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Exhibit 1
UNDERWRITING AGREEMENT
COOPERATIVE HOLDINGS, INC.
(a Delaware corporation)
[______________] Shares of Common Stock
(Par Value $.01 Per Share)
[ ], 2000
PENNSYLVANIA MERCHANT GROUP
XXXX CAPITAL PARTNERS, INC.
as Representatives of the several Underwriters
named in Schedule A attached hereto
c/o Pennsylvania Merchant Group
Four Falls Xxxxxxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Ladies and Gentlemen:
Cooperative Holdings, Inc, a Delaware corporation (the "Company"), and
the stockholder listed in Schedule B hereto (the "Selling Stockholder"), confirm
their respective agreements with Pennsylvania Merchant Group ("PMG"), Xxxx
Capital Partners, Inc. and each of the other Underwriters named in Schedule A
hereto (collectively, the "Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
PMG and Xxxx Capital Partners, Inc. are acting as representatives (in such
capacity, the "Representatives"), with respect to (i) the issue and sale by the
Company and the Selling Stockholder, acting severally and not jointly, and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.0l per share, of the
Company ("Common Stock") set forth in Schedules A and B hereto and (ii) the
grant by the Company to the Underwriters of the option described in Section 2(b)
hereof to purchase all or any part of additional shares of Common Stock to cover
over-allotments, if any. The aforesaid shares of Common Stock (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
shares of Common Stock subject to the option described in Section 2(b) hereof
(the "Option Securities") are hereinafter called, collectively, the
"Securities".
The Company and the Selling Stockholder understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333- ) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated _______, 2000 together with the Term
Sheet and all references in this Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
SECTION 1. Representation and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. Each
of the Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for
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that purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Prospectus, any
preliminary prospectus and any supplement thereto or prospectus wrapper prepared
in connection therewith, at their respective times of issuance and at the
Closing Time, complied and will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the Prospectus
and such preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved Securities.
Neither the Prospectus, any preliminary prospectus, nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectus, any preliminary prospectus, or any such amendment or supplement was
issued and at the Closing Time (and, if any Option Securities are purchased, at
the Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. If Rule 434 is used, the Company will
comply with the requirements of Rule 434 and the Prospectus shall not be
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply to statements
in or omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing by
any Underwriter through PMG expressly for use in the Registration Statement or
Prospectus.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(ii) Independent Accountants. The accountants who
certified the financial statement and supporting schedules included in the
Registration Statement are independent public accountants as required by the
1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements
included in the Registration Statement and the Prospectus, together with the
related schedules and notes, present
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fairly the financial position of the Company and its consolidated subsidiaries
at the dates indicated and the statements of operations, stockholders' equity
and cash flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The selected financial data
and the summary financial information included in the Registration Statement and
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus. All financial
statements required to be included in the Registration Statement and the
Prospectus pursuant to the 1933 Act, the 1933 Act Regulations and Regulation S-X
have been included in the Registration Statement and the Prospectus.
(iv) No Material Adverse Change in Business. Since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material with respect
to the Company and its subsidiaries considered as one enterprise, and (C) there
has been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has
been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vi) Subsidiaries.
(A) Each subsidiary of the Company and other
entity in which the Company owns a controlling interest (each a "Subsidiary"
and, collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation, or a limited liability company, as the case may be,
in good standing under the laws of the jurisdiction of its incorporation or
formation, as the case may be, has power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation or entity to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
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the conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(B) All of the issued and outstanding
capital stock or membership interests, as the case may be, of each such
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock or membership
interests, as the case may be, of any Subsidiary was issued in violation of any
preemptive or other rights of any securityholder of such Subsidiary.
(C) Other than the entities listed on
Exhibit 21 to the Registration Statement, the Company does not own an equity
interest in any other entity.
(vii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus in
the column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options referred to in
the Prospectus). The shares of issued and outstanding capital stock of the
Company, including the Securities to be purchased by the Underwriters from the
Selling Stockholder, have been duly authorized and validly issued and are fully
paid and nonassessable; none of the outstanding shares of capital stock of the
Company, including the Securities to be purchased by the Underwriters from the
Selling Stockholder, was issued in violation of any preemptive or other right of
any securityholder of the Company.
(viii) Authorization.
(A) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms.
(B) The Plan of Reorganization and Exchange
Agreement dated as of March 20, 2000 (the "Plan of Reorganization and Exchange
Agreement") between the Company, Cooperative Communications, Inc. ("CCI") and
the stockholders and optionholders of CCI and the Contribution Agreement dated
as of March 20, 2000 (the "Contribution Agreement") between the Company and each
of the members of Eastern Computer Services, LLC ("ECS") were each duly
authorized, executed and delivered by the Company and each of the other parties
thereto and each constitutes the valid and binding agreement of the Company and
the other parties thereto enforceable against the Company and the other parties
thereto in accordance with their respective terms.
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(C) As a result of the Plan of
Reorganization and Exchange Agreement and the Contribution Agreement, the
Company owns all of the outstanding equity interests of CCI and ECS free and
clear of all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind.
(ix) Authorization and Description of Securities. The
Securities have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set forth
herein, will be validly issued and fully paid and non-assessable, the Common
Stock conforms to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the Securities
is not subject to any preemptive or other right of any securityholder of the
Company.
(x) Absence of Defaults and Conflicts. Neither the
Company nor any of its Subsidiaries is (a) in violation of its charter or
by-laws or (b) in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which it or 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 (collectively, "Agreements
and Instruments") except, in the case of clause (b), for such defaults that
would not result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of Proceeds")
and in the Plan of Reorganization and Exchange Agreement and compliance by the
Company with its obligations hereunder and thereunder have been duly authorized
by all necessary corporate action and do not and will not, whether with or,
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below) under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its Subsidiaries pursuant to,
the Agreements and Instruments, nor will such action result in any violation of
the provisions of the charter, by-laws or other organization documents of the
Company or any of its Subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Subsidiaries or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its Subsidiaries.
