OHS DRAFT 11/21/97
MADE2MANAGE SYSTEMS, INC.
2,250,000 Shares of Common Stock*
UNDERWRITING AGREEMENT
__________ __, 1997
First Albany Corporation
Xxx Xxxxxx & Company
RvR Securities Corp.,
As Representatives of
the several Underwriters
c/o First Albany Corporation
Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Section 1. INTRODUCTORY. Made2Manage Systems, Inc., an Indiana
corporation (the "Company"), has an authorized capital stock consisting of
10,000,000 shares, no par value, of Common Stock ("Common Stock") and
3,662,111 shares, no par value, of Preferred Stock, of which 1,479,824 shares
were outstanding as of October 15, 1997. The Company, and the persons named
in Schedule II (the "Primary Selling Shareholders"), propose to sell
2,250,000 shares (the "Firm Shares") of Common Stock, of which 2,050,000
shares are to be issued and sold by the Company and 200,000 shares are to be
sold by the Primary Selling Shareholders to the several underwriters named in
Schedule I (the "Underwriters"), who are acting severally and not jointly.
In addition, certain persons named in Schedule III (the "Option Selling
Shareholders") propose to grant to the Underwriters an option to purchase up
to 337,500 additional shares of Common Stock ("Option Shares"), in the
respective amounts set forth opposite their respective names in Schedule III,
as provided in Section 5 hereof. The Firm Shares and, to the extent such
option is exercised, the Option Shares, are hereinafter collectively referred
to as the "Shares." The Primary Selling Shareholders and the Option Selling
Shareholders are hereinafter collectively referred to as the "Selling
Shareholders." Each Selling Shareholder has executed and delivered a Custody
Agreement and a Power of Attorney in the form attached hereto as Exhibit A
(collectively, the "Custody Agreement and Power of Attorney") pursuant to
which each Selling Shareholder has placed his Shares in custody and appointed
the persons designated therein as a committee (the "Committee") with
authority to execute and deliver this Agreement on behalf of such Selling
Shareholder and to take certain other actions with respect thereto and hereto.
----------------------------
*Plus an option to acquire up to 337,500 additional shares to cover
over-allotments.
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon as you
deem advisable after the registration statement hereinafter referred to
becomes effective, if it has not already yet become effective. You have also
advised the Company that the Underwriters will offer and sell the Shares to
the public only in those jurisdictions, and in such amounts, where due
qualification and/or registration has been effected or an exemption from such
qualification and/or registration is available under the applicable
securities or blue sky laws of such jurisdiction.
The Company and the Selling Shareholders hereby confirm their agreement with
the Underwriters as follows:
Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-1 and a
registration statement (Registration No. 333-38177) on Form S-1 relating to
the Shares, including a preliminary prospectus and such amendments to such
registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, and has been filed
with the Commission. The term "preliminary prospectus" as used herein means
a preliminary prospectus as contemplated by Rule 430 or Rule 430A of the
Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments and of each
related preliminary prospectus have been delivered to the Representatives.
If such registration statement has not become effective, a further amendment
to such registration statement, including a form of final prospectus,
necessary to permit such registration statement to become effective will be
filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus containing information
permitted to be omitted at the time of effectiveness by Rule 430A of the
Rules and Regulations will be filed promptly by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations. The
term "Registration Statement" means the registration statement as amended at
the time it becomes or became effective (the "Effective Date"), including
financial statements and all exhibits and any information deemed to be
included by Rule 430A. The term "Prospectus" means the prospectus as first
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no such filing is required, the form of final prospectus
included in the Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is first filed
with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date (as defined herein) and, if
later, the Option Closing Date (as defined herein) and when any
post-effective amendment to the Registration Statement becomes effective or
any amendment or supplement to the Prospectus is filed with the Commission,
the Registration Statement and the Prospectus (as amended or supplemented if
the Company shall have filed with the Commission any amendment or supplement
thereto) did or will comply with all applicable provisions of the Act and the
Rules and Regulations and will contain all statements required to be
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stated therein in accordance with the Act and the Rules and Regulations. On
the Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement, the
Prospectus or any such amendment or supplement did or will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. At the
Effective Date, the date the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date and, if
later, the Option Closing Date, the Prospectus did not or will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing representations and
warranties in this Section 2(b) do not apply to any statements or omissions
made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives or
relating to any Selling Shareholder furnished in writing to the Company by
such Selling Shareholder specifically for inclusion in the Registration
Statement or Prospectus or any amendment or supplement thereto. The Company
acknowledges that (i) the information on the cover page of the Prospectus
with respect to price, underwriting discounts and commissions, the terms of
the offering and (ii) the statements set forth under the heading
"Underwriting" in the Prospectus constitute the only information relating to
any Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement.
(c) The Company is, and at the Closing Date will be, a corporation
duly organized, and validly existing under the laws of its jurisdiction of
incorporation. The Company has, and at the Closing Date will have, full
power and authority to conduct all the activities conducted by it, to own or
lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The Company is,
and at the Closing Date will be, duly licensed or qualified to do business
and in good standing as a foreign corporation in all jurisdictions in which
the nature of the activities conducted by it or the character of the assets
owned or leased by it makes such license or qualification necessary, except
where the failure to be so qualified would not have a material adverse effect
on the business, business prospects, financial condition or results of
operations of the Company ("Material Adverse Effect"). The Company does not
own, and at the Closing Date will not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities of any corporation
or have any equity interest in any firm, partnership, joint venture,
association or other entity. Complete and correct copies of the articles of
incorporation and of the by-laws of the Company and all amendments thereto
have been delivered to the Representatives, and no changes therein will be
made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date.
(d) The outstanding shares of Common Stock have been, and the
Shares to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right. The description of the Common
Stock in the Registration Statement and the Prospectus is, and at the Closing
Date will be, complete and accurate in all respects. Except as set forth in
the Prospectus, the Company does not have outstanding, and at the Closing
Date will not have outstanding, any options to purchase, or any rights or
warrants to subscribe for, or any securities
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or obligations convertible into, or any contracts or commitments to issue or
sell, any shares of Common Stock, any shares of capital stock of any
subsidiary or any such warrants, convertible securities or obligations.
(e) The financial statements and schedules included in the
Registration Statement or the Prospectus present fairly in all material
respects the financial condition of the Company as of the respective dates
thereof and the results of operations and cash flows of the Company for the
respective periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire
period involved, except as otherwise disclosed in the Prospectus. No other
financial statements or schedules of the Company are required by the Act or
the Rules and Regulations to be included in the Registration Statement or the
Prospectus. Coopers & Xxxxxxx, L.L.P., (the "Accountants") who have reported
on such financial statements and schedules, are independent accountants with
respect to the Company as required by the Act and the Rules and Regulations.
