EXHIBIT 1
Xxxxxxxx Financial, Inc.
Common Stock
(no par value)
UNDERWRITING AGREEMENT
-----------------------
April ___, 2004
Xxxxxx, Xxxxx Xxxxx, Incorporated
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Section 1. Introductory.
Subject to the terms and conditions stated herein, Xxxxxxxx Financial,
Inc., a corporation organized under the laws of British Columbia, Canada (the
"Company"), proposes to issue and sell to Xxxxxx Xxxxx Xxxxx, Incorporated (the
"Underwriter") an aggregate of 1,500,000 shares of its common stock, no par
value (the "Common Stock"), and the stockholders listed in Schedule A hereto
(the "Selling Stockholders") propose severally to sell an aggregate of 900,000
shares of Common Stock (such 2,400,000 shares of Common Stock being hereafter
referred to as the "Firm Common Shares").
In addition, the Company has granted to the Underwriter an option to
purchase up to an additional 360,000 shares of Common Stock, as provided in
Section 3 (such additional shares, the "Optional Common Shares"). The Firm
Common Shares and, if and to the extent such option is exercised, the Optional
Common Shares are collectively called the "Common Shares").
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-2 (File No.
333-113215), which contains a form of prospectus, subject to completion, to be
used in connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "Securities Act"),
including any information deemed to be a part thereof at the time of
effectiveness pursuant to the Securities Act or any rule
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promulgated thereunder, is called the "Registration Statement." Any registration
statement filed by the Company pursuant to Rule 462(b) under the Securities Act
is called the "Rule 462(b) Registration Statement," and from and after the date
and time of filing of the Rule 462(b) Registration Statement, the term
"Registration Statement" shall include any Rule 462(b) Registration Statement.
The prospectus in the form included in the Registration Statement at the time it
becomes effective or, if the prospectus included in the Registration Statement
omits certain information in reliance upon Rule 430A under the Securities Act
and such information is thereafter included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act or as part of a
post-effective amendment to the Registration Statement after the Registration
Statement becomes effective, the prospectus as so filed, is referred to in this
Agreement as the "Prospectus." Any reference herein to the Registration
Statement, the 462(b) Registration Statement, the Prospectus or any amendment or
supplement thereto shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-2 under the
Securities Act, as of the effective date of the Registration Statement or the
date of such Prospectus, as the case may be, as such documents are modified or
superseded by such Prospectus (the "Incorporated Documents"). For purposes of
this Agreement, all references to the Registration Statement, the 462(b)
Registration Statement, the Prospectus, any preliminary prospectus or to any
amendment or supplement thereto shall be deemed to include any copy filed with
the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval
System (XXXXX).
Each of the Company and the Selling Shareholders, severally but not
jointly, hereby confirms its agreements with the Underwriter as follows:
Section 2. Representations and Warranties.
(a) The Company hereby represents and warrants to the Underwriter on
the date hereof and shall be deemed to represent and warrant to the Underwriter
on each Closing Date as follows:
(i) Compliance with Registration Requirements. The
Registration Statement has been filed with the Commission and has been declared
effective by the Commission under the Securities Act and no post-effective
amendment to the Registration Statement has been filed as of the date of this
Agreement. The Company has complied with all written requests of the Commission
(and all oral requests of the Commission to an executive officer of the Company)
for additional or supplemental information relating to the Registration
Statement. The Company has not received any notice that a stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued by the Commission or that any proceedings for such
purpose have been instituted by the Commission and, to the Company's knowledge,
no such proceedings are contemplated or threatened by the Commission.
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Each preliminary prospectus and the Prospectus when filed and
any supplement or amendment thereto when filed with the Commission under Rule
424(b) of the Securities Act complied or will comply, as the case may be, in all
material respects as to form with the Securities Act and at any such time did
not contain any 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 Registration Statement (including any Rule 462(b)
Registration Statement), in the form it became effective, and any post-effective
amendment thereto in the form it becomes effective, complied or will comply, as
the case may be, as to form in all material respects with the Securities Act and
at any such time did not contain any 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 representations and warranties set forth
in the two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement (including any Rule 462(b)
Registration Statement) or any post-effective amendment thereto, any preliminary
prospectus, or the Prospectus, or any amendments or supplements thereto, made in
reliance upon and in conformity with information relating to the Underwriter
furnished to the Company.
(ii) Offering Materials Furnished to the Underwriter. The
Company has delivered to the Underwriter a complete manually signed copy of the
Registration Statement and of each consent filed as a part thereof, and
conformed copies of the Registration Statement (without exhibits) and
preliminary prospectuses and the Prospectus, as amended or supplemented, in such
quantities and at such places as the Underwriter has reasonably requested.
(iii) Exhibits; Material Contracts. There are no contracts or
other documents required to be described in the Prospectus or to be filed as
exhibits to the Registration Statement which have not been described or filed as
required. The contracts so described in the Prospectus to which the Company or
any Subsidiary of the Company is a party have been duly authorized, executed and
delivered by the Company, constitute valid and binding agreements of the
Company, and are enforceable against and by the Company in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by general principles of equity or the availability of
specific performance, injunctive relief and other equitable principles. Neither
the Company, nor, to the best of the Company's knowledge, any other party is in
material breach of or material default under any of such contracts.
(iv) No Brokerage Commissions, etc. Except as disclosed in the
Prospectus, there are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company
or the Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
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(v) The Underwriting Agreement. The execution and
delivery of this Agreement by the Company has been duly authorized by all
necessary corporate action.
(vi) Authorization of the Common Shares. The Common Shares to
be sold by the Company have been duly authorized for issuance and sale pursuant
to this Agreement; all other outstanding shares of capital stock of the Company
are, and, when the Common Shares have been issued and delivered by the Company
to the Underwriter against payment therefor in accordance with the terms of this
Agreement, such Common Shares will be validly issued, fully paid and
non-assessable.
(vii) No Applicable Registration or Other Similar Rights.
There are no persons other than the Selling Stockholders with registration or
other similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated by
this Agreement, except for such rights as have been duly satisfied or waived.
(viii) No Material Adverse Change. Except as otherwise
disclosed or incorporated by reference in the Prospectus (or any amendment or
supplement thereto) subsequent to the respective dates as of which information
is given in such Prospectus: (i) there has been no material adverse change, or
any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings,
business or operations, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as one
enterprise (any such change or development is called a "Material Adverse
Change"); (ii) the Company and its subsidiaries, considered as one enterprise,
have not incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business, nor entered into any
material transaction or agreement not in the ordinary course of business; and
(iii) there has been no dividend or distribution of any kind declared, paid or
made by the Company, except for dividends or distributions paid to the Company
or its subsidiaries on any class of capital stock or other equity interests, or
repurchases or redemptions by the Company or any of its subsidiaries of any
class of capital stock or other equity interests.
