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2,000,000 SHARES
XXXXXXX RIVER ASSOCIATES INCORPORATED
COMMON STOCK
UNDERWRITING AGREEMENT
DATED ________, 1999
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Table of Contents
SECTION 1. REPRESENTATIONS AND WARRANTIES..................................................................5
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................5
(a) Compliance with Registration Requirements..............................................5
(b) Offering Materials Furnished to Underwriters...........................................6
(c) Distribution of Offering Material By the Company.......................................6
(d) The Underwriting Agreement.............................................................7
(e) Authorization of the Common Shares.....................................................7
(f) No Applicable Registration or Other Similar Rights.....................................7
(g) No Material Adverse Change.............................................................7
(h) Independent Accountants................................................................8
(i) Preparation of the Financial Statements................................................8
(j) Incorporation and Good Standing of the Company
and the Subsidiaries...................................................................8
(k) Capitalization and Other Capital Stock Matters.........................................9
(l) Exchange Act and Nasdaq National Market Listing........................................9
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required...................................................9
(n) No Material Actions or Proceedings....................................................10
(o) Intellectual Property Rights..........................................................10
(p) All Necessary Permits, etc............................................................11
(q) Title to Properties...................................................................11
(r) Tax Law Compliance....................................................................11
(s) Company Not an "Investment Company"...................................................12
(t) Insurance.............................................................................12
(u) No Price Stabilization or Manipulation................................................12
(v) Related Party Transactions............................................................12
(w) No Unlawful Contributions or Other Payments...........................................12
(x) ERISA Compliance......................................................................13
(y) Exchange Act Compliance...............................................................13
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.....................................14
(a) The Underwriting Agreement............................................................14
(b) The Custody Agreement and Power of Attorney...........................................14
(c) Title to Common Shares to be Sold; All Authorizations Obtained........................14
(d) Delivery of the Common Shares to be Sold..............................................14
(e) Non-Contravention; No Further Authorizations
or Approvals Required.................................................................15
(f) No Registration or Other Similar Rights...............................................15
(g) No Further Consents, etc..............................................................15
(h) Disclosure Made by Such Selling Stockholder in the Prospectus.........................16
(i) No Price Stabilization or Manipulation................................................16
(j) Registration Statement and Prospectus.................................................16
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SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES...............................................16
The Firm Common Shares..................................................................................16
The First Closing Date..................................................................................17
The Optional Common Shares; the Second Closing Date.....................................................17
Public Offering of the Common Shares....................................................................18
Payment for the Common Shares...........................................................................18
Delivery of the Common Shares...........................................................................19
Delivery of Prospectus to the Underwriters..............................................................19
SECTION 3. ADDITIONAL COVENANTS...........................................................................19
A. Covenants of the Company.......................................................................19
(a) Representatives' Review of Proposed Amendments
and Supplements.......................................................................19
(b) Securities Act Compliance.............................................................20
(c) Amendments and Supplements to the Prospectus and
Other Securities Act Matters..........................................................20
(d) Copies of any Amendments and Supplements to the Prospectus............................21
(e) Blue Sky Compliance...................................................................21
(f) Use of Proceeds.......................................................................21
(g) Transfer Agent........................................................................21
(h) Earnings Statement....................................................................21
(i) Periodic Reporting Obligations........................................................21
(j) Agreement Not To Offer or Sell Additional Securities..................................22
(k) Future Reports to the Representatives.................................................22
B. COVENANTS OF THE SELLING STOCKHOLDERS..........................................................23
(a) Agreement Not to Offer or Sell Additional Securities..................................23
(b) Delivery of Forms W-8 and W-9.........................................................23
SECTION 4. PAYMENT OF EXPENSES............................................................................23
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS..............................................24
(a) Accountants' Comfort Letter...........................................................25
(b) Compliance with Registration Requirements; No
Stop Order; No Objection from NASD....................................................25
(c) No Material Adverse Change............................................................26
(d) Opinion of Counsel for the Company....................................................26
(e) Opinion of Counsel for the Underwriters...............................................26
(f) Officers' Certificate.................................................................26
(g) Bring-down Comfort Letter.............................................................27
(h) Opinion of Counsel for the Selling Stockholders.......................................27
(i) Selling Stockholders' Certificate.....................................................27
(j) Selling Stockholders' Documents.......................................................27
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(k) Lock-Up Agreement from Certain Stockholders of
the Company Other Than Selling Stockholders...........................................28
(l) Additional Documents..................................................................28
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES........................................................28
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT................................................................29
SECTION 8. INDEMNIFICATION................................................................................29
(a) Indemnification of the Underwriters...................................................29
(b) Indemnification of the Company, its Directors and
Officers and the Selling Stockholders.................................................31
(c) Notifications and Other Indemnification Procedures....................................32
(d) Settlements...........................................................................33
SECTION 9. CONTRIBUTION...................................................................................33
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.............................................35
SECTION 11. TERMINATION OF THIS AGREEMENT..................................................................36
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY............................................37
SECTION 13. NOTICES........................................................................................37
SECTION 14. SUCCESSORS.....................................................................................38
SECTION 15. PARTIAL UNENFORCEABILITY.......................................................................38
SECTION 16. GOVERNING LAW PROVISIONS.......................................................................39
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS
TO SELL AND DELIVER COMMON SHARES..............................................................39
SECTION 18. GENERAL PROVISIONS.............................................................................39
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UNDERWRITING AGREEMENT
________, 0000
XXXX XX XXXXXXX SECURITIES LLC
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXX XXXXX XXXXXX INC.
