Exhibit 1.01
Up to 400,000 Shares
BENIHANA INC.
Class A Common Stock
UNDERWRITING AGREEMENT
May __, 0000
Xxxxxxxxx Xxxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Benihana of Tokyo, Inc. (the "Selling Stockholder") proposes to sell up to
an aggregate of 400,000 shares (the "Shares") of the Class A Common Stock, par
value $.10 per share (the "Class A Stock") of Benihana Inc., a Delaware
corporation (the "Company"). This is to confirm the agreement concerning the
purchase of the Shares from the Selling Stockholder by Ladenburg Xxxxxxxx & Co.
Inc., as underwriter (the "Underwriter").
SECTION 1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 and one or more amendments
thereto with respect to the Shares have (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii) become
effective under the Securities Act. Copies of such registration statement and
each of the amendments thereto have been delivered by the Company to you as the
Underwriter. As used in this Agreement, "Effective Time" means the date and the
time as of which such registration statement, or the most recent post- effective
amendment thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Underwriter pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement" means such
registration statement, as amended at the Effective Time, including all
information contained or incorporated by reference in the final prospectus filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations and
deemed to be a part of the registration statement as of the Effective Time
pursuant to Rule 430A of the Rules and Regulations; and "Prospectus" means the
prospectus in the form first used to confirm sales of Shares, including all
information contained or incorporated by reference therein. If the Company has
filed an abbreviated registration statement to register additional shares of
Class A Stock pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in Section 16)
have (i) been duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of incorporation, (ii)
are duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification, and (iii) have all power and authority necessary to own or hold
their respective properties and to conduct the businesses in which they are
engaged, except, in the case of clauses (ii) and (iii), where the failure to so
qualify and be in good standing as a foreign corporation or have such power or
authority would not, singularly or in the aggregate, reasonably be expected to
have a material adverse effect on the general affairs, management, consolidated
financial position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"). None of the Company's subsidiaries is a limited liability
company.
(d) The authorized capital stock of the Company consists of 5,000,000
shares of preferred stock, par value $1.00 per share (the "Preferred Stock"),
12,000,000 shares of common stock, par value $.10 per share (the "Common
Stock"), and 20,000,000 shares of Class A Stock. As of May 18, 2001, the Company
had 3,579,116 shares of Common Stock and 2,580,536 shares of Class A Stock
issued and outstanding and 9,177 shares of Class A Stock held in treasury. All
of the issued shares of capital stock of the
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Company have been, and all of the Shares will be, when issued upon conversion of
the Common Stock, duly and validly authorized and issued, are, and with respect
to the Shares, will be, fully paid and non-assessable and conform, and with
respect to the Shares, will conform, in all material respects to the description
thereof contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable. Except with respect to Haru
Holding Corp. ("Haru") and each of its subsidiaries, all of the issued and
outstanding shares of capital stock of each subsidiary of the Company are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except for the pledge of the capital stock of
such subsidiaries by the Company under the Credit Agreement dated as of December
1, 1997 by and among the Company, First Union National Bank and the other
parties thereto (the "Credit Facility"). The Company owns directly or
indirectly, 80% of the issued and outstanding shares of capital stock of Haru
and each of Haru's subsidiaries, free and clear of all liens, encumbrances,
equities or claims, except for the pledge of the capital stock of Haru and such
subsidiaries under the Credit Facility. Except as otherwise described in the
Prospectus, there are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any shares of the
Class A Stock pursuant to the Company's certificate of incorporation or by-laws
or any agreement or other instrument.
(e) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law), and except insofar as
the indemnification and contribution provisions hereof may be limited by
considerations of public policy.
(f) The Company has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of (i) the certificate of incorporation (or other
equivalent organizational document) or by-laws (or other equivalent
organizational document) of the Company or any of its subsidiaries or (ii) any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets; and except for the registration of the
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Shares under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and applicable state or foreign
securities laws or by the National Association of Securities Dealers, Inc. (the
"NASD") in connection with the purchase and distribution of the Shares by the
Underwriter, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(h) Except for the Selling Stockholder's registration rights with respect
to shares of capital stock of the Company owned by the Selling Stockholder
(other than the Shares), there are no contracts, agreements or understandings
between the Company and any person granting such person the right (other than
rights which have been waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act.
