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EXHIBIT 1.01
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WSGR DRAFT
10/29/96
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20,000,000 Shares
XXXXXX MICRO INC.
Class A Common Stock, par value $0.01 per share
UNDERWRITING AGREEMENT
____________, 1996
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_____________, 1996
Xxxxxx Xxxxxxx & Co. Incorporated
The Xxxxxxxx-Xxxxxxxx Company, Inc.
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
X.X. Xxxxxxxx & Co.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
The Xxxxxxxx-Xxxxxxxx Company, Inc.
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
c/o Morgan Xxxxxxx & Co. International Limited
25 Cabot Square
Canary Wharf
Xxxxxx X00 0XX
Xxxxxxx, Xxxxxx Xxxxxxx
Dear Sirs and Mesdames:
Xxxxxx Micro Inc., a Delaware corporation (the "Company") and a subsidiary
of Xxxxxx Industries Inc., a Tennessee corporation ("Xxxxxx Industries"),
proposes to issue and sell to the several Underwriters named in Schedules I and
II hereto (the "Underwriters") 20,000,000 shares (the "Firm Shares") of its
Class A Common Stock, par value $0.01 per share ("Class A Common Stock"). Xxxxxx
Industries is executing this Agreement for the sole purpose of giving the
representations and warranties included in Section 2 hereof.
It is understood that, subject to the conditions hereinafter stated,
16,000,000 Firm Shares (the "U.S. Firm Shares") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. Underwriters") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement Between U.S. and International Underwriters of even date herewith),
and 4,000,000 Firm Shares (the "International Shares") will be sold to the
several International Underwriters named in Schedule II hereto (the
"International Underwriters") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated, The
Xxxxxxxx-Xxxxxxxx Company, Inc., Alex. Xxxxx & Sons Incorporated, Xxxxxxxxx &
Xxxxx LLC and X.X. Xxxxxxxx & Co. shall act as representatives (the "U.S.
Representatives") of the several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co.
International Limited, The Xxxxxxxx-Xxxxxxxx Company, Inc., Alex. Xxxxx & Sons
Incorporated and Xxxxxxxxx & Xxxxx LLC shall act as representatives (the
"International Representatives") of the several International Underwriters.
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 3,000,000 shares of its Class A Common
Stock (the "Additional Shares") if and to the extent that the U.S.
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Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of Class A Common Stock granted
to the U.S. Underwriters in Section 3 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares." The shares of
Class A Common Stock and Class B Common Stock, par value $0.01 per share ("Class
B Common Stock"), of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement;" the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "Prospectus." If the
Company has filed an abbreviated registration statement to register additional
shares of Class A Common Stock pursuant to Rule 462(b) under the Securities Act
(the "Rule 462 Registration Statement"), then any reference herein to the
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
Immediately prior to the closing of the sale of the Firm Shares to the
Underwriters, the Company, Xxxxxx Industries, the Ingram Stockholders (as
defined in the Registration Statement), and certain subsidiaries of the
foregoing entities will enter into a series of transactions described in the
Prospectus under the caption "The Split-Off and the Reorganization," whereby the
Company will cease to be a subsidiary of Xxxxxx Industries. As part of these
transactions, Xxxxxx Industries will consummate an exchange (the "Exchange"),
pursuant to which existing stockholders of Xxxxxx Industries will exchange all
or a portion of their shares of Xxxxxx Industries common stock for shares of the
Company's Class B Common Stock. The Company, Xxxxxx Industries and the Ingram
Family Stockholders have entered into certain agreements pursuant to which the
operations of the three companies will be reorganized (the "Reorganization"). In
the Reorganization, the Company, Xxxxxx Industries and Xxxxxx Entertainment (as
defined in the Registration Statement) ("Xxxxxx Entertainment") will allocate
certain liabilities and obligations among themselves. The Exchange, together
with those elements of the Reorganization contemplated to occur prior to the
closing of the sale of the Firm Shares, are referred to herein as the
"Split-Off." Immediately after the Exchange, none of the Common Stock will be
held by Xxxxxx Industries; however, as described in the Prospectus, Xxxxxx
Industries will purchase approximately 300,000 shares of Class A Common Stock as
part of the public offering contemplated hereby. The term "Split-Off Agreements"
means the Reorganization Agreement, the Master Services Agreement, the Tax
Sharing and Tax Services Agreement, the Employee Benefits Transfer and
Assumption Agreement, the Exchange Agreement (each such agreement, as defined in
the Registration Statement) and any other agreements required to be delivered on
or before the closing of the Split-Off pursuant to any of the foregoing.
The use herein of the words "knowledge" or "know" with respect to a person,
unless otherwise stated, refers only to that information within the actual
knowledge of the person.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
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(a) The Registration Statement has become effective under the
Securities Act; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose
are pending before or, to the Company's knowledge, threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not apply
to statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(d) The Company does not have any significant subsidiaries (as
such term is defined in paragraph (w) of Rule 1-02 of Regulation S-X
promulgated by the Commission).