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(xi) Absence of Labor Disputes. No labor dispute with
the employees of the Company or any of its Subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its or any of
its Subsidiaries' principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect. The Company is in compliance with all applicable federal, state
and local laws relating to the payment of wages to employees (including, without
limitation, the Fair Labor Standards Act, as amended).
(xii) Absence of Proceedings. There is no action,
suit, proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its Subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder or which questions the
validity of the Plan of Reorganization and Exchange Agreement or the
Contribution Agreement or any actions taken or to be taken pursuant thereto; the
aggregate of all pending legal or governmental proceedings to which the Company
or any of its Subsidiaries is a party or of which any of their respective
properties or assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts
or documents which are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. The
Company and its Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
logos, characters, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now operated by
them, and neither the Company nor any of its Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company or any of its Subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect. All of the agreements pursuant to
which the Company or any of its Subsidiaries license Intellectual Property from
third parties (the "License Agreements") have been duly authorized, executed and
delivered by the Company or such Subsidiary and (assuming due authorization,
execution and delivery by the other parties
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thereto) constitute valid and binding agreements of the Company or such
Subsidiary, enforceable against the Company or such Subsidiary in accordance
with their terms. Neither the Company nor any of its Subsidiaries is in
violation or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any such License Agreement, nor
has the Company or any of its Subsidiaries received notice from any third party
that the Company or any of its Subsidiaries is in violation or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any such License Agreement, except for any violation or default
which, singly or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with,
or authorization, approval, consent, license, order, registration, qualification
or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities hereunder or
the consummation of the transactions contemplated by this Agreement, except (i)
such as have been already obtained or as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws and (ii) such as have been
obtained under the laws and regulations of jurisdictions outside the United
States in which the Reserved Securities are offered.
(xvi) Possession of Licenses and Permits.
(A) The Company and each of the Subsidiaries
(i) have all necessary licenses, consents, authorizations, approvals, orders,
certificates and permits of and from, and have made all declarations and filings
with, all federal, state, local and other governmental, administrative and
regulatory authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except to the
extent that the failure to obtain such licenses, consents, authorizations,
approvals, orders, certificates and permits or make such declarations and
filings would not have a Material Adverse Effect and (ii) have not received any
notice of proceedings relating to revocation or modification of any such
license, consent, authorization, approval, order, certificate or permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to have a Material Adverse Effect.
(B) Without limiting the foregoing, each of
the Company and its Subsidiaries have in effect all the telecommunications
regulatory licenses, permits, certificates, authorizations, consents, approvals
and orders ("Telecommunications Licenses") necessary or required to be obtained
from the Federal Communications Commission ("FCC") or the regulatory authority
of any state ("PUC") or local jurisdiction for the Company and its Subsidiaries
to conduct their respective businesses as presently conducted or as proposed to
be conducted and as described in the Registration Statement. The
Telecommunications Licenses obtained by the Company or its Subsidiaries have
been duly and validly issued and are in full
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force and effect and are not subject to any conditions outside the ordinary
course, all express conditions in the Telecommunications Licenses have been
satisfied, and no proceedings to revoke, restrict or modify such
Telecommunications Licenses are pending or, to the best of the Company's
knowledge, threatened. All fees due and payable to governmental authorities
pursuant to the rules governing Telecommunications Licenses have been paid and
no event has occurred with respect to the Telecommunications Licenses held by
the Company and/or its Subsidiaries which, with the giving of notice or the
lapse of time or both, would constitute grounds for revocation thereof. Each of
the Company and its Subsidiaries is in compliance in all material respects with
the terms of the Telecommunications Licenses, as applicable, and there is no
condition, event or occurrence existing, nor is there any proceeding being
conducted of which the Company has received notice, nor, to the Company's
knowledge, is there any proceeding threatened, by any governmental authority,
which would cause the termination, suspension, cancellation or nonrenewal of any
of the Telecommunications Licenses, or the imposition of any penalty or fine by
any regulatory authority.
(C) No registrations, filings, applications,
notices, transfers, consents, approvals, audits, qualifications, waivers or
other action of any kind is required by virtue of the execution and delivery of
this Agreement, the Power of Attorney and Custody Agreement or of the
consummation of the transactions contemplated hereby or thereby, (a) to avoid
the loss of any such Telecommunications License or any asset, property or right
pursuant to the terms thereof, or the violation or breach of any applicable law
thereto or (b) to enable the Company or any of its Subsidiaries to hold and
enjoy the same after the Closing Date (as defined herein) in the conduct of its
business as conducted prior to the Closing Date.
(xvii) Compliance with Laws. The Company is
conducting its business in compliance with all applicable laws, rules and
regulations, of the jurisdictions in which it is conducting business including;
without limitation, all applicable local, state and Federal laws and
regulations, except where the failure to so comply would not have a Material
Adverse Effect.
(xviii) Title to Property. The Company and its
Subsidiaries have good and marketable title to all real property owned by the
Company and its Subsidiaries and good title to all personal and other properties
or assets owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any kind
except such as (a) are described in the Prospectus or (b) do not, singly or in
the aggregate, materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company or any
of its Subsidiaries; all of the leases and subleases material to the business of
the Company and its Subsidiaries, considered as one enterprise, and under which
the Company or any of its Subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor any of its
Subsidiaries has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its
Subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or such Subsidiary to the continued
possession of the leased or subleased premises under any such lease or sublease;
and the
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Company and the Subsidiaries own or possess valid leasehold interests to all
property or assets necessary to carry on the business now operated by them as
described in the Prospectus.