(i) Except as set forth in the Prospectus, the Company has not sold or
issued any shares of Class A Stock during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act other than shares issued pursuant to
employee benefit plans, stock options plans or other employee compensation plans
or pursuant to outstanding options, rights or warrants.
(j) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included or incorporated in
the Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such date, there
has not been any material change in the capital stock or long-term debt of the
Company and its subsidiaries on a consolidated basis or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus.
(k) The financial statements (including the related notes and supporting
schedules) filed as part of the Registration Statement or included or
incorporated in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The other financial information and
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data filed as part of the Registration Statement or included in the Prospectus
is fairly presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(l) Deloitte & Touche, LLP, who have certified certain financial
statements of the Company, whose report is incorporated by reference in the
Prospectus and who have delivered the initial letter referred to in Section 9(h)
hereof, are independent public accountants as required by the Securities Act and
the Rules and Regulations.
(m) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects, except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; all assets held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not materially interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries taken as a whole.
(n) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar businesses in similar
industries.
(o) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights and licenses necessary for the conduct of their respective businesses
and have no reason to believe that the conduct of their respective businesses
will conflict with, and have not received any notice of any claim of conflict
with, any such rights of others, in each case except as could not reasonably be
expected to have a Material Adverse Effect.
(p) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries would reasonably be expected to have a Material Adverse
Effect; and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the
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Prospectus or filed as exhibits to the Registration Statement or incorporated by
reference as exhibits as permitted by the Rules and Regulations.
(r) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, shareholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists or, to the
knowledge of the Company, is imminent, which would reasonably be expected to
have a Material Adverse Effect.
(t) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any material liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and,
to the best of the Company's knowledge, nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof (except where
the failure to file would not reasonably be expected to have a Material Adverse
Effect) and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries which has had
(nor does the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its subsidiaries, would reasonably
be expected to have) a Material Adverse Effect.
(v) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any material liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any material transaction not in the ordinary course
of business or (iv) declared or paid any dividend on its capital stock.
(w) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements
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and to maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(y) Neither the Company nor any of its subsidiaries (i) is in violation
of its certificate of incorporation (or other equivalent organizational
document) or by-laws (or other equivalent organizational document), (ii) is in
default in any respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its properties or
assets is subject or (iii) is in violation in any respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business except, in the case
of clauses (ii) and (iii), for such defaults, violations and failures which
would not, singularly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(z) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(aa) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or would not be reasonably expected to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges,
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leaks, emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect; and the terms "hazardous wastes", "toxic wastes", "hazardous substances"
and "medical wastes" shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to environmental
protection.
(bb) Neither the Company nor any subsidiary is an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(cc) The Shares have been authorized for listing on the Nasdaq National
Market.
SECTION 2. Representations, Warranties and Agreements of the Selling
Stockholder. The Selling Stockholder represents, warrants and agrees that:
(a) The Selling Stockholder has good and valid title to the 294,737
shares of Common Stock and 105,263 shares of Class A Stock delivered to First
Union National Bank of North Carolina, the Company's transfer agent (the
"Transfer Agent"). The 294,737 shares of Common Stock are convertible into
294,737 shares of Class A Stock. Immediately prior to the Delivery Date (as
defined in Section 5 hereof), the Selling Stockholder will have good and valid
title to the shares of Class A Stock (including shares of Class A Stock issuable
upon conversion of the Common Stock) to be sold by the Selling Stockholder
hereunder on such date free and clear of all liens, encumbrances, equities or
claims; and upon delivery of such Shares and payment therefor pursuant hereto,
good and valid title to such Shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the Underwriter.
(b) The Selling Stockholder has delivered the certificates in negotiable
form representing the shares of Common Stock and Class A Stock to the Transfer
Agent.
(c) Each of this Agreement and the custody agreement dated the date
hereof between the Selling Stockholder and Xxxxxxxx Xxxxxx
Xxxxxxxxxx & Xxxxxxxxx, LLP (the "Custody Agreement") has been duly authorized,
executed and delivered by the Selling Stockholder and constitutes the legal,
valid and binding obligation of the Selling Stockholder, enforceable against the
Selling Stockholder in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law), and except insofar as the indemnification and contribution
provisions hereof may be limited by considerations of public policy.