(e) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned by them, in each case that is material to the
business of the Company and its subsidiaries, taken as a whole, in each
case free and clear of any security interest, lien, encumbrance, claim,
defect or adverse interest of any nature except such as are described in
the Prospectus or such as do not materially affect the value of such
property and do not interfere in any material respect with the use made and
proposed to be made of such property by the Company and its subsidiaries,
taken as a whole; and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere in any material respect with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries, taken
as a whole, in each case except as described in or contemplated by the
Prospectus.
(f) The authorized capital stock of the Company conforms, in
all material respects, as to legal matters to the description thereof
contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly issued,
fully paid and non-assessable; except as set forth 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; and all outstanding
shares of capital stock and options and other rights to acquire capital
stock were not issued in violation of any preemptive rights, rights of
first refusal or other similar rights.
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(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive rights, rights of first refusal or other
similar rights.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or bylaws of the Company, or any agreement or other
instrument binding upon the Company that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company,
except for any such contravention that would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, and would not
conflict with or materially impair the performance by the Company of its
obligations under this Agreement, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations under this
Agreement, except (i) such as may be required by the securities or Blue Sky
laws of the various states and other jurisdictions in connection with the
offer and sale of the Shares by the Underwriters and (ii) such consents,
approvals, authorizations, orders or qualifications which if not obtained
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and would not materially impair the
performance by the Company of its obligations under this Agreement.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
financial condition, earnings, business or operations of the Company and
its subsidiaries, taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement).
(l) Except as described in or contemplated by the Prospectus,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) the Company and its
subsidiaries have not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction, in each case not
in the ordinary course of business; (ii) other than repurchases of shares
pursuant to the Company's Key Employee Stock Purchase Plan, the Company has
not purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock other than ordinary and customary dividends; and (iii) there has not
been any material change in the capital stock, short-term debt or long-term
debt of the Company and its consolidated subsidiaries.
(m) There are no legal, regulatory or governmental proceedings
pending or, to the knowledge of any of the Company's officers, threatened
to which the Company or any of its subsidiaries is a party or to which any
of the properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts
or other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(n) The Company has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made all
declarations and filings with, all foreign, federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
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Prospectus, except to the extent that the failure to obtain or file would
not, singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(o) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act, complied
when so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(p) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(q) There is no legal or beneficial owner of any securities of
the Company who has any rights, not effectively satisfied or waived, to
require registration of any shares of capital stock of the Company in
connection with the filing of the Registration Statement.
(r) The Company and its subsidiaries, taken as a whole, are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied for,
except for any such insurance coverage which was not necessary for the
Company and its subsidiaries, taken as a whole, to have prudent and
customary coverage, or which was adequately replaced; and neither the
Company nor any such subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the financial condition, earnings, business or operations
of the Company and its subsidiaries, taken as a whole, except as described
in or contemplated by the Prospectus.
(s) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, "Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(t) The costs and liabilities, if any, associated with the
effect of Environmental Laws on the business, operations and properties of
the Company (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(u) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights, licenses,
inventions, trade secrets, copyrights, trademarks, service marks, trade
names, technology and know-how necessary to conduct its business in the
manner described in the Prospectus and, except as disclosed in the
Prospectus, neither the Company nor any of its subsidiaries has
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received any notice of infringement or conflict with (and neither the
Company nor any of its subsidiaries knows of any infringement or conflict
with) asserted rights of others with respect to any patents, patent rights,
inventions, trade secrets, copyrights, trademarks, service marks, trade
names, technology or know-how which could result in a material adverse
effect upon the Company and its subsidiaries, taken as a whole; and, except
as disclosed in the Prospectus, the discoveries, inventions, products or
processes of the Company and its subsidiaries referred to in the Prospectus
do not, to the knowledge of any of the Company's officers, infringe or
conflict with any right or patent of any third party, or any discovery,
invention, product or process which is the subject of a patent application
filed by any third party, known to any of the Company's officers which
could have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(v) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate foreign, federal,
state or local regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such certificates,
authorizations or permits would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, and neither the Company nor any such subsidiary has received any
notice of proceedings related to the revocation or modification of any such
certificate, authorization or permit with respect to which there is a
reasonable likelihood of an unfavorable decision, ruling or finding that
would, singly or in the aggregate, result in a material adverse change in
the financial condition, earnings, business or operations of the Company
and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus.
(w) The Company and its subsidiaries, taken as a whole,
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(x) Except as described in or contemplated by the Prospectus,
no material labor dispute with the employees of the Company or any of its
subsidiaries exists, or, to the knowledge of the Company, is imminent, and,
without any investigation, the Company's executive officers have no
knowledge of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors
that is reasonably likely to result in a material adverse change in the
financial condition or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole.
(y) Price Waterhouse LLP are, and during the periods covered
by their report included in the Registration Statement were, independent
certified public accountants with respect to the Company and its
subsidiaries within the meaning of the Securities Act.
(z) The financial statements, together with the related
schedules and notes thereto, included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), fairly present the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated
in the Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and the related schedules and
notes thereto have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
and are in accordance with the books and records of the Company and its
subsidiaries; the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment
or supplement thereto) is, in all material respects, accurately presented
and prepared on
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a basis consistent with such financial statements and the books and records
of the Company; and no other financial statements are required by the
Securities Act to be included in the Registration Statement or the
Prospectus.
