EXHIBIT 1
3,833,000 SHARES
XXXXXX'X SEAFOOD RESTAURANTS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
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March ____, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXX XXXXXXX & CO. INCORPORATED
X.X. XXXXXXXX & CO.
XXXXX XXXXXXX INC.
XXXXXXX XXXXXX XXXXX INC.
As Representatives of the Several Underwriters
c/o NATIONSBANC XXXXXXXXXX SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
Section 1. Introductory. Xxxxxx'x Seafood Restaurants, Inc., a
Delaware corporation (the "Company"), proposes to issue and sell 3,000,000
shares of its authorized but unissued Common Stock (the "Common Stock"), and
certain stockholders of the Company named in Schedule B annexed hereto (the
"Selling Stockholders") propose to sell an aggregate of 833,000 shares of the
Company's issued and outstanding Common Stock, to the several underwriters named
in Schedule A annexed hereto (the "Underwriters"). Said aggregate of 3,833,000
shares are herein called the "Firm Common Shares." In addition, the Company and
the Selling Stockholders, including Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), propose
to grant to the Underwriters an option to purchase up to an aggregate of 574,950
additional shares of Common Stock (the "Optional Common Shares"), as provided in
Section 5 hereof. The Firm Common Shares and, to the extent such option is
exercised, the Optional Common Shares are hereinafter collectively referred to
as the "Common Shares."
You have advised the Company and the Selling Stockholders that the
Underwriters propose to make a public offering of their respective portions of
the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company and the Selling Stockholders hereby confirm their respective
agreements with respect to the purchase of the Common Shares by the Underwriters
as follows:
Section 2. Representations and Warranties of the Company and Xxxxxxxx.
The Company and Xxxxxxxx represent and warrant to the several Underwriters that:
(a) A registration statement on Form S-3 (File No. 333- ) with respect
to the Common Shares has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The Company has prepared and has filed or proposes to file prior to
the effective date of such registration statement an amendment or amendments to
such registration statement, which amendment or amendments have been or will be
similarly prepared. There have been delivered to you two signed copies of such
registration statement and amendments, together with two copies of each exhibit
filed therewith. Conformed copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested. The
Company will next file with the Commission one of the following: (i) prior to
effectiveness of such registration statement, a further amendment thereto,
including the form of final prospectus, (ii) a final prospectus in accordance
with Rules 430A and 424(b) of the Rules and Regulations or (iii) a term sheet
(the "Term Sheet") as described in and in accordance with Rules 434 and 424(b)
of the Rules and Regulations. As filed, the final prospectus, if one is used,
or the Term Sheet and Preliminary Prospectus, if a final prospectus is not used,
shall include all Rule 430A Information (as hereinafter defined), and, except to
the extent that you shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the date and time
that this Agreement was executed and delivered by the parties hereto, or, to the
extent not completed at such date and time, shall contain only such specific
additional information and other changes (beyond that contained in the latest
Preliminary Prospectus) as the Company shall have previously advised you in
writing would be included or made therein.
The term "Registration Statement" as used in this Agreement shall mean such
registration statement at the time such registration statement becomes effective
and, in the event any post-effective amendment thereto becomes effective prior
to the First Closing Date (as hereinafter defined), shall also mean such
registration statement as so amended; provided, however, that such term shall
also include (i) all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes effective
as provided by Rule 430A of the Rules and Regulations and (ii) any registration
statement filed pursuant to 462(b) of the Rules and Regulations relating to the
Common Shares. The term "Preliminary Prospectus" as used in this agreement
shall mean any preliminary prospectus referred to in the preceding paragraph and
any preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean either (i) the prospectus relating to the
Common Shares in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, (ii) if a Term Sheet is
not used
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and no filing pursuant to Rule 424(b) of the Rules and Regulations is required,
shall mean the form of final prospectus included in the Registration Statement
at the time such registration statement becomes effective or (iii) if a Term
Sheet is used, the Term Sheet in the form in which it is first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, together with
the Preliminary Prospectus included in the Registration Statement at the time it
becomes effective. The term "Rule 430A Information" as used in this Agreement
shall mean information with respect to the Common Shares and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules and Regulations. Any reference
herein to any Preliminary Prospectus, the Prospectus or Registration Statement
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Form S-3 under the Act, as of the date of such Preliminary
Prospectus, Prospectus or Registration Statement, as the case may be.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus, and each Preliminary Prospectus has conformed
in all material respects to the requirements of the Act and the Rules and
Regulations and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and at the time the Registration Statement becomes
effective, and at all times subsequent thereto up to and including each Closing
Date hereinafter mentioned, the Registration Statement and the Prospectus, and
any amendments or supplements thereto, will contain all material statements and
information required to be included therein by the Act and the Rules and
Regulations and will in all material respects conform to the requirements of the
Act and the Rules and Regulations, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, will include 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;
provided, however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from any
Preliminary Prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
specifically for use in the preparation thereof. The documents incorporated by
reference in the Prospectus, when they were filled with the Commission,
conformed in all material respects to the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(c) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed (i)
in Exhibit 21 to the Company's Annual Report on Form 10-K for its most recent
fiscal year or (ii) on Schedule C hereto (the "subsidiaries"). The only
subsidiaries of the Company that would constitute "significant subsidiaries", as
such term is defined in Rule 1-02 of Regulation S-X of the Rules and
Regulations, are listed under the caption "Significant Subsidiaries" on Schedule
C attached hereto (such
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subsidiaries are referred to herein as the "Significant Subsidiaries"). The
Company and each of its subsidiaries other than Xxxxxx'x Management, L.P. (the
"Corporate Subsidiaries") have been duly incorporated and are validly existing
as corporations in good standing under the laws of their respective
jurisdictions of incorporation, with full power and authority (corporate and
other) to own and lease their properties and conduct their respective businesses
as described in the Registration Statement and the Prospectus; Xxxxxx'x
Management L.P. (the "Partnership") has been duly organized and is validly
existing and in good standing as a limited partnership under the laws of its
jurisdiction of organization, with full power and authority (partnership and
other) to own and lease its properties and conduct its business as described in
the Registration Statement and the Prospectus; the Company owns directly or
indirectly (through one or more Corporate Subsidiaries), all of the outstanding
capital stock of its Corporate Subsidiaries and all of the outstanding general
and limited partner interests in the Partnership, free and clear of all claims,
liens, charges and encumbrances; the Company and each of its subsidiaries are in
possession of and operating in compliance with all franchises, authorizations,
licenses, permits, easements, consents, certificates and orders material to the
conduct of their respective businesses, all of which are valid and in full force
and effect; the Company and each of its subsidiaries are duly qualified to do
business and in good standing as a foreign corporation or a foreign limited
partnership, as applicable, in each jurisdiction in which the ownership or
leasing of properties or the conduct of their respective businesses require such
qualification, except for jurisdictions in which the failure to so qualify would
not have a material adverse effect upon the Company and its subsidiaries, taken
as a whole; and no proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(d) The Company has an authorized and outstanding capital stock as set
forth under the heading "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable, have been approved for quotation on the Nasdaq
National Market, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities, and conform to
the description thereof contained in the Prospectus. All issued and outstanding
shares of capital stock of the Corporate Subsidiaries of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. All of
the outstanding general and limited partner interests in the Partnership have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as disclosed in or contemplated by the Prospectus and the financial
statements of the Company, and the related notes thereto, included in the
Prospectus, neither the Company nor any subsidiary has outstanding any options
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations.
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(e) The Common Shares to be sold by the Company have been duly authorized
and, when issued, delivered and paid for in the manner set forth in this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of the Common Shares by the Company
pursuant to this Agreement. No stockholder of the Company has any right which
has not been waived to require the Company to register the sale of any shares
owned by such stockholder under the Act in the public offering contemplated by
this Agreement. No further approval or authority of the stockholders or the
Board of Directors of the Company will be required for the transfer and sale of
the Common Shares to be sold by the Selling Stockholder or the issuance and sale
of the Common Shares to be sold by the Company as contemplated by this
Agreement.