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(d) The Selling Stockholder has full right, power and authority to enter
into this Agreement and the Custody Agreement and to perform its obligations
hereunder and thereunder; the execution, delivery and performance of this
Agreement and the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling Stockholder is
subject, nor will such actions result in any violation of the provisions of
applicable organizational documents of the Selling Stockholder or any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property or assets of the
Selling Stockholder; and, except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state
and foreign securities laws and by the NASD in connection with the purchase and
distribution of the Shares by the Underwriter, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement or the Custody Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby.
(e) The Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus, when
they become effective or are filed with the Commission, as the case may be, do
not and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date (as to
the Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Underwriter specifically for inclusion therein.
(f) The Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof are
not materially true and correct, is familiar with the Registration Statement and
the Prospectus (as amended or supplemented) and has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement, as
of the Effective Date, or the Prospectus (or any amendment or supplement
thereto), as of the applicable filing date, which has had or may have a Material
Adverse Effect and is not prompted to sell the Shares by any information
concerning the Company which is not set forth in the Registration Statement and
the Prospectus.
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(g) The Selling Stockholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
SECTION 3. Purchase of the Shares by the Underwriter. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Selling Stockholder agrees to sell to the
Underwriter up to 400,000 Shares of Class A Stock, and the Underwriter agrees to
purchase from the Selling Stockholder up to such 400,000 Shares, at a per Share
purchase price equal to a 10% discount (rounded to two decimal places) from the
closing bid price of a Share of Class A Stock on the Nasdaq National Market on
the date the Underwriter provides the Notice of Delivery Date (as hereinafter
defined) to the Selling Stockholder; provided, that in no event shall the
Selling Stockholder be required to sell such Shares to the Underwriter at a per
Share purchase price less than $8.50 per Share. However, if the per share price
to be paid to the Selling Stockholder based on a 10% discount from the closing
bid price would be less than $8.50, the Underwriter has the right to purchase
such shares at $8.50 per share. For purposes of this Agreement, delivery by the
Underwriter of the Notice of Delivery Date at any time prior to 6:00 p.m. New
York City time on any day shall constitute delivery of the Notice of Delivery
Date on such day.
The Selling Stockholder shall not be obligated to deliver any of the Shares
to be delivered on the Delivery Date (as hereinafter defined), except upon
payment for all the Shares to be purchased on the Delivery Date as set forth in
the Notice of Delivery Date and as provided herein.
SECTION 4. Offering of Shares by the Underwriter. There is no minimum
amount of Shares that must be sold by the Underwriter hereunder. The Shares are
to be initially offered to the public at an offering price equal to a 4%
discount (rounded to two decimal places) from the closing bid price of a Share
of Class A Stock on the Nasdaq National Market on the date the Underwriter
provides the Notice of Delivery Date (as hereinafter defined) to the Selling
Stockholder or, if the Underwriter purchases the shares at $8.50 per share as
described above, the Underwriter shall sell such shares to the public at $9.03
per share. The Underwriter may, at its own expense, enter into one or more
agreements, in its sole discretion, as it deems advisable, with one or more
broker-dealers who shall act as dealers in connection with such public offering.
SECTION 5. Delivery of and Payment for the Shares. Delivery of and payment
for the Shares shall be made at the offices of Ladenburg Xxxxxxxx & Co. Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time,
on the third full business day after the Underwriter sends the Selling
Stockholder the notice of a delivery date (the "Notice of Delivery Date"). The
Notice of Delivery Date shall specify that delivery and payment for some or all
of the Shares, specifying the exact number of such Shares, shall occur on the
third full business day after the Underwriter sends the Notice of Delivery Date.
The date and time
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are referred to as the "Delivery Date." On each Delivery Date, the Selling
Stockholder shall deliver or cause to be delivered certificates representing the
number of Shares specified in the Notice of Delivery Date to the Underwriter
against payment to or upon the order of the Selling Stockholder of the purchase
price by wire transfer in immediately available funds to a bank account
designated by the Selling Stockholder at least two business days prior to the
Delivery Date. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
the Underwriter hereunder. Upon delivery, the Shares shall be registered in such
names and in such denominations as the Underwriter shall request in writing not
less than two full business days prior to the Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Shares, the
Selling Stockholder shall make the certificates representing the Shares
available for inspection by the Underwriter in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the Delivery
Date.
