EXHIBIT 1.1
K&S Draft
06/10/98
2,000,000 Shares/1/
Jeepers! Inc.
Common Stock
PURCHASE AGREEMENT
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June __, 1998
XXXXX XXXXXXX INC.
XXXXX & COMPANY
XXXXXX XXXXXX XXXXXXXX & CO., INC.
As Representatives of the several
Underwriters named in Schedule II hereto
c/o Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Jeepers! Inc., a Delaware corporation (the "Company"), proposes to sell to
the several Underwriters named in Schedule II hereto (the "Underwriters") an
aggregate of 2,000,000 shares (the "Firm Shares") of Common Stock, $.01 par
value per share (the "Common Stock"), of the Company. The Firm Shares consist
of authorized but unissued shares of Common Stock to be issued and sold by the
Company. The stockholders of the Company listed in Schedule I hereto (the
"Selling Stockholders") have granted to the several Underwriters options to
purchase up to an aggregate of 300,000 additional shares of Common Stock,
respectively, on the terms and for
-----------------------------
/1/ Plus options to purchase up to an aggregate of 300,000 additional shares to
cover over-allotments.
the purposes set forth in Section 3 hereof (the "Option Shares"). The Firm
Shares and any Option Shares purchased pursuant to this Purchase Agreement are
herein collectively called the "Securities."
The Company and the Selling Stockholders hereby confirm their agreement
with respect to the sale of the Securities to the several Underwriters, for whom
you are acting as Representatives (the "Representatives").
1. Registration Statement and Prospectus. A registration statement on
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Form S-1 (File No. 333-50297) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") promulgated thereunder and has been filed
with the Commission; one or more amendments to such registration statement have
also been so prepared and have been, or will be, so filed; and, if the Company
has elected to rely upon Rule 462(b) of the Rules and Regulations to increase
the size of the offering registered under the Act, the Company will prepare and
file with the Commission a registration statement with respect to such increase
pursuant to Rule 462(b). Copies of such registration statement(s) and any
amendments thereto and each related preliminary prospectus have been delivered
to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
First Closing Date (as hereinafter defined), such registration statement as so
amended (but only from and after the effectiveness of such amendment), including
a registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the Company
with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the
Rules and Regulations or any other such prospectus provided to the Underwriters
by the Company for use in connection with the offering of the Securities
(whether or not required to be filed by the Company with the Commission pursuant
to Rule 424(b) of the Rules and Regulations) differs from
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the prospectus on file at the time the Registration Statement is or was declared
effective by the Commission, the term "Prospectus" shall refer to such differing
prospectus (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
provided to the Underwriters by the Company for such use. The term "Preliminary
Prospectus" as used herein means any preliminary prospectus included in the
Registration Statement prior to the time it becomes or became effective under
the Act and any prospectus subject to completion as described in Rule 430A or
434 of the Rules and Regulations.
2. Representations and Warranties of the Company and the Selling
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Stockholders.
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(a) The Company represents and warrants to, and agrees with, the several
Underwriters as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and each Preliminary
Prospectus, at the time of filing thereof, did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; except
that the foregoing shall not apply to statements in or omissions from any
Preliminary Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by you, or by any Underwriter through
you, specifically for use in the preparation thereof.
(ii) As of the time the Registration Statement (or any post-effective
amendment thereto, including a registration statement (if any) filed
pursuant to Rule 462(b) of the Rules and Regulations increasing the size of
the offering registered under the Act) is or was declared effective by the
Commission, upon the filing or first delivery to the Underwriters of the
Prospectus (or any supplement to the Prospectus (including any term sheet
meeting the requirements of Rule 434 of the Rules and Regulations)) and at
the First Closing Date and Second Closing Date (as hereinafter defined),
(A) the Registration Statement and Prospectus (in each case, as so amended
and/or supplemented) conformed or will conform in all material respects to
the requirements of the Act and the Rules and Regulations, (B) the
Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (C) the Prospectus (as so supplemented) did not or will
not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they are or were
made, not misleading; except that the foregoing clause (B) and (C) shall
not apply to statements in or omissions from any such document in reliance
upon, and in conformity with, written information furnished to the Company
by you, or by any Underwriter through you, specifically for use in the
preparation thereof. If the Registration Statement has been
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declared effective by the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission.
(iii) The consolidated financial statements of the Company, together with
the notes thereto, set forth in the Registration Statement and Prospectus
comply in all material respects with the requirements of the Act and fairly
present the consolidated financial condition of the Company as of the dates
indicated and the consolidated results of operations and changes in cash
flows for the periods therein specified in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise stated therein); and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein. No other financial statements or schedules
are required to be included in the Registration Statement or Prospectus.
Ernst & Young LLP, which has expressed its opinion with respect to the
financial statements and schedules filed as a part of the Registration
Statement and included in the Registration Statement and Prospectus, are
independent public accountants with respect to the Company as required by
the Act and the Rules and Regulations.
(iv) Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation. Each of the Company and its subsidiaries
has full corporate power and authority to own its properties and conduct
its business as currently being carried on and as disclosed in the
Registration Statement and Prospectus, and is duly qualified to do business
as a foreign corporation in good standing in each jurisdiction in which it
owns or leases real property or in which the conduct of its business makes
such qualification necessary and in which the failure to so qualify would
have a material adverse effect upon the business, prospects, condition
(financial or otherwise), properties or results of operations of the
Company and its subsidiaries, taken as a whole (a "Material Adverse
Effect"). None of the subsidiaries of the Company constitutes a
"significant subsidiary" within the meaning of Rule 1-02 of Regulation S-X
under the Act.
(v) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions, or declared or
paid any dividends or made any distribution of any kind with respect to its
capital stock; and there has not been any change in the capital stock
(other than a change in the number of outstanding shares of Common Stock
due to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt, or
any issuance of options, warrants, convertible securities or other rights
to purchase the capital stock of the Company or any of its subsidiaries, or
any material adverse change, or any development involving a prospective
material adverse change, in
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the business, prospects, condition (financial or otherwise), properties or
results of operations of the Company and its subsidiaries, taken as a
whole.
(vi) Except as set forth in the Prospectus, there is not pending or, to
the knowledge of the Company, threatened or contemplated, any action, suit
or proceeding to which the Company or any of its subsidiaries is a party
before or by any court or governmental agency, authority or body, or any
arbitrator, which could reasonably be expected to result in a Material
Adverse Effect.
(vii) Each contract, agreement, instrument, lease, license or other item
required to be disclosed in the Registration Statement or the Prospectus or
filed as an exhibit to the Registration Statement has been so described or
filed, as the case may be.
(viii) This Agreement has been duly authorized, executed and delivered by
the Company, and (assuming the due execution and delivery hereof by the
Underwriters) constitutes a valid, legal and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws or public policy relating thereto and
except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws affecting
the rights and remedies of creditors generally and to general principles of
equity whether in a court of law or equity. The execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute, any
agreement or instrument to which the Company is a party or by which it is
bound or to which any of its property is subject, the Company's charter or
by-laws, or any order, rule, regulation or decree of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including the
issuance or sale of the Firm Shares by the Company, except such as may be
required under the Act or state securities or blue sky laws; and the
Company has full power and authority to enter into this Agreement and to
authorize, issue and sell the Firm Shares as contemplated by this
Agreement.