(f) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been
any change in the capitalization of the Company, or in the business,
properties, business prospects, condition (financial or otherwise) or results
of operations of the Company arising for any reason whatsoever which could
have a Material Adverse Effect, (ii) the Company has not incurred nor will it
incur any material liabilities or obligations, direct or contingent, nor has
it entered into nor will it enter into any material transactions other than
in the ordinary course of business or pursuant to this Agreement and the
transactions referred to herein and (iii) the Company has not and will not
have paid or declared any dividends or other distributions of any kind on any
class of its capital stock.
(g) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(h) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
of its respective officers in their capacity as such, before or by any
Federal or state court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding might have a Material Adverse Effect.
(i) The Company has, and at the Closing Date will have, (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus, (ii) complied in all respects with all laws, regulations and
orders applicable to it or its business and (iii) performed all its
obligations required to be performed by it, and is not, and at the Closing
Date will not be, in default, under any contract or other instrument to which
it is a party or by which its property is bound or affected and, to the
knowledge of the Company, there does not exist any state of facts which
constitutes an event of default as defined in such contract or instrument or
which, with notice or lapse of time or both,
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would constitute such an event of default, except, in each case, where such
failure or default would not have a Material Adverse Effect. To the
knowledge of the Company, no other party under any contract or other
instrument to which it is a party is in default in any respect thereunder.
The Company is not, nor at the Closing Date will be, in violation of any
provision of its articles of incorporation or by-laws.
(j) No consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is required for
the execution of this Agreement or the consummation by the Company of the
transactions on its part herein contemplated, except such as have been
obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and rules of
the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution by the Underwriters of the
Shares to be sold by the Company.
(k) The Company has full corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and assuming the due authorization, execution and
delivery of this Agreement by the Representatives constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles and except as rights to indemnity and contribution
hereunder may be limited by applicable law. The performance of this Agreement
and the consummation of the transactions contemplated hereby will not result
in the creation or imposition of any lien, charge or encumbrance upon any of
the assets of the Company pursuant to the terms or provisions of, or result
in a breach or violation of any of the terms or provisions of, or constitute
a default under, or result in the acceleration of any obligation under, the
articles of incorporation or by-laws of the Company, any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other
agreement or instrument to which the Company is a party or by which the
Company or any of its properties is bound or affected, except, where any such
lien, charge or encumbrance, breach or violation, default, or acceleration
would not have a Material Adverse Effect, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company except where any such violation or conflict would not have a
Material Adverse Effect.
(l) There are no holders of securities of the Company having
preemptive rights to purchase Common Stock.
(m) The Company has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances or restrictions, except such as are described in
the Prospectus or except for those which would not have a Material Adverse
Effect. The Company has valid, subsisting and enforceable leases for the
properties described in the Prospectus as leased by it, with such exceptions
as are not material and do not materially interfere with the use made and
proposed to be made of such properties by the Company.
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(n) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company is a party have been duly
authorized, executed and delivered by the Company, constitute valid and
binding agreements of the Company and are enforceable against the Company in
accordance with the terms thereof subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(o) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representatives was or will be, when
made, inaccurate, untrue or incorrect.
(p) Neither the Company nor any or its directors, officers or
controlling persons has taken, directly or indirectly, any action designed,
or which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(q) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement
under the Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in
the securities registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Act.
(r) Prior to the Effective Date, the Shares will be duly authorized
for listing by the Nasdaq National Market, upon official notice of issuance.
(s) To the Company's knowledge, none of the trademarks, trade
names, service marks, service names, copyrights, patents and patent
applications, and none of the licenses and rights to the foregoing, presently
owned or held by the Company are in dispute or are in conflict with the right
of any other person or entity. The Company (i) owns or has the right to use,
free and clear of all liens, charges, claims, encumbrances, pledges, security
interests, defects or other restrictions or equities of any kind whatsoever,
all trademarks, trade names, service marks, service names, copyrights,
patents and patent applications, and licenses and rights with respect to the
foregoing, used in the conduct of its business as now conducted or proposed
to be conducted and, to the knowledge of the Company, the foregoing do not
infringe upon or otherwise adversely affect the right or claimed right of any
person, corporation or other entity under or with respect to any of the
foregoing and (ii) is not obligated or under any liability whatsoever to make
any payments by way of royalties, fees or otherwise to any owner or licensee
of, or other claimant to, any trademark, trade name, service xxxx, service
name, copyright, patent or patent application except as set forth in the
Registration Statement or the Prospectus. There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or governmental
or other proceeding, domestic or foreign, pending or, to the knowledge of the
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Company, threatened (or circumstances that may give rise to the same) against
the Company which challenges the exclusive rights of the Company with respect
to any trademarks, trade names, service marks, service names, copyrights,
patents, patent applications or licenses or rights to the foregoing used in
the conduct of its business.
(t) No labor dispute with the employees of the Company exists or,
to the best knowledge of the Company, is imminent that might have a Material
Adverse Effect.
(u) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
this offering.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE SELLING
SHAREHOLDERS. Each Selling Shareholder, severally and not jointly,
represents, warrants and covenants to each Underwriter that:
(a) Such Selling Shareholder has full power and authority to enter
into this Agreement and the Custody Agreement and Power of Attorney. All
authorizations and consents necessary for the execution and delivery by such
Selling Shareholder of the Custody Agreement and Power of Attorney, and for
the execution of this Agreement on behalf of such Selling Shareholder, have
been given. Each of the Custody Agreement and Power of Attorney and this
Agreement has been duly authorized, executed and delivered by or on behalf of
such Selling Shareholder and, assuming the due authorization, execution and
delivery by the Representatives constitutes a valid and binding agreement of
such Selling Shareholder and is enforceable against such Selling Shareholders
in accordance with the terms thereof and hereof subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles and except as rights to indemnity and contribution
hereunder may be limited by applicable law.
(b) Such Selling Shareholder now has, and at the time of delivery
thereof hereunder will have, (i) good and marketable title to the Shares to
be sold by such Selling Shareholder hereunder, free and clear of all liens,
encumbrances and claims whatsoever (other than pursuant to the Custody
Agreement and Power of Attorney) and (ii) full legal right and power, and all
authorizations and approvals required by law, to sell, transfer and deliver
such Shares to the Underwriters hereunder and to make the representations,
warranties and agreements made by such Selling Shareholder herein. Upon the
delivery of and payment for such Shares hereunder, such Selling Shareholder
will deliver good and marketable title thereto, free and clear of all liens,
encumbrances and claims whatsoever.
(c) On the Closing Date or Option Closing Date, as the case may be,
all stock transfer or other taxes (other than income taxes) which are
required to be paid in connection with the sale and transfer of the shares to
be sold by such Selling Shareholder to the several Underwriters hereunder
will have been fully paid or provided for by such Selling Shareholder and all
laws imposing such taxes will have been fully complied with.