(xix) Investment Company Act. The Company is not, and
upon the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus will
not be, an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of 1940, as
amended (the " 1940 Act").
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
Subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and
its Subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its Subsidiaries and (D) there
are no events or circumstances that might reasonably be expected to form, the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of its Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxi) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act.
(xxii) Stabilization or Manipulation. Neither the
Company nor any of its officers, directors or controlling persons has taken, nor
will it take, directly or indirectly, any action which is designed to cause or
to result in, or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(xxiii) Accounting Controls. The Company and its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (A)
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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 GAAP and to maintain accountability
for assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(xxiv) Tax Returns. The Company and its Subsidiaries
have filed all federal, state, local and foreign tax returns that are required
to have been filed by them pursuant to applicable foreign, federal, state, local
or other law or have duly requested extensions thereof, except insofar as the
failure to file such returns or request such extensions would not reasonably be
expected to result in a Material Adverse Effect, and has paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Company
and its Subsidiaries, except for such taxes or assessments, if any, as are being
contested in good faith and as to which adequate reserves have been provided or
where the failure to pay would not reasonably be expected to result in a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Company in respect of any income and corporation tax liability of the Company
and its Subsidiaries for any years not finally determined are adequate to meet
any assessments or reassessments for additional income tax for any years not
finally determined, except to the extent of any inadequacy that would not
reasonably be expected to result in a Material Adverse Effect.
(xxv) Year 2000 and Euro Disclosures. All disclosure
regarding year 2000 compliance and the Euro conversion that is required to be
described under the 1933 Act and the 1933 Act Regulations (including disclosures
required by Staff Legal Bulletin Xx. 0, XXX Xxxxxxx Xx. 00-0000 (July 29, 1998)
and SEC Release No. 33-7609 (November 9, 1998)) has been included in the
Prospectus. Neither the Company nor any its Subsidiaries has incurred or will
incur significant operating expenses or costs to ensure that its information
systems will be year 2000 compliant or to adjust its operating and information
systems to the conversion to a single currency in Europe, other than as
disclosed in the Prospectus.
(xxvi) Related Party Transactions. No relationship,
direct or indirect, exists between or among any of the Company or any affiliate
of the Company, on the one hand, and any director, officer, stockholder,
customer or supplier of any of them, on the other hand, which is required by the
1933 Act or by the 1933 Act Regulations to be described in the Registration
Statement of the Prospectus which is not so described as required.
(b) Representations and Warranties by the Selling Stockholder.
The Selling Stockholder represents and warrants to each Underwriter as of the
date hereof, as of the Closing Time, and, if the Selling Stockholder is selling
Option Securities on a Date of Delivery, as of each such Date of Delivery, and
agrees with each Underwriter, as follows:
(i) Accurate Disclosure. To the best knowledge of the
Selling Stockholder, the representations and warranties of the Company contained
in Section l(a) hereof
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are true and correct; such Selling Stockholder has reviewed and is familiar with
the Registration Statement and the Prospectus and neither the Prospectus nor any
Amendments or supplements thereto (including any prospectus wrapper) includes
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; such Selling
Stockholder is not prompted to sell the Securities to be sold by such Selling
Stockholder hereunder by any information concerning the Company or any
Subsidiary of the Company which is not set forth in the Prospectus. The
representations and warranties in this subsection shall not apply to statements
in or omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing by
any Underwriter through PMG expressly for use in the Registration Statement or
Prospectus.
(ii) Authorization of Agreements. The Selling
Stockholder has the full right, power and authority to enter into this Agreement
and the Power of Attorney and Custody Agreement (the "Power of Attorney and
Custody Agreement") and to sell, transfer and deliver the Securities to be sold
thereby hereunder. The execution and delivery of this Agreement and the Power of
Attorney and Custody Agreement and the sale and delivery of the Securities to be
sold by the Selling Stockholder and the consummation of the transactions
contemplated herein and compliance by such Selling Stockholder with its
obligations hereunder have been duly authorized by such Selling Stockholder and
do not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities to be sold by such Selling Stockholder or any property or
assets of such Selling Stockholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder may be bound, or to which any of the property or assets
of such Selling Stockholder is subject, nor will such action result in any
violation of the provisions of the charter or by-laws or other organizational
instrument of such Selling Stockholder, if applicable, or any applicable treaty,
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Stockholder or any of its properties.
(iii) Good and Marketable Title. The Selling
Stockholder has and will at the Closing Time and, if any Option Securities are
purchased, on the Date of Delivery have good and marketable title to the
Securities to be sold thereby hereunder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein contemplated,
each of the Underwriters will receive good and marketable title to the
Securities purchased by it from such Selling Stockholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or encumbrance
of any kind.
(iv) Due Execution of Power of Attorney and Custody
Agreement. The Selling Stockholder has duly executed and delivered, in the form
heretofore furnished to the
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Representatives, the Power of Attorney and Custody Agreement with Xxxxxxx X.
Xxxxxx as attorney-in-fact (the "Attorney-in-Fact"), and Xxxxxxx X. Xxxxxx, as
custodian (the "Custodian"); the Custodian is authorized to deliver the
Securities to be sold by the Selling Stockholder hereunder and to accept payment
therefor; and each Attorney-in-Fact is authorized to execute and deliver this
Agreement and the certificate referred to in Section 5(f) or that may be
required pursuant to Sections 5(l) and 5(m) on behalf of the Selling
Stockholder, to sell, assign and transfer to the Underwriters the Securities to
be sold by the Selling Stockholder hereunder, to determine the purchase price to
be paid by the Underwriters to the Selling Stockholder, as provided in Section
2(a) hereof, to authorize the delivery of the Securities to be sold by the
Selling Stockholder hereunder, to accept payment therefor, and otherwise to act
on behalf of the Selling Stockholder in connection with this Agreement.