(f) The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by the Company and constitutes
a valid and binding obligation of the Company in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws relating to or
affecting creditor rights generally or by general equitable principles and
except for indemnification provisions. The making and performance of this
Agreement by the Company and the consummation of the transactions herein
contemplated will not violate any provisions of the certificate of incorporation
or bylaws, or other organizational documents of the Company or any of its
subsidiaries, and will not conflict with, result in the breach or violation of,
or constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of its respective properties may be bound or affected, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to
the Company or any of its subsidiaries or any of their respective properties.
No consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, except for compliance with the Act, the Blue Sky
laws applicable to the public offering of the Common Shares by the several
Underwriters and the clearance of such offering with the National Association of
Securities Dealers, Inc. (the "NASD").
(g) Xxxxxx Xxxxxxxx LLP, who have expressed their opinion with respect to
the audited financial statements of the Company, and related schedules, filed
with the Commission as a part of the Registration Statement and included in the
Prospectus and in the Registration Statement, are independent accountants as
required by the Act and the Rules and Regulations.
(h) Xxxxx Xxxxxxxx LLP, who have expressed their opinion with respect to
the audited financial statements of Bayport Restaurant Group, Inc. incorporated
by reference in the Prospectus
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and in the Registration Statement, are independent accountants as required by
the Act and the Rules and Regulations.
(i) The financial statements and schedules of the Company, and the related
notes thereto, included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of the
Company as of the respective dates of such financial statements and schedules,
and the results of operations and changes in financial position of the Company
for the respective periods covered thereby. Such statements, schedules and
related notes have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis as certified by the
independent accountants named in subsection 2(g). No other financial statements
or schedules are required to be included in the Registration Statement. The
selected financial data set forth in the Prospectus under the captions
"Capitalization" and "Selected Consolidated Financial Information" fairly
present the information set forth therein on the basis stated in the
Registration Statement.
(j) Except as disclosed in the Prospectus, and except as to defaults which
individually or in the aggregate would not be material to the Company, neither
the Company nor any of its subsidiaries is in violation or default of any
provision of its certificate of incorporation or bylaws, or other organizational
documents, or is in breach of or default with respect to any provision of any
agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which it is a party or by
which or any of its properties are bound; and there does not exist any state of
facts which constitutes an event of default on the part of the Company or any
such subsidiary as defined in such documents or which, with notice or lapse of
time or both, would constitute such an event of default.
(k) There are no contracts or other documents required to be described in
the Registration Statement or to be filed as exhibits to the Registration
Statement by the Act, or by the Rules and Regulations which have not been
described or filed as required. The contracts so described in the Prospectus
are in full force and effect on the date hereof, and neither the Company nor any
of its subsidiaries, nor to the best of the Company's knowledge, any other party
is in breach of or default under any of such contracts.
(l) There are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened to which the
Company or any of its subsidiaries is or may be a party or of which property
owned or leased by the Company or any of its subsidiaries is or may be the
subject, or related to environmental or discrimination matters, which actions,
suits or proceedings might, individually or in the aggregate, prevent or
adversely affect the transactions contemplated by this Agreement or result in a
material adverse change in the condition (financial or otherwise), properties,
business, results of operations or prospects of the Company and its
subsidiaries; and no labor disturbance by the employees of the Company or any of
its subsidiaries
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exists or is imminent which might be expected to affect adversely such
condition, properties, business, results of operations or prospects. Neither the
Company nor any of its subsidiaries is a party or subject to the provisions of
any material injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental body.
(m) The Company or the applicable subsidiary has good and defensible title
to all the properties and assets reflected as owned in the financial statements
hereinabove described (or elsewhere in the Prospectus), subject to no lien,
mortgage, pledge, charge or encumbrance of any kind, except (i) those, if any,
reflected in such financial statements (or elsewhere in the Prospectus), or (ii)
those which are not material in amount and do not adversely affect the use made
and proposed to be made of such property by the Company and its subsidiaries.
The Company or the applicable subsidiary holds its leased properties under valid
and binding leases, with such exceptions as are not materially significant in
relation to the business of the Company. Except as disclosed in the Prospectus,
the Company owns or leases all such properties as are necessary to its
operations as now conducted or as proposed to be conducted.
(n) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or written
agreement or other transaction which is not in the ordinary course of business
or which could result in a material reduction in the future earnings of the
Company and its subsidiaries, taken as a whole; (ii) the Company and its
subsidiaries have not sustained any material loss or interference with their
respective businesses or properties from fire, flood, windstorm, accident or
other calamity, whether or not covered by insurance; (iii) the Company has not
paid or declared any dividends or other distributions with respect to its
capital stock and the Company and its subsidiaries are not in default in the
payment of principal or interest on any outstanding debt obligations; (iv) there
has not been any change in the capital stock (other than upon the sale of the
Common Shares hereunder) or indebtedness material to the Company and its
subsidiaries (other than in the ordinary course of business); and (v) there has
not been any material adverse change in the condition (financial or otherwise),
business, properties, results of operations or prospects of the Company and its
subsidiaries, taken as a whole.
(o) Except as disclosed in or specifically contemplated by the Prospectus,
the Company and its subsidiaries have sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals and governmental authorizations to
conduct their businesses as now conducted; the expiration of any trademarks,
trade names, patent rights, copyrights, licenses, approvals or governmental
authorizations would not have a material adverse effect on the condition
(financial or otherwise), business, results of operations or prospects of the
Company or its subsidiaries taken as a whole; and the Company has no knowledge
of any infringement by it or its subsidiaries of trademark, trade name rights,
patent rights, copyrights, licenses, trade secret or other similar rights of
others, and there is no claim being made against the Company or its subsidiaries
regarding trademark, trade name, patent, copyright, license, trade secret or
other infringement which could
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have a material adverse effect on the condition (financial or otherwise),
business, results of operations or prospects of the Company and its
subsidiaries, taken as a whole.
(p) The Company has not been advised, and has no reason to believe, that
either it or any of its subsidiaries is not conducting business in compliance
with all applicable laws, rules and regulations of the jurisdictions in which it
is conducting business, including, without limitation, all applicable local,
state and federal environmental laws and regulations; except where failure to be
so in compliance would not materially adversely affect the condition (financial
or otherwise), business, results of operations or prospects of the Company and
its subsidiaries, taken as a whole.
(q) All United States federal income tax returns of the Company and its
subsidiaries required by law to be filed have been filed and all taxes shown by
such returns or otherwise assessed, which are due and payable, have been paid;
each of the Company and the subsidiaries has filed all other tax returns that
are required to have been filed by it pursuant to applicable foreign, state,
local or other law, except insofar as the failure to file such returns would not
have a material adverse effect on the condition (financial or otherwise),
business, prospects or results of operations of the Company and its
subsidiaries, taken as a whole, and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company and the
subsidiaries, except for such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided; the charges,
accruals and reserves on the books of the Company and the subsidiaries in
respect of any tax liability for any years not finally determined are adequate
to meet any assessments or re-assessments for additional tax for any years not
finally determined, except to the extent of any inadequacy that would not have a
material adverse effect on the condition (financial or otherwise), business,
prospects or results of operations of the Company and its subsidiaries, taken as
a whole.
(r) Neither the Company nor any of its subsidiaries are, or on the First
Closing Date or Second Closing Date will be, an "investment company" or a
company "controlled" by an "investment company" as defined under the Investment
Company Act of 1940, as amended, and the rules and regulations promulgated by
the Commission thereunder (collectively, the "Investment Company Act").
(s) The Company has not distributed and will not distribute prior to the
First Closing Date any offering material in connection with the offering and
sale of the Common Shares other than the Prospectus, the Registration Statement
and the other materials permitted by the Act.
(t) Each of the Company and its subsidiaries maintains insurance of the
types and in the amounts that management of the Company reasonably believes to
be adequate for its business, including, but not limited to, insurance covering
real and personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and effect.
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(u) Neither the Company nor any of its subsidiaries has at any time during
the last five years (i) made any unlawful contribution to any candidate for
foreign office, or failed to disclose fully any contribution in violation of law
or (ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or of
any jurisdiction thereof.
(v) The Company has not taken and will not take, directly or indirectly,
any action designed to or that might be reasonably expected to cause or result
in stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Common Shares.