(aa) The New York Stock Exchange ("NYSE") has approved the
Class A Common Stock for listing, subject only to official notice of
issuance.
(bb) The Company has complied with all provisions of Section
517.075, Florida Statutes, relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
(cc) The Split-Off Agreements to which the Company is a party
have been duly authorized, executed and delivered by the Company and each
such agreement constitutes a valid and binding agreement of the Company.
(dd) Except as described in the Prospectus, all applicable
consents, authorizations, approvals, orders, certificates and permits of
and from, and all applicable declarations and filings with, all foreign,
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals having
jurisdiction over the Company required in connection with the Split-Off
have been obtained or filed, except to the extent that the failure to
obtain or file would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole; and
the execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Split-Off Agreements does not
contravene any provision of applicable law or the certificate of
incorporation or bylaws of the Company or any agreement or other instrument
binding upon the Company that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company,
except for any such contravention that would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, and would not
conflict with or materially impair the performance by the Company of its
obligations under the Split-Off Agreements.
(ee) The Split-Off shall have been consummated, in all
material respects, in accordance with the terms of the Split-Off Agreements
prior to the closing of the sale of the Firm Shares to the Underwriters.
2. Representations and Warranties of Xxxxxx Industries.
Xxxxxx Industries represents and warrants to and agrees with each of the
Underwriters that:
(a) Xxxxxx Industries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Tennessee.
(b) This Agreement has been duly authorized, executed and
delivered by Xxxxxx Industries.
(c) The execution and delivery by Xxxxxx Industries of, and
the performance by Xxxxxx Industries of its obligations under, this
Agreement will not contravene any provision of applicable law or the
certificate of incorporation or bylaws of Xxxxxx Industries or Xxxxxx
Entertainment or any agreement or other instrument binding upon Xxxxxx
Industries or Xxxxxx Entertainment that is material to Xxxxxx Industries
and its subsidiaries (including, without limitation, Xxxxxx Entertainment),
taken as a whole, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over Xxxxxx Industries or Xxxxxx
Entertainment, except for any such contravention that would not have a
material adverse effect on Xxxxxx Industries and its subsidiaries
(including, without limitation, Xxxxxx Entertainment), taken as a whole,
and would not conflict with or materially impair the performance by Xxxxxx
Industries of its obligations under
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this Agreement, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by Xxxxxx Industries of any of its obligations under this
Agreement, except (i) such as may be required by the securities or Blue Sky
laws of the various states and jurisdictions in connection with the offer
and sale of the Shares by the Underwriters and (ii) such consents,
approvals, authorizations, orders or qualifications which if not obtained
would not have a material adverse effect on Xxxxxx Industries and its
subsidiaries (including, without limitation, Xxxxxx Entertainment), taken
as a whole, and would not materially impair the performance by Xxxxxx
Industries of its obligations under this Agreement.
(d) The Split-Off Agreements to which Xxxxxx Industries is a
party have been duly authorized, executed and delivered by Xxxxxx
Industries and each such agreement constitutes a valid and binding
agreement of Xxxxxx Industries.
(e) Except as described in the Prospectus, all applicable
consents, authorizations, approvals, orders, certificates and permits of
and from, and all applicable declarations and filings with, all foreign,
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals having
jurisdiction over Xxxxxx Industries or Xxxxxx Entertainment required in
connection with the Split-Off have been obtained or filed, except to the
extent that the failure to obtain or file would not, singly or in the
aggregate, have a material adverse effect on Xxxxxx Industries and its
subsidiaries (including, without limitation, Xxxxxx Entertainment), taken
as a whole, and would not prevent the consummation of the Split-Off; and
the execution and delivery by Xxxxxx Industries of, and the performance by
Xxxxxx Industries of its obligations under, the Split-Off Agreements does
not contravene any provision of applicable law or the certificate of
incorporation or bylaws of Xxxxxx Industries or Xxxxxx Entertainment or any
agreement or other instrument binding upon Xxxxxx Industries or Xxxxxx
Entertainment that is material to Xxxxxx Industries and its subsidiaries
(including, without limitation, Xxxxxx Entertainment), taken as a whole, or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over Xxxxxx Industries or Xxxxxx Entertainment, except
for any such contravention that would not have a material adverse effect on
Xxxxxx Industries and its subsidiaries (including, without limitation,
Xxxxxx Entertainment), taken as a whole, and would not conflict with or
materially impair the performance by Xxxxxx Industries of its obligations
under the Split-Off Agreements.
(f) The Split-Off shall have been consummated, in all material
respects, in accordance with the terms of the Split-Off Agreements prior to
the closing of the sale of the Firm Shares to the Underwriters.
