[UNNEGOTIATED]
Draft 10/9/96
2,000,000 Shares
EXPRESSPOINT TECHNOLOGY SERVICES, INC.
Common Stock
UNDERWRITING AGREEMENT
_____________, 1996
Xxxxxx & Xxxxxxx, Inc.
-----------------------
000 Xxxxxxx Xxxxxx
2 World Financial Center
New York, New York 10281
On behalf of the Several
Underwriters named in
Schedule I attached hereto.
Ladies and Gentlemen:
ExpressPoint Technology Services, Inc., a Delaware corporation (the
"Company"), proposes to sell to you and the other underwriters named in Schedule
I attached hereto (the "Underwriters"), for whom you are acting as the
representatives (the "Representatives"), an aggregate of 2,000,000 shares (the
"Firm Shares") of the Company's Common Stock, par value $.01 per share (the
"Common Stock") all of which are to be issued and sold by the Company (the
"Company Shares"). In addition, those certain stockholders of the Company set
forth on Schedule II attached hereto (the "Selling Stockholders") and the
Company, propose to grant to the Underwriters an option to purchase up to an
additional 300,000 shares of Common Stock (the "Option Shares") for the purpose
of covering over-allotments in connection with the sale of the Firm Shares. Of
the Option Shares purchased by the Underwriter, the first 100,000 shares will be
sold by the Selling Stockholders (the "Selling Stockholder Shares") and the
remaining 200,000 shares will be sold by the Company (the "Company Option
Shares"). The obligation of each Selling Stockholder to sell Option Shares to
the Underwriters under this Agreement shall be as set forth opposite his name on
Schedule II attached hereto. The Firm Shares and the Option Shares are together
called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the
representations, warranties and agreements contained in, and
subject to the terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell the Firm Shares to
the several Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase at the purchase price per share
of Common Stock of $_____ (the "Initial Price"), the aggregate number
of Firm Shares set forth opposite such Underwriter's name in Schedule I
attached hereto. The Underwriters agree to offer the Firm Shares to the
public as set forth in the Prospectus (as hereinafter defined).
(b) The Selling Stockholders grant to the several Underwriters
an option to purchase severally and not jointly, all or any part of the
number of Selling Stockholder Shares at the Initial Price. The number
of Selling Stockholder Shares to be purchased by each Underwriter shall
be the same percentage (adjusted by the Representatives to eliminate
fractions) of the total number of Selling Stockholder Shares to be
purchased by the Underwriters as such Underwriter is purchasing of the
Firm Shares. Such option may be exercised only to cover over-allotments
in the sales of the Firm Shares by the Underwriters and may be
exercised in whole or in part at any time on or before 12:00 noon, New
York City time, on the business day before the Firm Shares Closing Date
(as defined below), and from time to time thereafter within 30 days
after the date of this Agreement, upon written, telecopy or telegraphic
notice, or verbal or telephonic notice confirmed by written, telecopy
or telegraphic notice, by the Representatives to each of the Company
and the Selling Stockholders no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at
least two business days before any Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Selling
Stockholder Shares to be purchased and the time and date (if other than
the Firm Shares Closing Date) of such purchase.
(c) The Company grants to the several Underwriters an option
to purchase severally and not jointly, all or any part of the number of
Company Option Shares at the Initial Price. The number of Company
Option Shares to be purchased by each Underwriter shall be the same
percentage (adjusted by the Representatives to eliminate fractions) of
the total number of Company Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such
option may be exercised only if the Underwriters have purchased all of
the Selling Stockholder Shares and only to cover over-allotments in the
sales of the Firm Shares by the Underwriters. Such option may be
exercised in whole or in part at any time on or before 12:00 noon, New
York City time, on the business day before the Firm Shares Closing Date
(as defined below), and from time to time thereafter within 30
days after the date of this Agreement, upon written, telecopy or
telegraphic notice, or verbal or telephonic notice confirmed by
written, telecopy or telegraphic notice, by the Representatives to the
Company no later than 12:00 noon, New York City time, on the business
day before the Firm Shares Closing Date or at least two business days
before any Option Shares Closing Date (as defined below), as the case
may be, setting forth the number of Company Option Shares to be
purchased and the time and date (if other than the Firm Shares Closing
Date) of such purchase.
2. Delivery and Payment. Delivery by the Company of the Firm Shares to
the Representatives for the respective accounts of the Underwriters, and payment
of the purchase price by certified or official bank check or checks payable in
New York Clearing House (next day) funds to the Company, shall take place at the
offices of Xxxxxx & Xxxxxxx, Inc., at 000 Xxxxxxx Xxxxxx, 2 World Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, at 10:00 a.m., New York City time, on the
third business day following the date on which the public offering of the Shares
commences (unless such date is postponed in accordance with the provisions of
Section 10(b) hereof), or at such time and place on such other date, not later
than 10 business days after the date of this Agreement, as shall be agreed upon
by the Company and the Representatives (such time and date of delivery and
payment are called the "Firm Shares Closing Date"). The public offering of the
Shares shall be deemed to have commenced at the time, which is the earlier of
(a) the time, after the Registration Statement (as defined in Section 4 below)
becomes effective, of the release by you for publication of the first newspaper
advertisement which is subsequently published relating to the Shares or (b) the
time, after the Registration Statement becomes effective, when the Shares are
first released by you for offering by the Underwriters or dealers by letter,
telecopy or telegram.
In the event the option with respect to the Selling Stockholder Shares
and/or the Company Shares, as the case may be, is exercised, delivery (i) by the
Selling Stockholders of the Selling Stockholder Shares and/or (ii) by the
Company of the Company Option Shares, as the case may be, to the Representatives
for the respective accounts of the Underwriters and payment of the purchase
price by certified or official bank check or checks payable in New York Clearing
House (next day) funds to the Selling Stockholders and/or the Company, as the
case may be, shall take place at the offices of Xxxxxx & Xxxxxxx, Inc., at the
address specified above, at the time and on the date (which may be the same date
as, but in no event shall be earlier than, the Firm Shares Closing Date)
specified in the notice referred to in Sections 1(b) and 1(c) (such time and
date of delivery and payment is called the "Option Shares Closing Date(s)"). The
Firm Shares Closing Date and the Option Shares Closing Date(s) are called,
individually, a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in
such names and shall be in such denominations as the
Representatives shall request at least two full business days before the Firm
Shares Closing Date or the Option Shares Closing Date(s), as the case may be,
and shall be made available to the Representatives for checking and packaging,
at such place as is designated by the Representatives, on the full business day
before the Firm Shares Closing Date or the Option Shares Closing Date(s), as the
case may be.
3. Public Offering. The Company and the Selling Stockholders understand
that the Underwriters propose to make a public offering of the Shares, as set
forth in and pursuant to the Prospectus (as defined in Section 4 below), as soon
after the effective date of the Registration Statement and the date of this
Agreement as the Representatives deem advisable. The Company and the Selling
Stockholders hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each preliminary prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. Representations and Warranties of the Company and the
Selling Stockholders.