(ix) All of the issued and outstanding shares of capital stock of the
Company, including the outstanding shares of Common Stock, are duly
authorized, validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, were not issued
in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and the holders thereof are not
subject to personal liability by reason of being such holders; the Firm
Shares which may be sold hereunder by the Company have been duly authorized
and, when issued, delivered and paid for in accordance with the terms
hereof, will be validly issued, fully paid and
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nonassessable, and the holders thereof will not be subject to personal
liability by reason of being such holders; and the capital stock of the
Company, including the Common Stock, conforms to the description thereof in
the Registration Statement and Prospectus. Except as otherwise stated in
the Registration Statement and Prospectus and except with respect to any
rights that terminate on the First Closing Date, there are no preemptive
rights or other rights outstanding to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company's charter, by-laws or any agreement or other
instrument to which the Company is a party or by which the Company is
bound. Neither the filing of the Registration Statement nor the offering or
sale of the Securities as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any shares of Common Stock or
other securities of the Company, other than rights that have been
effectively waived. All of the issued and outstanding shares of capital
stock of each of the Company's subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except as
otherwise disclosed in the Registration Statement and Prospectus and except
for any directors' qualifying shares, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens,
proxies, equities or other encumbrances, all of the issued and outstanding
shares of such stock. Except as disclosed in the Registration Statement and
the Prospectus, there are no options, warrants, agreements, contracts or
other rights in existence to purchase or acquire from the Company or any
subsidiary of the Company any shares of the capital stock of the Company or
any subsidiary of the Company. As of March 29, 1998, the Company had an
actual authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus.
(x) 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 the Registration
Statement (or any such right has been effectively waived) or any securities
being registered pursuant to any other registration statement filed by the
Company under the Act.
(xi) Except as disclosed in the Prospectus, the Company and each of its
subsidiaries holds, and is operating in compliance with, all franchises,
grants, authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory body
required for the conduct of its business, except where the failure to hold
or be in compliance could not reasonably be expected to have a Material
Adverse Effect, and all such franchises, grants, authorizations, licenses,
permits, easements, consents, certifications and orders are valid and in
full force and effect, except where the failure to hold or be in compliance
could not reasonably be expected to have a Material Adverse Effect; and the
Company and each of its subsidiaries is in compliance with all applicable
federal, state and local laws, regulations, orders and decrees, except
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where the failure to be in compliance could not reasonably be expected to
have a Material Adverse Effect.
(xii) The operations of the Company and its subsidiaries with respect to
any real property currently leased or owned or by any means controlled by
the Company or any subsidiary (the "Real Property") are in compliance with
all federal, state, and local laws, ordinances, rules, and regulations
relating to occupational health and safety and the environment
(collectively, "Laws"), except there the failure to be in compliance could
not reasonably be expected to have a Material Adverse Effect, and the
Company and its subsidiaries have all licenses, permits and authorizations
necessary to operate under all Laws and are in compliance with all terms
and conditions of such licenses, permits and authorizations, except there
the failure to be in compliance could not reasonably be expected to have a
Material Adverse Effect; neither the Company nor any subsidiary has
authorized, conducted or has knowledge of the generation, transportation,
storage, use, treatment, disposal or release of any hazardous substance,
hazardous waste, hazardous material, hazardous constituent, toxic
substance, pollutant, contaminant, petroleum product, natural gas,
liquefied gas or synthetic gas defined or regulated under any environmental
law on, in or under any Real Property, except as could not reasonably be
expected to have a Material Adverse Effect; and there is no pending or, to
the knowledge of the Company, threatened claim, litigation or any
administrative agency proceeding, nor has the Company or any subsidiary
received any written or oral notice from any governmental entity or third
party, that: (A) alleges a violation of any Laws by the Company or any
subsidiary; (B) alleges the Company or any subsidiary is a liable party
under the Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. (S) 9601 et seq. or any state superfund law; (C) alleges
possible contamination of the environment by the Company or any subsidiary;
or (D) alleges possible contamination of the Real Property.
(xiii) The Company and its subsidiaries have good and marketable title to
all property disclosed in the Registration Statement and Prospectus as
being owned by them, in each case free and clear of all liens, claims,
security interests or other encumbrances except such as are disclosed in
the Registration Statement and the Prospectus; the property held under
lease by the Company and its subsidiaries is held by them under valid,
subsisting and enforceable leases with only such exceptions with respect to
any particular lease as do not interfere in any material respect with the
conduct of the business of the Company or its subsidiaries; the Company and
each of its subsidiaries owns or possesses all patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and rights necessary for the conduct of the
business of the Company and its subsidiaries as currently carried on and as
disclosed in the Registration Statement and Prospectus; except as stated in
the Registration Statement and Prospectus, no name which the Company or any
of its subsidiaries uses and no other aspect of the business of the Company
or any of its subsidiaries will involve or give rise to any infringement
of, or license or similar fees for,
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any patents, patent applications, trademarks, service marks, tradenames,
trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets or other similar rights of others material to the
business or prospects of the Company, except for any infringement that
could not reasonably be expected to have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice
alleging any such infringement or fee.
(xiv) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or in breach of or otherwise in
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement or any
other contract, lease or other instrument to which it is subject or by
which any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject, except for breaches
or defaults that could not reasonably be expected to have a Material
Adverse Effect.
(xv) The Company has filed all federal, state and local income and
franchise tax returns, and the Company's subsidiaries have filed all
federal, state and local income and franchise tax returns required to be
filed (except for the failure to file franchise tax returns as could not
reasonably be expected to have a Material Adverse Effect), and neither the
Company nor any of its subsidiaries is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto, other than any which the Company or any of its
subsidiaries is contesting in good faith.
(xvi) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and
sale of the Firm Shares other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed by the
Company.
(xvii) The Securities have been conditionally approved for listing on
the Nasdaq Stock Market's National Market ("NASDAQ"), and, on the date the
Registration Statement became or becomes effective, the Company's
Registration Statement on Form 8-A or other applicable form under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), became or
will become effective.
(xviii) Other than the subsidiaries of the Company listed in Exhibit 21
to the Registration Statement, the Company owns no capital stock or other
equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(xix) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to assets
is
8
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xx) Other than as contemplated by this Agreement, the Company has not
incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
(xxi) Neither the Company nor any of its affiliates is presently doing
business with the government of Cuba or with any person or affiliate
located in Cuba.
(xxii) The Company maintains insurance, which is in full force and
effect, of the types and in the amounts adequate, in its reasonable
opinion, for its business and as are customary in the business in which the
Company is engaged.
(xxiii) The Master License Agreement, dated September 20, 1993, between
the Company and Pizza Hut, Inc., as amended to date, has been duly
authorized, executed and delivered on behalf of the Company and is a valid
and binding contract enforceable in accordance with its terms, subject, as
to enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws affecting the rights and
remedies of creditors generally and to general principles of equity whether
in a court of law or equity.