(g) Xxxxxx Industries is familiar with the statements relating
to Xxxxxx Industries under the captions "Certain Transactions" and "The
Split-Off and the Reorganization" in the Prospectus and the statements
relating to Xxxxxx Industries in other parts of the Registration Statement,
and such statements do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
3. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company at $________ a share (the "Purchase Price") the respective number of
Firm Shares set forth in Schedule I and II hereto opposite the name of such
Underwriter. Notwithstanding the foregoing, it is understood that if any
employees of the Company or any of its subsidiaries are purchasing Shares in
Canada in the Employee Directed Offer (as defined in the Registration
Statement), such Shares (the "Canadian Employee Shares") will be sold directly
by the Company to such employees at a price per share (the "Canadian Employee
Purchase Price") equal to the Public
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Offering Price (as defined below). In consideration for acting as agents of the
Company, the Underwriters will receive an advisory fee equal to the difference
between the Public Offering Price and the Purchase Price multiplied by the
aggregate number of Canadian Employee Shares sold in the Employee Directed
Offer.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to issue and sell to the U. S. Underwriters the Additional Shares, and the U.S.
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to 3,000,000 Additional Shares at the Purchase Price. If the U.S.
Representatives, on behalf of the U.S. Underwriters, elect to exercise such
option, the U.S. Representatives shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the U.S. Underwriters and the
date on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of U.S. Firm Shares set forth in Schedule I
hereto opposite the name of such U.S. Underwriter bears to the total number of
U.S. Firm Shares. The Additional Shares to be purchased by the U.S. Underwriters
hereunder and the U.S. Firm Shares are hereinafter collectively referred to as
the "U.S. Shares."
The Company hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it
will not, during the period ending 180 days after the date of the Prospectus,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the sale of any Shares to the Underwriters to be
sold hereunder, (B) the issuance by the Company of any shares of Common Stock
upon the exercise of an option or warrant or the conversion of a security
described in the Prospectus, (C) the grant of the Rollover Stock Options (as
defined in the Registration Statement), (D) the grant of options to purchase
Common Stock under the Company's 1996 Equity Incentive Plan and (E) the issuance
by the Company of any shares of Common Stock pursuant to the Company's 1996
Employee Stock Purchase Plan.
4. TERMS OF PUBLIC OFFERING. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company is
further advised by you that the Shares are to be offered to the public initially
at $_____________ a share (the "Public Offering Price") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
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Each U.S. Underwriter hereby makes to and with the Company the
representations and agreements of such U.S. Underwriter contained in the fifth
and sixth paragraphs of Article III of the Agreement Between U.S. and
International Underwriters of even date herewith. Each International Underwriter
hereby makes to and with the Company the representations and agreements of such
International Underwriter contained in the seventh, eighth, ninth and tenth
paragraphs of Article III of such Agreement Between U.S. and International
Underwriters.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be
made to the Company in federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at __________ at 10:00 A.M., New York City time, on
___________, 1996, or at such other time on the same or such other date, not
later than _________, 1996, as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company
in federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
U.S. Underwriters at __________ at 10:00 A.M., New York City time, on the date
specified in the notice described in Section 3 or at such other time on the same
or such other date, in any event not later than _______, 1996, as shall be
designated in writing by the U.S. Representatives. The time and date of such
payment are hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Company to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than __________ (New York City time) on
the date hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act, and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations, of the
Company and its subsidiaries, taken as a whole, from that set forth in
the Prospectus that, in your
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judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the chief executive
officer or president and the chief financial officer of the Company, to the
effect set forth in clause (a) (i) above, and to the effect that the
representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date.
The officers signing and delivering such certificate may
rely upon their knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the chief executive
officer or a co-president of Xxxxxx Industries, to the effect that the
representations and warranties of Xxxxxx Industries contained in this
Agreement are true and correct as of the Closing Date and that Xxxxxx
Industries has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officers signing and delivering such certificate may
rely upon their knowledge as to proceedings threatened.
(d) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx Xxxx & Xxxxxxxx, outside counsel for the Company, dated
the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the State of Delaware and has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus;
(ii) the authorized capital stock of the Company
conforms, in all material respects, as to legal matters to the
description thereof contained in the Prospectus;
(iii) the Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive rights, or, to the knowledge of such
counsel, rights of first refusal or other similar rights;
(iv) this Agreement has been duly authorized, executed
and delivered by the Company;
(v) the statements (A) in the Prospectus under the
captions "Risk Factors -- Relationship with Xxxxxx Industries,
Xxxxxx Entertainment, and the Xxxxxx Stockholders," "Risk
Factors -- Control by Xxxxxx Stockholders," "Risk Factors --
Shares Eligible for Future Sale," "Dividend Policy,"
"Management," "Certain Transactions," "The Split-Off and the
Reorganization," "Description of Capital Stock," "Shares
Eligible for Future Sale" and "Underwriters" and (B) in the
Registration Statement in Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to
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therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(vi) after due inquiry, such counsel does not know of
any legal, regulatory or governmental proceeding pending or
threatened to which the Company or any of its subsidiaries is
a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and
are not so described or of any statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not
described or filed as required;
(vii) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(viii) to the knowledge of such counsel, there is no legal
or beneficial owner of any securities of the Company who has
any rights, not effectively satisfied or waived, to require
registration of any shares of capital stock of the Company in
connection with the filing of the Registration Statement;