SECTION 6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Underwriter and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not later
than the Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or to the Prospectus
except as permitted herein; to advise the Underwriter, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Underwriter with copies thereof; to advise the Underwriter, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to the Underwriter and to counsel for the
Underwriter a signed copy of the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the Commission, including
all consents and exhibits filed therewith;
(c) To deliver promptly to the Underwriter such number of the following
documents as the Underwriter shall reasonably request: (i) conformed copies of
the Registration Statement as originally filed with the Commission and each
amendment
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thereto (in each case excluding exhibits) and (ii) each Preliminary Prospectus,
the Prospectus and any amended or supplemented Prospectus; and, if the delivery
of a prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Shares or any other securities relating thereto
and if at such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary to amend or supplement the Prospectus in order to
comply with the Securities Act, to notify the Underwriter and, upon its request,
to prepare and furnish without charge to the Underwriter and to any dealer in
securities as many copies as the Underwriter may from time to time reasonably
request of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
reasonable judgment of the Company or the Underwriter, be required by the
Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the Registration
Statement or supplement to the Prospectus or any Prospectus pursuant to Rule 424
of the Rules and Regulations, to furnish a copy thereof to the Underwriter and
counsel for the Underwriter and obtain the consent of the Underwriter to the
filing, which consent shall not be unreasonably delayed or withheld;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the Underwriter an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 1l(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158);
(g) Upon the request of the Underwriter, for a period of two years
following the Effective Date, to furnish to the Underwriter copies of all
materials furnished by the Company to its shareholders generally and all public
reports and all reports and financial statements furnished by the Company to the
principal national securities exchange upon which the Class A Stock may be
listed pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder;
(h) Promptly from time to time to take such action as the Underwriter may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as the Underwriter may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Shares; provided that in connection
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therewith the Company shall not be required to qualify as a foreign corporation,
to submit to general taxation or to file a general consent to service of process
in any jurisdiction;
(i) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Class A Stock or securities convertible into or exchangeable
for Class A Stock (other than (w) the Shares, (x) shares of Class A Stock issued
pursuant to employee benefit plans, stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights, or (y) shares of Class A Stock or
securities convertible into or exchangeable for Class A Stock issued in a
private placement transaction (provided that such shares shall not be publicly
resold during the period of 90 days after the date of the Prospectus; provided,
further, that the holder of shares issued in such a transaction shall furnish to
the Underwriter at or prior to the time of such issuance a letter in the form of
Exhibit A hereto)) or substantially similar securities, or sell or grant
options, rights or warrants with respect to any shares of Class A Stock or
securities convertible into or exchangeable for Class A Stock or substantially
similar securities (other than the grant of options pursuant to benefit plans
existing on the date hereof), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Class A Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Class A Stock or other securities, in cash or otherwise, in each case without
the prior written consent of the Underwriter; and to cause (i) each executive
officer and employee director of the Company, to furnish to the Underwriter,
prior to the first Delivery Date, a letter or letters, substantially in the form
of Exhibit A hereto and (ii) each non-employee director of the Company, to
furnish to the Underwriter, prior to the first Delivery Date, a letter or
letters, substantially in the form of Exhibit B hereto. In addition, the Selling
Stockholder hereby agrees to be bound by and to comply with the terms and
restrictions applicable to the Company in this paragraph (i).
(j) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as defined in
the Investment Company Act of 1940, as amended, and the rules and regulations of
the Commission thereunder; and
(k) During the period of 90 days from the date of the Prospectus, to
obtain an executed letter in the form of Exhibit A or Exhibit B hereto, as the
case may be, from each new executive officer and director who has not previously
executed such a letter.
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SECTION 7. Further Agreements of the Selling Stockholder. The Selling
Stockholder agrees:
(a) That concurrently with the execution hereof, such Selling Stockholder
will execute and deliver to the Underwriter a letter in the form of Exhibit A
hereto;
(b) That the Shares to be sold by the Selling Stockholder hereunder, which
is represented by the certificates held in custody for the Selling Stockholder,
is subject to the interest of the Underwriter, that the arrangements made by the
Selling Stockholder for such custody are to that extent irrevocable, and that
the obligations of the Selling Stockholder hereunder shall not be terminated by
any act of the Selling Stockholder, or to the extent permitted by applicable
law, by the death, incapacity, disability or incompetence, liquidation or
dissolution of the Selling Stockholder or, in the case of a trust, by the death
or incapacity of any executor or trustee or the termination of such trust, to
the extent applicable, or the occurrence of any other event; and
(c) To deliver to the Underwriter prior to the first Delivery Date a
properly completed and executed United States Treasury Department Form W- 8 (if
the Selling Stockholder is a non-United States person) or Form W-9 (if the
Selling Stockholder is a United States person).