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(d) The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of such
Selling Shareholder pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the acceleration of any obligation under, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which such Selling Shareholder
is a party or by which such Selling Shareholder or any of its property is
bound or affected, or under any ruling, decree, judgment, order, statute,
rule or regulation of any court or other governmental agency or body having
jurisdiction over such Selling Shareholder or the property of such Selling
Shareholder.
(e) No consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is required for
the consummation by such Selling Shareholder of the transactions on its part
contemplated herein and in the Custody Agreement and Power of Attorney,
except such as have been obtained under the Act or the Rules and Regulations
and such as may be required under state securities or Blue Sky laws or the
by-laws and rules of the NASD in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by such Selling
Shareholder.
(f) Such Selling Shareholder has no knowledge of any material fact
or condition not set forth in the Registration Statement or Prospectus which
has adversely affected, or may have a Material Adverse Effect, and the sale
of the Shares proposed to be sold by such Selling Shareholder is not prompted
by any such knowledge.
(g) All information with respect to such Selling Shareholder
contained in the Registration Statement and the Prospectus (as amended or
supplemented, if the Company shall have filed with the Commission any
amendment or supplement thereto) complied and will comply with all applicable
provisions of the Act and the Rules and Regulations, contains and will
contain all statements required to be stated therein in accordance with the
Act and the Rules and Regulations, and does not and will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(h) Other than as permitted by the Act and the Rules and
Regulations, such Selling Shareholder has not distributed and will not
distribute any preliminary prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Shares. Such
Selling Shareholder has not taken, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or result in, under
the Act or otherwise, or which has caused or resulted in, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(i) Certificates in negotiable form for the Shares to be sold
hereunder by such Selling Shareholder have been placed in custody, for the
purpose of making delivery of such Shares under this Agreement, under the
Custody Agreement and Power of Attorney which appoints Xxxxx X. Xxxxxxx and
Xxxxxxx X. Head as custodian (the "Custodian") for each Selling
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Shareholder. Such Selling Shareholder agrees that the Shares represented by
the certificates held in custody for him or it under the Agreement and Power
of Attorney are for the benefit of and coupled with and subject to the
interest hereunder of the Custodian, the Committee, the Underwriters, each
other Selling Shareholder and the Company, that the arrangements made by such
Selling Shareholder for such custody and the appointment of the Custodian and
the Committee by such Selling Shareholder are irrevocable, and that the
obligations of such Selling Shareholder hereunder shall not be terminated by
operation of law, whether by the death, disability, incapacity or liquidation
of any Selling Shareholder or the occurrence of any other event. If any
Selling Shareholder should die, become disabled or incapacitated or is
liquidated or if any other such event should occur before the delivery of the
Shares hereunder, certificates for the Shares shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement and
actions taken by the Committee and the Custodian pursuant to the Agreement
and Power of Attorney shall be as valid as if such death, liquidation,
incapacity or other event had not occurred, regardless of whether or not the
Custodian or the Committee, or either of them, shall have received notice
thereof.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represent and warrant
to the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discounts and commissions and
terms of the offering and (b) under "Underwriting" in the Prospectus was
furnished to the Company by and on behalf of the Underwriters for use in
connection with the preparation of the Registration and is correct and
complete in all material respects.
Section 5. AGREEMENT TO SELL AND PURCHASE.
(a) The Company and each of the Primary Selling Shareholders,
severally and not jointly, agree to sell to the Underwriters named in
Schedule I, and upon the basis of the respective representations, warranties
and agreements of the Company and the Primary Selling Shareholders herein
contained and subject to all the terms and conditions of this Agreement, each
Underwriter agrees, severally and not jointly, to purchase from the Company
and the Primary Selling Shareholders, at a purchase price of $_____ per
share of Common Stock, the respective number of Firm Shares set forth
opposite its name on Schedule I.
(b) Subject to all the terms and conditions of this Agreement, the
Option Selling Shareholders grant the Option to the several Underwriters to
purchase, severally and not jointly, up to 337,500 Option Shares at the same
price per share as the Underwriters shall pay for the Firm Shares. The
Option may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters and may be exercised in whole or in part at any
time (but not more than once) on or before the 45th day after the date of
this Agreement upon written or telegraphic notice (the "Option Shares
Notice") by the Representatives to the Company no later than 12:00 noon, New
York City time, at least two and no more than five business days before the
date specified for closing on the Option Shares Notice (the "Option Closing
Date") setting forth the aggregate number of Option Shares to be purchased
and the time and date for such purchase. On the Option Closing Date, the
Option Selling Shareholders will sell to the Underwriters the number of
Option Shares set forth in the Option Shares Notice, and each
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Underwriter will purchase such percentage of the Option Shares as is equal to
the percentage of Firm Shares that such Underwriter is purchasing, as
adjusted by the Representatives in such manner as they deem advisable to
avoid fractional Shares.
Section 6. DELIVERY AND PAYMENT. Delivery of the Firm Shares shall be
made to the Representatives for the accounts of the Underwriters against
payment of the purchase price by certified or official bank checks payable in
same day funds to the order of each of the Company and the Selling
Shareholders at the office of First Albany Corporation, New York, New York or
through the facilities of the Depository Trust Company for the accounts of
the several underwriters at 10:00 a.m., New York City time, on the third
business day following the date of this Agreement, or at such time on such
other date, not later than seven calendar days after the date of this
Agreement, as may be agreed upon by the Company and the Representatives (such
date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and
date (which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and shall
be registered in such names and in such denominations as the Representatives
shall request at least two (2) business days prior to the Closing Date or the
Option Closing-Date, as the case may be, by written notice to the Company.
For the purpose of expediting the checking and packaging of certificates for
the Shares, the Company agrees to make such certificates available for
inspection at least 24 hours prior to the Closing Date or the Option Closing
Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares by the Company to the respective
Underwriters shall be borne by the Company. The cost of tax stamps, if any,
in connection with the sale of the Shares by the Selling Shareholders shall
be borne by the Selling Shareholders. The Company and the Selling
Shareholders will pay and save each Underwriter and any subsequent holder of
the Shares harmless from any and all liabilities with respect to or resulting
from any failure or delay in paying Federal and state stamp and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the original issuance or sale to such Underwriter of the Firm
Shares and Option Shares.
Section 7. AGREEMENTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
The Company and the Selling Shareholders agree, severally and not jointly,
with the several Underwriters as follows:
(a) If the Effective Date of the Registration Statement is prior to
the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by First Albany
Corporation, subparagraph (4)) of Rule 424(b) not later than the earlier of
(A) the second business day following the execution and delivery of this
Agreement or (B) the fifteenth business day after the Effective Date.
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(b) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing
thereof and the Representatives shall not have objected thereto in good faith.