(ix) Independent Accountants. Ernst & Young LLP, who has
expressed its opinions with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) filed with the
Commission as a part of or incorporated by reference in the Registration
Statement and included in the Prospectus, are, to the Company's knowledge,
independent public accountants as required by the Securities Act.
(x) Preparation of the Financial Statements. The consolidated
financial statements of the Company filed with the Commission as a part of the
Registration
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Statement and included in the Prospectus (and any amendment or supplement
thereto) present fairly in all material respects, the consolidated financial
position of the Company and its subsidiaries as of and at the dates indicated
and the results of their operations and cash flows for the periods specified.
Any supporting schedules included in the Registration Statement present fairly
and accurately, in all material respects, the information required to be stated
therein. Such financial statements and supporting schedules have been prepared
in conformity with generally accepted accounting principles in the United States
applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No financial statements or
supporting schedules are required to be included or incorporated by reference in
the Registration Statement that have not been so included or incorporated. The
financial data set forth in the Prospectus under the captions "Selected
Financial Data" and "Capitalization" are accurately presented and prepared on a
basis consistent with the financial statements contained in the Registration
Statement and the books and records of the Company and fairly and accurately
present, in all material respects, the information set forth therein on a basis
consistent with that of such financial statements when read in conjunction with
the textual information included in those sections.
(xi) Organization and Good Standing of the Company and its
Subsidiaries. Each of the Company and its direct and indirect subsidiaries has
been duly incorporated or formed, as the case may be, and is validly existing as
a corporation, in good standing or of active status (if incorporated in the
state of Florida) under the laws of the jurisdiction of its incorporation or
formation, as the case may be, and has power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and, in the case of the Company, to enter into and perform its
obligations under this Agreement. Each of the Company and its subsidiaries 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 for such jurisdictions where the failure to so qualify or to be
in good standing would not, individually or in the aggregate, result in a
Material Adverse Change. All of the issued and outstanding shares of capital
stock of each subsidiary of the Company that is a corporation have been duly
authorized and validly issued, are fully paid and nonassessable and, except as
set forth in the Amended and Restated Loan and Security Agreement dated August
1, 2000, by and among Bank of America, as agent for the various financial
institutions, the Company and the various financial institutions from time to
time a party to the agreement, are owned by the Company, directly or through
subsidiaries, free and clear of any material security interest, mortgage,
pledge, lien, claim, restriction or encumbrance. The Company does not own or
control, directly or indirectly, any corporation, partnership, association or
other entity other than Xxxxxxxx Financial, Inc. and Xxxxxxxx Data Services,
Inc., each a Florida corporation.
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(xii) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus under the caption "Capitalization" as of the date set forth
therein. The capital stock of the Company (including the Common Shares) conforms
in all material respects to the description thereof contained in the Prospectus.
All of the issued and outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and non-assessable and
have been issued in compliance with applicable federal and state securities
laws. None of the outstanding shares of capital stock of the Company were issued
in violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. Except as set
forth in the Prospectus, and except for options to purchase capital stock issued
pursuant to the Xxxxxxxx Financial, Inc. Employee Stock Option Plan and the
Xxxxxxxx Financial, Inc. Non-Employee Director Stock Option Plan, the Company
does not have outstanding on the date hereof and each Closing Date any contracts
or commitments to issue or sell, any shares of Common Stock or options,
warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any Common Stock of the Company or any of its subsidiaries.
(xiii) Exchange Act Registration; Stock Exchange Listing. The
Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and is
quoted on the Nasdaq National Market System (the "Nasdaq NMS"), and the Company
has taken no action designed to, or likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or delisting the
Common Stock from the Nasdaq NMS, nor has the Company received any notification
that the Commission or the Nasdaq NMS is contemplating terminating such
registration or listing. Application has been made to list the Common Shares
being sold by the Company and the Selling Stockholders on the Nasdaq NMS, and as
of the Closing Date with respect thereto, the Common Shares being sold by the
Company and the Selling Stockholders shall have been approved for quotation on
the Nasdaq NMS, subject to official notice of issuance.
(xiv) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any subsidiary is
in breach of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of or default under)
("Default"), its respective articles or certificate of incorporation, bylaws,
certificate of limited partnership or partnership agreement, as the case may be,
or in the performance of any obligation, agreement, covenant or condition
contained in any license, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or any
subsidiary is a party or by which any of them or their respective properties is
bound (each, an "Existing Instrument"), except for such Defaults which would not
result in a Material Adverse Change. The Company's execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby (i) have been duly authorized by all necessary corporate action and will
not result in any violation of
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the provisions of the charter or by-laws or other organizational documents of
the Company, (ii) will not conflict with or constitute a Default or Debt
Repayment Triggering Event (as defined below), 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 that would result in a Material Adverse
Change, pursuant to, or require the consent of any other party to, any Existing
Instrument, where the failure to obtain such consent would result in a Material
Adverse Change and (iii) will not result in any material violation of any
material law, administrative regulation or administrative or court decree
applicable to the Company or any of its subsidiaries that would result in a
Material Adverse Change. No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company's execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby, except (i) such as have been obtained or made by the Company and are in
full force and effect under the Securities Act, (ii) such as may be required
under applicable state securities or blue sky laws or by the National
Association of Securities Dealers, Inc. (the "NASD") (iii) such as may be
required to list the Common Shares for trading on Nasdaq NMS.
As used herein, a "Debt Repayment Triggering Event" means any
event or condition which gives, or with the giving of notice or lapse of time or
both would give, 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.
(xv) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the Company's
knowledge, threatened (i) against the Company or any of its subsidiaries or (ii)
which has as the subject thereof any officer or director of, or property owned
or leased by, the Company or any of its subsidiaries, where in any such case (A)
there is a reasonable possibility that such action, suit or proceeding might be
determined adversely to the Company or such subsidiary and (B) any such action,
suit or proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute with the
employees of the Company or any of its subsidiaries taken as a whole, exists or,
to the best of the Company's knowledge, is threatened or imminent.
(xvi) Regulatory Compliance. The Company and its subsidiaries
are in compliance in all material respects with all applicable federal, state
and local laws and regulations applicable to them including, without limitation,
the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the rules and regulations of the
Commission promulgated thereunder (the "Xxxxxxxx-Xxxxx Act"), the Fair Debt
Collection Act, Truth in Lending Act, the Equal Credit Opportunity Act, the Fair
Credit Reporting Act, the Xxxxx-Xxxxx-Xxxxxx Act, and the Soldiers' and Sailors'
Civil Relief Act and comparable statutes in
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states where the Company and its subsidiaries' customers reside, and the
respective rules and regulations thereunder, the failure to comply with which
would have a Material Adverse Change. Neither the Company nor any of its
subsidiaries is a party to any agreement or memorandum of understanding with, or
party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary supervisory letter
from, or has adopted any board resolutions at the request of any regulatory
authority which restricts materially the conduct of its business as described in
the Prospectus, nor has the Company or any of its subsidiaries been advised in
writing by any of the regulatory authorities that it is contemplating issuing or
requesting (or considering the appropriateness of issuing or requesting) the
foregoing (nor has any executive officer of the Company been so advised,
whether in writing or orally).