(a) The Company represents and warrants to, and agrees
with, the several Underwriters that:
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement, and may have filed one or more amendments thereto,
on Form S-1 (Registration No. 333-_____), including in such
registration statement, and each such amendment, a related
preliminary prospectus (a "Preliminary Prospectus"), for the
registration of the Shares and the Option Shares, in
conformity with the requirements of the Securities Act of 1933
(the "Act"). In addition, the Company has filed or will
promptly file a further amendment to such registration
statement, in the form heretofore delivered to you. The
Company may also file a related registration statement with
the Commission pursuant to Rule 462(b) under the Act for the
purpose of registering certain additional Shares, which
registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original
Registration Statement" means such registration statement, as
amended, on file with the Commission at the time such
registration statement becomes effective (including the
prospectus, financial statements, exhibits, and all other
documents filed as a part thereof or incorporated by reference
directly or indirectly therein), provided that such
registration statement, at the time it becomes effective, may
omit such information as is permitted to be omitted from a
registration statement when it becomes effective
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pursuant to Rule 430A of the General Rules and Regulations
promulgated under the Act (the "Regulations"), which
information ("Rule 430 Information") shall be deemed to be
included in such registration statement when a final
prospectus is filed with the Commission in accordance with
Rules 430A and 424(b)(1) or (4) of the Regulations; the term
"Rule 462(b) Registration Statement" means any registration
statement filed with the Commission pursuant to Rule 462(b)
under the Act (including the Original Registration Statement
and any Preliminary Prospectus or Prospectus incorporated
therein at the time the Original Registration Statement
becomes effective); the term "Registration Statement" includes
both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus"
means each prospectus included in the Registration Statement,
or any amendments thereto, before it becomes effective under
the Act, the form of prospectus omitting Rule 430A Information
included in the Registration Statement when it becomes
effective, if applicable (the "Rule 430A Prospectus"), and any
prospectus filed by the Company with your consent pursuant to
Rule 424(a) of the Regulations; and the term "Prospectus"
means the final prospectus included as part of the
Registration Statement, except that if the prospectus relating
to the securities covered by the Registration Statement in the
form first filed on behalf of the Company with the Commission
pursuant to Rule 424(b) of the Regulations shall differ from
such final prospectus, the term "Prospectus" shall mean the
prospectus as filed pursuant to Rule 424(b) from and after the
date on which it shall have first been used.
(ii) When the Registration Statement becomes
effective, and at all times subsequent thereto to and
including the Closing Dates, and during such longer period as
the Prospectus may be required to be delivered in connection
with sales by the Underwriters or a dealer, and during such
longer period until any post-effective amendment thereto shall
become effective, the Registration Statement (and any
post-effective amendment thereto) and the Prospectus (as
amended or as supplemented if the Company shall have filed
with the Commission any amendment or supplement to the
Registration Statement or the Prospectus) will contain all
statements which are required to be stated therein in
accordance with the Act and the Regulations, will comply with
the Act and the Regulations, and will not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, and no event will have
occurred which should have been set forth in an amendment or
supplement to the
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Registration Statement or the Prospectus which has not then
been set forth in such an amendment or supplement; if a Rule
430A Prospectus is included in the Registration Statement at
the time it becomes effective, the Prospectus filed pursuant
to Rules 430A and 424(b)(1) or (4) will contain all Rule 430A
Information; and each Preliminary Prospectus, as of the date
filed with the Commission, did not include any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; except that no
representation or warranty is made in this Section 4(a)(ii)
with respect to statement or omissions made in reliance upon
and in conformity with written information furnished to the
Company as stated in Section 7(b) with respect to any
Underwriter by or on behalf of such Underwriter through the
Representatives expressly for inclusion in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or
any amendment or supplement thereto.
(iii) If the Company has elected to rely on Rule
462(b) and the Rule 462(b) Registration Statement has not been
declared effective, then (i) the Company has filed a Rule
462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (ii) the Company has given
irrevocable instructions for transmission of the applicable
filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111
promulgated under the Act or the Commission has received
payment of such filing fee.
(iv) Neither the Commission nor the "blue sky" or
securities authority of any jurisdiction have issued an order
(a "Stop Order") suspending the effectiveness of the
Registration Statement, preventing or suspending the use of
any Preliminary Prospectus, the Prospectus, the Registration
Statement, or any amendment or supplement thereto, refusing to
permit the effectiveness of the Registration Statement, or
suspending the registration or qualification of the Firm
Shares or the Option Shares nor has any of such authorities
instituted or threatened to institute any proceedings with
respect to a Stop Order.
(v) Any contract, agreement, instrument, lease, or
license required to be described in the Registration Statement
or the Prospectus has been properly described therein. Any
contract agreement, instrument, lease, or license required to
be filed as an exhibit to the Registration Statement has been
filed with the
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Commission as an exhibit to or has been incorporated as an
exhibit by reference into the Registration Statement.
(vi) The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Delaware, with full corporate power and authority,
and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and
other governmental authorities and all courts and other
tribunals, to own, lease, license, and use its properties and
assets and to carry on its business as now being conducted and
in the manner described in the Prospectus. [The Company does
not own, lease or license any property or conduct any business
outside the United States of America.] The Company has no
subsidiary or subsidiaries and does not control, directly or
indirectly, any corporation, partnership, joint venture,
association or other business organization, except for those
listed on Schedule III attached hereto and those permitted to
be excluded pursuant to Item 601, Exhibit 21 of Regulation
S-K, including the Founding Companies (as hereinafter defined)
(each such corporation a "Subsidiary" and collectively, the
"Subsidiaries"). Each of the Subsidiaries has been duly
organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
as listed on Schedule III attached hereto. The Company and
each of its Subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in
which the character or location of its or any of their
properties (owned, leased or licensed) or the nature of its or
any of their businesses makes such qualification necessary
except for such jurisdictions where the failure to so qualify
would not, either singly or in the aggregate, have a material
adverse effect on the assets or properties, business,
financial condition or results of operations of the Company
and its Subsidiaries, taken as a whole.
(vii) The authorized capital stock of the Company
consists of 15,000,000 of Common Stock, of which
______________ shares are outstanding. Each outstanding share
of Common Stock has been duly and validly authorized and
issued, fully paid, and non-assessable, without any personal
liability attaching to the ownership thereof and has not been
issued and is not owned or held in violation of any preemptive
rights of shareholders. There is no commitment, plan,
preemptive right or arrangement to issue, and no outstanding
option, warrant, or other right calling for the issuance of,
shares of capital stock of the Company or any security or
other instrument which by its terms is
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convertible into, exercisable for, or exchangeable for capital
stock of the Company, except as may be properly described in
the Prospectus. There is outstanding no security or other
instrument which by its terms is convertible into or
exchangeable for capital stock of the Company, except as may
be properly described in the Prospectus.
(viii) The financial statements of the Company and
each Subsidiary included in the Registration Statement and the
Prospectus fairly present, with respect to the Company and
each Subsidiary the financial position, the results of
operations, and the other information purported to be shown
therein at the respective dates and for the respective periods
to which they apply. Such financial statements have been
prepared in accordance with generally accepted accounting
principles (except to the extent that certain footnote
disclosures regarding any stub period may have been omitted in
accordance with the applicable rules of the Commission under
the Securities Exchange Act of 1934 (the "Exchange Act"))
consistently applied throughout the periods involved, are
correct and complete, and are in accordance with the books and
records of the Company. The accountants whose report on the
audited financial statements is filed with the Commission as a
part of the Registration Statement are, and during the periods
covered by their report(s) included in the Registration
Statement and the Prospectus were, independent certified
public accountants with respect to the Company within the
meaning of the Act and the Regulations. No other financial
statements are required by Form S-1 or otherwise to be
included in the Registration Statement or the Prospectus.
There has at no time been a material adverse change in the
financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of the
Company or any Subsidiary from the latest information set
forth in the Registration Statement or the Prospectus, except
as may be properly described in the Prospectus.
(ix) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation before any court or before any public body or
board pending, threatened, or in prospect (or any basis
therefor) with respect to the Company or any Subsidiary, or
any of its operations, business, properties, or assets, except
as may be properly described in the Prospectus or such as
individually or in the aggregate do not now have and will not
in the future have a material adverse effect upon the
operations, business, properties, assets or financial
condition of the Company or any Subsidiary. Neither the
Company nor any Subsidiary is involved in any labor
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dispute, nor is such dispute threatened, which dispute would
have a material adverse effect upon the operations, business,
properties, assets or financial condition of the Company or
any Subsidiary. Neither the Company nor any Subsidiary is in
violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree; nor is the Company or
any Subsidiary required to take any action in order to avoid
any such violation or default.