(ix) to such counsel's knowledge: (A) the Registration
Statement has become effective under the Securities Act, no
stop order proceedings with respect thereto have been
instituted or are pending or threatened under the Securities
Act and nothing has come to such counsel's attention to lead
it to believe that such proceedings are contemplated; and (B)
any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424(b) under the Securities Act has
been made in the manner and within the time period required by
such Rule 424(b);
(x) the Shares to be sold under this Agreement to the
Underwriters have been duly authorized for listing on the
NYSE, subject to official notice of issuance;
(xi) the Split-Off Agreements to which the
Company is a party have been duly authorized, executed and
delivered by the Company;
(xii) except as described in the Prospectus, all
applicable consents, authorizations, approvals, orders,
certificates and permits of and from, and all applicable
declarations and filings with, all federal and New York state
authorities required in connection with the Split-Off have
been obtained or filed, except to the extent that the failure
to obtain or file would not, singly or in the aggregate, have
a material adverse effect on the Company and its subsidiaries,
taken as a whole; and the execution and delivery by the
Company of, and the performance by the Company of its
obligations under, the Split-Off Agreements does not
contravene any provision of applicable federal or New York
state law or the General Corporation Law of the State of
Delaware or the certificate of incorporation or bylaws of the
Company or, to such counsel's knowledge, any agreement or
other instrument binding upon the Company that is material to
the Company and its subsidiaries, taken as a whole, or, to
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company, except for any such contravention that would not
have a material adverse effect on the Company
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and its subsidiaries, taken as a whole, and would not conflict
with or materially impair the performance by the Company of
its obligations under the Split-Off Agreements;
(xiii) such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules and other financial and statistical
data included therein as to which such counsel need not
express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (B) has no reason to
believe that (except for financial statements and schedules
and other financial and statistical data as to which such
counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading and (C) has no reason to
believe that (except for financial statements and schedules
and other financial and statistical data included therein as
to which such counsel need not express any belief) the
Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may state that their
opinion is limited to the federal laws of the United States, the laws
of the State of New York and the General Corporation Law of the State
of Delaware.
(e) The underwriters shall have received on the Closing Date
an opinion of Xxxxx X. Xxxxxxxx, Xx., Esq., Senior Vice President,
Secretary and General Counsel of the Company, dated the Closing Date,
to the effect that:
(i) the Company is duly qualified to transact business
and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(ii) the shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable; except as set
forth in the Prospectus, to the knowledge of such counsel,
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; and all outstanding
shares of capital stock and options and other rights to
acquire capital stock were not issued in violation of any
preemptive rights, or, to the knowledge of such counsel,
rights of first refusal or other similar rights;
(iii) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law
or the certificate of incorporation or bylaws of the Company
or, to such counsel's knowledge, any agreement or other
instrument binding upon the Company that is material to the
Company and its subsidiaries, taken as a whole, or, to such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company,
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except for any such contravention that would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole, and would not conflict with or materially
impair the performance by the Company of its obligations under
this Agreement, and no consent, approval, authorization or
order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its
obligations under this Agreement, except (i) such as may be
required by the securities or Blue Sky laws of the various
states and jurisdictions in connection with the offer and sale
of the Shares by the Underwriters and (ii) such consents,
approvals, authorizations, orders or qualifications which if
not obtained would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, and would not
materially impair the performance by the Company of its
obligations under this Agreement;
(iv) after due inquiry, such counsel does not know of
any legal, regulatory or governmental proceeding pending or
threatened to which the Company or any of its subsidiaries is
a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and
are not so described or of any statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not
described or filed as required;
(v) to the knowledge of such counsel, there is no legal
or beneficial owner of any securities of the Company who has
any rights, not effectively satisfied or waived, to require
registration of any shares of capital stock of the Company in
connection with the filing of the Registration Statement;
(vi) except as described in the Prospectus, all
applicable consents, authorizations, approvals, orders,
certificates and permits of and from, and all applicable
declarations and filings with, all federal and Tennessee state
authorities required in connection with the Split-Off have
been obtained or filed, except to the extent that the failure
to obtain or file would not, singly or in the aggregate, have
a material adverse effect on the Company and its subsidiaries,
taken as a whole; and the execution and delivery by the
Company of, and the performance by the Company of its
obligations under, the Split-Off Agreements does not
contravene any provision of applicable federal law or
Tennessee state law or the certificate of incorporation or
bylaws of the Company or, to such counsel's knowledge, any
agreement or other instrument binding upon the Company that is
material to the Company and its subsidiaries, taken as a
whole, or, to such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company, except for any such
contravention that would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole, and would
not conflict with or materially impair the performance by the
Company of its obligations under the Split-Off Agreements;
(vii) the Exchange has been consummated, in all material
respects, in accordance with the terms of the Split-Off
Agreements;
(viii) such counsel (A) has no reason to believe that
(except for financial statements and schedules and other
financial and statistical data as to which such counsel need
not express any belief) the Registration Statement and the
prospectus included therein at the time the Registration
Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements
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therein not misleading and (B) has no reason to believe that
(except for financial statements and schedules and other
financial and statistical data included therein as to which
such counsel need not express any belief) the Prospectus
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may state that his opinion is
limited to the federal laws of the United States and the laws of the State of
Tennessee.