(b) Each Selling Stockholder, severally and not jointly, represents and
warrants to, and agrees with, the several Underwriters as follows:
(i) Such Selling Stockholder is the record and beneficial owner of, and
has (or upon conversion of the Preferred Stock (as defined in the
Prospectus) will be the record and beneficial owner of and will have), and
on the Closing Date, will have, valid and marketable title to the Option
Shares to be sold by such Selling Stockholder, free and clear of all
security interests, claims, liens, restrictions on transferability,
legends, proxies, equities or other encumbrances; and upon delivery of and
payment for such Option Shares hereunder, and assuming that the
Underwriters acquire such shares without notice of any adverse claim (as
such term is defined in Section 8-102 of the Uniform Commercial Code in
effect in the state of New York), the several Underwriters will acquire
valid and marketable title thereto, free and clear of any security
interests, claims, liens, restrictions on transferability, legends,
proxies, equities or other encumbrances. Such Selling Stockholder is
selling the Option Shares to be sold by such Selling Stockholder for such
Selling Stockholder's own account and is not selling such Option Shares,
directly or indirectly, for the benefit of the Company, and no part of the
proceeds of such sale received by such Selling Stockholder will inure,
either directly or indirectly, to the benefit of the Company other than as
disclosed in the Registration Statement and Prospectus.
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(ii) Such Selling Stockholder has duly authorized, executed and
delivered an irrevocable power of attorney and custody agreement (the
"Custody Agreement") appointing Xxxxx X. El-Xxxx and Xxxxxxx X. Xxxxxxxxxx
as such Selling Stockholder's attorneys-in-fact (the "Attorneys-in-Fact")
with authority to execute, deliver and perform this Agreement on behalf of
the Selling Stockholder and appointing American Stock Transfer and Trust
Company, as custodian thereunder (the "Custodian"). Pursuant to the Custody
Agreement, the Selling Stockholder has placed in custody with the
Custodian, for delivery under this Agreement, the certificates representing
the Option Shares to be sold by such Selling Stockholder; such certificates
represent (or will, upon conversion of the Preferred Stock, represent)
validly issued, fully paid and nonassessable shares of Common Stock; and
such certificates were duly and properly endorsed in blank for transfer, or
were accompanied by all documents duly and properly executed that are
necessary to validate the transfer of title thereto, to the Underwriters,
free of any legend, restriction on transferability, proxy, lien or claim,
whatsoever. Such Selling Stockholder has full right, power and authority to
enter into the Custody Agreement and to perform its obligations under the
Custody Agreement. The Custody Agreement has been duly executed and
delivered by such Selling Stockholder and, assuming due authorization,
execution and delivery by the Custodian, is the valid and binding agreement
of such Selling Stockholder, enforceable against such Selling Stockholder
in accordance with its terms.
(iii) This Agreement and the Custody Agreement have each been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder and each constitutes a valid and binding agreement of such
Selling Stockholder, enforceable in accordance with its terms, except as
rights to indemnity hereunder or thereunder may be limited by federal or
state securities laws or public policy relating thereto and except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws affecting the rights
and remedies of creditors generally and to general principles of equity
whether in a court of law or equity. The execution and delivery of this
Agreement and the Custody Agreement and the performance of the terms hereof
and thereof and the consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any agreement or
instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound, or any law, regulation, order or decree
applicable to such Selling Stockholder; no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body is
required on the part of such Selling Stockholder for the execution,
delivery and performance of this Agreement and the Custody Agreement or for
the consummation by such Selling Stockholder of the transactions
contemplated hereby and thereby, including the sale of the Option Shares
being sold by such Selling Stockholder, except such as may be required
under the Act or state securities laws or blue sky laws.
(iv) Such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Option
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Shares other than any Preliminary Prospectus or the Prospectus or other
materials permitted by the Act to be distributed by such Selling
Stockholder.
(v) Such Selling Stockholder has reviewed the Registration Statement and
the Prospectus and to the best knowledge of such Selling Stockholder
neither the Registration Statement nor the Prospectus contains any untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading regarding such Selling Stockholder, the other Selling
Stockholders, the Company or otherwise.
(vi) The sale by such Selling Stockholder of the Option Shares pursuant
hereto is not prompted by any adverse information concerning the Company
that is not disclosed in the Registration Statement or the Prospectus.
(c) Any certificate signed by any officer of the Company and delivered to
you or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of Securities.
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(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell the Firm Shares to the several Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto. The purchase price for each Firm Share shall be $____ per
share. In making this Agreement, each Underwriter is contracting severally and
not jointly; except as provided in paragraph (c) of this Section 3 and in
Section 8 hereof, the agreement of each Underwriter is to purchase only the
respective number of Firm Shares specified in Schedule II.
The Firm Shares will be delivered by the Company to you for the accounts of
the several Underwriters against payment of the purchase price therefor by
certified or official bank check or other next day funds payable to the order of
the Company at the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually
acceptable, at 8:00 a.m. Central time on the third (or if the Securities are
priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30
p.m. Eastern time, the fourth) full business day following the date hereof, or
at such other time and date as you and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act, such time and date of delivery being herein
referred to as the "First Closing Date." If the Representatives so elect,
delivery of the Firm Shares may be made by credit through full fast transfer to
the accounts at The Depository Trust Company designated by the Representatives.
Certificates representing the Firm Shares, in definitive form and in such
denominations and registered in such names as you may request upon at least two
business days' prior notice to the Company, will be made available for
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checking and packaging not later than 10:30 a.m., Central time, on the business
day next preceding the First Closing Date at the offices of Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, each
Selling Stockholder, with respect to the number of Option Shares set forth
opposite the name of such Selling Stockholder in Schedule I hereto, hereby
grants to the several Underwriters an option to purchase all or any portion of
the Option Shares at the same purchase price as the Firm Shares, for use solely
in covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Shares. The options granted hereunder may be exercised
at any time (but not more than once) within 30 days after the effective date of
this Agreement upon notice (confirmed in writing) by Xxxxx Xxxxxxx Inc. to the
Company and to the Attorneys-in-Fact setting forth the aggregate number of
Option Shares as to which the several Underwriters are exercising the options,
the names and denominations in which the certificates for the Option Shares are
to be registered and the date and time, as determined by you, when the Option
Shares are to be delivered, such time and date being herein referred to as the
"Second Closing" and "Second Closing Date", respectively; provided, however,
that the Second Closing Date shall not be earlier than the First Closing Date
nor earlier than the second business day after the date on which the option
shall have been exercised. If the options are exercised, the obligation of each
Underwriter shall be to purchase from the Selling Stockholders granting options
to purchase the Option Shares, on a pro rata basis, that number of Option Shares
(to be adjusted by the Representatives to avoid fractional shares) which
represents the same proportion that the number of Option Shares granted by each
such Selling Stockholder bears to the total number of Option Shares granted by
all such Selling Stockholders. The number of Option Shares to be purchased by
each Underwriter shall be the same percentage of the total number of Option
Shares to be purchased by the several Underwriters as the number of Firm Shares
to be purchased by such Underwriter is of the total number of Firm Shares to be
purchased by the several Underwriters, as adjusted by the Representatives in
such manner as the Representatives deem advisable to avoid fractional shares.