(c) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly,
and will confirm such advice in writing, (1) when the Registration Statement
has become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the Commission for amendments or supplements
to the Registration Statement or Prospectus or for additional information,
(3) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the happening of
any event during the period mentioned in the second sentence of Section 7(e)
that in the judgment of the Company makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making
of any changes in the registration Statement or Prospectus in order to make
the statements therein, in light of the circumstances in which they are made,
not misleading, and (5) of receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission
relating to the Company, the Registration Statement, any preliminary
prospectus or the Prospectus. If at any time the Commission shall issue any
order suspending the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal of such order at
the earliest possible moment. If the Company has omitted any information
from the Registration Statement pursuant to Rule 430A of the Rules and
Regulations, the Company will use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and to notify the Representatives promptly of all such filings.
(d) The Company will furnish to the Representatives, without
charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto, and will furnish to the Representatives,
without charge, for transmittal to each of the other Underwriters, a copy of
the Registration Statement and any post-effective amendment thereto,
including financial statements and schedules but without exhibits.
(e) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(f) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter, the Company will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request. The Company consents
to the use of the Prospectus or any amendment thereto by the several
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be
11
delivered in connection therewith. If during such period of time any event
shall occur which in the judgment of the Company or counsel to the
Underwriters should be set forth in the Prospectus in order to make any
statement therein, in light of the circumstances under which it was made, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver
to each of the Underwriters, without charge, such number of copies thereof as
the Representatives may reasonably request.
(g) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to its
shareholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date) that will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth fiscal
quarter following the fiscal quarter that includes such Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end
of such fourth fiscal quarter.
(h) Prior to any public offering of the Shares by the Underwriters,
the Company will cooperate with the Representatives and counsel to the
Underwriters in connection with the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may request; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it
to general service of process in any jurisdiction where it is not now so
subject.
(i) During the period of two years commencing on the Effective
Date, the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish
to the Representatives and each other Underwriter who may so request a copy
of each annual or other report it shall be required to file with the
Commission.
(j) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last
day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement (which need not be
audited but shall be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(k) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company and the Selling
Shareholders, in such proportions (aggregating 100%) as they may agree upon
among themselves, will pay, or reimburse if paid by the Representatives, all
costs and expenses incident to the performance of the obligations of the
Company and the Selling Shareholders under this Agreement, including but not
limited to costs and expenses of or relating to (1) the preparation, printing
and filing of the Registration Statement and exhibits to it, each preliminary
prospectus, the Prospectus and any
12
amendment or supplement to the Registration Statement or Prospectus, (2) the
preparation and delivery of certificates representing the Shares, (3) the
printing of this Agreement, the Agreement Among Underwriters, any Dealer
Agreements, any Underwriters' Questionnaire and the Custody Agreement and
Power of Attorney, (4) furnishing (including costs of shipping and mailing)
such copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be requested
for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom shares may be sold, (5) the quotation of
the Shares on the National Association of Securities Dealers Automated
Quotation System, (6) any filings required to be made by the Underwriters
with the NASD, and the fees, disbursements and other charges of counsel for
the Underwriters in connection therewith, (7) the registration or
qualification of the Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions designated pursuant to Section 7(f), including
the fees, disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (8) counsel to the Company and
counsel to the Selling Shareholders and (9) the transfer agent for the Shares.
(l) If this Agreement shall be terminated by the Company or the
Selling Shareholders pursuant to any of the provisions hereof or if for any
reason the Company or any Selling Shareholder shall be unable to perform its
obligations hereunder, the Company and the Selling Shareholders, in such
proportions (aggregating 100%) as they may agree among themselves, will
reimburse the several Underwriters for all out-of-pocket expenses (including
the fees, disbursements and other charges of counsel to the Underwriters)
reasonably incurred by them in connection herewith.
(m) Each Selling Shareholder agrees to deliver to First Albany
Corporation, Attention: Corporate Finance Department, on or prior to the
Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
(n) The Company will not at any time, directly or indirectly, take
any action designed, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the shares
of Common Stock to facilitate the sale or resale of any of the Shares.
(o) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the
Act.
(p) During the period of six months commencing at the Closing Date,
the Company will not, without the prior written consent of the
Representatives, grant options to purchase shares of Common Stock at a price
less than the fair market value of the Company's Common Stock on the date of
the grant.
13
(q) On or before the Effective Date, the Company shall provide the
Representatives with true copies of duly executed, legally binding and
enforceable agreements pursuant to which for a period of six months from the
Effective Date, the officers and directors of the Company, holders of all
shares of Common Stock and holders of securities exchangeable or exercisable
for or convertible into shares of Common Stock, agree that it or he or she
will not directly or indirectly, issue, offer to sell, sell, grant an option
for the sale of, assign, transfer, pledge, hypothecate, distribute or
otherwise encumber or dispose of any shares of Common Stock or securities
convertible into, exercisable or exchangeable for or evidencing any right to
purchase or subscribe for any shares of Common stock (either pursuant to Rule
144 of the Rules and Regulations or otherwise) or dispose of any beneficial
interest therein without the prior written consent of First Albany
Corporation. In addition, for a period of six months from the Effective
Date, the Company will not directly or indirectly issue, offer to sell,
offer, sell, contract to sell, pledge or otherwise dispose of or file with
the Commission a registration statement under the Act relating to, any
additional shares of its Common Stock or securities convertible into or
exchangeable or exercisable for any shares of its Common Stock, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of First Albany Corporation, except
(i) issuances of Common Stock pursuant to the conversion or exchange of
convertible or exchangeable securities or the exercise of warrants or
options, in each case outstanding on the date hereof, (ii) grants of employee
or non-employee director stock options pursuant to the terms of a plan in
effect on the date hereof, (iii) issuances of Common Stock pursuant to the
Company's employee stock purchase plan, or (iv) the filing with the
Commission of registration statements on Form S-8 relating to option plans
and employee stock purchase plans in effect on the date hereof.
(r) The Selling Shareholders will not, for a period of six months
after the commencement of the public offering of the Shares, without the
prior written consent of First Albany Corporation, sell, contract to sell or
otherwise dispose of any shares of Common Stock.
(s) The Selling Shareholders will not, without the prior written
consent of the Representatives, make any bid for or purchase any shares of
Common Stock during the six month period commencing on the date hereof.
(t) As soon as any Selling Shareholder is advised thereof, such
Selling Shareholder will advise the Representatives and confirm such advice
in writing, (1) of receipt by such Selling Shareholder, or by any
representative of such Selling Shareholder, of any communication from the
Commission relating to the Registration Statement, the Prospectus or any
preliminary prospectus, or any notice or order of the Commission relating to
the Company or any of the Selling Shareholders in connection with the
transactions contemplated by this Agreement and (2) of the happening of any
event during the period from and after the Effective Date that in the
judgment of such Selling Shareholder makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to
make the statements therein, in light of the circumstances in which they were
made, not misleading.