(w) The Company is eligible to use a Registration Statement on Form S-3
under the Act and the Rules and Regulations thereunder for purposes of
registering the Common Shares under the Act.
(x) To the best of the Company's knowledge, neither the Company nor any of
its affiliates is currently doing business with the government of Cuba or with
any person or affiliate located in Cuba.
Section 3. Representations, Warranties and Covenants of the Selling
Stockholders.
(a) Xxxxxxxx represents and warrants to, and agrees with, the several
Underwriters that he has, and on the First Closing Date and the Second Closing
Date hereinafter mentioned, will have, good and marketable title to the Common
Shares proposed to be sold by him hereunder on such Closing Date and full right,
power and authority to enter into this Agreement and to sell, assign, transfer
and deliver such Common Shares hereunder, free and clear of all voting trust
arrangements, liens, encumbrances, equities, security interests, restrictions
and claims whatsoever; and upon delivery of and payment for such Common Shares
hereunder, the Underwriters will acquire good and marketable title thereto, free
and clear of all liens, encumbrances, equities, claims, restrictions, security
interests, voting trusts or other defects of title whatsoever.
(b) Each of X.X. Xxxxx, Xx., Xxxx X. Xxxx and Xxxxxx X. Xxxxxxxxxx, three
of the Selling Stockholders, represent and warrant to, and agree with, the
Underwriters that such Selling Stockholder has on the
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date hereof valid and currently exercisable options to purchase the Common
Shares proposed to be sold by such Selling Stockholder hereunder on the First
Closing Date and, pursuant to the valid exercise of such options, on the First
Closing Date such Selling Stockholder will have good and marketable title to the
Common Shares proposed to be sold by such Selling Stockholder hereunder on such
Closing Date; such Selling Stockholder has full right, power and authority to
enter into this Agreement and to sell, assign, transfer and deliver such Common
Shares hereunder, free and clear of all voting trust arrangements, liens,
encumbrances, equities, security interests, restrictions and claims whatsoever;
and upon delivery of and payment for such Common Shares hereunder, the
Underwriters will acquire good and marketable title thereto, free and clear of
all liens, encumbrances, equities, claims, restrictions, security interests,
voting trusts or other defects of title whatsoever.
(c) Each of the Selling Stockholders represents and warrants to, and agrees
with, the Underwriters that:
(i) The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in a breach or violation by
such Selling Stockholder of any of the terms or provisions of, or constitute a
default by such Selling Stockholder under, any indenture, mortgage, deed of
trust, trust (constructive or other), loan agreement, lease, franchise, license
or other agreement or instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder or any of his properties is bound, any
statute, or any judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to such Selling Stockholder or any of his
properties; and
(ii) Such Selling Stockholder has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Common Shares.
(d) Each of the Selling Stockholders agrees with the Company and the
Underwriters not to offer to sell, sell or contract to sell or otherwise dispose
of any shares of Common Stock or securities convertible into or exchangeable for
any shares of Common Stock, for a period of 90 days after the date of the
Prospectus without the prior written consent of NationsBanc Xxxxxxxxxx
Securities LLC ("Xxxxxxxxxx Securities").
Section 4. Representations and Warranties of the Underwriters. The
Underwriters, represent and warrant to the Company and to the Selling
Stockholders that the information set forth (i) on the cover page of the
Prospectus with respect to price, underwriting discounts and commissions and
terms of the offering and (ii) under "Underwriting" in the Prospectus was
furnished to the Company by and on behalf of the Underwriters for use in
connection with the preparation of the Registration Statement and the Prospectus
and is correct in all material respects. The Company and the Selling
Stockholders acknowledge that this information is the sole information furnished
to
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the Company by the Underwriters for inclusion in the Registration Statement, any
Preliminary Prospectus, any Prospectus, or any amendment or supplement thereto.
Section 5. Purchase, Sale and Delivery of Common Shares. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, (i) the Company agrees to issue
and sell to the Underwriters 3,000,000 of the Firm Common Shares, and (ii) the
Selling Stockholders agree, severally and not jointly, to sell to the
Underwriters, in the respective amounts set forth in Schedule B hereto, an
aggregate of 833,000 of the Firm Common Shares. The Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Stockholders, respectively, the number of Firm Common Shares described below.
The purchase price per share to be paid by the several Underwriters to the
Company and to the Selling Stockholders, respectively, for the Firm Common
Shares shall be _______ per share.
The obligation of each Underwriter to the Company shall be to purchase from
the Company that number of full shares which (as nearly as practicable, as
determined by you) bears to 3,000,000 the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares. The obligation of each
Underwriter to the Selling Stockholders shall be to purchase from the Selling
Stockholders that number of full shares which (as nearly as practicable, as
determined by you) bears to 833,000 the same proportion as the number of shares
set forth opposite the name of such Underwriter in Schedule A hereto bears to
the total number of Firm Common Shares.
Delivery of certificates for the Firm Common Shares to be purchased by the
Underwriters and payment therefor shall be made at the offices of Xxxxxxxxxx
Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such other
place as may be agreed upon by the Company and the Representatives) at such time
and date, not later than the third (or, if the Firm Common Shares are priced, as
contemplated by Rule 15c6-1(c) under the Securities Exchange Act of 1934, after
4:30 P.M. Washington D.C. time, the fourth) full business day following the
first date that any of the Common Shares are released by you for sale to the
public, as you shall designate by at least 48 hours prior notice to the Company
(or at such other time and date, not later than one week after such third or
fourth, as the case may be, full business day as may be agreed upon by the
Company and the Representatives (the "First Closing Date"); provided, however,
that if the Prospectus is at any time prior to the First Closing Date
recirculated to the public, the First Closing Date shall occur upon the later of
the third or fourth, as the case may be, full business day following the first
date that any of the Common Shares are released by you for sale to the public or
the date that is 48 hours after the date that the Prospectus has been so
recirculated.
Delivery of certificates for the Firm Common Shares shall be made by or on
behalf of the Company and the Selling Stockholders to you, for the respective
accounts of the Underwriters, with respect to the Firm Common Shares to be sold
by the Company and by the Selling Stockholders against payment by you, for the
accounts of the several Underwriters, of the purchase price therefor by wire
transfer of federal funds to accounts designated by the Company and each of the
Selling Stockholders in proportion to the number of Firm Common Shares to be
sold by the Company and
-11-
each of the Selling Stockholders, respectively. The certificates for the Firm
Common Shares shall be registered in such names and denominations as you shall
have requested at least two full business days prior to the First Closing Date,
and shall be made available for checking and packaging on the business day
preceding the First Closing Date at a location in New York, New York, as may be
designated by you. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company and the Selling Stockholders hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
833,000 Optional Common Shares, as provided more fully below, at the purchase
price per share to be paid for the Firm Common Shares, for use solely in
covering any over allotments made by you in the sale and distribution of the
Firm Common Shares. The option granted hereunder may be exercised at any time
(but not more than once) within 30 days after the first date that any of the
Common Shares are released by you for sale to the public, upon notice by you to
the Company and the Selling Stockholders setting forth the aggregate number of
Optional Common Shares as to which the Underwriters are exercising the option,
the names and denominations in which the certificates for such shares are to be
registered and the time and place at which such certificates will be delivered.
Such time of delivery (which may not be earlier than the First Closing Date),
being herein referred to as the "Second Closing Date," shall be determined by
you, but if at any time other than the First Closing Date shall not be earlier
than three nor later than five full business days after delivery of such notice
of exercise. The number of Optional Common Shares to be purchased by each
Underwriter shall be determined by multiplying the number of Optional Common
Shares to be sold by the Company and the Selling Stockholders
-12-
pursuant to such notice of exercise by a fraction, the numerator of which is the
number of Firm Common Shares to be purchased by such Underwriter as set forth
opposite its name in Schedule A and the denominator of which is 3,833,000
(subject to such adjustments to eliminate any fractional share purchases as you
in your discretion may make). Certificates for the Optional Common Shares will
be made available for checking and packaging on the business day preceding the
Second Closing Date at a location in New York, New York, as may be designated by
you. The manner of payment for and delivery of the Optional Common Shares shall
be the same as for the Firm Common Shares purchased from the Company and the
Selling Stockholders as specified in the two preceding paragraphs. At any time
before lapse of the option, you may cancel such option by giving written notice
of such cancellation to the Company and Xxxxxxxx. If the option is canceled or
expires unexercised in whole or in part, the Company will deregister under the
Act the number of Optional Common Shares as to which the option has not been
exercised.