(xvii) Intellectual Property Rights. The Company and its
subsidiaries own or possess sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, the "Intellectual Property Rights") reasonably necessary to
conduct their businesses as now conducted or as proposed to be conducted as
described in the Prospectus; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change.
Neither the Company nor any of its subsidiaries has received any written notice
(nor has any executive officer of the Company been notified orally) of
infringement or conflict with asserted Intellectual Property Rights of others,
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Change, and to
the Company's knowledge, no such infringements or conflicts exist.
(xviii) All Necessary Permits, etc. The Company and each of
its subsidiaries possesses such valid and current certificates, authorizations,
licenses, registrations and permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct their respective
businesses as described in the Registration Statement and Prospectus (or any
amendment or supplement thereto) (collectively, the "Governmental Licenses")
except where the failure to possess Governmental License would not result in a
Material Adverse Change; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where such
noncompliance would not, singly or in the aggregate, have a Material Adverse
Change; all of the Governmental Licenses are valid and in full force and effect,
except where such invalidity would not have a Material Adverse Change; and
neither the Company nor any of its subsidiaries have received any notice of
proceedings relating to the revocation or modification of any Governmental
Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Change.
(xix) Tax Law Compliance. The Company and its subsidiaries
have filed all federal, state, local and foreign income and franchise tax
returns required to be filed by or on behalf of the Company and any subsidiary
with respect to all periods ended prior to the date
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hereof, except where the failure to file would not have a Material Adverse
Change, or have properly requested extensions thereof and have paid all taxes
required to be paid by them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them, except such, if any,
that are being contested in good faith. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 2(a)(x) above in respect of all federal, state, local and foreign income
and franchise taxes for all periods as to which the tax liability of the Company
or any of its subsidiaries has not been finally determined.
(xx) Company Not an "Investment Company." The Company is not,
and after receipt of payment for the Common Shares will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(xxi) Insurance. The Company has no reason to believe that it
or any of its subsidiaries will not be able to (i) renew its existing insurance
coverage as and when such policies expire or (ii) obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct its
business as now conducted or as proposed to be conducted as described in the
Prospectus. During the past five years, neither the Company nor any of its
subsidiaries has been denied any insurance coverage which it has sought or for
which it has applied.
(xxii) No Price Stabilization or Manipulation. Other than
excepted activity pursuant to Regulation M under the Exchange Act, neither the
Company nor any of its officers, directors or controlling persons has taken any
action designed to or that might be reasonably 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 Common Shares or which is otherwise
prescribed by Regulation M promulgated by the Commission.
(xxiii) Related Party Transactions. There are no business
relationships or transactions, direct or indirect, involving the Company or any
of its subsidiaries on the one hand, and the directors, officers, or five
percent stockholders of the Company, on the other hand, required to be described
in the Registration Statement or the Prospectus which have not been described as
required or incorporated by reference therein.
(xxiv) No Unlawful Contributions or Other Payments. Neither
the Company nor any of its subsidiaries nor, to the best of the Company's
knowledge, any employee or agent of the Company or any subsidiary has made any
contribution or other payment to any official of, or candidate for, any federal,
state or foreign office in violation of any law or of the character required to
be disclosed in the Prospectus.
(xxv) Compliance with Environmental Laws. Except as otherwise
disclosed in the Prospectus, or except as would not, individually or in the
aggregate, result in a Material Adverse Change, the Company and its subsidiaries
(i) have been and are in compliance with applicable Environmental Laws (as
defined below), (ii) have received all material permits, licenses or other
approvals required of it under applicable Environmental Laws, to conduct their
business as described in the Prospectus and (iii) are in compliance with all
terms and conditions of any such permit, license or approval, except where such
noncompliance with Environmental
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Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, individually or in the aggregate, have a Material Adverse
Change. There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up and any potential liabilities to third parties) which would,
individually or in the aggregate, have a Material Adverse Change. To the
Company's knowledge, 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, to the
Company's knowledge, there are no events or circumstances that would 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 the Company, its subsidiaries, or any of its predecessors in interest
relating to hazardous materials or any Environmental Laws. To the Company's
knowledge, no property that is or has been owned, leased or occupied by the
Company or its subsidiaries has been designated as a Superfund Site pursuant to
the Comprehensive Environmental Response, Compensation of Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et. seq. "CERCLA") or otherwise designated
as a contaminated site under applicable state or local law and the Company has
not been named as a "potentially responsible party" under CERCLA.
As used herein, "Environmental Law" means any federal, state
or local environmental law, statute, bylaw, ordinance, rule or regulation,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. (S)(S) 9601-9675
("CERCLA"), the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
(S)(S) 1801-1819, the Resource Conservation and Recovery Act, as amended, 42
U.S.C. (S)(S) 6901-K, the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. (S)(S) 1101-11050, the Toxic Substances Control Act, 15 U.S.C.
(S)(S) 2601-2671, the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. (S)(S) 136-136y, the Clean Air Act, 42 U.S.C. (S)(S) 7401-7642, the Clean
Water Act (Federal Water Pollution Control Act), 33 U.S.C. (S)(S) 1251-1387, the
Safe Drinking Water Act, 42 U.S.C. (S)(S) 300f-300j-26, and the Occupational
Safety and Health Act, 29 U.S.C. (S)(S) 651-678, and any analogous state laws,
as any of the above have been amended as of the date hereof and as of each
Closing Date and in the regulations promulgated pursuant to each of the
foregoing (including environmental statutes and laws not specifically defined
herein) (individually, an "Environmental Law" and collectively, the
"Environmental Laws").
(xxvi) ERISA Compliance. Any "employee benefit plan" (as
defined under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (collectively,
"ERISA")) established or maintained by the Company or its ERISA Affiliates (as
defined below) that is subject to ERISA (individually,
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an "ERISA Plan") is in compliance in all material respects with ERISA. "ERISA
Affiliate" means, with respect to the Company, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Code of which
the Company is a member. No "reportable event" (as defined under ERISA) has
occurred with respect to any ERISA Plan. Except as disclosed in the Prospectus,
no ERISA Plan, if such ERISA Plan were terminated, would have any "amount of
unfunded benefit liabilities" (as defined under ERISA). Neither the Company nor
any of its ERISA Affiliates has incurred any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any ERISA Plan or (ii)
Sections 412, 4971, 4975 or 4980B of the Code. Each ERISA Plan that is intended
to be qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS as to its qualified status and nothing has
occurred since the date of such letter, whether by action or failure to act,
which would cause the loss of such qualification.