SECTION 8. Expenses. The Selling Stockholder agrees to pay (a) the
Underwriter a $75,000 non-accountable expense allowance to cover all of the
Underwriter's out-of-pocket expenses (the receipt of which is hereby
acknowledged by the Underwriter), (b) the costs incident to the sale and
delivery of the Shares and any taxes payable in that connection; (c) the costs
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (d) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (e) the costs
of reproducing and distributing this Agreement and any other related documents
in connection with the offering, purchase, sale and delivery of the Shares; (f)
the filing fees incident to securing the review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Shares; (g) any applicable
listing or other fees; (h) the fees and expenses of qualifying the Shares under
the securities laws of the several jurisdictions as provided in Section 6(h) and
of preparing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriter, which obligation shall be in addition to
the obligation referred to in subparagraph (a) above); (i) the costs and
expenses (excluding costs and expenses of the Underwriter and its
representatives) relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations, travel and lodging expenses of the
representatives and officers of the Selling Stockholder and any such
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consultants, and all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholder under this Agreement,
including all accounting and counsel fees and expenses incurred by the Company
and the Selling Stockholder in connection with the offering of the Shares
hereunder.
SECTION 9. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder on the Delivery Date are subject (x) to the accuracy
when made and on the Delivery Date, of the representations and warranties of the
Company and the Selling Stockholder contained herein (provided that, in the case
of this clause (x), the obligations of the Underwriter hereunder shall be
subject to the accuracy in all material respects of those representations and
warranties that are not qualified as to materiality), (y) to the performance by
the Company and the Selling Stockholder of their respective obligations
hereunder and (z) to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) The Underwriter shall not have discovered and disclosed to the Company
on or prior to the Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of fact which, in the opinion of Xxxxxxxxxx Xxxxxxx PC, counsel for the
Underwriter, is material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Custody Agreement, the
Shares, the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the
Underwriter, and the Company and the Selling Stockholder shall have furnished to
such counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, LLP, shall have furnished to
the Underwriter its written opinion, as counsel to the Company, addressed to the
Underwriter and dated the Delivery Date, in substantially the form attached
hereto as Exhibit C.
(e) Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, LLP, shall have furnished to
the Underwriter its written opinion, as counsel to the Selling Stockholder,
addressed to the Underwriter and dated the Delivery Date, in substantially the
form attached hereto as Exhibit D.
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(f) At the time of execution of this Agreement, the Underwriter shall have
received from Deloitte & Touche, LLP a letter, in form and substance
satisfactory to the Underwriter, addressed to the Underwriter and dated the date
hereof (i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) stating, as of the date hereof (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(g) With respect to the letter of Deloitte & Touche LLP referred to in the
preceding paragraph and delivered to the Underwriter concurrently with the
execution of this Agreement (the "initial letter"), the Company shall have
furnished to the Underwriter a letter (the "bring-down letter") of such
accountants, addressed to the Underwriter and dated the Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
(h) The Company shall have furnished to the Underwriter a certificate,
dated the Delivery Date, of its President and its chief financial officer
stating that:
(i) The representations, warranties and agreements of the Company in
Section 1 are true and correct as of the Delivery Date (provided that such
representations, warranties and agreements that are not qualified as to
materiality shall be true in all material respects); the Company has
complied with all its agreements contained herein; and the conditions set
forth in Sections 9(a) and 9(l) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and the Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (B) since the
-16-
Effective Date no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the Prospectus.
(i) The Selling Stockholder shall have furnished to the Underwriter a
certificate, dated the Delivery Date, signed by, or on behalf of, the Selling
Stockholder stating that the representations, warranties and agreements of the
Selling Stockholder in Section 2 are true and correct as of the Delivery Date
(provided that such representations, warranties and agreements that are not
qualified as to materiality shall be true in all material respects); and that
the Selling Stockholder has complied with all agreements contained herein
required to be complied with by the Selling Stockholder on or prior to the
Delivery Date.
(j) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included in the
Prospectus (i) any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Company and
its subsidiaries on a consolidated basis or any adverse change, or any
development involving a prospective adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Underwriter, so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered on the Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any of the following: (i) trading in securities generally on
the New York Stock Exchange or the American Stock Exchange or in the over-the-
counter market, or trading in any securities of the Company on any exchange or
in the over-the-counter market, shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Underwriter, impracticable or inadvisable to proceed with the public
offering or delivery of the Shares being delivered on the Delivery Date on the
terms and in the manner contemplated in the Prospectus.