(v) Absence of Manipulation. The Selling Stockholder
has not taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(vi) Absence of Further Requirements. No filing with,
or consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or foreign,
is necessary or required for the performance by the Selling Stockholder of its
obligations hereunder or in the Power of Attorney and Custody Agreement, or in
connection with the sale and delivery of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement, except such as
may have previously been made or obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(vii) Restriction on Sale of Securities. During a
period of 180 days from the date of the Prospectus, the Selling Stockholder will
not, without the prior written consent of PMG, (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file or cause the Company to file any registration statement under the 1933 Act
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to the Securities to be sold
hereunder.
(viii) Certificates Suitable for Transfer.
Certificates for all of the Securities to be sold by the Selling Stockholder
pursuant to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in blank with
signatures guaranteed, have been placed in custody with the Custodian with
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irrevocable conditional instructions to deliver such Securities to the
Underwriters pursuant to this Agreement.
(ix) No Association with NASD. Neither the Selling
Stockholder nor any of his/her/its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of Article
1, Section 1(m) of the By-laws of the NASD), any member firm of the NASD.
(c) Officers Certificates. Any certificate signed by any
officer of the Company or any of its Subsidiaries delivered to the
Representatives 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; and any certificate signed by or on behalf of the Selling
Stockholder as such and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Selling
Stockholder to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters' Closing.
(a) Initial Securities. On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company and the Selling Stockholder, severally and not jointly,
agree to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company and
the Selling Stockholder, at the price per share set forth in Schedule C, that
proportion of the number of Initial Securities set forth in Schedule B opposite
the name of the Company or the Selling Stockholder, as the case may be, which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
[____________] shares of Common Stock, as set forth in Schedule B, at the price
per share set forth in Schedule C, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time on one or more occasions only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by PMG to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and
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date of payment and delivery for such Option Securities. Any such time and date
of delivery (a "Date of Delivery") shall be determined by PMG, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as PMG in its discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery
of certificates for, the Initial Securities shall be made at the offices of
Xxxxxx Xxxxxxxx LLP, 3000 Two Xxxxx Square, Eighteenth and Xxxx Xxxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000-0000, or at such other place as shall be
agreed upon by PMG and the Company and the Selling Stockholder, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern Time on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by PMG
and the Company and the Selling Stockholder (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by PMG and the Company
on each Date of Delivery as specified in the notice from PMG to the Company.
Payment shall be made to the Company and to the Selling Stockholder by
wire transfer of immediately available funds to bank accounts designated by, in
the case of the Company, the Company and, in the case of the Selling
Stockholder, the Custodian pursuant to the Selling Stockholder's Power of
Attorney and Custody Agreement, in each case, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of receipt for, and make payment of the purchase price for, the Initial
Securities and the Option Securities, if any, which it has agreed to purchase.
PMG, individually and not as representative of the Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by any Underwriter
whose funds have not been received by Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations, Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before Closing Time or the
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relevant Date of Delivery, as the case may be. The certificates for the Initial
Securities and the Option Securities, if any, will be made available for
examination and packaging by the Representatives in the City of New York not
later than 10:00 A.M. (Eastern time) on the business day prior to Closing Time
or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information and (iv)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term Sheet
or any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the Prospectus,
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
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transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934 (the "1934 Act"), such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement, provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in
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effect for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect
and maintain the quotation of the Common Stock (including the Securities) on the
NASDAQ National Market and will file with the NASDAQ National Market all
documents and notices required by the NASDAQ National Market of companies that
have securities that are traded in the over-the-counter market and quotations
for which are reported by the NASDAQ National Market.
(j) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectus, the Company will not, without the prior
written consent of PMG, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectus, or
(C) any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing employee benefit plans of the Company referred to
in the Prospectus.
(k) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933) Act or the 1934
Act, will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the rules
and regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that
it will ensure that the Reserved Securities will be restricted as required by
the NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this Agreement.
The Underwriters will notify the Company as to which persons will need to be so
restricted. At the request of the Underwriters, the Company will direct the
transfer
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agent to place a stop transfer restriction upon such securities for such period
of time. Should the Company release, or seek to release, from such restrictions
any of the Reserved Securities, the Company agrees to reimburse the Underwriters
for any reasonable expenses (including, without limitation, legal expenses) they
incur in connection with such release.
(m) Compliance with Rule 463. The Company will file with the
Commission such information as may be required pursuant to Rule 463 of the 1933
Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities,
(ix) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the NASD of the
terms of the sale of the Securities, and (x) the fees and expenses incurred in
connection with the inclusion of the Securities in the Nasdaq National Market.
(b) Expenses of the Selling Stockholder. The Selling
Stockholder will pay all expenses incident to the performance of its respective
obligations under and the consummation of the transactions contemplated by this
Agreement, including (i) any stamp duties, capital duties and stock transfer
taxes, if any, payable upon the sale of the Securities to the Underwriters, and
their transfer between the Underwriters pursuant to an agreement between such
Underwriters, and (ii) the fees and disbursements of their respective counsel
and accountants.
(c) Termination of Agreement. If this Agreement is terminated
by PMG in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11 hereof, the Company and the Selling Stockholder shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
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(d) Allocation of Expenses. The provisions of this Section
shall not affect any agreement that the Company and the Selling Stockholder may
make for the sharing of such costs.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any Subsidiary of the Company or on behalf of the Selling Stockholder
delivered pursuant to the provisions hereof, to the performance by the Company
and the Selling Stockholder of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A Prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Xxxxxxxx Professional Corporation, counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters (and stating
that it may be relied upon by counsel to the Underwriters), together with signed
or reproduced copies of such letter for each of the other Underwriters, to the
effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect.