(xxvii) Offering. In connection with this offering, the
Company has not offered and will not offer shares of its Common Stock or any
other securities convertible into or exchangeable or exercisable for shares of
Common Stock in a manner in violation of the Securities Act; the Company has not
distributed and will not distribute any offering material in connection with the
offer and sale of the Shares, other than a preliminary prospectus, the
Prospectus, the Registration Statement including any amendments or supplements
to any of the foregoing, and other materials permitted by the Securities Act.
(xxviii) Broker/Dealer. The Company (i) is not required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act or the regulations promulgated thereunder, and (ii)except as
previously disclosed to the Underwriter in writing, neither the Company nor any
of its subsidiaries nor any director or officer of the Company or its
subsidiaries 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 I, Section 1(m) of the By-laws
of the NASD), any member firm of the NASD.
(xxix) No Unlawful Payments. Neither the Company, nor to the
Company's knowledge any other person associated with or acting on behalf of the
Company, including, without limitation, any director, officer, agent or employee
of the Company, has, directly or indirectly, while acting on behalf of the
Company (i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any other unlawful payment or established
or maintained any unlawful or unrecorded funds in violation of Section 30A of
the Exchange Act required to be disclosed in the Prospectus.
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(xxx) Internal Controls. The Company is in compliance
with the provisions of Section 13(b) of the Exchange Act.
(xxxi) Books and Records. The minute books of the Company
contain accurate and complete records of all meetings held of, and corporate
action taken by, the stockholders, the Company's board of directors and
committees of the Company's board of directors, and no meeting of any of such
stockholders, the Company's board of directors or such committees has been held
for which minutes have not been prepared and are not contained in such minute
books.
(xxxiii) Any certificate signed by an officer of the Company
and delivered to the Underwriter or to counsel for the Underwriter shall be
deemed to be a representation and warranty by the Company to each Underwriter as
to the matters set forth therein.
(b) Each of the Selling Stockholders represents and warrants as of
the date hereof as follows:
(i) Due Authorization. The execution and delivery of this
Agreement and a Custody Agreement and the Power of Attorney (as defined herein)
by such Selling Stockholder has been duly authorized, including by all necessary
corporate action if the Selling Stockholder is a corporation. This Agreement
has been duly authorized, executed and delivered by or on behalf of such
Selling Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(ii) Selling Stockholder Documents. The Custodian (as
defined herein) is authorized to deliver the Firm Shares to be sold by
each Selling Stockholder hereunder and to accept payment therefor.
(iii) No Conflict. The execution and delivery by each Selling
Stockholder of, and the performance by each Selling Stockholder of its
obligations under, this Agreement, the Custody Agreement signed by each Selling
Stockholder and _____________________, as Custodian (the "Custodian"), relating
to the deposit of the Common Shares to be sold by the Selling Stockholders (the
"Custody Agreement") and the Power of Attorney appointing certain individuals as
each Selling Stockholder's attorneys-in-fact to the extent set forth therein,
relating to the transactions contemplated hereby and by the Registration
Statement (the "Power of Attorney") will not result in (A) any material
violation of any material law, administrative regulation or administrative or
court decree applicable to such Selling Stockholder, (B) the violation of the
provisions of the charter , bylaws or other organizational documents of any
Selling Stockholder (if such Selling Stockholder is a corporation) or (C) a
conflict with any judgment, order or decree of any governmental body, agency or
court having jurisdiction over any Selling Stockholder. No consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for
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the performance by any Selling Stockholder of its obligations under this
Agreement or the Custody Agreement or Power of Attorney of any Selling
Stockholder, except such as have been obtained or such as may be required by the
securities or blue sky laws of the various states in connection with the offer
and sale of the Common Shares.
(iv) Good Title to Shares. Each Selling Stockholder has, and
on the first Closing Date (as hereinafter defined) will have, valid title to the
Common Shares to be sold by such Selling Stockholder on such Closing Date and
the legal right and power, and all authorization and approval required by law,
to sell, transfer and deliver the Common Shares to be sold by such Selling
Stockholder.
(v) Delivery of Common Shares. Delivery of the Common Shares
to be sold by such Selling Stockholder pursuant to this Agreement will pass
title to such Common Shares free and clear of any security interests, claims,
liens, equities and other encumbrances.
(vi) Share Certificates. Certificates for all of the Firm
Shares to be sold by such 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 irrevocable conditional
instructions to deliver such Firm Shares to the Underwriter pursuant to this
Agreement and the Custody Agreement.
(vii) NASD. No Selling Stockholder nor any affiliate of a
Selling Stockholder 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 I, Section 1(m) of the By-laws
of the NASD), any member firm of the NASD.
(viii) Warrants and Options. No Selling Stockholder has
granted with respect to the Firm Shares to be sold by such Selling Stockholder
under this Agreement, and the Firm Shares to be sold by such Selling Stockholder
under this Agreement are not subject to, any option, warrant, put, call, right
of first refusal or other right to acquire or purchase any such Firm Shares
other than pursuant to this Agreement, except as may be required under Section
409(h) of the Internal Revenue Code of 1986, as amended (the "Code").
(ix) No Price Stabilization or Manipulation. Other than
excepted activity pursuant to Regulation M under the Exchange Act, no Selling
Stockholder has taken any action designed to or that might be reasonably
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 Common Shares or
which is otherwise prescribed by Regulation M promulgated by the Commission.
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(x) Disclosure by Selling Stockholder in Registration
Statement. The portion of the Registration Statement comprised of the table and
the notes thereto under the caption "Selling Stockholders" in the form supplied
to the Selling Stockholder, insofar as such portion specifically relates to each
Selling Stockholder, does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
Section 3. Purchase, Sale and Delivery of the Common Shares.
(a) The Firm Common Shares. On the basis of the agreements herein,
but subject to the conditions herein set forth, the Company and each Selling
Stockholder (each, a "Seller" and collectively, the "Sellers"), severally and
not jointly, agrees to sell to the Underwriter the Firm Common Shares upon the
terms herein set forth. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Underwriter agrees to purchase from such Seller the Firm
Common Shares. The purchase price per Firm Common Share to be paid by the
Underwriter to the Sellers shall be $___ per share.
(b) The First Closing Date. Delivery of the Firm Common Shares to be
purchased by the Underwriter and payment therefor shall be made at such place as
may be agreed to by the Company and the Underwriter at 11:00 a.m. Eastern time,
on April ___, 2004, or such other time and date as the Underwriter and the
Company shall agree (the time and date of such closing are called the "First
Closing Date"), but in no event more than four business days after the date of
this Agreement.