(f) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx X. Xxxxxxxx, Xx., Esq., Vice President, Secretary
and General Counsel for Xxxxxx Industries, dated the Closing Date, to
the effect that:
(i) Xxxxxx Industries has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Tennessee;
(ii) this Agreement has been duly authorized, executed
and delivered by Xxxxxx Industries;
(iii) the execution and delivery by Xxxxxx Industries of,
and the performance by Xxxxxx Industries of its obligations
under, this Agreement will not contravene any provision of
applicable law or the certificate of incorporation or bylaws
of Xxxxxx Industries or Xxxxxx Entertainment or, to such
counsel's knowledge, any agreement or other instrument binding
upon Xxxxxx Industries or Xxxxxx Entertainment that is
material to Xxxxxx Industries and its subsidiaries (including,
without limitation, Xxxxxx Entertainment), taken as a whole,
or, to such counsel's knowledge, any judgment, order or decree
of any governmental body, agency or court having jurisdiction
over Xxxxxx Industries or Xxxxxx Entertainment, except for any
such contravention that would not have a material adverse
effect on Xxxxxx Industries and its subsidiaries (including,
without limitation, Xxxxxx Entertainment), taken as a whole,
and would not conflict with or materially impair the
performance by Xxxxxx Industries of its obligations under this
Agreement, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is
required for the performance by Xxxxxx Industries of any of
its obligations under this Agreement, except (i) such as may
be required by the securities or Blue Sky laws of the various
states and jurisdictions in connection with the offer and sale
of the Shares by the Underwriters and (ii) such consents,
approvals, authorizations, orders or qualifications which if
not obtained would not have a material adverse effect on
Xxxxxx Industries and its subsidiaries (including, without
limitation, Xxxxxx Entertainment), taken as a whole, and are
would not materially impair the performance by Xxxxxx
Industries of its obligations under this Agreement;
(iv) the Split-Off Agreements to which Xxxxxx Industries
is a party have been duly authorized, executed and delivered
by Xxxxxx Industries; and
(v) except as described in the Prospectus, all
applicable consents, authorizations, approvals, orders,
certificates and permits of and from, and all applicable
declarations and filings with, all federal and Tennessee state
authorities required in connection with the Split-Off have
been obtained or filed, except to the extent that the failure
to obtain or file would not, singly or in the aggregate, have
a material adverse effect on Xxxxxx Industries and its
subsidiaries (including,
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without limitation, Xxxxxx Entertainment), taken as a whole
and would not prevent the consummation of the Exchange; and
the execution and delivery by Xxxxxx Industries of, and the
performance by Xxxxxx Industries of its obligations under, the
Split-Off Agreements does not contravene any provision of
applicable federal law or Tennessee state law or the
certificate of incorporation or bylaws of Xxxxxx Industries or
Xxxxxx Entertainment or, to such counsel's knowledge, any
agreement or other instrument binding upon Xxxxxx Industries
or Xxxxxx Entertainment that is material to Xxxxxx Industries
and its subsidiaries (including, without limitation, Xxxxxx
Entertainment), taken as a whole, or, to such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over Xxxxxx
Industries or Xxxxxx Entertainment, except for any such
contravention that would not have a material adverse effect on
Xxxxxx Industries and its subsidiaries (including, without
limitation, Xxxxxx Entertainment), taken as a whole, and would
not conflict with or materially impair the performance by
Xxxxxx Industries of its obligations under the Split-Off
Agreements.
(g) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to
in subparagraphs (iii), (iv), (v) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and
(xiii) of paragraph (d) above.
With respect to (A) subparagraph (xiii) of paragraph (d)
above, Xxxxx Xxxx & Xxxxxxxx and Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, and
with respect to (B) subparagraph (viii) of paragraph (e) above, Xxxxx
X. Xxxxxxxx, Xx., Esq., may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
The opinions of Xxxxx Xxxx & Xxxxxxxx and Xxxxx X. Xxxxxxxx,
Xx., Esq. described in paragraphs (d), (e) and (f), respectively, above
shall be rendered to you at the request of the Company or Xxxxxx
Industries, as the case may be, and shall so state therein.
(h) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Price Waterhouse LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided, however, that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than the date hereof.
(i) The "lock-up" agreements, each substantially in the form
attached hereto as Exhibit A, between you and certain stockholders,
officers and directors of the Company relating to sales and certain
other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date.
(j) The Company shall have complied with the provisions of
paragraph (a) of Section 7 hereof with respect to the furnishing of
Prospectuses on the business day following the date of this Agreement.
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(k) All documents, opinions or certificates required to be
delivered on or prior to the Closing Date pursuant to the Split-Off
Agreements shall have been delivered, and all transactions contemplated
to be consummated on or prior to the Closing Date pursuant to the
Split-Off Agreements as described under the caption "The Split-Off and
the Reorganization" in the Prospectus shall have been consummated.
All the agreements, opinions, certificates and letters
mentioned above or elsewhere in this Agreement shall be deemed in compliance
with the provisions hereof only if Xxxxxx Xxxxxxx & Co. Incorporated as a
representative of the several Underwriters, shall be reasonably satisfied that
they comply in form and scope.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents and legal opinions
as you may reasonably request with respect to the good standing of the Company,
the due authorization and issuance of the Additional Shares and other matters
related to the issuance of the Additional Shares.
7. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish to you, without charge, six (6) signed copies
of the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 10:00 A.M. New York City time on the
business day following the date of this Agreement and during the period
mentioned in paragraph (c) below, as many copies of the Prospectus and
any supplements and amendments thereto or to the Registration Statement
as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements
to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
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(e) To make generally available to the Company's security
holders and to you as soon as practicable an earnings statement
covering the twelve-month period ending January 3, 1998 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing
any Blue Sky memorandum in connection with the offer and sale of the
Shares under securities laws of various states and other jurisdictions
and all expenses in connection with the qualification of the Shares for
offer and sale under state or foreign securities laws as provided in
paragraph (d) of Section 7 hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
memorandum, (iv) all filing fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Shares by the National Association of Securities
Dealers, Inc. (the "NASD"), (v) all fees and expenses in connection
with the preparation and filing of the registration statement on Form
8-A relating to the Class A Common Stock and all costs and expenses
incident to listing the Shares on the NYSE, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of
the Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and, if the Company shall agree in advance, for a portion of the cost
associated with the chartering of aircraft in connection with the road
show based on the number of (A) officers and representatives of the
Company and (B) consultants utilizing such aircraft compared to the
total number of passengers using such aircraft and (ix) all other costs
and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this
Section 7. It is understood, however, that except as provided in this
paragraph (f) of Section 7, Section 8 and the last paragraph of Section
10 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make.
(g) During a period of three years from the effective date of
the Registration Statement, the Company will furnish to you copies of
(i) all reports to its stockholders and (ii) all reports, financial
statements and proxy or information statements filed by the Company
with the Commission or any national securities exchange.
(h) The Company will apply the proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
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(i) Prior to the Closing Date or any Additional Closing Date,
as the case may be, the Company will not, directly or indirectly, issue
any press release or other communication, other than any press release
or other communication made in the ordinary course of business, and not
material to the business of the Company and its subsidiaries, taken as
a whole, and will not hold any press conference with respect to the
Company, or its financial condition, results of operations, business,
properties, assets, or prospects or this offering, without your prior
written consent, which shall not be unreasonably withheld.
Notwithstanding the foregoing, the Company may take any such action
without your prior written consent, if advised by counsel that such
action is required in order to comply with applicable law, provided
that you are given notice of such action at the earliest practicable
date and that you and your counsel are provided an opportunity, to the
extent practicable, to consult with the Company with respect to such
action.
8. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages
or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy
of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such
failure is the result of noncompliance by the Company with paragraph
(a) of Section 7.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Underwriter, but only
with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for
use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to paragraph (a) or (b) of this
Section 8, such person (the "Indemnified Party") shall promptly notify
the person against whom such indemnity may be sought (the "Indemnifying
Party") in writing and the Indemnifying Party, upon
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request of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may designate in such
proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified
Party unless (i) the Indemnifying Party and the Indemnified Party shall
have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood that the Indemnifying Party shall not, in
respect of the legal expenses of any Indemnified Party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Xxxxxx Xxxxxxx &
Co. Incorporated, in the case of parties indemnified pursuant to
paragraph (a) of this Section 8, and by the Company, in the case of
parties indemnified pursuant to paragraph (b) of this Section 8. The
Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified
Party shall have requested an Indemnifying Party to reimburse the
Indemnified Party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the Indemnifying
Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such Indemnifying
Party of the aforesaid request and (ii) such Indemnifying Party shall
not have reimbursed the Indemnified Party in accordance with such
request prior to the date of such settlement. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party,
effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Party is or could have been a party
and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 8 is unavailable to an Indemnified
Party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party under
such paragraph, in lieu of indemnifying such Indemnified Party
thereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the 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 on the one hand and of the Underwriters
on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in
the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Company and
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other
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things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the respective number of Shares
they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) of this Section 8. The amount paid or
payable by an Indemnified Party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 8,
no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
8 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Indemnified Party at law or in
equity.
(f) The indemnity and contribution provisions contained in
this Section 8 and the representations, warranties and other statements
of the Company contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, or the Company,
its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
9. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
NYSE, the American Stock Exchange, the NASD, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses (a)(i) through (iv), such
event singly or together with any other such event, makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
10. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it has or they have agreed to purchase hereunder on such
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date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided,
however, that in no event shall the number of Shares that any Underwriter has
agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 10 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the
aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If, on the
Option Closing Date, any U.S. Underwriter or U.S. Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Additional Shares to be purchased, the non-defaulting U.S.
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting U.S. Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
11. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
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13. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
XXXXXX MICRO INC.
By: ________________________________
XXXXXX INDUSTRIES INC.
By: ________________________________
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Accepted, _________, 1996
Xxxxxx Xxxxxxx & Co. Incorporated
The Xxxxxxxx-Xxxxxxxx Company, Inc.
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
X.X. Xxxxxxxx & Co.
Acting severally on behalf of themselves and the
several U.S. Underwriters named in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: _____________________________________________
Xxxxxx Xxxxxxx & Co. International Limited
The Xxxxxxxx-Xxxxxxxx Company, Inc.
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
Acting severally on behalf of themselves and the
several International Underwriters named in Schedule
II hereto.