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(iv) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization"; the shares of issued and
outstanding capital stock of the Company, including the Securities to be
purchased by the Underwriters from the Selling Stockholder, have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of any preemptive or other right of any securityholder of the Company.
(v) The Securities have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued and fully paid and
non-assessable and no holder of the Securities is or will be subject to personal
liability by reason of being such a holder.
(vi) The issuance and sale of the Securities by the
Company and the sale of the Securities by the Selling Stockholder is not subject
to preemptive or other similar rights of any securityholder of the Company.
(vii) Each Subsidiary has been duly incorporated and is
validly existing as a corporation or limited liability company in good standing
under the laws of the jurisdiction of its incorporation or formation, has power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock or membership interests of each Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable and,
to the best of our knowledge, is owned by the Company, directly or through
Subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital stock of
any Subsidiary was issued in violation of any preemptive or other right of any
securityholder of such Subsidiary.
(viii) (A) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms except as such enforceability may be limited by bankruptcy or other
equitable principles.
(B) Each of the Plan of Reorganization and
Exchange Agreement and the Contribution Agreement were duly authorized, executed
and delivered by the Company and each of the other parties thereto and
constitutes the valid and binding agreement of the Company and the other parties
thereto enforceable against the Company and the other parties
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thereto in accordance with their respective terms except as such enforceability
may be limited by bankruptcy or other equitable principles.
(ix) The Registration Statement, including, any Rule
462(b) Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the best
of our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
(x) The Registration Statement, including any Rule
462(b) Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus, and each amendment or supplement to
the Registration Statement and Prospectus, as of their respective effective or
issue dates (other than the financial statements and supporting schedules,
included therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus
was not materially different, as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
(xii) The form of certificate used to evidence the
Common Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws of the
Company and the requirements of the Nasdaq National Market.
(xiii) There is not pending or, to the best of our
knowledge, threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any of its Subsidiaries is a party, or to which the
property of the Company or any of its Subsidiaries is subject, before or brought
by any court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the properties or
assets thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations hereunder.
(xiv) The information in the Prospectus under "Risk
Factors," "Business -- Competition," "Business--Regulation,"
"Business--Facilities," "Business--Legal Proceedings," "Description of Capital
Stock--Shares Eligible for Future Sale," and in the Registration Statement under
Item 14, to the extent that such information constitutes matters of law,
summaries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects.
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(xv) To the best of our knowledge, there are no
statutes or regulations that are required to be described in the Prospectus that
are not described as required.
(xvi) All descriptions in the Registration Statement of
contracts and other documents to which the Company or any of its Subsidiaries
are a party are accurate in all material respects; to the best of our knowledge,
there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
(xvii) Neither the Company nor any of its Subsidiaries
is in violation of its charter or by-laws and, to the best of our knowledge, no
default by the Company or any of its Subsidiaries exists in the due performance
or observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement.
(xviii) No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the 1933
Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we need express no opinion) is necessary or required in connection with
the due authorization, execution and delivery of this Agreement or for the
offering, issuance, sale or delivery of the Securities.
(xix) The execution, delivery and performance of this
Agreement, the Plan of Reorganization and Exchange Agreement and the
Contribution Agreement and the consummation of the transactions contemplated
herein and therein and in the Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use Of Proceeds")
and compliance by the Company with its obligations hereunder and thereunder do
not and will not, whether with or without the giving of notice or lapse of time
or both, conflict with or constitute a breach of, or default or Repayment Event
(as defined in Section 1(a)(x) of this Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Subsidiaries pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to us, to which the Company or any of its
Subsidiaries is a party or by which it or 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 such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the Company or any of its Subsidiaries, or any applicable
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law, statute rule, regulation, judgment, order, writ or decree, known to us, of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties, assets or operations.
(xx) To the best of our knowledge, there are no persons
with registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the 0000 Xxx.
(xxi) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
1940 Act.
In rendering such opinion, such counsel may rely as to matters of
fact upon certificates of officers of the Company, and as to matters governed by
the laws of states other than New Jersey, Pennsylvania, Delaware or Federal laws
on local counsel in such jurisdictions provided that in each case such counsel
shall state that they believe that they and the Underwriters are justified in
relying on such other counsel. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) and as of the Closing Date or the Option Closing Date, as the
case may be, contained an 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, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and Regulations and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they are made, not misleading (except that such counsel need express
no view as to financial information, including the financial statements,
schedules and statistical information therein).
(c) Opinion of Special Regulatory Counsel for Company. At Closing
Time, the Representatives shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, special regulatory
counsel for the Company, in form and substance satisfactory to counsel for the
Underwriters (and stating that it may be relied upon by counsel to the
Underwriters), together with signed or reproduced copies of such letter for each
of the Representatives, to the effect that:
(i) Each of the Company and the Subsidiaries has made
all reports and filings, and paid all fees, required by the FCC and each PUC,
and has all certificates, orders, permits, licenses, authorizations, consents,
and approvals of and from, and has made all filings and registrations, with the
FCC and each PUC necessary to own, lease, license and use its properties and
assets and to conduct its business of providing foreign, interstate and local
telecommunications services within the United States in the manner described in
the Prospectus (collectively, the "Licenses").
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(ii) Neither the Company nor any of the Subsidiaries is
subject to any pending or, to our knowledge, threatened complaint, investigation
or proceeding before the FCC or any PUC based on any alleged violation by the
Company or any Subsidiary in connection with its provision of or failure to
provide telecommunications service and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the violation,
revocation or modification of any of the licenses, or the qualification or
rejection of any such filing or registration, the effect of which, singly or in
the aggregate, would have a Material Adverse Effect.