You have advised the Company and the Selling Stockholders that each
Underwriter has authorized you to accept delivery of its Common Shares, to make
payment and to receipt therefor. You, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose to
make a public offering of their respective portions of the Common Shares as soon
after the effective date of the Registration Statement as in the judgment of the
Underwriters is advisable and at the public offering price set forth on the
cover page of and on the terms set forth in the final prospectus, if one is
used, or on the first page of the Term Sheet, if one is used.
Not later than 12:00 p.m. on the second business day following the date the
Common Shares are released by the Underwriters 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 Underwriters shall request.
Section 6. Covenants of the Company. The Company covenants and agrees
that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such timely
filing. The Company will promptly advise you in writing (i) of the receipt of
any comments of the Commission, (ii) of any request of the Commission for
amendment of or supplement to the Registration Statement (either before or after
it becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information, (iii) when the Registration Statement shall have become
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the institution
of any proceedings for that purpose. If the Commission shall enter any such
stop order at any time, the Company will
-13-
use its best efforts to obtain the lifting of such order at the earliest
possible moment. The Company will not file any amendment or supplement to the
Registration Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus of which you have not been furnished
with a copy a reasonable time prior to such filing or to which you reasonably
object or which is not in compliance with the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly upon
your request, any amendments or supplements to the Registration Statement or the
Prospectus which in your judgment may be necessary or advisable to enable the
several Underwriters to continue the distribution of the Common Shares and will
use its best efforts to cause the same to become effective as promptly as
possible. The Company will fully and completely comply with the provisions of
Rule 430A of the Rules and Regulations with respect to information omitted from
the Registration Statement in reliance upon such Rule.
(c) If at any time within the nine-month period referred to in Section
10(a)(3) of the Act during which a prospectus relating to the Common Shares is
required to be delivered under the Act any event occurs, as a result of which
the Prospectus, including any amendments or supplements, would include an untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or if
it is necessary at any time to amend the Prospectus, including any amendments or
supplements, to comply with the Act or the Rules and Regulations, the Company
will promptly advise you thereof and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will correct
such statement or omission or an amendment or supplement which will effect such
compliance and will use its best efforts to cause the same to become effective
as soon as possible; and, in case any Underwriter is required to deliver a
prospectus after such nine-month period, the Company upon request, but at the
expense of such Underwriter, will promptly prepare such amendment or amendments
to the Registration Statement and such Prospectus or Prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of the
Act.
(d) As soon as practicable, but not later than 45 days after the end of the
first quarter ending after one year following the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
(e) During such period as a prospectus is required by law to be delivered
in connection with sales by an Underwriter or dealer, the Company, at its
expense, but only for the nine-month period referred to in Section 10(a)(3) of
the Act, will furnish to you and the Selling Stockholders or mail to your order
copies of the Registration Statement, the Prospectus, the Preliminary Prospectus
and all amendments and supplements to any such documents in each case as soon as
available and in such quantities as you and the Selling Stockholders may
request, for the purposes contemplated by the Act.
-14-
(f) The Company shall cooperate with you and your counsel in order to
qualify or register the Common Shares for sale under (or obtain exemptions from
the application of) the Blue Sky laws of such jurisdictions as you designate,
will comply with such laws and will continue such qualifications, registrations
and exemptions in effect so long as reasonably required for the distribution of
the Common Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation, nor shall the Company be required to escrow
any shares of capital stock of the Company. The Company will advise you
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, with your cooperation, will use its best
efforts to obtain the withdrawal thereof.
(g) During the period of five years hereafter or for so long as required by
law, if shorter, the Company will furnish to the Representatives and, upon
request of the Representatives, to each of the other Underwriters: (i) as soon
as practicable 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
accountants; (ii) as soon as practicable after the filing thereof, copies of
each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Report on Form 8-K or other report filed by the Company with the Commission, the
NASD or any securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of its Common
Stock.
(h) During the period of 90 days after the first date that any of the
Common Shares are released by you for sale to the public, without the prior
written consent of Xxxxxxxxxx Securities (which consent may be withheld at the
sole discretion of Xxxxxxxxxx Securities), the Company will not issue, offer,
sell, grant options to purchase or otherwise dispose of any of the Company's
equity securities or any other securities convertible into or exchangeable with
its Common Stock or other equity security, except that Company may, without
consent, issue shares of Common Stock upon exercise of stock options outstanding
as of the date of the Prospectus and grant additional options under the
Company's 1993 Stock Option Plan, the Company's Nonqualified Formula Stock
Option Plan for Non-Employee Directors, the Company's 1995 Flexible Incentive
Plan and any other stock option plan adopted by the Board of Directors of the
Company and approved by the stockholders of the Company, in each case consistent
with past practices.
(i) The Company will apply the net proceeds of the sale of the Common
Shares sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus.
(j) The Company (i) will use its best efforts to qualify or register its
Common Stock for sale in non-issuer transactions under, or obtain exemptions
from the application of, the Blue Sky
-15-
laws of the State of California (and thereby permit market making transactions
and secondary trading in the Company's Common Stock in California), (ii) will
comply with such Blue Sky laws, and (iii) will continue such qualifications,
registrations and exemptions in effect for a period of five years after the date
hereof.
(k) The Company will file with the National Association of Securities
Dealers, Inc. all documents and notices required by the NASD of companies that
have issued securities that are traded in the over-the-counter market and
quotations of which are reported by the Nasdaq National Market.
You may, in your sole discretion, waive in writing the performance by the
Company of any one or more of the foregoing covenants or extend the item for
their performance.
Section 7. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company agrees to pay all costs, fees and expenses of the
Company and, except as set forth below, of the Selling Stockholders incurred in
connection with the performance of their obligations hereunder and in connection
with the transactions contemplated hereby, including, without limiting the
generality of the foregoing, (i) all expenses incident to the issuance and
delivery of the Common Shares (including all costs of preparing stock
certificates), (ii) all fees and expenses of the registrar and transfer agent of
the Common Stock, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Common Shares to the Underwriters,
(iv) all fees and expenses of the Company's counsel and the Company's
independent accountants, (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the Registration
Statement, each Preliminary Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, this Agreement, the Agreement Among Underwriters, the Selected
Dealers Agreement, the Underwriters' Questionnaire, the Underwriters' Power of
Attorney and the Blue Sky memorandum, (vi) all filing fees, attorneys' fees
and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the United States or Canadian Blue Sky laws, (vii) all filing fees, attorneys'
fees and expenses incurred by the Company or the Underwriters in connection with
compliance with the rules of the National Association of Securities Dealers,
Inc. ("NASD") in connection with the offering of the Common Shares, and (viii)
all other fees, costs and expenses referred to in Item 13 of the Registration
Statement. Except as provided in this Section 7, Section 9 and Section 11
hereof, the Underwriters shall pay all of their own expenses, including the fees
and disbursements of their counsel (excluding those relating to qualification,
registration or exemption under the United States or Canadian Blue Sky laws and
the Blue Sky memorandum referred to above). This Section 7 shall not affect any
agreements relating to the payment of expenses between the Company and the
Selling Stockholders.
Each of the Selling Stockholders will pay (directly or by reimbursement)
all fees and expenses incident to the performance of his obligations under this
Agreement which are not
-16-
otherwise specifically provided for herein, including but not limited to (i) any
fees and expenses of counsel for such Selling Stockholder; and (ii) all expenses
and taxes incident to the sale and delivery of the Common Shares to be sold by
such Selling Stockholder to the Underwriters hereunder.