(c) The Optional Common Shares; the Second Closing Date. In
addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Company hereby grants an option to the Underwriter to purchase up to an
aggregate of 360,000 Optional Common Shares from the Company at the purchase
price per share to be paid by the Underwriter for the Firm Common Shares. The
options granted hereunder are for use by the Underwriter solely in covering any
over-allotments in connection with the sale and distribution of the Firm Common
Shares. The options granted hereunder may be exercised at any time upon notice
by the Underwriter to the Company, which notice may be given at any time within
30 days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriter is
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may not be earlier than the First Closing Date; and in the case that
such date is simultaneous with the First Closing Date, the
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term "First Closing Date" shall refer to the time and date of delivery of
certificates for the Firm Common Shares and the Optional Common Shares). Such
time and date of delivery, if subsequent to the First Closing Date, is called
the "Second Closing Date" and shall be determined by the Underwriter and shall
not be earlier than three nor later than ten full business days after delivery
of such notice of exercise. (The First Closing Date and the Second Closing Date
are sometimes referred to herein as a "Closing Date".) The Underwriter agrees to
purchase the number of Optional Common Shares with respect to which the
Underwriter exercised the option on the Second Closing Date. The Underwriter may
cancel the option at any time prior to its expiration by giving written notice
of such cancellation to the Company and each Selling Stockholder.
(d) Public Offering of the Common Shares. The Underwriter hereby
advises the Company that the Underwriter intends to offer for sale to the
public, as described in the Prospectus, their respective portions of the Common
Shares as soon after this Agreement has been executed and the Registration
Statement has been declared effective as the Underwriter, in its sole judgment,
has determined is advisable and practicable.
(e) Payment for the Common Shares. Payment for the Common Shares
shall be made by the Underwriter at the applicable Closing Date by wire transfer
of immediately available Federal funds to the order of each Seller.
(f) Delivery of the Common Shares. The Company shall deliver, or
cause to be delivered, to the Underwriter certificates for the Firm Common
Shares, against the irrevocable release of a wire transfer of immediately
available Federal funds for the amount of the purchase price therefor. The
Company also shall deliver, or cause to be delivered, to the Underwriter
certificates requested for the Optional Common Shares the Underwriter has agreed
to purchase at the applicable Closing Date against the irrevocable release of a
wire transfer of immediately available Federal funds for the amount of the
purchase price therefor. The certificates for the Common Shares shall be in
definitive form and registered in such names and denominations as the
Underwriter shall have requested at least two full business days prior to the
applicable Closing Date and shall be made available for inspection on the
business day preceding the applicable Closing Date at a location the Underwriter
may reasonably designate. Delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriter.
(g) Delivery of Prospectus to the Underwriter. Not later than 12:00
p.m. on the second business day following the date the Common Shares are first
released by the Underwriter for sale to the public, the Company shall deliver or
cause to be delivered, copies of the Prospectus in such quantities and at such
places as the Underwriter shall request, which request shall be received no
later than the effective date of the Registration Statement.
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Section 4. Additional Covenants. The Company ovenants and agrees with the
Underwriter as follows:
(a) Underwriter's Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the latest Closing
Date or such date, as in the opinion of counsel for the Underwriter, the
Prospectus is no longer required by law to be delivered in connection with sales
by the Underwriter or dealer (the "Prospectus Delivery Period"), prior to
amending or supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the Prospectus,
the Company shall furnish to the Underwriter for review a copy of each such
proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Underwriter reasonably objects.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Underwriter in writing of (i) the receipt of
any comments of, or requests for additional or supplemental information from,
the Commission relating to the Registration Statement, (ii) the time and date of
any filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to any preliminary prospectus or the Prospectus, (iii)
the time and date that any post-effective amendment to the Registration
Statement becomes effective and (iv) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or suspending the
use of any preliminary prospectus or the Prospectus, or of any proceedings to
remove, suspend or terminate from listing or quotation the Common Stock from any
securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings
for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company will use its reasonable best efforts to obtain the lifting
of such order at the earliest possible moment. Additionally, the Company agrees
that it shall comply with the provisions of Rules 424(b), 430A and 434, as
applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under such Rule 424(b) were
received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any event
shall occur or condition exist as a result of which the Prospectus, as then
amended or supplemented, would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the reasonable opinion of the Underwriter or counsel for
the Underwriter it is otherwise necessary to amend or supplement the Prospectus
to comply with law, the Company agrees to promptly notify the Underwriter and to
promptly prepare (subject to Section 4(a)
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hereof), file with the Commission and furnish at its own expense to the
Underwriter and to dealers, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading or so that the
Prospectus, as amended or supplemented, will comply with law. Neither the
Underwriter's consent to, nor the its delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 6.
(d) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Underwriter, without charge and in as many copies
as the Underwriter reasonably requests, (i) during the Prospectus Delivery
Period, the Prospectus and any amendments and supplements thereto, (ii) signed
copies of each Registration Statement, which will include all exhibits, (iii)
each related preliminary prospectus, and (iv) copies of the Incorporated
Documents, including exhibits.
(e) Blue Sky Compliance. The Company will arrange for the
qualification of the Common Shares for sale under the laws of such jurisdictions
as the Underwriter designates and will continue such qualifications in effect so
long as required for the distribution, except that in no event shall the Company
be obligated in connection therewith to qualify a foreign corporation or to
execute a general consent to service of process. The filing fees incurred in
connection with such filings will be paid by the Company. The Company will
advise the Underwriter promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall use
its reasonable efforts to obtain the withdrawal thereof at the earliest possible
moment.
(f) Use of Proceeds. The Company shall apply the net proceeds from
the sale of the Common Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall maintain, at its expense, a
registrar and transfer agent for the Common Stock.
(h) Earning Statement. As soon as practicable, but not later than
the Availability Date (as defined below), the Company will make generally
available to its security holders and to the Underwriter an earning statement
(which need not be audited) covering the twelve-month period that satisfies the
provisions of Section 11(a) of the Securities Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
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fourth fiscal quarter following the fiscal quarter that includes the date on
which the Registration Statement became effective, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year, "Availability
Date" means the 90th day after the end of such fourth fiscal quarter.
(i) Periodic Reporting Obligations. During the Prospectus Delivery
Period, the Company shall file, on a timely basis, with the Commission reports
and documents required to be filed under the Exchange Act.