(x) The Company and each Subsidiary has good and
marketable title in fee simple absolute to all real properties
and good title to all other properties and assets which the
Prospectus indicates are owned by it, and has valid and
enforceable leasehold interests in each of such items, free
and clear of all liens, security interests, pledges, charges,
encumbrances, and mortgages (except as may be properly
described in the Prospectus). No real property owned, leased,
licensed or used by the Company lies in an area which is, or
to the knowledge of the Company will be, subject to zoning,
use or building code restrictions which would prohibit, and no
state of facts relating to the actions or inaction of another
person or entity or his or its ownership, leasing, licensing
or use of any real or personal property exists or will exist
which would prevent, the continued effective ownership,
leasing, licensing or use of such real property in the
business of the Company and each Subsidiary as presently
conducted or as the Prospectus indicates it contemplates
conducting (except as may be properly described in the
Prospectus).
(xi) The Company and each Subsidiary, and to the
knowledge of the Company and each Subsidiary, any other party,
is not now or is not expected by the Company and each
Subsidiary to be in violation or breach of, or in default with
respect to, complying with any term, obligation or provision
of any contract, agreement, instrument, lease, license,
indenture, mortgage, deed of trust, note, arrangement or
understanding which is material to the Company and any
Subsidiary or by which any of its properties or business may
be bound or affected, and no event has occurred which with
notice or lapse of time or both would constitute such a
default, and each such contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement
or understanding is in full force and is the legal, valid and
binding obligation of the parties thereto and is enforceable
as to them in accordance with its terms. The Company and each
Subsidiary enjoy peaceful and undisturbed possession under all
leases and licenses under which they are operating. Neither
the Company nor any Subsidiary is a party to or bound by any
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contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding,
or subject to any charter or other restriction, which has had
or may in the future have a material adverse effect on the
financial condition, results of operations, business,
properties, assets, liabilities or future prospects of the
Company or any Subsidiary. Neither the Company nor any
Subsidiary is in violation or breach of, or in default with
respect to, any term of their respective certificates of
incorporation (or other charter document) or by-laws or of any
franchise, license, permit, judgment, decree, order, statute,
rule or regulation.
(xii) The Company and each Subsidiary have filed all
federal, state, local and foreign tax returns which are
required to be filed through the date hereof, or have received
extensions thereof, and have them pay all taxes shown on such
returns and all assessments received by it to the extent that
the same are material and have become due.
(xiii) Neither the Company, nor any Subsidiary, nor
any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any
Subsidiary has, directly or indirectly used any corporate
funds for unlawful contributions, gifts, entertainment, or
other unlawful expenses relating to political activity; made
any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; violated any
provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment. No transaction has
occurred between or among the Company, any Subsidiary, and any
of its officers or directors or any affiliates or affiliates
of any such officer or director, except as described in the
Prospectus.
(xiv) The Company and each Subsidiary has all
requisite power and authority to execute, deliver and perform
this Agreement. All necessary corporate proceedings of the
Company and each Subsidiary have been duly taken to authorize
the execution, delivery and performance of this Agreement.
This Agreement has been duly authorized, executed, and
delivered by the Company, is the legal, valid and binding
obligation of the Company and each Subsidiary, and is
enforceable as to the Company and each Subsidiary in
accordance with its terms. No consent, authorization,
approval, order, license, certificate or permit of or from, or
declaration or filing with, any federal, state, local or other
governmental authority or any court or other
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tribunal is required by the Company or any Subsidiary for the
execution, delivery or performance by the Company and each
Subsidiary of this Agreement (except filings under the Act
which have been or will be made before the applicable Closing
Date and such consents consisting only of consents under "blue
sky" or securities laws which have been obtained at or prior
to the date of this Agreement). No consent of any party to any
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding to
which the Company or any Subsidiary is a party, or to which
any of its respective properties or assets are subject, is
required for the execution, delivery or performance of this
Agreement, and the execution, delivery and performance of this
Agreement, will not violate, result in a breach of, conflict
with, accelerate the due date of any payments under, or (with
or without the giving of notice or the passage of time or
both) entitle any party to terminate or call a default under
any such contract, agreement, instrument, lease, license,
indenture, mortgage, deed of trust, note, arrangement, or
understanding, or violate or result in a breach of any term of
the certificate of incorporation (or other charter document)
or by-laws of the Company or any Subsidiary, or violate,
result in a breach of, or conflict with any law, rule,
regulation, order, judgment or decree binding on the Company
or any Subsidiary or to which any of its operations, business,
properties or assets are subject.
(xv) The Firm Shares and the Company Option Shares
are duly and validly authorized. The Firm Shares and the
Company Option Shares, when delivered in accordance with this
Agreement, will be duly and validly issued, fully paid, and
non-assessable, without any personal liability attaching to
the ownership thereof, and will not be issued in violation of
any preemptive rights of shareholders, optionholders,
warrantholders and any other persons and the Underwriters will
receive good title to the Firm Shares and the Company Option
Shares purchased by them, respectively, free and clear of all
liens, security interests, pledges, charges, encumbrances,
shareholders' agreements and voting trusts.
(xvi) The Firm Shares, the Company Option Shares and
the Common Stock conform to all statements relating thereto
contained in the Registration Statement or the Prospectus.
(xvii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as may otherwise be properly described
therein, there has not been any
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material adverse change in the assets or properties, business
or results of operations or financial condition of the Company
or any Subsidiary, whether or not arising from transactions in
the ordinary course of business; neither the Company nor any
Subsidiary has sustained any material loss or interference
with its business or properties from fire, explosion,
earthquake, flood or other calamity, whether or not covered by
insurance; since the date of the latest balance sheet included
in the Registration Statement and the Prospectus, except as
reflected therein, neither the Company nor any Subsidiary has
undertaken any liability or obligation, direct or contingent,
except for liabilities or obligations undertaken in the
ordinary course of business; and neither the Company nor any
Subsidiary has (A) issued any securities or incurred any
liability or obligation, primary or contingent, for borrowed
money, (B) entered into any transaction not in the ordinary
course of business, or (C) declared or paid any dividend or
made any distribution on any of its capital stock or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its capital stock.
(xviii) Neither the Company, nor any Subsidiary, nor
any of its officers, directors or affiliates (as defined in
the Regulations), has taken or will take, directly or
indirectly, prior to the termination of the underwriting
syndicate contemplated by this Agreement, any action designed
to stabilize or manipulate the price of any security of the
Company, or which has caused or resulted in, or which might in
the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of
the Company, to facilitate the sale or resale of any of the
Firm Shares or the Option Shares.
(xix) The Company has obtained from each of its
executive officers and directors and principal shareholders,
their enforceable written agreement, in form and substance
satisfactory to counsel for the Underwriters, that for a
period of 180 days from the date on which the public offering
of the Shares commences they will not, without the prior
written consent of Xxxxxx, on behalf of the Underwriters,
offer, pledge, sell, contract to sell, grant any option for
the sale of, or otherwise dispose of, directly or indirectly,
any shares of Common Stock or other securities of the Company
(or any security or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for shares
of Common Stock or other securities of the Company, including,
without limitation, any shares of Common Stock issuable
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under any employee stock options), beneficially owned by
them.
(xx) Neither the Company nor any Subsidiary is not,
and does not intend to conduct its business in a manner in
which it would be, an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940 (the
"Investment Company Act").
(xxi) All offers and sales of the Company's and each
Subsidiary's capital stock prior to the date hereof were at
all relevant times exempt from the registration requirements
of the Act and were the subject of an available exemption from
the registration requirements of all applicable state
securities or blue sky laws.