No Option Shares shall be sold and delivered unless the Firm Shares previously
have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Custodian and the Selling
Stockholders, as appropriate, to you for the accounts of the several
Underwriters against payment of the purchase price therefor by certified or
official bank check or other next day funds payable to the order of the
Custodian or the Company, as appropriate, at the offices of Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable at 8:00 a.m., Central time, on the
Second Closing Date. If the Representatives so elect, delivery of the Option
Shares may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives. Certificates
representing the Option Shares in definitive form and in such denominations and
registered in such names as you have set forth in your notice of option
exercise, will be made available for checking and packaging not later than 10:30
a.m., Central time, on the business day
12
next preceding the Second Closing Date at the office of Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
(c) It is understood that you, individually and not as Representatives of
the several Underwriters, may (but shall not be obligated to) make payment to
the Company or the Selling Stockholders, on behalf of any Underwriter for the
Securities to be purchased by such Underwriter. Any such payment by you shall
not relieve any such Underwriter of any of its obligations hereunder. Nothing
herein contained shall constitute any of the Underwriters an unincorporated
association or partner with the Company or any Selling Stockholder.
4. Covenants.
---------
(a) The Company covenants and agrees with the several Underwriters as
follows:
(i) If the Registration Statement has not already been declared effective
by the Commission, the Company will use its best efforts to cause the
Registration Statement and any post-effective amendments thereto to become
effective as promptly as possible; the Company will notify you promptly of
the time when the Registration Statement or any post-effective amendment to
the Registration Statement has become effective or any supplement to the
Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) has been filed and of any request by the Commission
for any amendment or supplement to the Registration Statement or Prospectus
or additional information; if the Company has elected to rely on Rule 430A
of the Rules and Regulations, the Company will prepare and file a
Prospectus (or term sheet within the meaning of Rule 434 of the Rules and
Regulations) containing the information omitted therefrom pursuant to Rule
430A of the Rules and Regulations with the Commission within the time
period required by, and otherwise in accordance with the provisions of,
Rules 424(b), 430A and 434, if applicable, of the Rules and Regulations; if
the Company has elected to rely upon Rule 462(b) of the Rules and
Regulations to increase the size of the offering registered under the Act,
the Company will prepare and file a registration statement with respect to
such increase with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rule 462(b); the Company
will prepare and file with the Commission, promptly upon your request, any
amendments or supplements to the Registration Statement or Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) that, in your opinion, may be necessary in connection with the
distribution of the Securities by the Underwriters pursuant to this
Agreement; and the Company will not file any amendment or supplement to the
Registration Statement or Prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) to which you shall
reasonably object by notice to the Company after having been furnished a
copy a reasonable time prior to the filing.
13
(ii) The Company will advise you, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceeding for
any such purpose; and the Company will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such
a stop order should be issued.
(iii) Within the time during which a prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) relating to
the Securities is required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon it by the
Act, as now and hereafter amended, and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Securities as contemplated by the provisions
hereof and the Prospectus. If during such period any event occurs as a
result of which the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the Act,
the Company will promptly notify you and will amend the Registration
Statement or supplement the Prospectus (at the expense of the Company) so
as to correct such statement or omission or effect such compliance.
(iv) The Company will use its best efforts to qualify the Securities for
sale under the securities laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required
for the distribution of the Securities, except that the Company shall not
be required in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any state.
(v) The Company will furnish to the Underwriters copies of the
Registration Statement (three of which will be signed and will include all
exhibits), each Preliminary Prospectus, the Prospectus, and all amendments
and supplements (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) to such documents, in each case as soon as
available and in such quantities as you may from time to time reasonably
request.
(vi) During a period of three years commencing with the date hereof, the
Company will furnish to the Representatives, and to each Underwriter who
may so request in writing, copies of all periodic and special reports
furnished to the stockholders of the Company and all information, documents
and reports filed with the Commission, the National Association of
Securities Dealers, Inc., NASDAQ or any securities exchange.
14
(vii) The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than 15 months after the
end of the Company's current fiscal quarter, an earnings statement (which
need not be audited) covering a 12-month period beginning after the
effective date of the Registration Statement that shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 9(a) hereof or is terminated,
will pay or cause to be paid (A) all expenses (including transfer taxes
allocated to the respective transferees) incurred in connection with the
delivery to the Underwriters of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the Company's
accountants and counsel but, except as otherwise provided below, not
including fees of the Underwriters' counsel) in connection with the
preparation, printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Securities, each Preliminary
Prospectus, the Prospectus, and any amendment thereof or supplement
thereto, and the printing, delivery, and shipping of this Agreement and
other underwriting documents, (C) all filing fees and fees and
disbursements of the Underwriters' counsel incurred in connection with the
qualification of the Securities for offering and sale by the Underwriters
or by dealers under the securities or blue sky laws of the states and other
jurisdictions which you shall designate in accordance with Section 4(d)
hereof, (D) the fees and expenses of any transfer agent or registrar, (E)
the filing fees incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Securities, (F)
listing fees, if any, and (G) all other costs and expenses incident to the
performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Securities provided
for herein is not consummated by reason of action by the Company pursuant
to Section 9(a) hereof which prevents this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part of
the Company or the Selling Stockholders to perform any agreement on its or
their part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company
or the Selling Stockholders is not fulfilled, the Company will reimburse
the several Underwriters for all out-of-pocket disbursements (including
fees and disbursements of counsel) incurred by the Underwriters in
connection with their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations hereunder.
The Company shall not in any event be liable to any of the Underwriters for
loss of anticipated profits from the transactions covered by this
Agreement.
(ix) The Company will apply the net proceeds from the sale of the Firm
Shares to be sold by it hereunder for the purposes set forth in the
Prospectus and will file such reports with the Commission with respect to
the sale of the Firm Shares and the
15
application of the proceeds therefrom as may be required in accordance with
Rule 463 of the Rules and Regulations.
(x) The Company will not, without Xxxxx Xxxxxxx'x prior written
consent, offer, sell, contract to sell, pledge, or otherwise dispose of,
directly or indirectly, any shares of Common Stock or other securities
convertible into or exchangeable for, or any options or rights to purchase
options or warrants to acquire shares of Common Stock or securities
exchangeable for or convertible into shares of Common Stock during the 180-
day period following the date of the Prospectus, provided, however, that
the Company may (i) issue shares upon the exercise of options and warrants
granted prior to the date of the Prospectus provided such options and
warrants are disclosed in the Prospectus, (ii) grant options under the
Company's 1998 Incentive Capital Accumulation Plan provided such options
are not exercisable during the 180-day period following the date of the
Prospectus, (iii) issue shares of Common Stock upon the conversion of the
Preferred Stock and (iv) issue options or warrants to landlords in
connection with the execution of a lease, provided that such options or
warrants are not exercisable during the 180-day period following the date
of the Prospectus.