By Xxxxxx Xxxxxxx & Co. International Limited
By: _____________________________________________
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SCHEDULE I
U.S. UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
------------------------------------------------------ ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated.....................
The Xxxxxxxx-Xxxxxxxx Company, Inc. ..................
Alex. Xxxxx & Sons Incorporated ......................
Xxxxxxxxx & Xxxxx LLC ................................
X.X. Xxxxxxxx & Co....................................
---------------------
Total...................... 16,000,000
27
SCHEDULE II
INTERNATIONAL UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
------------------------------------------------------ ---------------------
Xxxxxx Xxxxxxx & Co. International Limited............
The Xxxxxxxx-Xxxxxxxx Company, Inc. ..................
Alex. Xxxxx & Sons Incorporated ......................
Xxxxxxxxx & Xxxxx LLC ................................
---------------------
Total...................... 4,000,000
28
EXHIBIT A
LOCK-UP AGREEMENT
_____________, 1996
Xxxxxx Xxxxxxx & Co. Incorporated
The Xxxxxxxx-Xxxxxxxx Company, Inc.
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
X.X. Xxxxxxxx & Co.
as Representatives of the Several Underwriters
Re: Initial Public Offering of Xxxxxx Micro Inc.
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives") of the several underwriters (the "Underwriters"), propose to
enter into an underwriting agreement with Xxxxxx Micro Inc. (the "Company")
providing for the initial public offering (the "Public Offering") by the
Underwriters of shares of Class A Common Stock, par value $.01 per share, of the
Company (together with the Company's Class B Common Stock, par value $.01 per
share, the "Common Stock") pursuant to a Registration Statement (the
"Registration Statement") to be filed by the Company with the Securities and
Exchange Commission (the "Commission").
To induce the Underwriters that may participate in the Public Offering,
subject to the terms of the Underwriting Agreement, to continue their efforts in
connection with the Public Offering, the undersigned hereby agrees that, without
the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending one hundred eighty (180) days after the date of the final prospectus (the
"Prospectus") relating to the Public Offering: (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for shares of
Common Stock (collectively, the "Shares") (whether such Shares are now owned by
the undersigned or are hereafter acquired) or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Shares, whether or not any such transaction
described in clause (1) or (2) above is to be settled by delivery of such
Shares, in cash or otherwise. In addition, the undersigned agrees that, without
the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending one hundred eighty (180) days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any
Shares.
Notwithstanding the foregoing, if the undersigned is an individual, he
or she may transfer any or all of the Shares either during his or her lifetime
or on death by gift, will or intestacy to his or her immediate family or to a
trust, partnership or other entity, the beneficiaries, partners or equity
holders of which are exclusively the undersigned and/or a member or members of
his or her immediate family; provided, however, that in any such case, it shall
be a condition to the transfer that the transferee execute an agreement stating
that the transferee is receiving and holding the Shares subject to the
provisions of this Agreement, and there shall be no further transfer
29
of such Shares except in accordance with this Agreement. For purposes of this
and the following paragraph, "immediate family" shall mean lineal descendant,
spouse, adopted child, father, mother, brother or sister of the transferor and
the spouses, adopted children and lineal descendants of any of the foregoing.
In addition, notwithstanding the foregoing, if the undersigned is a
partnership, the partnership may transfer any Shares to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner, and any partner
who is an individual may transfer any such Shares by gift, will or intestate
succession to his or her immediately family; if the undersigned is a trust, the
trust may transfer any Shares to any beneficiary of such trust or to the estate
of any such beneficiary, and any beneficiary who is an individual may transfer
any such Shares by gift, will or intestate succession to a member or members of
his or her immediate family; and if the undersigned is a corporation, the
corporation may transfer any Shares to any shareholder of such corporation, and
any shareholder who is an individual may transfer any such Shares by gift, will
or intestate succession to his or her immediate family; provided, however, that
in any such case, it shall be a condition to the transfer that the transferee
execute an agreement stating that the transferee is receiving and holding the
Shares subject to the provisions of this Agreement, and there shall be no
further transfer of such Shares except in accordance with this Agreement.
In addition, notwithstanding the foregoing, any Shares that were
purchased pursuant to the Company's Key Employee Stock Purchase Plan may be sold
or otherwise transferred to the Company in accordance with the terms thereof.
The undersigned hereby acknowledges that this agreement is valid and
binding notwithstanding any prior agreements relating to this matter and further
agrees and consents to the entry of stop-transfer instructions with the
Company's transfer agent against the transfer of shares of Common Stock held by
the undersigned except in compliance with the terms and conditions of this
agreement. The undersigned also understands that the Company and the
Underwriters will proceed with the Public Offering in reliance on this Lock-Up
Agreement. Whether or not the Public Offering occurs as planned depends on a
number of factors, including market conditions. A final decision as to the
Public Offering will be made by the Underwriters and the Company. This Lock-Up
Agreement shall terminate if the pricing of the Public Offering shall not have
occurred prior to or on January 1, 1997.
Very truly yours,
___________________________________
Name of Stockholder
___________________________________
Signature of Authorized Signatory
______________________________________________
Print Name and Title, if applicable
______________________________________________
Additional Signature(s), if stock jointly held