14
Section 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of each Underwriter are subject to the following conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 5:00 p.m.,
New York City time, on the date of this Agreement or at such later date and
time as shall be consented to in writing by the Representatives and all
filings required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction shall be in effect and no proceeding for such
purpose shall be pending before or threatened or contemplated by the
Commission or the authorities of such jurisdiction, (iii) any request for
additional information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and (iv) after the date hereof no
amendment or supplement to the Registration Statement or the Prospectus shall
have been filed unless a copy thereof was first submitted to the
Representatives and the Representatives did not object thereto in good faith,
and the Representatives shall have received certificates, dated the Closing
Date and the Option Closing Date and signed by the Chief Executive Officer or
the Chairman of the Board of Directors of the Company and the Chief Financial
Officer of the Company (who may, as to proceedings threatened, rely upon the
best of their information and belief), to the effect of clauses (i), (ii),
(iii) and (iv).
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall not have been
a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or
results of operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
in each case other than as set forth in or contemplated by the Registration
Statement or Prospectus and (ii) the Company shall not have sustained any
material loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration Statement
and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters at the initial public offering
price.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
respective officers or directors in their capacities as such, before or by
any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in
which litigation or proceeding an unfavorable ruling, decision or finding
would have a Material Adverse Effect.
15
(e) Each of the representations and warranties of the Company and
the Selling Shareholders contained herein shall be true and correct in all
material respects at the Closing Date and, with respect to the Option Shares,
at the Option Closing Date, as if made at the Closing Date and, with respect
to the Option Shares, at the Option Closing Date, and all covenants and
agreements herein contained to be performed on the part of the Company and
the Selling Shareholders and all conditions herein contained to be fulfilled
or complied with by the Company and the Selling Shareholders at or prior to
the Closing Date and, with respect to the Option Shares, at or prior to the
Option Closing Date, shall have been duly performed, fulfilled or complied
with.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
and satisfactory in form and substance to counsel for the Underwriters, from
Ice, Xxxxxx, Xxxxxxx & Xxxx, counsel to the Company and the Selling
Shareholders, to the effect set forth in Exhibit B.
(g) The Representatives shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
LLP, counsel to the Underwriters, with respect to the Registration Statement,
the Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to the Representatives.
(h) Concurrently with the execution and delivery of this Agreement,
the Accountants shall have furnished to the Representatives and the Board of
Directors of the Company a "comfort" letter, dated the date of its delivery,
addressed to the Representatives and in form and substance satisfactory to
the Representatives, confirming that they are independent public accountants
within the meaning of the act and the applicable published Rules and
Regulations thereunder and stating to the effect that:
i) in their opinion the financial statements and schedules and
summary of earnings examined by them and included in the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
ii) on the basis of a reading of the latest available interim
financial statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statement and summary of
earnings included in the Registration Statements do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such
unaudited financial statements for them to be in conformity with
generally accepted accounting principles;
16
(B) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of this Agreement,
there was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company or, at
the date of the latest available balance sheet read by such
accountants, there was any decrease in net current assets, as
compared with amounts shown on the latest balance sheet included
in the Prospectus; or
(C) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year and with the period of corresponding
length ended the date of the latest income statement included in
the Prospectus, in net sales or net operating income in the total
or per share amounts of net income,
except in all cases set forth in clauses B and C above, for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
iii) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statement (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company subject
to the internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation) with
the results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such letter and
have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter.
At the Closing Date and, as to the Option Shares, the Option
Closing Date, the Accountants shall have furnished to the Representatives a
letter, dated the date of its delivery, which shall confirm, on the basis of
a review in accordance with the procedures set forth in the "comfort" letter
from the Accountants, that nothing has come to their attention during the
period from the date of the "comfort" letter to a date (specified in the
letter) not more than five days prior to the Closing Date and the Option
Closing Date which would require any change in their letter dated the date
hereof if it were required to be dated and delivered at the Closing Date and
the Option Closing Date.
(i) Concurrently with the execution and delivery of this Agreement
and at the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to the Representatives an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer, in form and substance
satisfactory to the Representatives, to the effect that:
17
i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) to the signer's
knowledge, as of the date of such certificate, such documents are true and
correct in all material respects and do not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
untrue or misleading and (B) in the case of the certificate delivered at
the Closing Date and the Option Closing Date, since the Effective Date no
event has occurred of which the signer has knowledge as a result of which
it is necessary to amend or supplement the Prospectus in order to make the
statements therein not untrue or misleading in any material respect.
ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is dated, true and correct in all material respects.
iii) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be complied with
by the Company on or prior to the date of such certificate has been duly,
timely and fully complied with.
iv) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission.
(j) Concurrently with the execution and delivery of this Agreement
and at the Closing Date and, as to the Option Shares, the Option Closing Date,
there shall have been furnished to the Representatives an accurate certificate,
dated the date of its delivery, signed by the Committee on behalf of each of the
Selling Shareholders, in form and substance satisfactory to the Representatives,
to the effect that the representations and warranties of each of the Selling
Shareholders contained herein are true and correct in all material respects on
and as of the date of such certificate as if made on and as of the date of such
certificate, and each of the covenants and conditions required herein to be
performed or complied with by the Selling Shareholders on or prior to the date
of such certificate has been duly, timely and fully performed or complied with.
(k) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 7(n).
(l) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the Nasdaq National Market upon official notice of
issuance.
18
(n) The Company and the Selling Shareholders shall have furnished
to the Representatives such certificates, in addition to those specifically
mentioned herein, as the Representatives may have reasonably requested as to
the accuracy and completeness at the Closing Date and the Option Closing Date
of any statement in the Registration Statement or the Prospectus, as to the
accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Company and the Selling Shareholders
herein, as to the performance by the Company and the Selling Shareholders of
its and their respective obligations hereunder, or as to the fulfillment of
the conditions concurrent and precedent to the obligations hereunder of the
Representatives.
Section 9. QUALIFIED INDEPENDENT UNDERWRITER. The Company hereby
confirms that at its request First Albany Corporation has without
compensation acted as "qualified independent underwriter" (in such capacity,
the "QIU") within the meaning of Rule 2710 of the Conduct Rules of the
National Association of Securities Dealers, Inc. in connection with the
offering of the Shares. The Company and the Selling Shareholders will
severally and not jointly indemnify and hold harmless the QIU against any
losses, claims, damages or liabilities, joint or several, to which the QIU
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 the QIU's acting (or alleged failing to act) as such
"qualified independent underwriter" and will reimburse the QIU for any legal
or other expenses reasonably incurred by the QIU in connection with
investigating or defending any such loss, claim, damage, liability or action
as such expenses are incurred; provided, however, that neither the Company
nor any of the Selling Shareholders shall be obligated to indemnify or hold
harmless the QIU against any loss, claim, damage or liability arising from or
related to the gross negligence or willful misconduct of the QIU; provided
further, that each Selling Shareholder shall only be subject to liability
under this Section to the extent such liability arises out of or is based
upon any untrue statement or alleged untrue statement or upon an omission or
alleged omission based upon information provided by such Selling Shareholder
or contained in a representation or warranty given by such Selling
Shareholder in this Agreement or the Custody Agreement; and provided,
further, that the liability under this Section of each Selling Shareholder
shall be limited to an amount equal to the aggregate gross proceeds to such
Selling Shareholder from the sale of Common Stock sold by such Selling
Shareholder hereunder.