Section 8. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Common
Shares on the First Closing Date and the Optional Common Shares on the Second
Closing Date shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein set
forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the statements of Company
officers and the Selling Stockholders made pursuant to the provisions hereof, to
the performance by the Company and the Selling Stockholders of their respective
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:30 P.M., Washington, D.C. time, on the date of this Agreement, or at such
later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b) of
the Rules and Regulations, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules and Regulations;
prior to such Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or, to the knowledge of
the Company, the Selling Stockholders or the Underwriters, shall be contemplated
by the Commission; any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to the Underwriters' satisfaction; and prior to such Closing Date
there shall not have come to the attention of the Underwriters any facts that
would cause them to believe that the Prospectus, at the time it was required to
be delivered to a purchaser of the Common Shares, contained any untrue statement
of a material fact or omitted to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) The Underwriters shall be satisfied that since the respective dates as
of which information is given in the Registration Statement and Prospectus, (i)
there shall not have been any change in the capital stock (other than upon the
sale of the Common Shares under this Agreement or pursuant to the exercise of
director or employee stock options outstanding as of the respective dates of the
Registration Statement or the Prospectus) of the Company or any of its
subsidiaries or any material change in the indebtedness (other than as
contemplated by the Prospectus) of the Company or any of its subsidiaries, (ii)
except as set forth or contemplated by the Registration Statement or the
Prospectus, no material verbal or written agreement or other transaction shall
have been entered into by the Company or any of its subsidiaries, which is not
in the ordinary course of business or which could result in a material reduction
in the future earnings of the Company and its subsidiaries, taken as a whole,
(iii) no loss or damage (whether or not insured) to the property of the Company
or any of its subsidiaries shall have been sustained which materially and
adversely affects the condition (financial or otherwise), business, results of
operations or prospects of the Company and its subsidiaries, taken as a whole,
(iv) no legal or governmental action, suit or proceeding
-17-
affecting the Company or any of its subsidiaries which is material to the
Company and its subsidiaries or which affects or may affect the transactions
contemplated by this Agreement shall have been instituted or threatened and (v)
there shall not have been any material change in the condition (financial or
otherwise), business, management, results of operations or prospects of the
Company and its subsidiaries taken as a whole which makes it impractical or
inadvisable in your judgment to proceed with the public offering or purchase the
Common Shares as contemplated hereby.
(c) There shall have been furnished to you on each Closing Date, in form
and substance satisfactory to the Underwriters, except as otherwise expressly
provided below.
(i) An opinion of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel for the Company,
addressed to the Underwriters and dated the First Closing Date, or the Second
Closing Date, as the case may be, to the effect that:
(1) The Company and each of the Significant Subsidiaries other than
Xxxxxx'x Management, L.P. (the "Significant Corporate Subsidiaries") have
been duly incorporated, are validly existing and in good standing as
corporations under the laws of their respective jurisdictions and have all
requisite corporate power and authority to own or lease its properties and
conduct its business as described in the Prospectus; the Partnership has
been duly organized and is validly existing and in good standing as a
limited partnership under the laws of its jurisdiction of organization and
has all requisite partnership power and authority to own or lease its
properties and conduct its business as described in the Prospectus; the
Company and each of the Significant Corporate Subsidiaries is duly
qualified as a foreign corporation in good standing in all other
jurisdictions where it owns or leases properties or conducts business; and
the Partnership is duly qualified as a foreign limited partnership in good
standing in all other jurisdictions where it owns or leases properties or
conducts business;
(2) The authorized, issued and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the
Prospectus; all necessary and proper corporate proceedings have been taken
in order to authorize validly such authorized Common Stock; all outstanding
shares of Common Stock (including the Firm Common Shares and any Optional
Common Shares) have been duly and validly issued, are fully paid and
nonassessable, have been issued in compliance with federal and state
securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase any
securities and conform to the description thereof contained in the
Prospectus; without limiting the foregoing, there are no preemptive or
other rights to subscribe for or purchase any of the Common Shares to be
sold by the Company hereunder;
(3) All of the issued and outstanding shares of capital stock of the
Company's Significant Corporate Subsidiaries have been duly and validly
authorized and issued, are fully paid and nonassessable and are owned
beneficially by the Company free and clear of
-18-
all liens, encumbrances, equities, claims, security interests, voting
trusts or other defects of title whatsoever; and all of the outstanding
general partner and limited partner interests in the Partnership have been
duly authorized and validly issued, are fully paid and nonassessable and
are owned, directly or indirectly (through one or more Significant
Corporate Subsidiaries), by the Company and are owned beneficially by the
Company free and clear of all liens, encumbrances, equities, claims,
security interests, voting trusts or other defects of title whatsoever;
(4) The certificates evidencing the Common Shares to be delivered
hereunder are in due and proper form under Delaware law, and when duly
countersigned by the Company's transfer agent and registrar, and delivered
to, or upon the order of, the Underwriters against payment of the agreed
consideration therefor in accordance with the provisions of this Agreement,
the Common Shares represented thereby will be duly authorized and validly
issued, fully paid and nonassessable, will not have been issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities and will conform in all respects to
the description thereof contained in the Prospectus and there is no
restriction upon the voting or transfer of any of the Common Shares
pursuant to applicable law (assuming compliance with all applicable federal
and state securities laws) or the Company's certificate of incorporation or
bylaws or, to the best of such counsel's knowledge, any agreement or other
outstanding instrument;
(5) Except as disclosed in or specifically contemplated by the
Prospectus, to the best of such counsel's knowledge, there are no
outstanding options, warrants or other rights calling for the issuance of,
and no commitments, plans or arrangements to issue, any shares of capital
stock of the Company or any of its subsidiaries or any security convertible
into or exchangeable for capital stock of the Company or any of its
subsidiaries;
(6) (a) The Registration Statement has become effective under the Act,
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission; any required
filing of the Prospectus and any supplement thereto pursuant to Rule 424(b)
of the Rules and Regulations has been made in the manner and within the
time period required by such Rule 424(b);
(b) The Registration Statement, the Prospectus and each amendment or
supplement thereto (except for the financial statements and schedules
included therein as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Act and
the Rules and Regulations;
(c) To the best of such counsel's knowledge, there are no franchises,
leases, contracts, agreements or documents of a character required to be
disclosed in the Registration
-19-
Statement or Prospectus or to be filled as exhibits to the Registration
Statement which are not disclosed or filed, as required;
(d) To the best of such counsel's knowledge, there are no legal or
governmental actions, suits or proceedings pending or threatened against
the Company which are required to be described in the Prospectus which are
not described as required;
(e) The documents incorporated by reference in the Registration
Statement and the Prospectus (except for the financial statements and
schedules included therein as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder;
(7) The Company has full right, power and authority to enter into this
Agreement and to sell and deliver the Common Shares to be sold by it to the
several Underwriters; this Agreement has been duly and validly authorized
by all necessary corporate action by the Company, has been duly and validly
executed and delivered by and on behalf of the Company, and is a valid and
binding agreement of the Company in accordance with its terms, except as
enforceability may be limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and except as to those provisions relating to indemnity or
contribution for liabilities arising under the Act as to which no opinion
need be expressed; and no approval, authorization, order, consent,
registration, filing, qualification, license or permit of or with any
court, regulatory, administrative or other governmental body is required
for the execution and delivery of this Agreement by the Company or the
consummation of the transactions contemplated by this Agreement, except (i)
such as have been obtained and are in full force and effect under the Act
and (ii) such as may be required under United States and Canadian Blue Sky
laws in connection with the purchase and distribution of the Common Shares
by the Underwriters and the clearance of such offering with the NASD (as to
which matters in clauses (i) and (ii) no opinion need be expressed);
(8) Neither the execution or performance of this Agreement nor the
consummation of the transactions herein contemplated will conflict with,
result in the breach of, or constitute, either by itself or upon notice or
the passage of time or both, a default under, any agreement, mortgage, deed
of trust, lease, franchise, license, indenture, permit or other instrument
known to such counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of its or
their property may be bound which is material to the Company and its
subsidiaries, or violate any of the provisions of the certificate of
incorporation or bylaws, or other organizational documents, of the Company
or any of its subsidiaries or, so far as is known to such counsel, violate
any statute, judgment, decree, order, rule or regulation of any court or
governmental body having jurisdiction over the Company or any of its