(xi) The Company either has caused to be delivered to you or will cause
to be delivered to you prior to the effective date of the Registration
Statement a letter from each of the Company's directors and officers and
each of its stockholders (other than Xxxxx Sandoloski, Xxx Sandoloski,
Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxx Xxxxxxxx, Xxxxxx X.
Xxxxxxxx and Xxxxx X. Xxxxxxxx, Xxxxx Xxxxxxxx Inc. Custodian for Xxxxxx X.
Xxxxxxxx XXX and HPB Associates, L.P.), stating that such person agrees
that he or she will not, without Xxxxx Xxxxxxx'x prior written consent,
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any shares of Common Stock or other securities of the Company
that are substantially similar to the shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, shares of Common Stock or any such
substantially similar securities, beneficially owned (within the meaning of
Rule 13d-3 of the Exchange Act) by him prior to the date of the Prospectus
for a period of 180 days after the date of the Prospectus, other than such
an offer, sale, contract to sell, pledge or disposition (A) not subject to
the registration requirements of the Act, (i) to a transferee who is a
stockholder of the Company on the date hereof or who is an affiliate of the
transferring stockholder, (ii) representing a distribution in kind to any
direct or indirect equity owner of the transferring stockholder, (iii)
constituting a gift or (iv) pursuant to the laws of testamentary or
intestate descent, provided that the recipient of such securities, in each
case, agrees to be bound by the foregoing restrictions or (B) pursuant to a
registered offering under the Act.
(xii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of the
16
Company to facilitate the sale or resale of the Securities, and has not
effected any sales of Common Stock which are required to be disclosed in
response to Item 701 of Regulation S-K under the Act which have not been so
disclosed in the Registration Statement.
(xiii) The Company will not incur any liability for any finder's or
broker's fee or agent's commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xiv) The Company will inform the Underwriters at any time prior to the
consummation of the distribution of the Securities by the Underwriters if
it commences engaging in business with the government of Cuba or with any
person or affiliate located in Cuba. Such information will be provided
within 90 days after the commencement thereof or after a change occurs with
respect to previously reported information.
(b) Each Selling Stockholder covenants and agrees with the several
Underwriters as follows:
(i) Except as otherwise agreed to by the Company and the Selling
Stockholder, such Selling Stockholder will pay all taxes, if any, on the
transfer and sale, respectively, of the Option Shares being sold by such
Selling Stockholder and its proportionate share of the gross spread
relating to the sale, if any, of Option Shares sold by such Selling
Stockholder.
(ii) The Option Shares to be sold by such Selling Stockholder,
represented by the certificates on deposit with the Custodian pursuant to
the Custody Agreement of such Selling Stockholder, are subject to the
interest of the several Underwriters and the other Selling Stockholders;
the arrangements made for such custody are, except as specifically provided
in the Custody Agreement, irrevocable; and the obligations of such Selling
Stockholder hereunder shall not be terminated, except as provided in this
Agreement or in the Custody Agreement, by any act of such Selling
Stockholder, by operation of law, whether by the liquidation, dissolution
or merger of such Selling Stockholder, by the death of such Selling
Stockholder, or by the occurrence of any other event. If any Selling
Stockholder should liquidate, dissolve or be a party to a merger or if any
other such event should occur before the delivery of the Option Shares
hereunder, certificates for the Option Shares deposited with the Custodian
shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such liquidation, dissolution, merger or
other event had not occurred, whether or not the Custodian shall have
received notice thereof.
(iii) Such Selling Stockholder will not, without Xxxxx Xxxxxxx'x prior
written consent, offer, sell, contract to sell, pledge, or otherwise
dispose of, directly or indirectly, any shares of Common Stock or other
securities of the Company that are substantially
17
similar to the shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, shares of Common Stock or any such substantially similar
securities, beneficially owned (within the meaning of Rule 13d-3 of the
Exchange Act) by him prior to the date of the Prospectus for a period of
180 days after the date of the Prospectus, other than such an offer, sale,
contract to sell, pledge or disposition (A) not subject to the registration
requirements of the Act, (i) to a transferee who is a stockholder of the
Company on the date hereof or who is an affiliate of the transferring
stockholder, (ii) representing a distribution in kind to any direct or
indirect equity owner of the transferring stockholder, (iii) constituting a
gift or (iv) pursuant to the laws of testamentary or intestate descent,
provided that the recipient of such securities, in each case, agrees to be
bound by the foregoing restrictions or (B) pursuant to a registered
offering under the Act.
(iv) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities,
and has not effected any sales of Common Stock which, if effected by the
Company, would be required to be disclosed in response to Item 701 of
Regulation S-K.
(v) Such Selling Stockholder shall immediately notify you if any event
occurs, or of any change in information relating to such Selling
Stockholder or any new information relating to such Selling Stockholder,
which results in the Prospectus (as supplemented) including an untrue
statement of a material fact or omitting to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
5. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
several Underwriters hereunder are subject to the accuracy, as of the date
hereof and at each of the First Closing Date and the Second Closing Date (as if
made at such Closing Date), of and compliance with all representations,
warranties and agreements of the Company and the Selling Stockholders contained
herein, to the performance by the Company and the Selling Stockholders of their
respective obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:00 p.m., Central time, on the date of this Agreement, or such later time and
date as you, as Representatives of the several Underwriters, shall approve and
all filings required by Rules 424, 430A and 434 of the Rules and Regulations
shall have been timely made; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereof shall have been issued; no
proceedings for the issuance of such an order shall have been initiated or
threatened; and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
18
(b) No Underwriter shall have advised the Company that the Registration
Statement or the Prospectus, or any amendment thereof or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries shall have incurred
any material liabilities or obligations, direct or contingent, or entered into
any material transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and there shall not
have been any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt of the Company or any of its subsidiaries, or any
issuance of options, warrants, convertible securities or other rights to
purchase the capital stock of the Company or any of its subsidiaries or any
material adverse change or any development involving a prospective material
adverse change (whether or not arising in the ordinary course of business), in
the general affairs, condition (financial or otherwise), business, key
personnel, property, prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, that, in your judgment, makes it
impractical or inadvisable to offer or deliver the Securities on the terms and
in the manner contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of Weil, Gotshal &
Xxxxxx LLP, counsel for the Company, dated such Closing Date and addressed to
you, to the effect that:
(i) Each of the Company and its subsidiaries has been duly organized and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and its subsidiaries
has all requisite corporate power and authority to own, lease and operate
its properties and carry on its business as currently being conducted and
is duly qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction in which the character of its activities
requires such qualification except where the failure to so qualify would
not have a material adverse effect on the business, operations or financial
condition of the Company and its subsidiaries considered as a whole.
(ii) The capital stock of the Company conforms as to legal matters in all
material respects to the description thereof contained in the Prospectus
under the caption "Description of Capital Stock." All of the issued and
outstanding shares of the capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, with no
personal liability attaching to the ownership thereof. The Firm Shares to
be issued and sold by the Company hereunder have been duly authorized and,
when issued, delivered and paid for as contemplated by this Agreement, will
be validly
19
issued, fully paid and nonassessable, with no personal liability attaching
to the ownership thereof. To such counsel's knowledge, neither the filing
of the Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating to
the registration of any shares of Common Stock or other securities of the
Company other than rights that have been effectively waived.