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(l) The Shares shall be listed on the Nasdaq National Market System.
(m) Prior to the Delivery Date, the Underwriter shall have received from
the Selling Stockholder and from each executive officer and director of the
Company, an executed letter in the form of Exhibit A or Exhibit B, as
applicable, pursuant to Section 6(i) hereto.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
SECTION 10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless the Underwriter, its
officers and employees and each person, if any, who controls the Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Shares), to which the Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky application, any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by the Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse the Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by the Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company by or on behalf of the
Underwriter specifically for
-18-
inclusion therein which information consists solely of the information specified
in Section 10(f); and provided further that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning the Selling Stockholder furnished to the Company in writing by or on
behalf of such Selling Stockholder specifically for inclusion therein; and
provided further that as to any Preliminary Prospectus, this indemnity agreement
shall not inure to the benefit of the Underwriter, its officers or employees, or
any person controlling the Underwriter, on account of any loss, claim, damage,
liability or action arising from the sale of the Shares to any person by the
Underwriter if the Underwriter failed to send or give a copy of the Prospectus,
as the same may be amended or supplemented, to that person within the time
required by the Securities Act, and the untrue statement or alleged untrue
statement of any material fact or omission or alleged omission to state a
material fact in such Preliminary Prospectus was corrected in the Prospectus,
unless such failure resulted from non-compliance by the Company with Section
6(c). The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to the Underwriter or to any officer, employee or
controlling person of the Underwriter.
(b) The Selling Stockholder shall indemnify and hold harmless the
Underwriter, its officers and employees and each person, if any, who controls
the Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Shares), to which the Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky application, any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and shall reimburse the Underwriter and each such officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Underwriter, officer, employee or controlling person
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Selling Stockholder shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company by or on behalf of the
-19-
Underwriter specifically for inclusion therein which information consists solely
of the information specified in Section 10(f); and provided further that as to
any Preliminary Prospectus, this indemnity agreement shall not inure to the
benefit of the Underwriter, its officers or employees, or any person controlling
the Underwriter, on account of any loss, claim, damage, liability or action
arising from the sale of Shares to any person by that Underwriter if that
Underwriter failed to send or give a copy of the Prospectus, as the same may be
amended or supplemented, to that person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of any
material fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in the Prospectus, unless such failure
resulted from non-compliance by the Company with Section 6(c). Notwithstanding
the foregoing, the aggregate liability of the Selling Stockholder pursuant to
the provisions of this Section 10(b) shall be limited to an amount equal to the
net proceeds (before deducting expenses) received by such Selling Stockholder
from the sale of its Shares hereunder. The foregoing indemnity agreement is in
addition to any liability which the Selling Stockholder may otherwise have to
the Underwriter or to any officer, employee or controlling person of that
Underwriter.
(c) The Underwriter shall indemnify and hold harmless the Company, its
officers and employees, each of its directors, and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company by or on behalf
of the Underwriter specifically for inclusion therein, and shall reimburse the
Company and any such director, officer or controlling person for any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which the Underwriter may otherwise have to the Company or any such
director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under this Section 10
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 10, notify the indemnifying party in writing of the
claim or the commencement of that
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action; provided, however, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have under this Section 10
except to the extent it has been materially prejudiced by such failure and,
provided further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 10. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 10 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that any indemnified party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment
thereof has been specifically authorized by the indemnifying party in writing,
(ii) such indemnified party shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to employ
separate counsel or (iii) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in writing by the Underwriter if the
indemnified parties under this Section 10 consist of the Underwriter or the
Underwriter's officers, employees or controlling persons, or by the Company, if
the indemnified parties under this Section consist of the Company or any of the
Company's directors, officers, employees or controlling persons. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise, consent or judgment includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such action effected
without its written consent (which consent shall not be unreasonably withheld),
but if settled with the consent of the indemnifying party or if there be a final
judgment of
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the plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, 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 such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Selling Stockholder on the one hand and the Underwriter on the
other from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholder
(with the fault of the Company also being considered in determining the fault of
the Selling Stockholder) on the one hand and the Underwriter on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Selling
Stockholder on the one hand and the Underwriter on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds (before deducting expenses) from the offering of the Shares purchased
under this Agreement received by the Selling Stockholder on the one hand, and
the total underwriting discounts and commissions received by the Underwriter
with respect to the Shares purchased under this Agreement on the other hand bear
to the total gross proceeds from the offering of the Shares under this
Agreement, in each case as described on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Stockholder (with the fault of the Company also being considered in determining
the fault of the Selling Stockholder) or the Underwriter, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholder and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this Section were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 10(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 10(e), the Underwriter shall not be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public was offered to the public exceeds the amount
of any damages which such Underwriter has otherwise paid or become liable to
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pay by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Notwithstanding the foregoing, the aggregate liability of the Selling
Stockholder pursuant to the provisions of this Section 10(e) shall be limited to
an amount equal to the net proceeds (before deducting expenses) received by such
Selling Stockholder from the sale of its Shares hereunder.