(xxii) No person or entity has the right to require
registration of shares of Common Stock or other securities of
the Company because of the filing or effectiveness of the
Registration Statement.
(xxiii) Except as may be set forth in the Prospectus,
neither the Company nor any Subsidiary has incurred any
liability for a fee, commission or other compensation on
account of the employment of a broker or finder in connection
with the transactions contemplated by this Agreement.
(xxiv) No transaction has occurred between or among
the Company, any Subsidiary, and any of their respective
officers or directors or any affiliates of any such officer or
director, that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(xxv) The Common Stock, including the Shares, are
authorized for quotation on the Nasdaq National Market.
(xxvi) Neither the Company nor any Subsidiary, nor
any of their affiliates is presently doing business with the
government of Cuba or with any person or affiliate located in
Cuba. If, at any time after the date that the Registration
Statement is declared effective with the Commission or with
the Florida Department of Banking and Finance (the "Florida
Department"), whichever date is later, and prior to the end of
the period referred to in the first clause of Section 4(ii)
hereof, the Company commences engaging in business with the
government of Cuba or with any person or affiliate located in
Cuba, the Company will so inform the Florida Department within
ninety days after such commencement of business in Cuba, and
during the period referred to in Section 4(ii) hereof will
inform the Florida Department within ninety
-13-
days after any change occurs with respect to previously
reported information.
(b) The Selling Stockholders, severally and not
jointly, represent and warrant to, agree with, the
several Underwriters that:
(i) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation before any court or beneficiary, public body or
board pending, threatened, or in prospect (or any basis
therefor known to such Selling Stockholder) with respect to
such Selling Stockholder or any of such Selling Stockholder's
business, properties or assets. Such Selling Stockholder is
not in violation of, or in default with respect to, any law,
rule, regulation, order, judgment, or decree; nor is such
Selling Stockholder required to take any action in order to
avoid such violation or default.
(ii) Each such Selling Stockholder has all requisite
power and authority to execute, deliver, and perform this
Agreement. This Agreement has been duly executed and delivered
by or on behalf of each such Selling Stockholder, is the
legal, valid and binding obligation of each Selling
Stockholder, and is enforceable as to each such Selling
Stockholder in accordance with its terms. No consent,
authorization, approval, order, license, certificate, or
permit of or from, or declaration or filing with, any federal,
state, local or other governmental authority or any court or
other tribunal is required by each such Selling Stockholder
for the execution, delivery or performance of this Agreement
(except filings under the Act which have been made before the
applicable Closing Date and such consents consisting only of
consents under "blue sky" or securities laws which have been
obtained at or prior to the date of this Agreement) by each
such Selling Stockholder. No consent of any party to any
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding to
which such Selling Stockholder is a party, or to which any of
each such Selling Stockholder's properties or assets are
subject, is required for the execution, delivery or
performance of this Agreement; and the execution, delivery and
performance of this Agreement will not violate, result in a
breach of, conflict with, or (with or without the giving of
notice or the passage of time or both) entitle any party to
terminate or call a default under any such contract,
agreement, instrument, lease, license, indenture, mortgage,
deed of trust, note, arrangement or understanding, or violate,
result in a breach of, or conflict with, any law, rule,
regulation, order,
-14-
judgment or decree binding on each such Selling Stockholder or
to which any of each such Selling Stockholder's operations,
business, properties, or assets are subject.
(iii) Each such Selling Stockholder has good title to
the Selling Stockholder Shares to be sold by such Selling
Stockholder pursuant to this Agreement, free and clear of all
liens, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts and when delivered
in accordance with this Agreement, the Underwriters will
receive good title to the Selling Stockholder Shares from such
Selling Stockholder, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders'
agreements and voting trusts.
(iv) Neither any Selling Stockholder nor any of such
Selling Stockholder's affiliates (as defined in the
Regulations) has taken or will take, directly or indirectly,
prior to the termination of the underwriting syndicate
contemplated by this Agreement, any action designed to
stabilize or manipulate the price of any security of the
Company, or which has caused or resulted in, or which might in
the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of
the Company, to facilitate the sale or resale of any of the
Selling Stockholder Shares.
(v) All information furnished or to be furnished to
the Company by or on behalf of each such Selling Stockholder
for use in connection with the preparation of the Registration
Statement and the Prospectus is true in all respects and does
not and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading.
(vi) Except as may be set forth in the Prospectus, no
Selling Stockholder has incurred any liability for a fee,
commission or other compensation on account of the employment
of a broker or finder in connection with the transactions
contemplated by this Agreement.
(vii) Each Selling Stockholder has no knowledge that,
and does not believe that, any representation or warranty of
the Company in Section 4(a) is incorrect.
(viii) Each Selling Stockholder has not, directly or
indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful
payment to foreign or domestic government
-15-
officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; violated any
provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
(ix) No transaction has occurred between any Selling
Stockholder and the Company or any Subsidiary that is required
to be described in the Registration Statement or the
Prospectus and is not so properly described.
5. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters under this Agreement are several
and not joint. The respective obligations of the Underwriters to
purchase the Shares are subject, in the Representatives' sole
discretion, to each of the following terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a)(i) of this Agreement; if the
Original Registration Statement or any amendment thereto filed prior to
the Firm Closing Date has not been declared effective as of the time of
execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have been declared effective not
later than the earlier of (i) 11:00 a.m. New York time, on the date on
which the amendment to the registration statement originally filed with
respect to the Shares or to the Registration Statement, as the case may
be, containing information regarding the public offering price of the
Shares has been filed with the Commission, and (ii) the time
confirmations are sent or given as specified by Rule 462(b)(2) or, with
respect to the Original Registration Statement, such later time and
date as shall have been consented to by the Representatives.
(b) No order preventing or suspending the use of any
preliminary prospectus or the Prospectus shall have been or shall be in
effect and no order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Representatives.
(c) The representations and warranties of the Company and the
Selling Stockholders contained in this Agreement and in the
certificates delivered pursuant to Section 5(d) shall be true and
correct when made and on and as of each Closing Date as if made on such
date and the Company and the Selling
-16-
Stockholders shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by it at or before such Closing Date.
(d) The Representatives shall have received on each Closing
Date (i) a certificate, addressed to the Representatives and dated such
Closing Date, of the chief executive or chief operating officer and the
chief financial officer of the Company to the effect that the persons
executing such certificate have carefully examined the Registration
Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company and each Subsidiary in
this Agreement are true and correct on and as of such Closing Date with
the same effect as if made on such Closing Date and the Company and
each Subsidiary has performed all covenants and agreements and
satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date and (ii)
certificates, addressed to the Representatives and dated such Closing
Date, of each of the Selling Stockholders to the effect that the
representations and warranties of each such Selling Stockholder are
true and correct on and as of such Closing Date and each such Selling
Stockholder has performed all covenants and agreements and satisfied
all conditions contained in this Agreement required to be performed or
satisfied by each such Selling Stockholder at or prior to such Closing
Date.