(iii) All of the issued and outstanding shares of capital stock of each
of the Company's subsidiaries have been duly authorized and validly issued
and are fully paid and nonassessable, and, to such counsel's knowledge,
except as otherwise disclosed in the Prospectus, the Company owns of record
and beneficially, free and clear of all security interests, claims, liens
and other encumbrances, all of the issued and outstanding shares of such
capital stock.
(iv) To such counsel's knowledge and except as disclosed in the
Registration Statement and Prospectus, there are no outstanding securities
of the Company convertible into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company or any of its
subsidiaries, options, warrants, calls, subscriptions, rights, commitments
or any other agreements of any character obligating the Company or any of
its subsidiaries to issue any shares of its capital stock or any securities
convertible into or evidencing the right to purchase or subscribe for any
shares of such stock, and there are no agreements or understandings with
respect to the voting, sale or transfer of any shares of capital stock of
the Company to which the Company is a party.
(v) The Registration Statement has become effective under the Act and,
to such counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceeding under the Act
for that purpose has been instituted or, to the knowledge of such counsel,
threatened by the Commission.
(vi) To such counsel's knowledge, there are no agreements, contracts,
leases or other agreements to which the Company is a party which are
required by the Act to be disclosed or referred to in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement which are not disclosed or referred to therein or filed as
required. Except as disclosed in the Prospectus, to such counsel's
knowledge, there are no legal or governmental proceedings pending or
threatened against the Company or any of its subsidiaries of a character
required to be disclosed in the Registration Statement or the Prospectus by
the Act or the Rules and Regulations which, if adversely determined, would
have a material adverse effect on the business, operations or financial
condition of the Company and its subsidiaries considered as a whole.
(vii) The Company has all requisite corporate power and authority to
enter into this Agreement, and this Agreement has been duly authorized,
executed and delivered by the Company and (assuming the due authorization,
execution and delivery by the Underwriters and the Selling Stockholders)
constitutes a valid, legal and binding obligation
20
of the Company. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the issuance and
delivery of the Firm Shares will not conflict with, constitute a default
under or violate (i) any of the terms, conditions or provisions of the
certificate of incorporation or by-laws of the Company or any of its
subsidiaries, (ii) any of the provisions of any document, agreement or
other instrument to which the Company or any of its subsidiaries is a party
or by which it is bound which is filed as an exhibit to the Registration
Statement or of which such counsel is aware, (iii) any New York, Delaware
corporate or federal statute, law, rule or regulation (other than state
securities or blue sky laws, as to which such counsel need not express any
opinion) applicable to the Company or any of its subsidiaries, or (iv) any
order or decree of any court or governmental authority known to such
counsel binding on the Company or any of its subsidiaries of which such
counsel is aware. No consent, approval, authorization or other action by or
filing with any New York, Delaware corporate or federal governmental
authority is required in connection with the execution, delivery and
performance by the Company of this Agreement or the consummation by the
Company of the transactions contemplated hereby, except such as has been
obtained under the Act or as may be required under state securities or blue
sky laws (as to which such counsel need not express any opinion).
(viii) To such counsel's knowledge, no default exists in the performance
or observance of any material obligation, agreement, covenant or condition
contained in the Fourth Amended and Restated Stockholders Agreement, dated
May 18, 1998, among the Company and its stockholders.
(ix) The Registration Statement and the Prospectus (except for the
financial statements and the notes thereto and the other financial,
statistical and accounting data included in the Registration Statement or
the Prospectus, as to which such counsel need not express any opinion),
comply as to form in all material respects with the requirements of the Act
and the Rules and Regulations.
(x) The statements (1) in the Prospectus under the captions "Certain
Relationships and Related Transactions" and "Description of Capital Stock"
and (2) in the Registration Statement in Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal matters or
documents (or provisions thereof) referred to therein, fairly present the
information required to be disclosed with respect to such legal matters and
documents (or provisions thereof) and fairly summarize in all material
respects such legal matters and documents (or provisions thereof) required
to be disclosed.
In addition, such counsel shall state that such counsel has participated in
conferences with directors, officers and other representatives of the Company,
the Selling Stockholders, the Representatives, Underwriters' Counsel and the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and Prospectus and related matters
were discussed, and, although such counsel has not independently verified and is
21
not passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, nothing has come to such counsel's attention which leads such
counsel to believe that, at the time the Registration Statement became effective
and at all times subsequent thereto up to and on the Closing Date, the
Registration Statement and any amendment or supplement thereto (other than the
financial statements and related notes, including supporting schedules and other
financial, statistical and accounting data included therein as to which such
counsel expresses no belief) 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 the Prospectus and any
amendment or supplement thereto (except as aforesaid), as of its issue date and
at the Closing Date contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion such counsel may rely (i) as to matters of law
other than New York law, Delaware corporate law and federal law, upon the
opinion or opinions of local counsel provided that the extent of such reliance
is specified in such opinion and that such counsel shall state that such opinion
or opinions of local counsel are satisfactory to them and that they believe they
and you are justified in relying thereon and (ii) as to matters of fact, to the
extent such counsel deems reasonable upon certificates of officers of the
Company.
(e) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of respective counsel
for the Selling Stockholders, dated such Closing Date and addressed to you, to
the effect that:
(i) Such Selling Stockholder is the sole record owner of the Option
Shares to be sold by such Selling Stockholder. Upon transfer, assignment
and delivery of and payment for the Option Shares as contemplated herein,
the Underwriters will receive good and marketable title to the Option
Shares purchased by it from such Selling Stockholder, free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest.
In rendering this opinion, such counsel may assume that the Underwriters
are acquiring the Option Shares being purchased from such Selling
Stockholder without notice of any adverse claim as such phrase is defined
in Section 8-105 of the Uniform Commercial Code in effect in the State of
New York.
(ii) Such Selling Stockholder has the power and authority to enter into
the Custody Agreement and this Agreement and to perform such Selling
Stockholder's obligations thereunder and hereunder; and this Agreement and
the Custody Agreements have been duly and validly authorized, executed and
delivered by (or by the Attorneys-in-Fact, or either of them, on behalf of)
the Selling Stockholders and are valid and binding agreements of the
Selling Stockholders, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including
22
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity), and except that rights to indemnification and contribution
thereunder may be limited by federal or state securities law or public
policy relating thereto.
(iii) The execution and delivery of this Agreement and the Custody
Agreement and the performance of the terms hereof and thereof and the
consummation of the transactions herein and therein contemplated will not
conflict with, violate or constitute a default under (i) any of the terms,
conditions or provisions of the certificate of incorporation or by-laws of
any Selling Stockholder, (ii) any of the terms, conditions or provisions of
any document, agreement or other instrument to which any such Selling
Stockholder is a party or by which it is bound of which such counsel is
aware, (iii) any New York, Delaware corporate or federal law or regulation
(other than federal and state securities or blue sky laws, as to which we
express no opinion), or (iv) any order or decree of any court or
governmental authority binding on any such Selling Stockholder of which
such counsel is aware; no consent, approval, authorization or other action
by or filing with any New York, Delaware corporate or federal governmental
authority is required in connection with the execution and delivery by any
such Selling Stockholder of this Agreement and the Custody Agreement or the
consummation by the Company of the transactions contemplated hereby and
thereby, except such as has been obtained under the Act or as may be
required under state securities or blue sky laws (as to which such counsel
need not express any opinion).