(iii) To our knowledge, (i) the Licenses are validly
issued; (ii) the Licenses are in full force and effect and are not subject to
conditions outside the ordinary course; and (iii) all express conditions in the
Licenses have been satisfied.
(iv) The statements in the Registration Statement and
Prospectus under the heading of "Risk Factors - Risks Relating to Government
Regulations," "Business Competition" and "Business - Regulation" insofar as such
statements constitute a summary of the legal matters, documents or proceedings
of the FCC with respect to telecommunications matters referred to therein, are
accurate in all material respects, and fairly summarize the matter therein
described.
(v) All regulatory tariffs applicable to the Company's
and the Subsidiaries' interexchange, exchange access, and international
operations, (the "FCC Tariffs") and local exchange and intrastate operations
(the "PUC Tariffs") are in full force and effect in accordance with their terms,
and to our knowledge, there is no outstanding notice of suspension, cancellation
or termination or any threatened suspension, cancellation or termination with
respect to any of the FCC Tariffs or PUC Tariffs. Neither the Company nor any of
the Subsidiaries is subject to any restrictions or conditions applicable to its
FCC Tariffs or PUC Tariffs that limit or would limit the operations of the
Company or the Subsidiaries (other than restrictions or conditions generally
applicable to tariffs of that type). Each such FCC Tariff and PUC Tariff has
been accepted by the FCC or the applicable PUC, as the case may be. To our
knowledge, the Company and the Subsidiaries are not in violation under any of
the terms and conditions of any of the FCC Tariffs or the PUC Tariffs.
(vi) (A) The execution and delivery of the Underwriting
Agreement and the Power of Attorney and Custody Agreements by the Company and
the consummation of the transactions contemplated thereby do not violate (i) any
Federal communications law applicable to the Company and/or Subsidiaries, (ii)
any State law applicable to the Company and/or Subsidiaries, and (iii) to the
best of our knowledge, any decree from any court; and (B) no authorization of
the FCC or any PUC that has not already been received from, or prior filing that
has not already been made with, such agency is necessary for the execution and
delivery of the Underwriting Agreement or the Power of Attorney and Custody
Agreements by the Company and the consummation of the transactions contemplated
thereby in accordance with the terms
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thereof, except where the failure to obtain such authorization or make such
filing would not have a material adverse effect on the prospects, condition,
financial or otherwise, or on the earnings, business or operations of the
Company and its Subsidiaries, taken as a whole.
(vii) Based upon a review of public files of the FCC,
appropriate files of this firm and an inquiry of lawyers in this firm who have
substantial responsibility for the Company's and the Subsidiaries' legal matters
handled by this firm, we confirm that except as disclosed in the Underwriting
Agreement: (a) there is no unsatisfied adverse FCC order, decree or ruling
outstanding against the Company or any Subsidiary or any of the Licenses; (b)
none of the Company or any Subsidiary is a party to any complaint, action or
other proceeding at the FCC, including complaints against other licensees or
applicants; (c) Schedule B hereto includes all applications on behalf of the
Company or any Subsidiary or with respect to the Licenses that are now pending
before the FCC; and (d) the Company and the Subsidiaries have not been the
subject of any final adverse order, decree or ruling of the FCC or any PUC
(including any notice of forfeiture which has been paid).
(viii) To the best of our knowledge, neither the
Company nor any of its Subsidiaries is in violation of, or in default under, any
provision of Federal communications law or State communications law, the effect
of which, singly or in the aggregate, would have a Material Adverse Effect.
(ix) No facts have come to the attention of such
counsel to cause it to believe, and such counsel has no reason to believe, that
both as of the Effective Date and as of the Closing Date, the statements in the
Registration Statement and the Prospectus under the captions "Business -
____________," "Business - Competition," "Business - Regulation," and "Business
- Legal Proceedings" that pertain to the Communications Act, contained or
contains any untrue statement of a material fact or omitted or omits 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 were made, not misleading.
(d) Opinion of Counsel for the Selling Stockholder. At Closing Time,
the Representatives shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxxxx Ingersol Professional Corporation, counsel for the
Selling Stockholder, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the Representatives, to the effect that:
(i) No filing with, or consent, approval,
authorization, license, order, registration, qualification or decree of, any
court or governmental authority or agency, domestic or foreign (other than the
issuance of the order of the Commission declaring, the Registration Statement
effective and such authorizations, approvals or consents as may be necessary
under state securities laws, as to which we need express no opinion) is
necessary or required to be obtained by the Selling Stockholder for the
performance by each Selling
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Stockholder of its obligations under this Agreement or under the Power of
Attorney and Custody Agreement, or in connection with the offer, sale or
delivery of the Securities.
(ii) The Power of Attorney and Custody Agreement has
been duly executed and delivered by the Selling Stockholder and constitutes the
legal, valid and binding agreement of such Selling Stockholder enforceable
against the Selling Stockholder in accordance with its terms except as
enforceability may be handled by bankruptcy or equitable principles.
(iii) This Agreement has been duly authorized, executed
and delivered by or on behalf of the Selling Stockholder and constitutes the
legal, valid and binding agreement of such Selling Stockholder enforceable
against the Selling Stockholder in accordance with its terms except as
enforceability may be handled by bankruptcy or equitable principles.
(iv) The Attorney-in-Fact has been duly authorized by
the Selling Stockholder to deliver the Securities on behalf of the Selling
Stockholder in accordance with the terms of this Agreement.
