") and agree to
comply with the provisions of Article III, Section 24 of the NASD's Rules of
Fair Practice (the "NASD Rules"), or, if we are not such a member, we are a
foreign dealer or institution that is not registered under Section 15(b) of the
Securities Exchange Act of 1934 and that hereby agrees (i) to make no sales
within the United States, its territories or its possessions or to persons who
are citizens thereof or residents therein, (ii) if the offering of the Shares is
one within the scope of the NASD's Interpretation with Respect to Free-Riding
and Withholding, not to make other sales of Shares to persons enumerated in
paragraphs "1" through "5" of such Interpretation or in a manner inconsistent
with paragraph "6" thereof and (iii) to comply with the provisions of Article
III, Sections 8, 24, 25 (as applicable to a non-member broker/dealer in a
foreign country) and 36 of the NASD Rules.
Name of Selected Dealer
----------------------------------
----------------------------------
(Authorized Signature)
Dated: ______________, 1996