(e) The Representatives shall have received at the time this
Agreement is executed and on each Closing Date, signed letters from
Coopers & Xxxxxxx LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and scope reasonably satisfactory to the Representatives, with
reproduced copies or signed counterparts thereof for each of the
Underwriters confirming that they are independent accountants within
the meaning of the Act and the Regulations, that the response to Item
10 of the Registration Statement is correct in so far as it relates to
them and stating in effect that:
(i) in its opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by it comply as to form in all material respects
with the applicable accounting requirements of the Act, the
Exchange Act and the related published rules and regulations
thereunder;
(ii) on the basis of a reading of the amounts
included in the Registration Statement and the Prospectus
under the heading "Selected Financial Information" which would
not necessarily reveal matters
-17-
of significance with respect to the comments set forth in such
letter, a reading of the minutes of the meetings of the
shareholders and directors of the Company and each Subsidiary,
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and each Subsidiary as to transactions and events
subsequent to the date of the latest audited financial
statements, except as disclosed in the Registration Statement
and the Prospectus, nothing came to its attention which caused
it to believe that:
(A) the amounts in "Selected Financial
Information," and included in the Registration
Statement and the Prospectus do not agree with the
corresponding amounts in the audited financial
statements from which such amounts were derived; or
(B) with respect to the Company and each
Subsidiary, there were, at a specified date not more
than five business days prior to the date of the
letter, any decreases in net sales, income before
income taxes and net income or any increases in
long-term debt of the Company or any decreases in the
capital stock, working capital or the shareholders'
equity in the Company and each Subsidiary, as
compared with the amounts shown on the Company's
audited Balance Sheet for the fiscal year ended
December 31, 1995 included in the Registration
Statement or the audited Statement of Operations, for
such year; and
(iii) it has performed certain other procedures as a
result of which it determined that information of an
accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived
from the general accounting records of the Company and each
Subsidiary) set forth in the Registration Statement and the
Prospectus and reasonably specified by the Representatives
agrees with the accounting records of the Company.
References to the Registration Statement and the Prospectus in
this paragraph (e) are to such documents as amended and supplemented at
the date of such letter.
(f) The Representatives shall have received on each Closing
Date from Xxxxxxx, Street & Deinard, Professional Association, counsel
for the Company, an opinion, addressed to the Representatives and dated
such Closing Date, and in form and scope satisfactory to counsel for
the Underwriters, with reproduced copies or signed counterparts thereof
for each of the Underwriters, to the effect that:
-18-
(i) The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Delaware, with full corporate power and authority to
own, lease, license and use its properties and assets and to
conduct its business in the manner described in the
Prospectus. To the knowledge of such counsel, the Company has
all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and declarations and
filings with, all federal, state, local and other governmental
authorities and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its
business in the manner described in the Prospectus. [The
Company does not own, lease or license any property or conduct
any business outside the United States of America.] The
Company has no subsidiary or subsidiaries and does not
control, directly or indirectly, any corporation, partnership,
joint venture, association or other business organization,
except for those listed on Schedule II attached hereto and
those permitted to be excluded pursuant to Item 601, Exhibit
21 of Regulation S-K, including the Founding Companies. Each
of the Subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, as listed on Schedule III
attached hereto. The Company and each of its Subsidiaries is
duly qualified and in good standing as a foreign corporation
in each jurisdiction in which the character or location of its
or any of their properties (owned, leased or licensed) or the
nature of its or any of their businesses makes such
qualification necessary except for such jurisdictions where
the failure to so qualify would not, either singly or in the
aggregate, have a material adverse effect on the assets or
properties, business, financial condition or results of
operations of the Company and its Subsidiaries, taken as a
whole.
(ii) The Company has authorized, issued and
outstanding capital stock as set forth in the "actual" column
of the capitalization table under the caption "Capitalization"
in the Prospectus. The certificates evidencing the Shares are
in due and proper legal form. Each outstanding share of Common
Stock has been duly and validly authorized and issued, fully
paid, and is non-assessable, without any personal liability
attaching to the ownership thereof, and has not been issued
and is not owned or held in violation of any preemptive right
of shareholders. To the knowledge of such counsel, there is no
commitment, plan, or arrangement to issue, and no outstanding
option, warrant, or other right calling for the issuance of,
any share of capital stock of the Company or any security or
other instrument which by its terms is convertible into,
exercisable for, or
-19-
exchangeable for capital stock of the Company, except as may
be properly described in the Prospectus. To the knowledge of
such counsel, there is outstanding no security or other
instrument which by its terms is convertible into, exercisable
for or exchangeable for capital stock of the Company, except
as may be properly described in the Prospectus.
(iii) To the knowledge of such counsel, there is no
litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation before any
court or before any public body or board pending, threatened,
or in prospect (or any basis therefor) with respect to the
Company, any Subsidiary, or any of its operations, businesses,
properties, assets, or financial condition or any of the
Selling Stockholders attached hereto except as may be properly
described in the Prospectus or such as individually or in the
aggregate do not now have and will not in the future have a
material adverse effect upon the operations, business,
properties, assets, or financial condition of the Company or
any Subsidiary. To the knowledge of such counsel, neither the
Company nor any Subsidiary is involved in any labor dispute,
nor is such dispute threatened, which dispute would have a
material adverse effect upon the operations, business,
properties, assets or financial condition of the Company or
any Subsidiary. Neither the Company nor any Subsidiary is in
violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree, except as may be
properly described in the Prospectus or such as in the
aggregate do not now have and will not in the future have a
material adverse effect upon the operations, business,
properties, assets, or financial condition of the Company or
any Subsidiary; nor is the Company or any Subsidiary required
to take any action in order to avoid any such violation or
default.
(iv) To the knowledge of such counsel, the Company
nor any Subsidiary, nor any other party is now or is expected
by the Company or any Subsidiary to be in violation or breach
of, or in default with respect to, complying with any term,
obligation or provision of any contract, agreement,
instrument, lease, license, indenture, mortgage, deed of
trust, note, arrangement or understanding which is material to
the Company or any Subsidiary or by which any of its
properties or businesses may be bound or affected and no event
has occurred which with notice or lapse of time or both would
constitute such a default.
(v) Neither the Company nor any Subsidiary is in
violation or breach of, or in default with respect to,
-20-
any term of their certificates of incorporation (or other
charter documents) or by-laws.
(vi) Each of the Company and the Selling Stockholders
has all requisite power and authority to execute, deliver and
perform this Agreement and to issue and sell the Shares. All
necessary corporate proceedings of the Company and the
Subsidiaries have been taken to authorize the execution,
delivery and performance by the Company and the Subsidiaries
of this Agreement. This Agreement has been duly authorized,
executed and delivered by each of the Company and the Selling
Stockholders, is the legal, valid and binding obligation of
each of the Company and of the Selling Stockholders
enforceable against the Company and the Selling Stockholders
in accordance with its terms, except (x) as enforceability may
be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and court
decisions with respect thereto, (y) no opinion as to the
availability of equitable remedies need be expressed, and (z)
as rights to indemnification or contribution hereunder may be
limited under Federal and state securities laws and the
policies underlying such laws. No consent, authorization,
approval, order, license, certificate or permit of or from, or
declaration or filing with, any federal state, local or other
governmental authority or any court or other tribunal is
required by the Company, any Subsidiary or any of the Selling
Stockholders, for the execution, delivery or performance by
the Company or any of such Selling Stockholders of this
Agreement (except filings under the Act which have been made
prior to the Closing Date and filings or consents under "blue
sky" or securities laws, as to which such counsel need express
no opinion). To the knowledge of such counsel, no consent of
any party to any contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement
or understanding to which the Company, any Subsidiary or any
of the Selling Stockholders is a party, or to which any of
their respective properties or assets are subject, is required
for the execution, delivery or performance of this Agreement;
and the execution, delivery and performance of this Agreement
will not violate, result in a breach of, conflict with, or
(with or without the giving of notice or the passage of time
or both) entitle any party to terminate or call a default
under any such contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement
or understanding, in each case known to such counsel, or
violate or result in a breach of any term of the certificate
of incorporation (or other charter document) or bylaws of the
Company or any
-21-
Subsidiary, or violate, result in a breach of, or conflict
with any law, rule, regulation, order, judgment, or decree
binding on the Company or any Subsidiary or to which any of
their respective operations, businesses, properties or assets
are subject or any of the Selling Stockholders.