(v) The execution, delivery and performance of this
Agreement and the Power of Attorney and Custody Agreement and the sale and
delivery of the Securities and the consummation of the transactions contemplated
in this Agreement and in the Registration Statement and compliance by the
Selling Stockholder with its obligations under this Agreement have been duly
authorized by all necessary action on the part of the Selling Stockholder and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities or any property or assets of the Selling Stockholder
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which any
Selling Stockholder is a party or by which it may be bound, or to which any of
the property or assets of the Selling Stockholder may be subject nor all such
action result in any violation of the provisions of the charter, by-laws or
partnership agreement of the Selling Stockholder, if applicable, or any law,
administrative regulation, judgment or order of any governmental agency or body
or any administrative or court decree having jurisdiction over such Selling
Stockholder or any of its properties.
(vi) To the best of our knowledge, the Selling
Stockholder has valid and marketable title to the Securities to be sold by such
Selling Stockholder pursuant to this Agreement, free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any kind, and
has full right, power and authority to sell, transfer and deliver such
Securities pursuant to this Agreement. By delivery of a certificate or
certificates therefor such Selling Stockholder will transfer to the Underwriters
who have purchased such Securities pursuant to this Agreement (without notice of
any defect in the title of such Selling Stockholder and who are otherwise bona
fide purchasers for purposes of the Uniform Commercial Code)
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valid and marketable title to such Securities, free and clear of any pledge,
lien, security interest, charge, claim equity or encumbrance of any kind.
(e) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxx Xxxxxxxx LLP, counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the Representatives with respect
to the matters set forth in clauses (i), (ii), (v), (viii)(A), (ix), (x), (xii)
and the penultimate paragraph of Section 5(b). In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New Jersey, the Commonwealth of Pennsylvania, the
federal law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its Subsidiaries and certificates of public officials.
(f) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section l(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(g) Certificate of Selling Stockholder. At Closing Time, the
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of the Selling Stockholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of the Selling Stockholder contained in
Section l(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) the Selling
Stockholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(h) Accountant's Comfort Letters. At the time of the execution of
this Agreement, the Representatives shall have received from KPMG Peat Marwick
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letters for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
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respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(i) Bring-down, Comfort Letter. At Closing Time, the Representatives
shall have received from KPMG Peat Marwick LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(j) Approval of Listing. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(k) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(l) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit A hereto signed by the persons listed on Schedule D hereto.
(m) Conditions to Purchase of Option Securities. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company and the Selling Stockholder contained herein and the
statements in any certificates furnished by the Company, any Subsidiary of the
Company and the Selling Stockholder hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:
(i) Officers' Certificate. A certificate, dated such
Date of Delivery, of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(e) hereof
remains true and-correct as of such Date of Delivery.
(ii) Certificate of Selling Stockholder. A certificate,
dated such Date of Delivery, of an Attorney-in-Fact on behalf of the Selling
Stockholder confirming that the certificate delivered at Closing Time pursuant
to Section 5(f) remains true and correct as of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable
opinion of Xxxxxxxx Xxxxxxxx Professional Corporation, counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion required by Section
5(b) hereof.
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(iv) Opinion of Special Regulatory Counsel for Company
The favorable opinion of Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, special
regulatory counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(v) Opinion of Counsel for the Selling Stockholder. The
favorable opinion of Xxxxxxxx Ingersol Professional Corporation, counsel for the
Selling Stockholder, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(vi) Opinion of Counsel for Underwriters. The favorable
opinion of Xxxxxx Xxxxxxxx LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by Section
5(e) hereof
(vii) Bring-down Comfort Letter. A letter from KPMG
Peat Marwick LLP, in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially in the same form and substance as the
letters furnished to the Representatives pursuant to Section 5(h) hereof, except
that the "specified date" in the letter furnished pursuant to this paragraph
shall be a date more than five days prior to such Date of Delivery.
(n) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Stockholder in connection with the issuance
and sale of the Securities as herein contemplated shall be satisfactory in form
and substance to the Representatives and counsel for the Underwriters.
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by PMG by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 5, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
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SECTION 6. Indemnification.
(a) Indemnification of Underwriters. (1) The Company and the Selling
Stockholder, jointly and severally agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of (A) the violation of any
applicable laws or regulations of foreign jurisdictions where Reserved
Securities have been offered and (B) any untrue statement or alleged untrue
statement of a material fact included in the supplement or prospectus wrapper
material distributed in connection with the reservation and sale of the Reserved
Securities to eligible employees of the Company or the omission or alleged
omission therefrom of a material fact necessary to make the statements therein,
when considered in conjunction with the Prospectus or preliminary prospectus,
not misleading;
(iii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or in connection
with any violation of the nature referred to in Section 6(a)(1)(ii)(A) hereof or
any such alleged untrue statement or omission, provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company and the Selling Stockholder; and
(iv) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by PMG),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission
or in connection with any violation of the nature referred to in (i), (ii) or
(iii) above, to the extent that any such expense is not paid under (i), (ii) or
(iii) above;
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provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through PMG expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers and the
Selling Stockholder. Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the
Selling Stockholder and each person, if any, who controls any Selling
Stockholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a)(1) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through PMG
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a)(1) above, counsel to the indemnified parties shall be selected by PMG, and,
in the case of parties indemnified pursuant to Section 6(b) above, counsel to
the indemnified parties shall be selected by the Company. An indemnifying party
may participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
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indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(e) Other Agreements with Respect to Indemnification. The provisions
of this Section shall not affect any agreement among the Company and the Selling
Stockholder with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (1) above but also the relative fault of the Company and the
Selling Stockholder on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions, or in connection with any violation
of the nature referred to in Section 6(a)(1)(ii)(A) hereof, which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Stockholder and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus,
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or, if Rule 434 is used, the corresponding location on the Term Sheet bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Company and the Selling Stockholder on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Stockholder or by the
Underwriters and the parties' relative intent, knowledge, access to, information
and opportunity to correct or prevent such statement or omission or any
violation of the nature referred to in Section 6(a)(1)(ii)(A) hereof.