In rendering such opinion such counsel may rely (i) as to matters of law
other than Delaware and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that such opinion or opinions of local counsel
are satisfactory to them and that they believe they and you are justified in
relying thereon and (ii) as to matters of fact, to the extent such counsel deems
reasonable upon certificates of officers of the Selling Stockholders.
(f) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, such opinion or opinions from King
& Spalding, counsel for the several Underwriters, dated such Closing Date and
addressed to you, with respect to the incorporation of the Company, the validity
of the Securities, the Registration Statement, the Prospectus and other related
matters as you reasonably may request, and such counsel shall have received such
papers and information as they request to enable them to pass upon such matters.
(g) On each Closing Date you, as Representatives of the several
Underwriters, shall have received a letter of Ernst & Young LLP, dated such
Closing Date and addressed to you, confirming that they are independent public
accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which
23
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date of such letter), the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and the effect of the letter so to be delivered on such
Closing Date shall be to confirm the conclusions and findings set forth in such
prior letter.
(h) On each Closing Date, there shall have been furnished to you, as
Representatives of the Underwriters, a certificate, dated such Closing Date and
addressed to you, signed by the chief executive officer and by the chief
financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made at and
as of such Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the effectiveness of the
Registration Statement or any amendment thereof or the qualification of the
Securities for offering or sale has been issued, and no proceeding for that
purpose has been instituted or, to the best of their knowledge, is
contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments thereof or
supplements thereto (including any term sheet within the meaning of Rule
434 of the Rules and Regulations), and (A) such documents contain all
statements and information required to be included therein; the
Registration Statement, or any amendment thereof, does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the Prospectus, as amended or supplemented, does not
include any untrue statement of 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, (B) since the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented prospectus which has
not been so set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions, not in the ordinary course of business, or declared
or paid any dividends or made any distribution of any kind with respect to
its capital stock, and except as disclosed in the Prospectus, there has not
been any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock, of
the Company or any of its subsidiaries, or any material
24
adverse change or any development involving a prospective material adverse
change (whether or not arising in the ordinary course of business), in the
business, prospects, condition (financial or otherwise), properties or
results of operations of the Company and its subsidiaries, taken as a
whole, and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the best of their knowledge,
threatened or contemplated, any action, suit or proceeding to which the
Company or any of its subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in any material adverse change in the condition (financial or
otherwise), business, prospects or results of operations of the Company and
its subsidiaries, taken as a whole.
(i) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, a certificate or certificates,
dated such Closing Date and addressed to you, signed by such Selling Stockholder
or either of such Selling Stockholder's Attorneys-in-Fact to the effect that the
representations and warranties of such Selling Stockholder contained in this
Agreement are true and correct as if made at and as of such Closing Date, and
that such Selling Stockholder has complied with all the agreements and satisfied
all the conditions on such Selling Stockholder's part to be performed or
satisfied at or prior to such Closing Date.
(j) The Company shall have furnished to you and counsel for the
Underwriters such additional documents, certificates and evidence as you or they
may have reasonably requested.
(k) The Common Stock of the Company shall be approved for listing on
NASDAQ.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and counsel for the Underwriters. The Company will furnish you
with such conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
6. Indemnification and Contribution.
--------------------------------
(a) The Company and, to the extent that the Selling Stockholders sell
Option Shares pursuant to this Agreement, each Selling Stockholder, jointly and
severally, agree to indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company and/or such Selling Stockholders, as the case may be),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, including
the information deemed to be a part of the Registration Statement at the time of
effectiveness pursuant to Rules 430A and 434(d) of the Rules and Regulations, if
applicable, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), or arise out of or are
25
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, however, that neither
the Company nor any Selling Stockholder shall be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation thereof;
provided, further, that, to the extent any such losses, claims, damages or
liabilities to which such Underwriter may become subject arise under Section 12
of the Act, the foregoing indemnity agreement with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting such losses, claims, damages or liabilities purchased
Securities, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities arising under Section 12 of the Act; and further
provided, however, that in no event shall any Selling Stockholder be liable
under the provisions of this Section 6 for any amount in excess of the aggregate
amount of proceeds such Selling Stockholder received from the sale of the Option
Shares pursuant to this Agreement.
In addition to their other obligations under this Section 6(a), the Company
and, to the extent that the Selling Stockholders sell Option Shares pursuant to
this Agreement, each Selling Stockholder, jointly and severally agree that, as
an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section 6(a),
they will reimburse each Underwriter on a monthly basis for all reasonable legal
fees or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's and/or the Selling Stockholder's obligation to
reimburse the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, the Underwriter that received such payment shall
promptly return it to the party or parties that made such payment, together with
interest, compounded daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit standing) announced
from time to time by Norwest Bank Minnesota, N.A. (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement shall be in addition to any
liabilities which the Company or the Selling Stockholders may otherwise have.
26
(b) Each Underwriter will indemnify and hold harmless the Company and, to
the extent that the Selling Stockholders sell Option Shares pursuant to this
Agreement, each Selling Stockholder against any losses, claims, damages or
liabilities to which the Company and the Selling Stockholders may become
subject, under the Act or otherwise (including in settlement of any litigation,
if such settlement is effected with the written consent of such Underwriter),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by you, or by such Underwriter through you, specifically for use in the
preparation thereof, and will reimburse the Company and, if applicable, the
Selling Stockholders for any legal or other expenses reasonably incurred by the
Company or any such Selling Stockholder in connection with investigating or
defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability that it may have to any
indemnified party. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. The indemnified party
shall have the right to employ counsel (consisting of one law firm and any
necessary local counsel) of its choice in any such action, and the fees and
expenses of such counsel shall be borne by the indemnifying party or parties and
reimbursed to the Underwriters as incurred (in accordance with the provisions of
the second paragraph in subsection (a) above) if (i) the employment of counsel
by such indemnified party has been authorized in writing by the indemnifying
party or (ii) the named parties to such action or proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party, counsel to the indemnified party shall have reasonably concluded that
and, in the reasonable opinion of the indemnified party, representation of both
parties by the same counsel would be inappropriate, due to an actual or
potential conflict of interest between them (in which
27
case the indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party) or (iii) the indemnifying party
shall not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof. An indemnifying party
shall not be obligated under any settlement agreement relating to any action
under this Section 6 to which it has not agreed in writing.