(vii) The Company Shares are duly and validly
authorized. Such opinion delivered at each of the Closing
Dates shall state that each Company Share, to be delivered on
that date is duly and validly issued, fully paid, and
non-assessable, with no personal liability attaching to the
ownership thereof, and is not issued in violation of any
preemptive rights of shareholders, optionholders,
warrantholders and any other persons, and each of the Selling
Stockholders has, pursuant to this Agreement, transferred to
each of the several Underwriters who has purchased the Selling
Stockholder Shares, and the Underwriters have received good
title to the Shares purchased by them, respectively, from the
Company and the Selling Stockholders, for the consideration
contemplated herein and in good faith and without notice of
any adverse claim within the meaning of the Uniform Commercial
Code, free and clear of any liens, security interests,
pledges, charges, encumbrances, shareholders' agreements,
voting trusts and other claims. The Common Stock, the Firm
Shares, the Selling Stockholder Shares and the Company Option
Shares conform to all statements relating thereto contained in
the Registration Statement or the Prospectus.
(viii) To the knowledge of such counsel, any
contract, agreement, instrument, lease or license required to
be described in the Registration Statement or the Prospectus
has been properly described therein. To the knowledge of such
counsel, any contract, agreement, instrument, lease or license
required to be filed as an exhibit to the Registration
Statement has been filed with the Commission as an exhibit to
or has been incorporated as an exhibit by reference into the
Registration Statement.
(ix) Insofar as statements in the Prospectus purport
to summarize the status of litigation or the provisions of
laws, rules, regulations, orders, judgments, decrees,
contracts, agreements, instruments, leases or licenses, such
statements have been prepared or reviewed by such counsel and
to the knowledge of such counsel, accurately reflect the
status of such litigation and provisions purported to be
summarized and are correct in all material respects.
-22-
(x) Neither the Company nor any Subsidiary is an
"investment company" as defined in Section 3(a) of the
Investment Company Act and, if the Company conducts its
business as set forth in the Prospectus, will not become an
"investment company" and will not be required to be registered
under the Investment Company Act.
(xi) To the knowledge of such counsel, no person or
entity has the right to require registration of shares of
Common Stock or other securities of the Company because of the
filing or effectiveness of the Registration Statement except
such persons or entities from whom written waivers of such
rights have been received prior to the Closing Date.
(xii) The Registration Statement has become effective
under the Act. No Stop Order has been issued and no
proceedings for that purpose has been instituted or are
threatened, pending, or to such counsel's knowledge,
contemplated.
(xiii) The Registration Statement, any Rule 430A
Prospectus, and the Prospectus, and any amendment or
supplement thereto (other than financial statements and other
financial data and schedules which are or should be contained
in any thereof, as to which such counsel need express no
opinion), comply as to form in all material respects with the
requirements of the Act and the Regulations. The conditions
for the use of Form S-1 have been satisfied with respect to
the Registration Statement.
(xiv) To the knowledge of such counsel, since the
effective date of the Registration Statement, no event has
occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus
which has not been set forth in such an amendment or
supplement.
(xv) The agreement of each officer, director,
principal shareholder of the Company and each Selling
Stockholder, stating that for a period of 180 days from the
date on which the public offering of the Shares commences,
such officer, director, principal shareholder and each Selling
Stockholder will not, without the prior written consent of
Xxxxxx, on behalf of the Underwriters, offer, pledge, sell,
contract to sell, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any shares of
Common Stock (or any other securities of the Company or any
security or other instrument which by its terms is convertible
into, exercisable for, or exchangeable for shares of Common
Stock or other securities of the Company, including, without
limitation, any shares of Common
-23-
Stock issuable under any employee stock options), beneficially
owned by such individual, has been duly and validly
authorized, executed and delivered by such individual and
constitutes the legal, valid and binding obligation of such
individual enforceable against such individual in accordance
with its terms.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement, any Rule 430A
Prospectus, or the Prospectus, or any amendment or supplement thereto (other
than financial statements and other financial data and schedules which are or
should be contained in any thereof, as to which such counsel need express no
opinion) and in conferences with officers and other representatives of the
Company, each Subsidiary and each Selling Stockholder, representatives of the
Representatives and representatives of the independent accountants of the
Company, at which conferences the contents of the Registration Statement, any
Rule 430A Prospectus, the Prospectus and related matters were discussed and,
although such counsel has not independently verified and is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement, the Prospectus, any Rule
430A Prospectus, or any amendment or supplement thereto (except as specified in
the foregoing opinion), on the basis of the foregoing and relying as to
materiality upon the representations of executive officers of the Company and
each Subsidiary and each Selling Stockholder after conferring with such
executive officers and Selling Stockholders, no facts have come to the attention
of such counsel which lead such counsel to believe that the Registration
Statement at the time it 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, or that the
Prospectus, except for the financial statements and other financial and
statistical data included therein as to which counsel need express no opinion,
as amended or supplemented on the date thereof contained any untrue statement of
a material fact or omitted 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.
In rendering their opinion as aforesaid, counsel may rely upon
an opinion or opinions, each dated the Closing Date, of other counsel retained
by the Company as to laws of any jurisdiction other than the Federal laws of the
United States, the General Corporate Law of the states of Delaware and
Minnesota, provided that (1) each such local counsel is reasonably acceptable to
the Representatives and (2) such reliance is expressly authorized by each
opinion so relied upon and a copy of each such opinion is addressed to the
Representatives and is in form and substance reasonably satisfactory to them and
their counsel. In addition, such counsel may rely, as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers of the
Company and the Selling Stockholders, provided
-24-
that executed copies of such certificates are provided to the Representatives.
(g) The Representatives shall have received on each Option
Shares Closing Date on which Selling Stockholder Shares are purchased from
_________________, counsel to the Selling Stockholders, an opinion, addressed to
the Representatives, and dated such Closing Date, to the effect that:
(i) The Selling Stockholders have all requisite power
and authority to execute, deliver and perform this Agreement
and to issue and sell the Shares. The Selling Stockholders
have the power and authority to execute, deliver and perform
this Agreement and to issue and sell the Shares. This
Agreement has been duly authorized, executed and delivered by
the Selling Stockholders, is the legal, valid and binding
obligation of the Selling Stockholders enforceable as to the
Selling Stockholders in accordance with its terms, except (x)
as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and court decisions with respect thereto, (y) no
opinion as to the availability of equitable remedies need be
expressed and (z) as rights to indemnification hereunder may
be limited under Federal and state securities laws and the
policies underlying such laws. No consent, authorization,
approval, order, license, certificate or permit of or from, or
declaration or filing with, any federal state, local or other
governmental authority or any court or other tribunal is
required by the Selling Stockholders, for the execution,
delivery or performance by the Selling Stockholders of this
Agreement (except filings under the Act which have been made
prior to the Closing Date and filings or consents under "blue
sky" or securities laws, as to which such counsel need express
no opinion). To the knowledge of such counsel, no consent of
any party to any contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement
or understanding to which the Trustee is a party, or to which
its property or assets are subject, is required for the
execution, delivery or performance of this Agreement; and the
execution, delivery and performance of this Agreement will not
violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both)
entitle any party to terminate or call a default under any
such contract, agreement, instrument, lease, license,
indenture, mortgage, deed of trust, note, arrangement or
understanding, in each case known to such counsel.
-25-
(ii) Such opinion delivered at each of the Option
Shares Closing Dates shall state that each Share, as the case
may be, to be delivered on that date is duly and validly
issued, fully paid, and non-assessable, with no personal
liability attaching to the ownership thereof, and is not
issued in violation of any preemptive or other rights of
stockholders, optionholders, warrantholders and other persons
and such Selling Stockholder has, pursuant to this Agreement,
transferred to each of the several Underwriters who has
purchased such Selling Stockholder Shares in good faith and
without actual notice of any lien, encumbrance, equity or
adverse claim within the meaning of the Uniform Commercial
Code, good and valid title to such Selling Stockholder Shares
free and clear of all liens, encumbrances, equities or claims.