The Company, the Selling Stockholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were 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 above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, 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 which such
Underwriter has otherwise been required to pay by reason of any 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 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Selling Stockholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
such Selling Stockholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.
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The provisions of this Section shall not affect any agreement
among the Company and the Selling Stockholder with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or any of its
Subsidiaries or the Selling Stockholder submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Company or the Selling Stockholder, and shall survive delivery of the Securities
to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. PMG may terminate this Agreement, by
notice to the Company and the Selling Stockholder, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of PMG, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission or the Nasdaq National Market, or if the
Nasdaq National Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections it 5, 6, 7 and 8 shall survive such. termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
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36
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Selling Stockholder to
sell the Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the Underwriters to purchase and the Selling Stockholder to sell the relevant
Option Securities, as the case may be, either the (i) Representatives or (ii)
the Company and any Selling Stockholder shall have the right to postpone Closing
Time or the relevant Date of Delivery, as the case may be, 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. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Default by the Selling Stockholder or the Company.
(a) If the Selling Stockholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of Securities which the Selling
Stockholder is obligated to sell hereunder, and the Company does not commit to
increase the number of Securities to be sold by it hereunder to the total number
to be sold by the Selling Stockholder as set forth in Schedule B hereto, then
the Underwriters may, at the option of the Representatives, by notice from the
Representatives to the Company, either (b) terminate this Agreement without any
liability on the fault of any non-defaulting party except that the provisions of
Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or (b) elect to
purchase the Securities which the Company has agreed to sell hereunder. No
action taken pursuant to this Section 11 shall relieve the Selling Stockholder
so defaulting from liability, if any, in respect of such default.
In the event of a default by the Selling Stockholder as
referred to in this Section 11, each of the Representatives or the Company shall
have the right to postpone Closing Time or Date of Delivery for a period not
exceeding seven days in order to effect any required change in the Registration
Statement or Prospectus or in any other documents or arrangements.
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37
(b) If the Company shall fail at Closing Time or at the Date
of Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party; provided, however, that the provisions of Sections
1, 4, 6, 7 and 8 shall remain in full force and effect. No action taken pursuant
to this Section shall relieve the Company from liability, if any, in respect of
such default.
[SIGNATURE PAGE FOLLOWS]
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38
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company and the Attorney-in-Fact
for the Selling Stockholder a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the
Underwriters, the Company and the Selling Stockholder in accordance with its
terms.
Very truly yours,
COOPERATIVE HOLDINGS, INC.
By: _______________________________
Title:
Xxxxxxx X. Xxxxxx
By: _______________________________
Title:
As Attorney-in-Fact acting on behalf of
the Selling Stockholder named in
Schedule B hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
PENNSYLVANIA MERCHANT GROUP
XXXX CAPITAL PARTNERS, INC.
By: PENNSYLVANIA MERCHANT GROUP
By ____________________________________
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
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39
SCHEDULE A
Number of Initial
Name of Underwriter Securities
Pennsylvania Merchant Group ...........................
Xxxx Capital Partners, Inc. .........................
[ ].............................
[ ].............................
Total .................................................. [___________]
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SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
COOPERATIVE [__________] [__________]
HOLDINGS, INC.
Xxxxxxx X. Xxxxxxxx [__________] __________
1996 Family Limited
Partnership
---------- ----------
Total ...................................... [__________] [__________]
B-1
41
SCHEDULE C
COOPERATIVE HOLDINGS, INC.
[ ] Shares of Common Stock
(Par Value S.01 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $-.
2. The purchase price per share for the Securities to be paid
by the several Underwriters shall be $-, being an amount equal to the initial
public offering price set forth above less $- per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
C-1
42
SCHEDULE D
Xxxxx X. Xxxxxxxx 1996 Family Limited Partnership,
000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx 1996 Family Limited Partnership,
000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxx, Xx.
Xxxxx X. Xxxxxxxx, Xx.
Xxxxxxx Xxxxxxxx
Xxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxxxx X. Xxxxx, Ph.D.
Xxxxx Xxxxxxx
Xxxx Xxxxxx
Xxx X. Xxxxxxxxxx
X-0
00
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(I)]
Exhibit A
___________, 2000
PENNSYLVANIA MERCHANT GROUP
XXXX CAPITAL PARTNERS, INC.
as Representatives of the several Underwriters
to be named in the within-mentioned Purchase Agreement
c/o Pennsylvania Merchant Group
Four Xxxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Proposed Public Offering by Cooperative Holdings, Inc.
Dear Sirs:
The undersigned, a stockholder or an officer and/or director
of Cooperative Holdings, Inc., a Delaware corporation (the "Company"),
understands that Pennsylvania Merchant Group ("PMG"), and Xxxx Capital
Partners, Inc. propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with the Company and a certain selling stockholder
providing for the public offering of shares of the Company's common stock, par
value $.01 per share (the "Common Stock").
In recognition of the benefit that such an offering will
confer upon the undersigned and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
with each underwriter to be named in the Underwriting Agreement that, during a
period of 180 days from the date of the Underwriting Agreement, the undersigned
will not, without the prior written consent of PMG, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise transfer or dispose, directly or indirectly, of any
shares of the Common Stock or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, whether now owned or hereafter acquired
by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file, or cause or request the Company to
file, any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common
Exhibit A-1
44
Stock, whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or other securities, in cash
or otherwise.
Very truly yours,
------------------------
Signature
------------------------
Print Name
Exhibit A-2