subsidiaries or any of its or their property;
-20-
(9) Neither the Company nor any subsidiary is in violation of its
certificate of incorporation or bylaws, or other organizational documents
or to the best of such counsel's knowledge, in breach of or default with
respect to any provision of any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument known to such
counsel to which the Company or any such subsidiary is a party or by which
it or any of its properties may be bound or affected, except where such
default would not materially adversely affect the Company and its
subsidiaries; and, to the best of such counsel's knowledge, the Company and
its subsidiaries are in compliance with all laws, rules, regulations,
judgments, decrees, orders and statutes of any court or jurisdiction to
which they are subject, except where noncompliance would not materially
adversely affect the Company and its subsidiaries;
(10) To the best of such counsel's knowledge, no holders of securities
of the Company have rights which have not been waived to the registration
of shares of Common Stock or other securities, because of the filing of the
Registration Statement by the Company or the offering contemplated hereby;
(11) To the best of such counsel's knowledge, this Agreement has been
duly authorized, executed and delivered by or on behalf of each of the
Selling Stockholders; the performance of this Agreement and the
consummation of the transactions herein contemplated by the Selling
Stockholders will not result in a breach of, or constitute a default under,
any indenture, mortgage, deed of trust, trust (constructive or other), loan
agreement, lease, franchise, license or other agreement or instrument to
which any of the Selling Stockholders is a party or by which any of the
Selling Stockholders or any of the respective properties of such Selling
Stockholder may be bound, or violate any statute, judgment, decree, order,
rule or regulation known to such counsel of any court or governmental body
having jurisdiction over any of the Selling Stockholders or any of the
respective properties of any of the Selling Stockholders; and to the best
of such counsel's knowledge, no approval, authorization, order or consent
of any court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this Agreement or the
consummation by any of the Selling Stockholders of the transactions
contemplated by this Agreement, except (i) such as have been obtained and
are in full force and effect under the Act and (ii) such as may be required
under the rules of the NASD and United States and Canadian Blue Sky laws;
(12) To the best of such counsel's knowledge, each of the Selling
Stockholders has full right, power and authority to enter into this
Agreement and to sell, transfer and deliver the Common Shares to be sold on
such Closing Date by such Selling Stockholder hereunder and good and
marketable title to the Common Shares to be sold on the Closing Date by
such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities, claims, restrictions, security interests, voting
trusts, or other defects of title whatsoever, has been transferred to the
Underwriters (whom counsel may assume to be bona fide purchasers) who have
purchased such Common Shares hereunder;
-21-
(13) To the best of such counsel's knowledge, this Agreement is a
valid and binding agreement of each of the Selling Stockholders in
accordance with its terms except as enforceability may be limited by
general equitable principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and except
with respect to those provisions relating to indemnities or contributions
for liabilities under the Act, as to which no opinion need be expressed;
and
(14) No transfer taxes are required to be paid in connection with the
sale and delivery of the Common Shares to the Underwriters hereunder.
In rendering such opinion, such counsel may rely as to the matters set
forth in paragraphs (11), (12), (13) and (14), on opinions of other counsel
retained by the Selling Stockholders, as to matters of local law, on opinions of
local counsel, and as to matters of fact, on certificates of the Selling
Stockholders and of officers of the Company and of governmental officials, in
which case their opinion is to state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates are to be attached to the opinion. Such
counsel shall also include a statement to the effect that nothing has come to
such counsel's attention that would lead such counsel to believe that either at
the effective date of the Registration Statement or at the applicable Closing
Date, the Registration Statement or the Prospectus, or any such amendment or
supplement, contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(ii) Such opinion or opinions of Xxxxxxx & Xxxxx L.L.P., counsel for the
Underwriters, dated the First Closing Date or the Second Closing Date, as the
case may be, with respect to the incorporation of the Company, the sufficiency
of all corporate proceedings and other legal matters relating to this Agreement,
the validity of the Common Shares, the Registration Statement and the Prospectus
and other related matters as the Underwriters may reasonably require, and the
Company and the Selling Stockholders shall have furnished to such counsel such
documents and shall have exhibited to them such papers and records as they may
reasonably request for the purpose of enabling them to pass upon such matters.
In connection with such opinions, such counsel may rely on representations or
certificates of officers of the Company and governmental officials.
(iii) A certificate of the Company executed by the Chief Executive Officer
or President and the chief financial or accounting officer of the Company, dated
the First Closing Date or the Second Closing Date, as the case may be, to the
effect that:
(1) The representations and warranties of the Company set forth in
Section 2 of this Agreement are true and correct as of the date of this
Agreement and as of the First Closing Date or the Second Closing Date, as
the case may be, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied on or
prior to such Closing Date;
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(2) The Commission has not issued any order preventing or suspending
the use of the Prospectus or any Preliminary Prospectus filed as a part of
the Registration Statement or any amendment thereto; no stop order
suspending the effectiveness of the Registration Statement has been issued;
and to the best of the knowledge of the respective signers, no proceedings
for that purpose have been instituted or are pending or contemplated under
the Act;
(3) Each of the respective signers of the certificate has carefully
examined the Registration Statement and the Prospectus; in his opinion and
to the best of his knowledge, the Registration Statement and the Prospectus
and any amendments or supplements thereto contain all statements required
to be stated therein regarding the Company and its subsidiaries; and
neither the Registration Statement nor 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;
(4) Since the initial date on which the Registration Statement was
filed, no agreement, written or oral, transaction or event has occurred
which should have been set forth in an amendment to the Registration
Statement or in a supplement to or amendment of any prospectus which has
not been disclosed in such a supplement or amendment;
(5) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as disclosed in or
contemplated by the Prospectus, there has not been any material adverse
change or a development involving a material adverse change in the
condition (financial or otherwise), business, properties, results of
operations, management or prospects of the Company and its subsidiaries
taken as a whole; and no legal or governmental action, suit or proceeding
is pending or threatened against the Company or any of its subsidiaries
which is material to the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, or which may
adversely affect the transactions contemplated by this Agreement; since
such dates and except as so disclosed, neither the Company nor any of its
subsidiaries has entered into any verbal or written agreement or other
transaction which is not in the ordinary course of business or which could
result in a material reduction in the future earnings of the Company or
incurred any material liability or obligation, direct, contingent or
indirect, made any change in its capital stock, made any material change in
its short-term debt or funded debt or repurchased or otherwise acquired any
of the Company's capital stock; and the Company has not declared or paid
any dividend, or made any other distribution, upon its outstanding capital
stock payable to stockholders of record on a date prior to the First
Closing Date or Second Closing Date; and
(6) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus and except as disclosed in or
contemplated by the Prospectus,
-23-
the Company and its subsidiaries have not sustained a material loss or
damage by strike, fire, flood, windstorm, accident or other calamity
(whether or not insured).
(iv) On the First Closing Date or the Second Closing Date, as the case
may be, a certificate, dated such Closing Date and addressed to the
Underwriters, signed by or on behalf of each of the Selling Stockholders to the
effect that the representations and warranties of such Selling Stockholder in
this Agreement are true and correct, as if made at and as of the First Closing
Date or the Second Closing Date, as the case may be, and such Selling
Stockholder has complied with all the agreements and satisfied all the
conditions on his part to be performed or satisfied prior to the First Closing
Date or the Second Closing Date, as the case may be.
(v) On the date before this Agreement is executed, and also on the First
Closing Date and the Second Closing Date a letter addressed to the Underwriters
from Xxxxxx Xxxxxxxx LLP, independent accountants, the first one to be dated the
day before the date of this Agreement, the second one to be dated the First
Closing Date and the third one (in the event of a Second Closing) to be dated
the Second Closing Date, in form and substance satisfactory to you.
(vi) On or before the First Closing Date, letters from each director and
officer of the Company, in form and substance satisfactory to you, confirming
that for a period of 90 days after the date of the Prospectus, such person will
not directly or indirectly sell or offer to sell or otherwise dispose of any
shares of Common Stock or any right to acquire such shares without the prior
written consent of Xxxxxxxxxx Securities other than shares disposed of as bona
fide gifts, provided such gifted shares continued to be bound for the prescribed
period.
(vii) On or before the First Closing Date, the Common Shares shall have
been duly approved for quotation on the Nasdaq National Market.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters. The Company shall
furnish you with such manually signed or conformed copies of such opinions,
certificates, letters and documents as you request. Any certificate signed by
any officer of the Company and delivered to the Underwriters or to counsel for
the Underwriters shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the statements made therein.