(j) Agreement Not to Offer or Sell Additional Securities. During the
period of 120 days following the date of the Prospectus, the Company will not,
without the prior written consent of the Underwriter, (which consent may be
withheld at the sole discretion of the Underwriter), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or establish
an open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of,
or file any registration statement under the Securities Act in respect of, any
shares of Common Stock, options or warrants to acquire shares of Common Stock or
securities exchangeable or exercisable for or convertible into shares of Common
Stock (other than as contemplated by this Agreement with respect to the Common
Shares); provided, however, that the Company may (i) issue shares of Common
Stock upon the exercise of warrants outstanding on the date hereof, as set forth
in the Prospectus, (ii) grant options to purchase Common Stock and issue shares
of Common Stock upon the exercise of options, in both cases, pursuant to any
stock option plan or arrangements, or issue shares of Common Stock in the
ordinary course of business pursuant to the Company's employee benefit plans
existing on the date hereof, and (iii) issue shares of Common Stock in payment
of all or a portion of the purchase price for properties acquired from sellers
who are not affiliates of the Company. In addition, each Selling Stockholder,
agrees that, without the prior written consent of the Underwriter, it will not,
during the period ending 120 days after the date of the Prospectus, make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
(k) Future Reports to the Underwriter. During the period of three
years hereafter, the Company will furnish to the Underwriter at c/x Xxxxxx,
Xxxxx Xxxxx, Incorporated, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxx (i) at the same time as distributed to the
Company's stockholders after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report on Form
10-KSB or 10-K, Quarterly Report on Form 10-QSB or 10-Q, Current
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Report on Form 8-K or other report filed by the Company with the Commission or
the Nasdaq NMS; (iii) at the same time as mailed to the Company's stockholders,
copies of any report or communication of the Company mailed generally to holders
of its capital stock; and (iv) from time to time, such other information
concerning the Company as the Underwriter may reasonably request.
(l) Statement Regarding Certain Events. If at any time prior to 30
days after the Registration Statement becomes effective, any publication or
event relating to or affecting the Company shall occur as a result of which in
the reasonable opinion of the Underwriter the market price of the Common Shares
has been or is likely to be materially affected (regardless of whether such
publication or event necessitates a supplement or amendment to the Prospectus)
and after written notice from the Underwriter advising the Company to the effect
set forth above, the Company agrees to forthwith prepare, consult with the
Underwriter concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to the Underwriter, responding
to or commenting on such publication or event.
(m) No Price Stabilization or Manipulation. The Company and the
Selling Stockholders will not, and the Company will use its best efforts to
cause its officers, directors and affiliates not to, take, directly or
indirectly prior to the termination of the underwriting syndicate contemplated
by this Agreement, any action designed to stabilize or manipulate the price of
any security of the Company, or which may cause or result in, or which might
reasonably be expected to result in, the stabilization or manipulation of the
price of any security of the Company, to facilitate the sale or resale of any of
the Common Shares.
Section 5. Payment of Expenses. The Company agrees to pay all costs,
fees and expenses incurred by it in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including, without limitation, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the preliminary prospectuses and
the Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Underwriter; (ii) the issuance and delivery of
the Common Shares to the Underwriter, including any transfer taxes payable upon
the sale of the Common Shares to the Underwriter (other than transfer taxes on
resales by the Underwriter); (iii) the fees and disbursements of the Company's
counsel and accountants; (iv) the filing fees in connection with the
qualification of the Common Shares under the applicable securities laws in
accordance with Section 4(b) and (e) hereof and any filing fee in connection
with the review of the offering with the NASD, (v) the transfer agent's and
registrar's fees and all miscellaneous expenses referred to in Part II of the
Registration Statement and (vi) costs related to travel and lodging incurred by
the Company and its employees relating to meetings with and presentations to
prospective purchasers of the
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Common Shares. The Company, upon the request of the Underwriter, will provide
funds in advance for filing fees in connection with "blue sky" qualifications
and the NASD.
Section 6. Conditions of the Obligations of the Underwriter. The
obligations of the Underwriter to purchase and pay for the Common Shares as
provided herein on any Closing Date shall be subject to the accuracy of the
representations and warranties in all material respects on the part of the
Company and the Selling Stockholders set forth in Section 2 hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Common Shares, the accuracy of the representations and
warranties in all material respects on the part of the Company as set forth in
Section 2 hereof as of the Second Closing Date, as though then made; to the
timely performance by the Company of its covenants and other obligations
hereunder; and to each of the following additional conditions:
(a) Accountants' Comfort Letters. On the date hereof, the
Underwriter shall have received from Xxxxx Xxxxxx PLLC, independent public
accountants for the Company, letters dated the date hereof addressed to the
Underwriter, in form and substance reasonably satisfactory to the Underwriter,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration Statement and the Prospectus, including the
Incorporated Documents.
(b) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date:
(i) The Registration Statement shall have been declared
effective, and the Prospectus shall have been filed with the Commission not
later than the Commission's close of business on the second business day
following the date hereof or such later time and date to which the Underwriter
shall have consented. The Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise);
(ii) The Common Stock shall have begun trading on the Nasdaq
NMS, and the Common Shares shall have been approved for quotation on the Nasdaq
NMS;
(iii) No stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
preventing or suspending the use of any Prospectus or any amendment or
supplement thereto shall have been issued, and no
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proceedings for that purpose shall have been instituted or pending or, to the
best knowledge of the Company or the Underwriter, shall be contemplated or
threatened by the Commission;
(iv) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and arrangements;
(v) the Common Shares shall have been qualified under the
securities or blue sky laws of such jurisdictions as the Underwriter shall have
designated or an exemption therefrom shall be available;
(vi) no stop orders suspending the sale of the Common Shares
in any jurisdiction referred to in Section 4(e) shall have been issued, and no
proceedings for that purpose shall have been instituted or shall be pending or,
to the best knowledge of the Company or the Underwriter, shall be contemplated
or threatened by the officials of any such jurisdiction; and
(c) No Material Adverse Change. For the period from and after the
date of this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, there shall not have
occurred any change, or any development or event involving a prospective change,
in the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as one enterprise which, in
the reasonable judgment of the Underwriter, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Common Shares.
(d) Opinion of Counsel for the Company. On each Closing Date, the
Underwriter shall have received the opinion of Xxxxx & Xxxxxxx, LLP, United
States counsel for the Company, and of Xxxxxx Xxxxx Harwardt, Canadian counsel
for the Company dated as of such Closing Date, in form and substance reasonably
satisfactory to the Underwriter.
(e) Opinion of Counsel for the Underwriter. On each Closing Date,
the Underwriter shall have received the favorable opinion of Neuberger, Quinn,
Gielen, Rubin & Gibber, P.A., counsel for the Underwriter, dated as of such
Closing Date, in form and substance reasonably satisfactory to the Underwriter.
(g) Officers' Certificate. On each Closing Date, the Underwriter
shall have received a written certificate executed by (i) the Chairman of the
Board, Chief Executive Officer and President of the Company and (ii) the Chief
Financial Officer or Chief Accounting Officer of the Company, dated as of such
Closing Date, to the effect set forth in subsection (b)(ii) of this Section 6,
and further to the effect that:
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(i) no stop order suspending the effectiveness of the
Registration Statement or post-effective amendment thereto or suspending the use
of any Prospectus or amendment or supplement thereto or the qualification of the
Securities for offering or sale has been issued, and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of each such
person, are contemplated or threatened under the Securities Act or any
applicable state securities or blue sky statute or regulation, and any and all
filings required by Rule 424, Rule 430A and Rule 462(b) have been timely made;
(ii) the Registration Statement and Prospectus and, if any,
each amendment and each supplement thereto, contain all statements and
information required by the Securities Act or any rules or regulations
promulgated thereunder to be included therein, and neither the Registration
Statement or the Prospectus nor any amendment or supplement thereto includes any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
(iii) for the period from and after the date of this Agreement
and prior to such Closing Date, there has not occurred any Material Adverse
Change;
(iv) the representations and warranties of the Company set
forth in this Agreement are true and correct in all material respects with the
same force and effect as though expressly made on and as of such Closing Date,
except that, to the extent any representations and warranties are qualified by
terms such as "material," "materially," "material adverse effect" or "Material
Adverse Change," such representations and warranties will be true and correct in
all respects; and
(v) the Company has performed or complied in all material
respects with all of the covenants and agreements hereunder and satisfied all
the conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date.