19
Section 10. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of Section
15 of the Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted),
to which they, or any of them, may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or
the Prospectus, or the omission or alleged omission to state in such document
a material fact required to be stated in it or necessary to make the
statements in it, in light of the circumstances under which they were made,
not misleading, provided that the Company and the Selling Shareholders will
not be liable to the extent that such loss, claim, liability, expense or
damage arises from the sale of the Shares in the public offering to any
person by an Underwriter and is based on an untrue statement or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company
by the Representatives on behalf of any Underwriter expressly for inclusion
in the Registration Statement, any preliminary prospectus or the Prospectus,
and provided further that the Company and the Selling Shareholders will not
be liable to any Underwriter, the directors, officer, employees or agents of
such Underwriter or any person controlling such Underwriter with respect to
any loss, claim, liability, expense, charge or damage arising out of or
based on any untrue statement or alleged untrue statement or omission or
alleged omission to state a material fact in any preliminary prospectus which
is corrected in the Prospectus if the person asserting any such loss, claim,
liability, charge or damage purchased Shares from such Underwriter but was
not sent or given a copy of the Prospectus at or prior to the written
confirmation of the sale of such Shares to such Person. The Company and the
Selling Shareholders acknowledge that (i) the information on the cover page
of the Prospectus with respect to price, underwriting discounts and omissions
and terms of the offering and (ii) the statements set forth under the heading
"Underwriting" in any preliminary prospectus and the Prospectus constitute
the only information relating to any Underwriter furnished in writing to the
Company by the Representatives on behalf of the Underwriters expressly for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus. This indemnity agreement will be in addition to any liability
that the Company or any Selling Shareholder might otherwise have.
(b) Insofar as the foregoing indemnity agreement, or the
representations and warranties contained in Section 2, may permit
indemnification for liabilities under the Act of any person who is an
Underwriter or a partner or controlling person of an Underwriter within the
meaning of Section 15 of the Act and who, at the date of this Agreement, is a
director, officer or controlling person of the Company, the Company has been
advised that in the opinion of the Commission such provisions may contravene
Federal public policy as expressed in the act and may therefore be
unenforceable. In the event that a claim for indemnification under such
20
agreement or such representations and warranties for any such liabilities
(except insofar as such agreement provides for the payment by the Company of
expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such a
person, the Company will submit to a court of appropriate jurisdiction
(unless in the opinion of counsel for the Company the matter has already been
settled by controlling precedent) the question of whether or not
indemnification by it for such liabilities is against public policy as
expressed in the Act and therefore unenforceable, and the Company will be
governed by the final adjudication of such issue.
(c) Each Selling Shareholder will indemnify and hold harmless the
Company and the Underwriters, each person, if any, who controls the Company
and the Underwriters within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, each director of the Company and each officer of the
Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only so far as
losses, claims, liabilities, expenses and damages arise out of or are based
on any untrue statement or omission made in reliance on and in conformity
with information relating to any Selling Shareholder furnished in writing to
the Company or Underwriters by such Shareholder expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus.
(d) Each Underwriter will indemnify and hold harmless the Company,
the Selling Shareholders, each person, if any, who controls the Company or
the Selling Shareholders within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each director of the Company and each officer
of the Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company and the Selling Shareholders to each
Underwriter, but only insofar as losses, claims, liabilities, expenses and
damages arise out of or are based on any untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to the
Company by the Representatives on behalf of such Underwriter expressly for
use in the Registration Statement, any preliminary prospectus or the
Prospectus or arise out of, or are based upon a failure or alleged failure of
such Underwriter to deliver the Prospectus as required by applicable laws.
The Company and the Selling Shareholders acknowledge that (i) information on
the cover page of the Prospectus with respect to price underwriting discounts
and commissions and the terms of the offering and (ii) the statements set
forth under the heading "Underwriting" in any preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives on behalf of the
Underwriters expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity will be in addition
to any liability that each Underwriter might otherwise have.
(e) Any party that proposes to assert the right to be indemnified
under Section 9 or this Section 10 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is
to be made against an indemnifying party or parties under Section 9 or this
Section 10, notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so to notify
such indemnifying party will not relieve it from any liability that it may
have to any indemnified party under Section 9 or this Section 10 unless, and
only to the extent that, such omission results in the
21
forfeiture of substantive rights or defenses by the indemnifying party. If
any such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be
entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of
the commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense of the
action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to
the indemnified party for any legal or other expenses except as provided
below. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (l) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based
on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict exists (based on advice
of counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm admitted
to practice in such jurisdiction at any one time for all such indemnified
party or parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or
claim effected without its written consent (which consent will not be
unreasonably withheld).
(f) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 9 or the
foregoing paragraphs of this Section 10 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company, the
Selling Shareholders or the Underwriters, the Company, the Selling
Shareholders and the Underwriters will contribute to the total losses,
claims, liabilities, expenses and damages (including any investigative, legal
and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted,
but after deducting any contribution received by the Company or the Selling
Shareholders from persons other than the Underwriters, such as persons who
control the Company or the Selling Shareholders within the meaning of the
Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which
the Company or the Selling Shareholders and any one or more of the
Underwriters may be subject in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover of the Prospectus bears to the
public offering price appearing on the cover and the Company and the Selling
Shareholders are responsible in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and Selling
Shareholders. If, but only if, the allocation
22
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate
to reflect not only the relative benefits referred to in the foregoing
sentence but also the relative fault of the Company and the Selling
Shareholders, on the one hand, and the Underwriters, on the other, with
respect to the statement or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any
other relevant equitable considerations with respect to such offering. Such
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 or
the Representatives on behalf of the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to above in this subsection (e) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (e). Notwithstanding the provisions of this subsection (e),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Common Stock underwritten by it
and distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and no Selling Shareholder shall be required to contribute any
amount in excess of the net proceeds received by such Selling Shareholder
from the sale of shares of Common Stock sold by such Shareholder in the
offering. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section
10(e) were to be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 10(e) shall be deemed to include,
for purpose 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), no Underwriter shall be required contribute any amount in
excess of the underwriting discounts received by it, and no person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 10(e) are several in proportion to
their respective underwriting obligations and not joint. For purposes of
this Section 10(e), any person who controls a party to this Agreement within
the meaning of the Act will have the same rights to contribution as that
party, and each officer of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject in each
case to the provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this Section
10(e), will notify any such party or parties from whom contribution may be
sought, but the omission so to notify will not relieve the party or parties
from
23
whom contribution may be sought from any other obligation it or they may have
under this Section 10(e). No party will be liable for contribution with
respect to any action or claim settled without its written consent (which
consent will not be unreasonably withheld).