If any condition to your obligations hereunder to be satisfied prior to or
at the First Closing Date is not so satisfied, this Agreement at your election
will terminate upon notification by you to the Company and the Selling
Stockholders without liability on your part or the part of the Company or the
Selling Stockholders except for the expenses to be paid or reimbursed by the
Company and by the Selling Stockholders pursuant to Sections 7 and 9 hereof and
except to the extent provided in Section 11 hereof.
-24-
Section 9. Reimbursement of Underwriters' Expenses. Notwithstanding
any other provisions hereof, if this Agreement shall be terminated by you
pursuant to Section 8, or if the sale to the Underwriters of the Common Shares
at the First Closing is not consummated because of any refusal, inability or
failure on the part of the Company or the Selling Stockholders to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse you upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by you in connection with the proposed purchase and the sale
of the Common Shares, including but not limited to fees and disbursements of
counsel, printing expenses, travel expenses, postage, telegraph charges and
telephone charges relating directly to the offering contemplated by the
Prospectus. Any such termination shall be without liability of any party to any
other party except that the provisions of this Section, Section 7 and Section 11
shall at all times be effective and shall apply.
Section 10. Effectiveness of Registration Statement. You, the Company
and the Selling Stockholders will use your, its and their best efforts to cause
the Registration Statement to become effective, to prevent the issuance of any
stop order suspending the effectiveness of the Registration Statement and, if
such stop order be issued, to obtain as soon as possible the lifting thereof.
Section 11. Indemnification. (a) The Company and the Selling
Stockholders, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act against any losses, claims, damages, liabilities or expenses,
joint or several, to which such Underwriter or such controlling person may
become subject, under the 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 losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state in any of them a material fact
required to be stated therein or necessary to make the statements in any of them
not misleading, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company or the Selling
Stockholders contained herein or any failure of the Company or the Selling
Stockholders to perform their respective obligations hereunder or under law; and
will reimburse each Underwriter and each such controlling person for any legal
and other expenses as such expenses are reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, neither the Company nor the Selling
Stockholders will be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 4 hereof; and provided
further, that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any Preliminary Prospectus, the indemnity
contained in this paragraph shall not inure to the benefit of any
-25-
Underwriter from whom the person asserting any such loss, claim, damages,
liabilities or expenses purchased the Common Stock concerned (or to the benefit
of any person controlling such Underwriter) to the extent any such loss, claim,
damage, liability or expense of such Underwriter or controlling person results
from the fact that a copy of the Prospectus was not sent or given to such person
at or prior to the written confirmation of sale of Common Stock to such person
as required by the Act, and if the untrue statement or omission has been
corrected in the Prospectus, unless the failure to deliver the Prospectus was a
result of noncompliance by the Company with its obligations under Section 6(e)
hereof; and provided further, that each Selling Stockholder shall only be liable
under this paragraph for an amount equal to the initial offering price of the
Common Stock sold by such Selling Stockholder to the Underwriters. The Company
and the Selling Stockholders may agree, as among themselves and without limiting
the rights of the Underwriters under this Agreement, as to their respective
amounts of such liability for which they each shall be responsible. In addition
to their other obligations under this Section 11(a), the Company and the Selling
Stockholders agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, or any
inaccuracy in the representations and warranties of the Company or the Selling
Stockholders herein or failure to perform their obligations hereunder, all as
described in this Section 11(a), they will reimburse each Underwriter on a
quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
or the Selling Stockholders' obligations to reimburse each Underwriter for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by Bank of America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter within 30
days of a request for reimbursement, shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which the Company or the Selling Stockholders may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, the Selling Stockholders and each person, if any, who controls the
Company or any of the Selling Stockholders within the meaning of the Act,
against any losses, claims, damages, liabilities or expenses to which the
Company, the Selling Stockholders, or any such director, officer or controlling
person may become subject, under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including the
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or
-26-
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 4 hereof, and will
reimburse the Company, the Selling Stockholders, or any such director, officer
or controlling person for any legal and other expense reasonably incurred by the
Company, the Selling Stockholders, 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. In addition
to its other obligations under this Section 11(b), each Underwriter severally
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, or any alleged
statement or omission, described in this Section 11(b) which relates to
information furnished to the Company pursuant to Section 4 hereof, it will
reimburse the Company (and, to the extent applicable, each officer, director,
controlling person or the Selling Stockholders) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company (and, to
the extent applicable, each officer, director, controlling person or the Selling
Stockholders) for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Company (and, to the extent applicable, each officer, director,
controlling person or the Selling Stockholders) shall promptly return it to the
Underwriters together with interest, compounded daily, determined on the basis
of the Prime Rate. Any such interim reimbursement payments which are not made to
the Company within 30 days of a request for reimbursement, shall bear interest
at the Prime Rate from the date of such request. This indemnity agreement will
be in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 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, 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 than under the indemnity agreement contained in this Section or 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 may wish,
jointly with all other indemnifying parties similarly notified, 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 the indemnified party shall
have reasonably concluded that there may be a conflict 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
-27-
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 its 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 11 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 such counsel in connection with the
assumption of legal defenses 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, approved
by the Underwriters in the case of paragraph (a), representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel reasonably 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 fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 11 is required by
its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) in respect of any losses, claims, damages, liabilities or expenses referred
to herein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Selling Stockholders and the Underwriters from the offering of the
Common Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, the Selling Stockholders and the Underwriters in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company, the
Selling Stockholders and the Underwriters shall be deemed to be in the same
proportion, in the case of the Company and the Selling Stockholders as the total
price paid to the Company and to each Selling Stockholder, respectively, for the
Common Shares sold by them to the Underwriters (net of underwriting commissions
but before deducting expenses) bears to the total price to the public set forth
on the cover of the Prospectus, and in the case of the Underwriters as the
underwriting commissions received by them bears to the total price to the public
set forth on the cover of the Prospectus. The relative fault of the Company,
the Selling Stockholders and the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact or
the inaccurate or the alleged inaccurate representation and/or warranty relates
to information supplied by the Company, the Selling Stockholders or the
Underwriters 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
-28-
above shall be deemed to include, subject to the limitations set forth in
subparagraph (c) of this Section 11, 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 subparagraph (c) of this
Section 11 with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this subparagraph (d); provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under subparagraph (c) for purposes of
indemnification. The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 11 were determined solely by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required to contribute
any amount in excess of the amount of the total underwriting commissions
received by such 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 11 are several in proportion to their respective underwriting
commitments and not joint.
(e) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in Sections 11(a) and 11(b) hereof,
including the amounts of any requested reimbursement payments and the method of
determining such amounts, shall be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of Governors of the New
York Stock Exchange, Inc. or pursuant to the Code of Arbitration Procedure of
the NASD. Any such arbitration must be commenced by service of a written demand
for arbitration or written notice of intention to arbitrate, therein electing
the arbitration tribunal. In the event the party demanding arbitration does not
make such designation of an arbitration tribunal in such demand or notice, then
the party responding to said demand or notice is authorized to do so. Such an
arbitration would be limited to the operation of the interim reimbursement
provisions contained in Sections 11(a) and 11(b) hereof and would not resolve
the ultimate propriety or enforceability of the obligation to reimburse expenses
which is created by the provisions of such Sections 11(a) and 11(b) hereof.
Section 12. Default of Underwriters. It shall be a condition to this
Agreement and the obligation of the Company and the Selling Stockholders to sell
and deliver the Common Shares hereunder, and of each Underwriter to purchase the
Common Shares in the manner as described herein, that, except as hereinafter in
this paragraph provided, each of the Underwriters shall purchase and pay for all
the Common Shares agreed to be purchased by such Underwriter hereunder upon
tender to the Representatives of all such shares in accordance with the terms
hereof. If any Underwriter defaults in its obligations to purchase Common
Shares hereunder on either the First or Second Closing Date and the aggregate
number of Common Shares which such defaulting Underwriter agreed but failed to
purchase on such Closing Date does not exceed 10% of the total
-29-
number of Common Shares which the Underwriters are obligated to purchase on such
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Common
Shares which such defaulting Underwriter agreed but failed to purchase on such
Closing Date. If any Underwriter defaults and the aggregate number of Common
Shares with respect to which such default occurs is more than the above
percentage and arrangements satisfactory to the Representatives and the Company
for the purchase of such Common Shares by other persons are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company or the Selling
Stockholders except for the expenses to be paid by the Company and the Selling
Stockholders pursuant to Section 7 hereof and except to the extent provided in
Section 11 hereof.