(h) Bring-down Comfort Letters. On each Closing Date, the
Underwriter shall have received from Xxxxx Xxxxxx PLLC, independent public
accountants for the Company, letters dated such date, in form and substance
reasonably satisfactory to the Underwriter, to the effect that they reaffirm the
statements made in the letters furnished by them pursuant to subsection (a) of
this Section 6, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to
the First Closing Date or Second Closing Date, as the case may be.
(i) Lock-Up Agreements. On or before the date hereof, the Company
shall have furnished to the Underwriter an agreement in the form of Exhibit A
hereto from certain Selling Stockholders and directors and executive officers of
the Company whose names are set
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forth on Schedule 1 to Exhibit A, and each such agreement shall be in full force
and effect on each Closing Date.
(j) Selling Stockholders' Certificates. The Underwriter shall have
received on each Closing Date, a certificate, dated as of such Closing Date and
signed by the Attorney-in-Fact of each Selling Stockholder, to the effect that
the representations and warranties of the Selling Stockholders contained in this
Agreement are true and correct in all material respects as of such Closing Date
and that the Selling Stockholders have complied in all material respects with
all of the agreements and satisfied all of the conditions on their part to be
performed or satisfied hereunder on or before such Closing Date.
(k) Selling Stockholder Documents. On the date hereof, the Company
and the Selling Stockholders shall have furnished for review by the Underwriter
copies of the Powers of Attorney and Custody Agreements executed by each of the
Selling Stockholders and such further information, certificates and documents as
the Underwriter may reasonably request.
(l) Additional Documents. On or before each Closing Date, the
Underwriter and counsel for the Underwriter shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Common
Shares as contemplated herein, or in order to evidence the material accuracy of
any of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.
If any condition specified in this Section 6 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Underwriter by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 5, Section 9 and
Section 10 shall at all times be effective and shall survive such termination.
Section 7. Reimbursement of Underwriter's Expenses. If this Agreement is
terminated by the Underwriter pursuant to Section 6 or if the sale to the
Underwriter of the Common Shares on any Closing Date is not consummated because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, the Company agrees,
(subject to the last sentence of this Section 7), to reimburse the Underwriter,
upon demand for all out-of-pocket expenses that shall have been reasonably
incurred by the Underwriter in connection with the proposed purchase and
offering and sale of the Common Shares, including, but not limited to, fees and
disbursements of counsel, printing expenses, travel expenses, postage, and
facsimile and telephone charges. It is acknowledged and agreed that any
Xxxxxxxx Financial, Inc.
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payments to which the Underwriter may be entitled under this Section 7 shall be
in addition to any such payments to which the Underwriter may otherwise be
entitled under Section 5.
Section 8. [Intentionally left blank]
Section 9. Indemnification.
(a) Indemnification of the Underwriter. The Company agrees to
indemnify and hold harmless the Underwriter and its officers, directors,
employees and agents, and each person, if any, who controls the Underwriter
within the meaning of the Securities Act and the Exchange Act, against any loss,
claim, damage, liability or reasonable expense, to which the Underwriter or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any
amendment thereto, including any information deemed to be a part thereof
pursuant to the Securities Act or any rule promulgated thereunder, 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 (ii) upon
any untrue statement or alleged untrue statement of a material fact contained 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; and to reimburse the
Underwriter and each such person for any and all expenses (including the
reasonable fees and disbursements of counsel chosen by the Underwriter by the
Underwriter or such person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by the
Underwriter or any Selling Stockholder expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), as the same is described in Section 9(d) below; and
provided, further, that with respect to any preliminary prospectus, the
foregoing indemnity agreement shall not inure to the benefit of the Underwriter,
if the person asserting any loss, claim, damage, liability or expense purchased
Common Shares from the Underwriter, or any person controlling the Underwriter,
if copies of the Prospectus were timely delivered to the Underwriter pursuant to
Section 3 and a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was
Xxxxxxxx Financial, Inc.
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not sent or given by or on behalf of the Underwriter to such person, if required
by law so to have been delivered, at or prior to the written confirmation of the
sale of the Common Shares to such person, and if the Prospectus (as so amended
or supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. The indemnity agreement set forth in this Section
9(a) shall be in addition to any liabilities that the Company may otherwise
have.
(b) Indemnification of the Underwriter by the Selling Stockholders.
Each Selling Stockholder agrees, severally and not jointly, to indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of the Securities Act and the Exchange Act, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in the light of the circumstances under which they were made, not
misleading, but only with reference to information relating to such Selling
Stockholder furnished in writing by or on behalf of such Selling Stockholder
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) Indemnification of the Company by the Selling Stockholders. Each
Selling Stockholder agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act and the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading, but only with reference to information
relating to such Selling Stockholder furnished in writing by or on behalf of
such Selling Stockholder expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(d) Indemnification of the Company, its Directors and Officers. The
Underwriter agrees to indemnify and hold harmless the Company, the Selling
Stockholders, each
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of the Company's directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act or the Exchange Act, against any loss, claim, damage,
liability or expense, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act, the Exchange
Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Underwriter), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in the case of any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto), in light of the
circumstances in which they were made, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), based on
written information furnished to the Company by the Underwriter expressly for
use therein; and to reimburse the Company or any such director, officer or
controlling person for any legal and other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. The Company acknowledges that the
statements with respect to the public offering of the Securities set forth under
the caption "Underwriting" have been furnished by the Underwriter to the Company
expressly for use therein and constitute the only information furnished in
writing by or on behalf of the Underwriter for inclusion in the Prospectus. The
indemnity agreement set forth in this Section 9(d) shall be in addition to any
liabilities that the Underwriter may otherwise have.
(e) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 9 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 9, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise under the
indemnity agreement contained in this Section 9 to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the
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indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party,
and counsel to the indemnifying party shall have concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel) representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the reasonable fees and expenses of counsel shall
be at the expense of the indemnifying party.
(f) Settlements. The indemnifying party under this Section 9 shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (i) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding 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 an indemnified party.