(h) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
satisfactory in form and substance to the Representatives and its
counsel, and the Underwriters shall have received from Squadron,
Ellenoff, Plesent & Xxxxxxxxx, LLP, a favorable opinion, addressed to
the Representatives and dated such Closing Date, with respect to the
Shares, the Registration Statement and the Prospectus, and such other
related matters, as the Representatives may reasonably request, and the
Company and the Selling Stockholders shall have furnished to Squadron,
Ellenoff, Plesent & Xxxxxxxxx, LLP, such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
6. Covenants of the Company and the Selling Stockholders.
(a) The Company covenants and agrees as follows:
(i) The Company shall use its best efforts to cause
the Registration Statement to become effective as promptly as
possible. If the Registration Statement has become or becomes
effective with a form of prospectus omitting Rule 430A
information, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus,
properly completed, pursuant to Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to
you of such timely filing. The Company shall notify you
immediately, and confirm such notice in writing, (A) when the
Registration Statement and any post-effective amendment
thereto become effective, (B) of the receipt of any comments
from the Commission or the "blue sky" or securities authority
of any jurisdiction regarding the Registration Statement, any
post-effective amendment thereto, the Prospectus, or any
amendment or supplement
-26-
thereto, and (C) of the receipt of any notification with
respect to a Stop Order. The Company shall not file any
amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished the
Representatives a copy for their review prior to filing and
shall not file any such proposed amendment or supplement to
which the Representatives reasonably object. The Company shall
use its best efforts to prevent the issuance of any Stop Order
and, if issued, to obtain as soon as possible the withdrawal
thereof.
(ii) During the time when a Prospectus relating to
the Shares is required to be delivered hereunder or under the
Act or the Regulations, comply so far as it is able with all
requirements imposed upon it by the Act, as now existing and
as hereafter amended, and by the Regulations, as from time to
time in force, so far as necessary to permit the continuance
of sales of or dealings in the Shares in accordance with the
provisions hereof and the Prospectus. If, at any time when a
prospectus relating to the Shares is required to be delivered
under the Act and the Regulations, any event as a result of
which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Act or the
Regulations, the Company promptly shall prepare and file with
the Commission, subject to the third sentence of paragraph (i)
of this Section 6(a), an amendment or supplement which shall
correct such statement or omission or an amendment which shall
effect such compliance.
(iii) The Company shall make generally available to
its security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date (or 90 days if
such 12-month period coincides with the Company's fiscal
year), an earnings statement (which need not be audited) of
the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Act or Rule 158
of the Regulations.
(iv) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including all exhibits
and amendments thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and
-27-
all amendments thereof and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the
Act or the Regulations, as many copies of any preliminary
prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Representatives may reasonably
request.
(v) The Company shall cooperate with the
Representatives and its counsel in endeavoring to qualify the
Shares for offer and sale under the laws of such jurisdictions
as the Representatives may designate and shall maintain such
qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the
Company shall not be required in connection therewith, as a
condition thereof, to qualify as a foreign corporation or to
execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business
in any jurisdiction.
(vi) For a period of five years after the date of
this Agreement, the Company shall supply to the
Representatives, and to each other Underwriter who may so
request in writing, copies of such financial statements and
other periodic and special reports as the Company may from
time to time distribute generally to the holders of any class
of its capital stock and to furnish to the Representatives a
copy of each annual or other report it shall be required to
file with the Commission.
(vii) Without the prior written consent of Xxxxxx, on
behalf of the Underwriters, for a period of 180 days from the
date on which a public offering of the Shares commences, the
Company shall not issue, sell or register with the Commission
or otherwise dispose of, directly or indirectly, any
securities of the Company (or any securities convertible into
or exercisable or exchangeable for securities of the Company),
except for the issuance of the Shares pursuant to the
Registration Statement.
(viii) If the Company elects to rely on Rule 462(b),
the Company shall both file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b)
and pay the applicable fees in accordance with Rule 111
promulgated under the Act by the earlier of (i) 10:00 p.m.
eastern time on the date of this Agreement and (ii) the time
confirmations are sent or given, as specified by Rule
462(b)(2).
(ix) The Company shall make all filings required to
be made under applicable securities laws and by the
-28-
Nasdaq National Market on or before the last Closing Date.
(x) Prior to each Closing Date and for a period of 25
days thereafter, the Representatives shall be given reasonable
written prior notice of any press release or other direct or
indirect communication and of any press conference with
respect to the Company, the financial conditions, results of
operations, business, properties, assets, liabilities of the
Company, or this offering.
(xi) Until expiration of the Representative's
Warrants, the Company shall keep reserved sufficient shares of
Common Stock for issuance upon exercise thereof.
(b) The Company and the Selling Stockholders agree to pay, or
reimburse if paid by the Representatives, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses relating to the registration and
public offering of the Shares including those relating to: (i) the
preparation, printing, filing and distribution of the Registration
Statement including all exhibits thereto, each preliminary prospectus,
the Prospectus, all amendments and supplements to the Registration
Statement and the Prospectus, and any documents required to be
delivered with any Preliminary Prospectus or the Prospectus, and the
printing, filing and distribution of the Agreement Among Underwriters,
this Agreement and related documents; (ii) the preparation and delivery
of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the various jurisdictions referred
to in Section 6(a)(v), including the fees and disbursements of counsel
for the Underwriters in connection with such registration and
qualification and the preparation, printing, distribution and shipment
of preliminary and supplementary Blue Sky memoranda up to a maximum
amount of $25,000; (iv) the furnishing (including costs of shipping and
mailing) to the Representatives and to the Underwriters of copies of
each preliminary prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished, as may be reasonably requested for use
in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (v) the filing
fees of the National Association of Securities Dealers, Inc. in
connection with its review of the terms of the public offering; (vi)
the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of all reports and
information required by Section 6(a)(vi); (vii) inclusion of the Shares
for quotation on the NASDAQ National Market System; and (viii) all
transfer taxes, if any, with respect to the sale
-29-
and delivery of the Shares by the Company and the Selling Stockholders
to the Underwriters. Except as otherwise contemplated by Section 9
hereof, the Underwriters will pay their own counsel fees and expenses
to the extent not otherwise covered by clause (iii) above, and their
own travel and travel-related expenses in connection with the
distribution of the Shares. Without limiting the Company's obligations
set forth above, it agrees to pay all of its other costs and expenses
incident to the performance of its obligations under this Agreement and
the sale of the Shares by it hereunder.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Act, the Exchange Act or other Federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus or
any amendment thereof or supplement thereto, or arise out of or are
based upon any omission or alleged omission to state therein such fact
required to be stated therein or necessary to make such statements
therein not misleading. The Selling Stockholders agree, jointly and
severally, to indemnify each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any and all losses, claims,
damages and liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), to which they, or any of them, may become subject
under the Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact with respect
to such Selling Stockholders contained in any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto (which amendments or supplements are furnished to
such Selling Stockholders), or which arise out of or are based upon any
omission or alleged omission to state therein such fact required to be
stated therein or necessary to make such statements therein not
misleading, but only with reference to
-30-
information relating to such Selling Stockholders furnished in writing
to the Company by or on behalf of such Selling Stockholders expressly
for use in connection with the preparation of the Registration
Statement and Prospectus or any amendment thereof or supplement
thereto. Such indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on account of
any losses, claims, damages or liabilities arising from the sale of the
Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus,
or such amendment or supplement, in reliance upon and in conformity
with information furnished in writing to the Company by the
Representatives on behalf of any Underwriter specifically for use
therein. The obligations of each of the Selling Stockholders, pursuant
to this Section 7(a) and Section 8, shall be limited to an amount not
exceeding the product of the Per Share Price to Public of the Shares as
set forth on the cover page of the Prospectus and the number of Shares
being sold by each of them. In no event shall the indemnification
agreement contained in this Section 7(a) inure to the benefit of any
Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any losses, claims, damages, liabilities or
actions arising from the sale of the Shares upon the public offering to
any person by such Underwriter if such losses, claims, damages,
liabilities or actions arise out of, or are based upon, a statement or
omission or alleged omission in a preliminary prospectus and if, in
respect to such statement, omission or alleged omission, the Prospectus
differs in a material respect from such preliminary prospectus and a
copy of the Prospectus has not been sent or given to such person at or
prior to the confirmation of such sale to such person. This indemnity
agreement will be in addition to any liability which the Company and
Selling Stockholders may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each director of the Company, and each
officer of the Company who signs the Registration Statement and each
Selling Stockholder, to the same extent as the foregoing indemnity from
the Company and the Selling Stockholders to each Underwriter, but only
insofar as such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or omission or alleged untrue
statement or omission which was made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, which were made in reliance upon and in conformity
with information furnished in writing to the Company by the
Representatives on behalf of any
-31-
Underwriter for specific use therein; provided, however, that the
obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) and the Selling
Stockholders shall be limited to the net proceeds received by the
Company and the Selling Stockholders, respectively, from such
Underwriter. For all purposes of this Agreement, the amounts of the
selling concession and reallowance set forth in the Prospectus
constitute the only information furnished in writing by or on behalf of
any Underwriter expressly for inclusion in any Preliminary Prospectus,
any Rule 430A Prospectus, the Registration Statement or the Prospectus
or any amendment or supplement thereto.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 7(a) or
7(b) shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party otherwise than under this Section. In case any
such action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and the approval
by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other
expenses, except as provided below. The indemnified party shall have
the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the employment of counsel by such indemnified party
has been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have been advised by counsel reasonably
satisfactory to the indemnified party that there may be a conflict of
interest between the indemnifying parties and the indemnified party in
the conduct of the defense of such action (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party),
-32-
or (iii) the indemnifying parties shall not have employed counsel to
assume the defense of such action within a reasonable time after notice
of the commencement thereof, in each of which cases the reasonable fees
and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnifying party shall not be liable for any settlement
of any action, suit, proceeding or claim effected without its written
consent.