(g) The indemnity and contribution agreements contained in Section
9 and this Section 10 and the representations and warranties of the Company,
the Underwriters and the Selling Shareholders contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Shares and payment therefor or (iii) any termination of this
Agreement.
Section 11. TERMINATION. The obligations of the several Underwriters
under this Agreement may be terminated at any time prior to the Closing Date
(or, with respect to the Option Shares, on or prior to the Option Closing
Date), by notice to the Company from the Representatives, without liability
on the part of any Underwriter to the Company, if, prior to delivery and
payment for the Shares (or the Option Shares, as the case may be), in the
sole judgment of the Representatives, (i) trading in any of the equity
securities of the Company shall have been suspended by the Commission, by an
exchange that lists the Shares or by the National Association of Securities
Dealers Automated Quotation Market System, (ii) trading in securities
generally on the New York Stock Exchange shall have been suspended or limited
or minimum or maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in
securities generally by such exchange or by order of the Commission or any
court or other governmental authority, (iii) a general banking moratorium
shall have been declared by either Federal or New York State authorities or
(iv) any material adverse change in the financial or securities markets in
the United States or in political, financial or economic conditions in the
United States or any outbreak or material escalation of hostilities or other
calamity or crisis shall have occurred, the effect of which is such as to
make it, in the sole judgment of the Representatives, impracticable to market
the Shares.
Section 12. SUBSTITUTION OF UNDERWRITERS. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it
or they have agreed to purchase hereunder, and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of
Firm Shares, the other Underwriters shall be obligated, severally, to
purchase the Firm Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase, in the proportions which the number
of Firm Shares which they have respectively agreed to purchase pursuant to
Section 5 bears to the aggregate number of Firm Shares which all such
non-defaulting Underwriters have so agreed to purchase, or in such other
proportions as the Representatives may specify. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm Shares and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refuse to purchase exceeds one-tenth of the
aggregate number of the Firm Shares and arrangements satisfactory to the
Representatives and the Company for the purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the
Company for the purchase or sale of any Shares under this Agreement. In any
such case either the
24
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven business days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus
or in any other documents or arrangements may be effected. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 12. Any action taken pursuant to this Section
12 shall not relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
Section 13. MISCELLANEOUS. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office
of the Company, Made2Manage Systems, Inc., 0000 Xxxxxx Xxxx, Xxxxxxxxxxxx, XX
00000, Attention: Xxxxx X. Xxxxxxx or (b) if to the Underwriters, to the
Representatives at the offices of (i) First Albany Corporation, Xxx Xxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance
Department, (ii) RvR Securities Corp., Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, XX
00000, Attention: ____________________; and (iii) Xxx Xxxxxx & Company, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000, Attention
____________________. Any such notice shall be effective only upon receipt.
Any notice under Section 10 or 11 may be made by telex or telephone, but if
so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company and the Selling Shareholders and of the controlling
persons, directors and officers referred to in Section 9, and their
respective successors and assigns, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "successors and
assigns" as used in this Agreement shall not include a purchaser, as such
purchaser, of Shares from any of the several Underwriters.
The Representatives will act for the several Underwriters in connection
with the transactions contemplated by this Agreement, and any action under
this Agreement taken by the Representatives -- jointly or by First Albany
Corporation -- will be binding upon all the Underwriters. Xxxxx X. Xxxxxxx
and Xxxxxxx X. Head will act for the Selling Shareholders in connection with
such transactions, and any action under or in respect of this Agreement taken
by Xxxxx X. Xxxxxxx and Xxxxxxx X. Head will be binding upon the Selling
Shareholders.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in the City of New York
in any suit or proceeding arising
25
out of or relating to this Agreement or the transactions contemplated hereby.
This Agreement shall supersede any agreement or understanding, oral or
written, express or implied, between the Company, the Selling Shareholders
and the Underwriters relating to the sale of any of the Shares.
No change, amendment or supplement to, or waiver of this Agreement or any
term, provision or condition contained herein, shall be valid or of any
effect, unless in writing and signed by the party against whom such is
asserted.
26
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several Underwriters.
Very truly yours,
MADE2MANAGE SYSTEMS, INC.
By:____________________________________
Name:
Title:
The Selling Shareholders Named on
Schedule II and III Hereto
By:_____________________________________
Attorney-in-Fact
Confirmed as of the date first
above mentioned:
FIRST ALBANY CORPORATION
XXX XXXXXX & COMPANY
RvR SECURITIES CORP.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule II hereof.
BY: FIRST ALBANY CORPORATION
By:___________________________________
Name:
Title:
27
SCHEDULE I
UNDERWRITERS
Name Number of Shares
---- ----------------
First Albany Corporation _______________
Xxx Xxxxxx & Company _______________
RvR Securities Corp. _______________
Total _______________
28
SCHEDULE II
PRIMARY SELLING SHAREHOLDERS
Name Number of Shares
---- ----------------
____________
____________
Total ____________
29
SCHEDULE III
OPTION SELLING SHAREHOLDERS
Name Number of Shares
---- ----------------
____________
Total ____________
30
EXHIBIT B
Matters to be Covered in the Opinion of
Ice Xxxxxx Xxxxxxx & Xxxx
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation;
2. The Company has the corporate power to own, lease and operate its
properties and to conduct its business as described in the Prospectus;
3. The Company is duly qualified to do business as a foreign corporation
and is in good standing in the following jurisdictions:
____________________________________;
4. The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus under the caption "Capitalization" as of
the dates stated therein; all outstanding shares of Convertible Preferred
Stock of the Company shall automatically convert into shares of Common Stock
as of the Closing as described in the Prospectus; the issued and outstanding
shares of capital stock of the Company have been duly and validly authorized
and issued, are fully paid and nonassessable and have not been issued in
violation of any preemptive right or other rights to subscribe for or
purchase securities or, except to the extent any such violations would not be
material to the Company (whether because of the magnitude of the violation,
because any claims thereof would be barred by the statute of limitations or
otherwise), in violation of any applicable federal or state securities laws
or in violation of any applicable federal or state securities laws, provided
that in rendering their opinion as to non-violation of federal and state
securities laws, such counsel may assume, unless counsel has knowledge of
facts that may render such assumption unreasonable, that any purchasers had,
to the extent relevant and represented by such purchasers in writing, any
required investment intent;
5. The Company has corporate power and authority to enter into the
Agreement and to carry out all the terms and provisions thereof;
6. The execution, delivery and performance of this Agreement and the
issuance and sale of the Shares to be sold by the Company do not (A) conflict
with, violate, result in a breach of or constitute a default (or an event
that with notice or lapse of time, or both, would constitute a default) under
the Articles of Incorporation or By-laws of the Company or any agreement
(including, without limitation, an agreement with respect to registration
rights) to which the Company is a party or by which it or any of its
properties or assets is bound and which is known to such counsel or (B)
result in violation of any federal or Indiana law, rule or regulation or, to
________________________
(1) In rendering this opinion, counsel may rely as to questions of law not
involving the laws of the United States or the State of Indiana on opinions
of local counsel (provided that such counsel states that they believe they
and the Underwriters are justified in relying thereon) and, as to questions
of fact, upon representations or certificates of officers of the Company and
government officials, in which case their opinion is explicitly to state that
they are so relying thereon and that they have no knowledge of any material
misstatement or inaccuracy in such opinions, representations or certificate.