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriter or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days in
order that the necessary changes in the Registration Statement, Prospectus and
any other documents, as well as any other arrangements, may be effected. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
Section 13. Effective Date. This Agreement shall become effective
immediately as to Sections 7, 9, 11, 14 and 16 and, as to all other provisions,
(i) if at the time of execution of this Agreement the Registration Statement has
not become effective, at 2:00 P.M., California time, on the first full business
day following the effectiveness of the Registration Statement, or (ii) if at the
time of execution of this Agreement the Registration Statement has been declared
effective, at 2:00 P.M., California time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the Company
or by release of any of the Common Shares for sale to the public. For the
purposes of this Section 13, the Common Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common Shares for sale to securities dealers, whichever may
occur first.
Section 14. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you and
the Selling Stockholders or by you by notice to the Company and the Selling
Stockholders at any time prior to the time this Agreement shall become effective
as to all its provisions, and any such termination shall be without liability on
the part of the Company or the Selling Stockholders to any Underwriter (except
for the expenses to be paid or reimbursed by the Company and the Selling
Stockholders pursuant to Sections 7 and 9 hereof and except to the extent
provided in Section 11 hereof) or of any
-30-
Underwriter to the Company or the Selling Stockholders (except to the extent
provided in Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the First Closing
Date by notice to the Company (i) if additional material governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange or on the
American Stock Exchange or in the over the counter market by the NASD, or
trading in securities generally shall have been suspended on either such
exchange or in the over the counter market by the NASD, or a general banking
moratorium shall have been established by federal, New York or California
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Representatives, to materially and
adversely affect the marketability of the Common Shares, (iii) if any adverse
event shall have occurred or shall exist which makes untrue or incorrect in any
material respect any statement or information contained in the Registration
Statement or Prospectus or which is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened, or there
shall have been any development or prospective development involving
particularly the business or properties or securities of the Company or any of
its subsidiaries or the transactions contemplated by this Agreement, which, in
the reasonable judgment of the Representatives, may materially and adversely
affect the Company's business or earnings and makes it impracticable or
inadvisable to offer or sell the Common Shares. Any termination pursuant to
this subsection (b) shall be without liability on the part of any Underwriter to
the Company or the Selling Stockholders or on the part of the Company or the
Selling Stockholders to any Underwriter (except for expenses to be paid or
reimbursed by the Company and the Selling Stockholders pursuant to Sections 7
and 9 hereof and except to the extent provided in Section 11 hereof).
(c) This Agreement shall also terminate at 5:00 P.M., California time, on
the tenth full business day after the Registration Statement shall have become
effective if the initial public offering price of the Common Shares shall not
then as yet have been determined as provided in Section 5 hereof. Any
termination pursuant to this subsection (c) shall be without liability on the
part of any Underwriter to the Company or the Selling Stockholders or on the
part of the Company or the Selling Stockholders to any Underwriter (except for
expenses to be paid or reimbursed by the Company and the Selling Stockholders
pursuant to Sections 7 and 9 hereof and except to the extent provided in Section
11 hereof).
Section 15. Failure of the Selling Stockholders to Sell and Deliver. If
any of the Selling Stockholders shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by such Selling
Stockholder at the First Closing Date under the terms of this Agreement, then
the Underwriters may at their option, by written notice from you to the Company
and the
-31-
Selling Stockholders, either (i) terminate this Agreement without any liability
on the part of any Underwriter or, except as provided in Sections 7, 9 and 11
hereof, the Company or the Selling Stockholders, or (ii) purchase the shares
which the Company has agreed to sell and deliver in accordance with the terms
hereof. In the event of a failure by any of the Selling Stockholders to sell and
deliver as referred to in this Section, either you or the Company shall have the
right to postpone the First Closing Date for a period not exceeding seven
business days in order that the necessary changes in the Registration Statement,
Prospectus and any other documents, as well as any other arrangements, may be
effected.
Section 16. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriters or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
Section 17. Notices. All communications hereunder shall be in writing
and, if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxx Xxxxxxxx, with a copy to Xxxxxxx & Xxxxx L.L.P., 0000 Xxxxx
Xxxxx, Xxxxxxx, Xxxxx 00000, Attn: Xxxxxx X. Xxxxx, Esq.; and if sent to the
Company or the Selling Stockholders shall be mailed, delivered or telegraphed
and confirmed to the Company at 0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, with a copy to Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C., 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx X.
Xxxxxx; Esq. The Company, the Selling Stockholder or you may change the address
for receipt of communications hereunder by giving notice to the others.
Section 18. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 12 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 11, and in each case their
respective successors, personal representatives and assigns, and no other person
will have any right or obligation hereunder. No such assignment shall relieve
any party of its obligations hereunder. The term "successors" shall not include
any purchaser of the Common Shares as such from any of the Underwriters merely
by reason of such purchase.
Section 19. Representation of Underwriters. You will act as
Representatives for the several Underwriters in connection with all dealings
hereunder, and any action under or in respect of this Agreement taken by you
jointly or by Xxxxxxxxxx Securities, as Representatives, will be binding upon
all the Underwriters.
Section 20. 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
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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 21. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of Delaware.
Section 22. General. 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 several
counterparts' each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Stockholders and you.
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed copies hereof, whereupon it will
become a binding agreement among the Company, the Selling Stockholders and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
XXXXXX'X SEAFOOD
RESTAURANTS, INC.
By:___________________________________
Xxxxxx X. Xxxxxxxx, President
and Chief Executive Officer
SELLING STOCKHOLDERS:
--------------------------------------
Xxxxxx X. Xxxxxxxx
--------------------------------------
X.X. Xxxxx, Xx.
--------------------------------------
Xxxx X. Xxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxxx
The foregoing Underwriting Agreement
is hereby confirmed and accepted by us
in San Francisco, California as of the
date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXX XXXXXXX & CO. INCORPORATED
X.X. XXXXXXXX & CO.
XXXXX XXXXXXX INC.
XXXXXXX XXXXXX XXXXX INC.
ACTING AS REPRESENTATIVES OF THE
SEVERAL UNDERWRITERS NAMED IN
THE ATTACHED SCHEDULE A.
BY: NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:_________________________________
Xxxxxxx X. Xxxxx
Managing Director
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SCHEDULE A
NUMBER OF FIRM
COMMON SHARES
TO BE PURCHASED
NAME OF UNDERWRITER BY UNDERWRITERS
--------------------------------------- ---------------
NationsBanc Xxxxxxxxxx Securities LLC.................
Xxxxxx Xxxxxxx & Co. Incorporated.....................
X.X. Xxxxxxxx & Co....................................
Xxxxx Xxxxxxx Inc.....................................
Xxxxxxx Xxxxxx Xxxxx Inc..............................
TOTAL.................................. 3,833,000
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SCHEDULE B
NUMBER OF FIRM
COMMON SHARES
NAME OF SELLING STOCKHOLDER TO BE SOLD
----------------------------- --------------
Xxxxxx X. Xxxxxxxx ................................... 700,000
X.X. Xxxxx, Xx. ...................................... 62,000
Xxxx X. Xxxx ......................................... 37,000
Xxxxxx X. Xxxxxxxxxx ................................. 34,000
-------
833,000
=======
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SCHEDULE C
SUBSIDIARIES OF XXXXXX'X SEAFOOD RESTAURANTS, INC.
SIGNIFICANT SUBSIDIARIES:
------------------------
Xxxxxx'x X.X., Inc., a Delaware corporation
Xxxxxx'x Limited, Inc., a Delaware corporation
Xxxxxx'x Trademark, Inc., a Delaware corporation
LSRI Holdings, Inc., a Delaware corporation
Xxxxxx'x Management, L.P., a Delaware limited partnership
OTHER SUBSIDIARIES NOT LISTED ON EXHIBIT 21 TO THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996:
[to come]
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