(d) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and,
if applicable, the Selling Stockholders on the one hand and the Underwriters on
the other from the offering of the Firm and/or Option Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and,
if applicable, the Selling Stockholders on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and, if
applicable, the Selling Stockholders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and, if
applicable, the Selling Stockholders bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relevant intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The
28
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Stockholders under this
Section 6 shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 6
shall be in addition to any liability that the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is named in
the Registration Statement as about to become a director of the Company), to
each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company or any Selling Stockholder within
the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
--------------------------------------------------
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters, the Company and the Selling Stockholders contained in Section 6
hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof, or the Company or any of its officers, directors, or controlling
persons, or any Selling Stockholder or any controlling person thereof and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
8. Substitution of Underwriters.
----------------------------
(a) If any Underwriter or Underwriters shall fail to take up and pay for
the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased does not aggregate
more than 10% of the total amount of Firm Shares set forth in Schedule II
hereto, the remaining Underwriters shall be obligated to take up and pay for (in
proportion to their respective underwriting obligations hereunder as set forth
in Schedule II hereto except as may otherwise be determined by you) the Firm
Shares that the withdrawing or defaulting Underwriters agreed but failed to
purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay for
the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased aggregates more than
10% of the total amount of Firm Shares set forth in Schedule II hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination, the Company shall not be under any
liability to any Underwriter (except to the extent provided in Section
4(a)(viii) and Section 6 hereof) nor shall any Underwriter (other than an
Underwriter who shall have failed, otherwise than for some reason permitted
under this
29
Agreement, to purchase the amount of Firm Shares agreed by such Underwriter to
be purchased hereunder) be under any liability to the Company (except to the
extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the non-
defaulting Underwriters or by any other party or parties, the Representatives or
the Company shall have the right to postpone the First Closing Date for not more
than seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used herein, the term "Underwriter" includes
any person substituted for an Underwriter under this Section 8.
9. Effective Date of this Agreement and Termination.
------------------------------------------------
(a) This Agreement shall become effective at 10:00 a.m., Central time, on
the first full business day following the effective date of the Registration
Statement, or at such earlier time after the effective time of the Registration
Statement as you in your discretion shall first release the Securities for sale
to the public; provided, that if the Registration Statement is effective at the
time this Agreement is executed, this Agreement shall become effective at such
time as you in your discretion shall first release the Securities for sale to
the public. For the purpose of this Section, the Securities shall be deemed to
have been released for sale to the public upon release by you of the publication
of a newspaper advertisement relating thereto or upon release by you of telexes
offering the Securities for sale to securities dealers, whichever shall first
occur. By giving notice as hereinafter specified before the time this Agreement
becomes effective, you, as Representatives of the several Underwriters, or the
Company may prevent this Agreement from becoming effective without liability of
any party to any other party, except that the provisions of Section 4(a)(viii)
and Section 6 hereof shall at all times be effective.
(b) You, as Representatives of the several Underwriters, shall have the
right to terminate this Agreement by giving notice as hereinafter specified at
any time at or prior to the First Closing Date, and the option referred to in
Section 3(b), if exercised, may be canceled at any time prior to the Second
Closing Date, if (i) the Company shall have failed, refused or been unable, at
or prior to such Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) trading on the New York Stock Exchange or the
American Stock Exchange shall have been wholly suspended, (iv) minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the New York Stock Exchange or the
American Stock Exchange, by such Exchange or by order of the Commission or any
other governmental authority having jurisdiction, (v) a banking moratorium shall
have been declared by Federal, New York or Delaware authorities, or (vi) there
has occurred any material adverse change in the financial markets in the United
States or an outbreak of major hostilities (or an escalation thereof) in which
the United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or occurrence
of a similar character shall have occurred since the execution of this Agreement
that, in your judgement,
30
makes it impractical or inadvisable to proceed with the completion of the sale
of and payment for the Securities. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
4(a)(viii) and Section 6 hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section, the Company and an
Attorney-in-Fact, on behalf of the Selling Stockholders, shall be notified
promptly by you by telephone or facsimile, confirmed by letter. If the Company
elects to prevent this Agreement from becoming effective, you and an Attorney-
in-Fact, on behalf of the Selling Stockholders, shall be notified by the Company
by telephone or facsimile, confirmed by letter.
10. Default by One or More of the Selling Stockholders or the Company. If
-----------------------------------------------------------------
one or more of the Selling Stockholders shall fail at the Second Closing Date to
sell and deliver the number of Option Shares which such Selling Stockholder or
Selling Stockholders are obligated to sell hereunder, and the remaining Selling
Stockholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Option Shares to be sold by them hereunder to the total
number of Option Shares to be sold by all Selling Stockholders as set forth in
Schedule I, the Company agrees that it will sell that number of Common Shares to
the Underwriters which represents the Selling Stockholder's Option Shares that
the Selling Stockholder has failed to so sell, or such lesser number as may be
requested by you.
In the event of a default by any Selling Stockholder as referred to in this
Section, either you or the non-defaulting Selling Stockholders shall have the
right to postpone the Second Closing Date for a period not exceeding seven days
in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
If the Company shall fail at the First Closing Date to sell and deliver the
number of Firm Shares which it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any non-
defaulting party.
11. Information Furnished by Underwriters. The statements set forth in
-------------------------------------
the last paragraph of the cover page and under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus constitute the written information
furnished by or on behalf of the Underwriters referred to in Section 2 and
Section 6 hereof.
12. Notices. Except as otherwise provided herein, all communications
-------
hereunder shall be in writing or by telegraph or by facsimile with written
confirmation of transmission and, if to the Underwriters, shall be mailed,
telegraphed or delivered to the Representatives c/o Xxxxx Xxxxxxx Inc., Xxxxx
Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, except that
notices given to an Underwriter pursuant to Section 6 hereof shall be sent to
such Underwriter at the address stated in the Underwriters' Questionnaire
furnished by such Underwriter in connection with this offering; if to the
Company, to Jeepers! Inc., 00 Xxxxxxx Xxxxx, Xxxxxxx, XX 00000, Attention: Xxxxx
X. El-Xxxx; if to any of the Selling Stockholders, at the address of the
Attorneys-
31
in-Fact as set forth in the Powers of Attorney, or in each case to such other
address as the person to be notified may have requested in writing. All notices
given by telegram shall be promptly confirmed by letter. Any party to this
Agreement may change such address for notices by sending to the parties to this
Agreement written notice of a new address for such purpose.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure
----------------------------------------
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Minnesota.
15. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Signature Page Follows]
32
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement among the Company,
the Selling Stockholders and the several Underwriters in accordance with its
terms.
Very truly yours,
Jeepers! Inc.
By
---------------------------
President
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXXX INC.
By
----------------------------
Managing Director
XXXXX & COMPANY
By
----------------------------
Managing Director
XXXXXX XXXXXX XXXXXXXX & CO., INC.
By
----------------------------
Managing Director
33
SCHEDULE I
Selling Stockholders
Number of
Option Shares
Name to be Sold
---- -------------
___________
Total.................
===========
SCHEDULE II
Underwriter Number of Firm Shares (1)
----------- -------------------------
Xxxxx Xxxxxxx Inc.
Xxxxx & Company
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
---------------
Total...............................
===============
_________________
(1) The Underwriters may purchase up to an additional 300,000 Option Shares, to
the extent the options described in Section 3(b) of the Agreement are
exercised, in the proportions and in the manner described in the Agreement.