(g) Limitations on Selling Stockholder Liability. The liability of
each Selling Stockholder under this Section 9 shall not exceed an amount equal
to the net proceeds received by such Selling Stockholders from the sale of Firm
Shares by such Selling Stockholder to the Underwriter hereunder. The Company and
the Selling Stockholders may agree, as among
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April ___, 2004
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themselves and without limiting the rights of the Underwriter under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
Section 10. Contribution. If the indemnification provided for in Section 9
is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand, from the offering of the Common Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company or a Selling Stockholder, on the one hand, and
the Underwriter, on the other hand, in connection with the offering of the
Common Shares pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Common
Shares pursuant to this Agreement (before deducting expenses) received by the
Company or a Selling Stockholder, and the total underwriting discount and
commissions received by the Underwriter, in each case as set forth on the front
cover page of the Prospectus bear to the aggregate initial public offering price
of the Common Shares as set forth on such cover. The relative fault of the
Company or a Selling Stockholder, on the one hand, and the Underwriter, 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, on the one hand, or the Underwriter, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 9(e), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 9(e) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 10; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 9(e) for purposes of indemnification.
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The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 10.
Notwithstanding the provisions of this Section 10, the Underwriter shall
not be required to contribute any amount in excess of the underwriting discount
and commissions received by the Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 10, each officer and
employee of the Underwriter and each person, if any, who controls the
Underwriter within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as the Underwriter, each officer and
employee of a Selling Shareholder, (if the Selling Shareholder is an entity)
shall have the same rights as to contribution as such Selling Shareholder, and
each director of the Company, each officer of the Company, and each person, if
any, who controls the Company within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.
Section 11. [Intentionally left blank]
Section 12. Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by the Underwriter by notice given to the Company if
at any time (i) trading or quotation in any of the Company's securities shall
have been refused, suspended, or limited by the Commission or by the Nasdaq NMS,
or trading in securities generally on the Nasdaq NMS or the New York Stock
Exchange has been suspended or limited, or minimum or maximum prices shall have
been generally established on any of such stock exchanges by the Commission or
the NASD; (ii) a general banking moratorium shall have been declared by any
federal, or New York authorities; (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or in the United States' or international political, financial or economic
conditions, as in the reasonable judgment of the Underwriter is material and
adverse and makes it impracticable or inadvisable to market the Common Shares in
the manner and on the terms described in the Prospectus or to enforce contracts
for the sale of securities; (iv) in the reasonable judgment of the Underwriter
there shall have occurred any Material Adverse Change; (v) the Company shall
have sustained a loss by strike, fire, flood, earthquake, accident or other
calamity of such character as in the judgment of the Underwriter may interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured; or Any
termination pursuant to this Section 12 shall be without liability on the part
of (a) the Company to the Underwriter, except that the Company shall be
obligated to reimburse the
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expenses of the Underwriter pursuant to Section 5 hereof, (b) the Underwriter to
the Company or any Selling Stockholder, or (c) of any party hereto to any other
party.
Section 13. Representations and Indemnities to Survive Delivery. Except as
otherwise set forth herein, the respective indemnities, agreements,
representations, warranties and other statements of the Company, of the
Company's officers, of any of the Selling Stockholders and of the Underwriter
set forth in or made pursuant to this Agreement will remain in full force and
effect according to the applicable statute of limitations, regardless of any
investigation made by or on behalf of the Underwriter, Selling Stockholder or
the Company or any of its or their officers or directors or any controlling
person, as the case may be.
Section 14. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Underwriter:
Xxxxxx, Xxxxx Xxxxx, Incorporated
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx
with a copy to:
Neuberger, Quinn, Gielen, Rubin & Gibber, P.A.
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esquire
If to the Company:
Xxxxxxxx Financial, Inc.
2454 XxXxxxxx Xxxxx Xxxx
Xxxxxxxx X, Xxxxx 000X
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
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with a copy to:
Xxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxx. 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
If to the Selling Stockholders:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
Section 15. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, and to the benefit of the employees, officers
and directors and controlling persons referred to in Section 9 and Section 10,
and in each case their respective successors, and no other person will have any
right or obligation hereunder. The term "successors" shall not include any
purchaser of the Common Shares as such from the Underwriter merely by reason of
such purchase.
Section 16. Partial Unenforceability. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
Section 17. Governing Law Provisions.
(a) Governing Law Provisions. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Delaware and
applicable to agreements made and to be performed in such state.
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(b) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the State of _______ the courts of the State
of Florida (collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
(c) Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
Section 18. General Provisions. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in writing by
all of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit. The Section headings herein are for the convenience of the parties only
and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 9 and the contribution provisions of
Section 10, and is fully informed regarding said provisions. Each of the parties
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hereto further acknowledges that the provisions of Sections 9 and 10 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
Xxxxxxxx Financial, Inc.
By:
-------------------------------
Name:
Title:
The Selling Stockholders named in
Schedule A hereto, acting severally
By:
-------------------------------
, Attorney-in-Fact
-------------
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Underwriter as of the date first above written.
Xxxxxx, Xxxxx Xxxxx, Incorporated
By:
-------------------------------
Name:
Title:
SCHEDULE A
NUMBER OF FIRM
SELLING STOCKHOLDER COMMON SHARES TO BE SOLD
------------------- ------------------------
Xxxxx X. Xxxxxxx Family Trust .... 500,000
Xxxxxx & Xxxxxx Xxxxx ............ 45,664
Xxxxx Children, LLC .............. 125,000
Xxxxx Family, LLC ................ 111,450
Grenma, Inc. ..................... 50,000
Xxxxx Xxxxx ...................... 23,332
Xxxxx X. Xxxxx Grantor Trust ..... 8,888
Xxxxxxx & Xxxxx Xxxxx ............ 35,666
Total ............................ 900,000
EXHIBIT A
LOCK UP AGREEMENT
Xxxxxx, Xxxxx Xxxxx, Incorporated
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Re: Xxxxxxxx Financial, Inc. (the "Company")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock, no par value, of the Company ("Common Stock") or securities
convertible into or exchangeable or exercisable for Common Stock. The Company
proposes to carry out a public offering of Common Stock (the "Offering") for
which you will act as the Underwriter. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into underwriting arrangements with the Company with
respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Xxxxxx, Xxxxx Xxxxx,
Incorporated (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including,
without limitation, any short sale), pledge, transfer, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the Securities
Exchange Act of 1934, as amended, or otherwise dispose of any shares of Common
Stock, options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
undersigned (other than as a bona fide gift, provided that the donee thereof
agrees in writing to be bound by this Agreement), or publicly announce the
undersigned's intention to do any of the foregoing, for a period commencing on
the date hereof and continuing to and including the date that is 120 days after
the effective date of the registration statement of the Company related to the
Offering. The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representative, and assigns of the
undersigned.
Dated: , 2004
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Printed Name of Holder:
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Signature
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Printed Name of Person Signing
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Capacity of Person Signing if
Signing as Custodian, Trustee, or
on Behalf of an Entity