Copies of any opinion, representation or certificate so relied upon shall be
delivered to the Representative and counsel to the Underwriters.
B-1
the knowledge of such counsel, any writ, judgment, order, injunction or
decree of any government, governmental body, agency or court or any
arbitration tribunal having jurisdiction over the Company or any of its
properties, which violation would have a Material Adverse Effect/
7. The Shares to be sold by the Company are duly authorized and, when
issued and delivered against payment in full therefor, will be validly
issued, fully paid, non-assessable, and free of preemptive rights;
8. The Underwriting Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery of the Agreement by the Representatives, is the valid and binding
agreement of the Company enforceable against the Company in accordance with
its terms, except insofar as the indemnification and contribution provisions
of the Underwriting Agreement may be limited by public policy concerns and
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally or by general equitable principles;
9. Except for the order of the Commission making the Registration
Statement effective, similar authorizations required under the securities or
Blue Sky laws of certain jurisdictions (as to which such counsel need express
no opinion), no consent, approval, authorization or other order of any
federal or Indiana governmental body or, to the knowledge of such counsel,
other person is required in connection with the authorization, issuance, sale
and delivery of the Shares and the execution, delivery and performance by the
Company of the Underwriting Agreement;
10. The Registration Statement has become effective under the Securities
Act and, to the knowledge of such counsel, 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
threatened under the Securities Act;
11. The Registration Statement and the Prospectus, and each amendment or
supplement thereto (other than the financial statements, financial data and
supporting schedules included therein, as to which such counsel need express
no opinion), as of the effective date of the Registration Statement, complied
as to form in all material respects with the requirements of the Securities
Act and the applicable Rules and Regulations. The Company satisfies the
requirements for filing a registration statement on Form S-1;
12. The terms and provisions of the capital stock of the Company conform
in all material respects to the description thereof contained in the
Registration Statement and Prospectus, and the information in the Prospectus
under the caption "Description of Capital Stock," to the extent they
constitute matters of law or legal conclusions, has been reviewed by such
counsel and is correct and the form of certificate for the Shares complies
with Indiana law;
13. The description in the Registration Statement and the Prospectus of
the articles of incorporation and bylaws of the Company and of statutes and
contracts are accurate in all material respects and fairly present in an
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material respects the information required to be presented by the Securities
Act and the Rules and Regulations;
14. To the knowledge of such counsel, there are no agreements,
contracts, licenses, leases or documents of a character required to be
described or referred to in the Registration Statement or Prospectus or to be
filed as an exhibit to the Registration Statement that are not described or
referred to therein and filed as required;
15. To the knowledge of such counsel, there are no legal or governmental
proceedings pending or threatened against the Company or of a character which
are required to be disclosed in the Registration Statement or the Prospectus
by the Securities Act or the applicable Rules and Regulations, other than
those described therein;
16. To the knowledge of such counsel, the Company is not presently in
breach of, or in default under, any bond, debenture, note or other evidence
of indebtedness or any contract, indenture, mortgage, deed of trust, loan
agreement, lease, license or, without limitation, other agreement or
instrument to which the Company is a party or by which any of its properties
are bound that, individually or in the aggregate, would have a Material
Adverse Effect;
17. To the knowledge of such counsel, except as set forth in the
Registration Statement and Prospectus, no holders of Common Stock, Preferred
Stock or other securities of the Company have registration rights with
respect to any securities of the Company; and
18. With respect to each Selling Shareholder:
(A) each Selling Shareholder has the full right, power and authority
to enter into the Underwriting Agreement and the Custody Agreement and to
carry out all the terms and provisions thereof;
(B) the Underwriting Agreement, the Custody Agreement and the
Power-of-Attorney have been duly authorized, executed and delivered by each
Selling Shareholder and, assuming due authorization, execution and delivery
by the Representatives and/or Custodian, as applicable, the Underwriting
Agreement, the Custody Agreement and the Power-of-Attorney are the legal,
valid, binding and enforceable agreements or instruments of such Selling
Shareholder, except insofar as the indemnification and contribution
provisions of the Underwriting Agreement may be limited by public policy
concerns and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles;
(C) assuming that (i) the Underwriters have no notice of any
adverse claims with respect to the Shares being sold hereunder by such
Selling Shareholder, and (ii) the certificates representing the Shares being
sold by such Selling Shareholder are delivered to the Underwriters duly
endorsed or accompanied by a duly executed assignment separate from
certificate in the State of Indiana, the delivery by such Selling Shareholder
to the several Underwriters of certificates for the Shares being sold
hereunder by such Selling Shareholder against payment therefor as provided
herein, will convey good and marketable title to such Shares to the several
B-3
Underwriters, free and clear of all "adverse claims" (as that term is defined
in Section 8302 of the Commercial Code of the State of California); and
(D) the sale of the Shares to the Underwriters by such Selling
Shareholder pursuant to the Underwriting Agreement, the compliance by such
Selling Shareholder with the other provisions of the Underwriting Agreement
and the Custody Agreement, and the consummation of the other transactions
therein contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state securities
or blue sky laws, or (ii) conflict with or result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
statute or, to the knowledge of such counsel, any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder or any of such
Selling Shareholder's properties are bound or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Shareholder.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, the independent public accountants of the Company, the
Representatives and counsel to the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although they have not independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention
of such counsel that caused them to believe that, at the time the
Registration Statement became effective, the Registration Statement (except
as to financial statement, financial data and supporting schedules contained
therein, as to which such counsel need express no opinion) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or at the Closing Date or any later date on which the Option
Shares are to be purchased, as the case may be, the Prospectus contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Such opinion shall also state that Underwriters' counsel is entitled
to rely thereon. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law
(1991) or any comparable state accord.
B-4