(f) The Underwriter confirms and the Company acknowledges that the
statements with respect to the public offering of the Shares by the Underwriter
set forth in the third paragraph of the cover page and in paragraphs one, three,
four, five, six, seven, eight (the last sentence) and thirteen under the caption
"Plan of Distribution" in, the Prospectus are correct and constitute the only
information concerning such Underwriter furnished in writing to the Company by
or on behalf of the Underwriter specifically for inclusion in the Registration
Statement and the Prospectus.
SECTION 11. Termination. The obligations of the Underwriter hereunder may
be terminated by the Underwriter by notice given to and received by the Company
and the Selling Stockholder prior to delivery of and payment for all of the
Shares if, prior to that time, any of the events described in Sections 9(k) or
9(l), shall have occurred or if the Underwriter shall decline to purchase the
Shares for any reason permitted under this Agreement. Notwithstanding any other
provision of this Agreement to the contrary, this Agreement shall terminate
automatically if the purchase of the Shares by the Underwriter is not completed
by August ___, 2001. The termination date cannot be extended.
SECTION 12. Reimbursement of Underwriter's Expenses. If the Selling
Stockholder shall fail to tender the Shares for delivery to the Underwriter by
reason of any failure, refusal or inability on the part of the Company or the
Selling Stockholder to perform any agreement on its part to be performed, or
because any other condition of the Underwriter's obligations hereunder required
to be fulfilled by the Company or the Selling Stockholder is not fulfilled, the
Company or the Selling Stockholder, as the case may be, will reimburse the
Underwriter for all reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel) incurred by the Underwriter in connection with
this Agreement and the proposed purchase of the Shares and upon demand the
Company or the Selling Stockholder, as the case may be, shall pay the full
amount thereof to the Underwriter. If this Agreement is terminated pursuant to
Section 11 by reason of the default of the Underwriter, neither the Company nor
the Selling Stockholder shall be obligated to reimburse the Underwriter on
account of those expenses.
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SECTION 13. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail, telex or
facsimile transmission to Ladenburg Xxxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Director of Investment Banking (Fax: 212-409-
2173), with a copy to Xxxxxx X. Xxxxxx, Esq., Xxxxxxxxxx Xxxxxxx PC, 00
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (Fax: 000-000-0000), (b) if to
the Company, shall be delivered or sent by mail, telex or facsimile transmission
to the address of the Company set forth in the Registration Statement,
Attention: Xxxx Xxxxxxxx, if to the Selling Stockholder, shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Xxxxxxx Kata, in either case
with a copy to Xxxxxxxx X. Xxxxxxxxx, Esq., Xxxxxxxx Xxxxxx Xxxxxxxxxx &
Xxxxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax: 000-000-0000).
Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof. The Company and the Underwriter shall be entitled
to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Selling Stockholder by the Custodian acting on behalf of the
Selling Stockholder.
SECTION 14. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriter, the Company,
the Selling Stockholder and their respective representatives and successors.
This Agreement and the terms and provisions hereof are for the sole benefit of
only those persons, except that (A) the representations, warranties, indemnities
and agreements of the Company and the Selling Stockholder contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control the Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriter contained in
Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors, officers and employees of the Company, and any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 14 any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
SECTION 15. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholder and the
Underwriter contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Shares and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any on controlling any
of them.
SECTION 16. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
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Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
SECTION 18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the Company, the
Selling Stockholder and the Underwriter, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
BENIHANA INC.
By:_____________________________________
Name:
Title:
BENIHANA OF TOKYO, INC.
By:_____________________________________
Accepted:
LADENBURG XXXXXXXX & CO. INC,
as Underwriter
By:_____________________________________
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