8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Sections 7(a) and (b) is due in accordance with its terms but for any reason
(other than by reason of the failure of the party asserting the right to be
indemnified to give notice as provided in Section 7(c)) is held to be
unavailable from the Company, the Selling Stockholders or the Underwriters, the
Company, the Selling Stockholders and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by the Company from persons other
than the Underwriters, such as the Selling Stockholders, persons who control the
Company within the meaning of the Act, officers of the Company who signed the
Registration Statement and directors of the Company, who may also be liable for
contribution) to which the Company and the Selling Stockholders and one or more
of the Underwriters may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other from the offering
of the Shares or, if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to above but also the relative fault of the Company and the Selling Stockholders
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, the Selling Stockholders and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the Offering (net of underwriting discounts but before deducting
expenses) received by the Company or the Selling Stockholders from the sale of
the Shares, as set forth in the table on the cover page of the Prospectus (but
not taking into account the use of the proceeds of such sale of Shares by the
Company), bear to (y) the underwriting discount received by the Underwriters, as
set forth in the table on the cover page of the Prospectus. The relative fault
of the Company, the Selling Stockholders and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact related to information supplied by the
Company, the Selling Stockholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to
-33-
correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and 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 which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, (i) in no case shall any Underwriter (except as may be provided
in the Agreement Among Underwriters) be liable or responsible for any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter hereunder, (ii) in no case shall any of the
Selling Stockholders be liable or responsible for any amount in excess of the
product of the Per Share Price to Public of the Shares as set forth on the cover
page of the Prospectus and the number of Shares being sold by each of them
subject to the limitation expressed in Section 7(a), and (iii) the Company shall
be liable and responsible for any amount in excess of the underwriting discounts
and commissions and the amount referred to in clause (ii); provided, however
that no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as such Underwriter, and each person, if any, who
controls the Company within the meaning of the Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i), (ii)
and (iii) in the immediately preceding sentence of this Section 8. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
Section, notify such party or parties from whom contribution may be sought, but
the omission so to notify such party or parties from whom contribution may be
sought shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its written consent. The
Underwriters' obligations to contribute pursuant to this Section 8 are several
in proportion to their respective underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with
respect to the Shares to be purchased on any Closing Date by the
Representatives by notifying the Company at any time prior to the
purchase of the Shares:
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(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted,
or in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the Offering; (iii) if there shall be such
a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States such as to make it, in the judgment of the
Representatives, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission or
trading generally on the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. or the Nasdaq National Market System has been
suspended or limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or
any other governmental or regulatory authority; or (v) if a banking
moratorium has been declared by any state or federal authority, or
(b) at or before any Closing Date, if any of the conditions
specified in Section 5 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions,
neither the Company nor the Selling Stockholders shall be under any liability to
any Underwriter, and no Underwriter shall be under any liability to the Company
or the Selling Stockholders, except that no Underwriter who shall have failed or
refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, shall be relieved of
liability to the Company and the Selling Stockholders or to the other
Underwriters for damages occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this
-35-
Agreement. If no such arrangements have been made by the close of
business on the business day following such Closing Date:
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date does not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 10
by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to an additional business day within
which it may, but is not obligated to, find one or more substitute
underwriters reasonably satisfactory to the Representatives to purchase
such Shares upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and the Selling
Stockholders and without liability on the part of the Company and the Selling
Stockholders, except in both cases as provided in Sections 6(b), 7, 8, 9 and 10.
The provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company or the Selling Stockholders or the
nondefaulting Underwriters arising out of such default. A substitute underwriter
hereunder shall become an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements,
representations, warranties, indemnities and other statements of
the Company or its officers, of the Selling Stockholders and of
the Underwriters set forth in or made pursuant to this Agreement
-36-
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or the Company or the Selling Stockholders or
any of the officers, directors or controlling persons referred to in Sections 7
and 8 hereof, and shall survive delivery of and payment for the Shares. The
provisions of Sections 6(b), 7, 8, 9 and 10 shall survive the termination or
cancellation of this Agreement.
12. This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors and assigns and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters, or the Company, and directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Shares from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered, or by telefax or telegraph if subsequently confirmed by letter,
(a) if to the Representatives, to Xxxxxx & Xxxxxxx, Inc., 000 Xxxxxxx Xxxxxx, 2
World Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxxx,
Senior Managing Director, telecopy: (000) 000-0000 and (b) if to the Company, to
the Company's agent for service as such agent's address appears on the cover
page of the Registration Statement.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflict of
laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, singular or plural, as the identity of the
person or persons or entity or entities require.
All section headings herein are for convenience of reference only and
are not part of this Agreement, and no construction or inference shall be
derived therefrom.
-37-
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
EXPRESSPOINT TECHNOLOGY SERVICE, INC.
By: ______________________________
Name:
Title:
----------------------------------
----------------------------------
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Confirmed on behalf of itself
and as the Representatives of the several Underwriters
named in Schedule I annexed hereto:
XXXXXX & XXXXXXX, INC.
By:______________________________
Name: Xxxxx Xxxxxxxxx
Title: Senior Managing Director
---------------------------------
By:______________________________
Name:
Title:
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SCHEDULE I
Number of Firm
Shares to be
Name of Underwriter Purchased
------------------- --------------
Xxxxxx & Xxxxxxx, Inc.....
Total _______________
-40-
SCHEDULE II
Name of Selling Stockholder Number of Shares
--------------------------- To be Sold
----------------
-41-
SCHEDULE III
Subsidiary Jurisdiction of Incorporation
---------- -----------------------------
Delta Parts, Inc. Minnesota
Amcom Corporation Minnesota
-42-