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Xxxxxxx River Associates Incorporated, a Massachusetts
corporation (the "Company"), proposes to issue and sell to the several
underwriters named in SCHEDULE A (the "Underwriters") an aggregate of 200,000
shares of its Common Stock, no par value (the "Common Stock"); and the
stockholders of the Company named in SCHEDULE B (collectively, the "Selling
Stockholders") severally propose to sell to the Underwriters an aggregate of
1,800,000 shares of Common Stock. The 200,000 shares of Common Stock to be sold
by the Company and the 1,800,000 shares of Common Stock to be sold by the
Selling Stockholders are collectively called the "Firm Common Shares." In
addition, the Selling Stockholders propose severally to grant to the
Underwriters an option to purchase up to an additional 300,000 shares of Common
Stock, each Selling Stockholder selling up to the amount set forth opposite such
Selling Stockholder's name in Schedule B, all as provided in Section 2. The
additional 300,000 shares to be sold by the Selling Stockholders pursuant to
such option are collectively called the "Optional Common Shares." The Firm
Common Shares and, if and to the extent such option is exercised, the Optional
Common Shares are collectively called the "Common Shares." Banc of America
Securities LLC ("BAS"), Xxxxxxx Xxxxx & Company L.L.C. and Xxxxxxx Xxxxx Barney
Inc. have agreed to act as representatives of the several Underwriters (in such
capacity, the "Representatives") in connection with the offering and sale of the
Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333- 85899), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto,
in the form in which it was declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including all documents incorporated or
deemed to be incorporated by reference therein and any information deemed to be
a part thereof at the time of effectiveness pursuant to Rule 430A or Rule 434
under the Securities Act is called the "Registration Statement." Any
registration statement filed by the Company pursuant to Rule 462(b) under the
Securities Act, is called the "Rule 462(b) Registration Statement," and from and
after the date and time of filing of the Rule 462(b) Registration Statement the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters
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to confirm sales of the Common Shares, is called the "Prospectus"; provided,
however, if the Company has, with the consent of BAS, elected to rely upon Rule
434 under the Securities Act, the term "Prospectus" shall mean the Company's
prospectus subject to completion (each, a "preliminary prospectus") dated
_______, 1999 (such preliminary prospectus is called the "Rule 434 preliminary
prospectus"), together with the applicable term sheet (the "Term Sheet")
prepared and filed by the Company with the Commission under Rules 434 and 424(b)
under the Securities Act and all references in this Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. All references in this
Agreement to the Registration Statement, the Rule 462(b) Registration Statement,
a preliminary prospectus, the Prospectus or the Term Sheet, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX"). All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder (collectively, the "Exchange Act"), which
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.
The Company and each of the Selling Stockholders hereby confirm their
respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The
Registration Statement and any Rule 462(b) Registration Statement have
been declared effective by the Commission under the Securities Act. The
Company has complied to the Commission's satisfaction with all requests
of the Commission for additional or supplemental information. No stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the
Commission.
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Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to XXXXX (except as may be
permitted by Regulation S-T under the Securities Act), was identical to
the copy thereof delivered to the Underwriters for use in connection
with the offer and sale of the Common Shares. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and
at all subsequent times, complied and will comply in all material
respects with the Securities Act and did not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as amended or supplemented, as
of its date and at all subsequent times, did not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments
or supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by the Representatives expressly for use therein. There are no
contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement which have not
been described or filed as required.
(b) Offering Materials Furnished to Underwriters. The Company
has delivered to each Representative one complete manually signed copy
of the Registration Statement and of each consent and certificate of
experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and preliminary prospectuses
and the Prospectus, as amended or supplemented, in such quantities and
at such places as the Representatives have reasonably requested for
each of the Underwriters.
(c) Distribution of Offering Material By the Company. The
Company has not distributed and will not distribute, prior to the later
of the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering material
in connection with the offering and sale of the Common Shares other
than a preliminary prospectus, the Prospectus or the Registration
Statement.
(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to
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indemnification or contribution hereunder may be limited by applicable
law and except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles.
(e) Authorization of the Common Shares. The Common Shares to
be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights. There
are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this Agreement,
except for such rights as have been duly waived or complied with.
(g) No Material Adverse Change. Except as otherwise disclosed
in the Prospectus, subsequent to the respective dates as of which
information is given in the Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries (the "Subsidiaries"),
considered as one entity (any such change is called a "Material Adverse
Change"); (ii) the Company and the Subsidiaries, considered as one
entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business
nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company, by a Subsidiary on any class
of capital stock or repurchase or redemption by the Company or any
Subsidiary of any class of capital stock.
(h) Independent Accountants. Ernst & Young LLP, who have
expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus, are independent
public or certified public accountants as required by the Securities
Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
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(i) Preparation of the Financial Statements. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the
consolidated financial position of the Company and the Subsidiaries as
of and at the dates indicated and the results of their operations and
cash flows for the periods specified. The supporting schedules, if any,
included in the Registration Statement present fairly the information
required to be stated therein. Such financial statements and supporting
schedules have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved, except as may be expressly stated in the related
notes thereto. No other financial statements or supporting schedules
are required to be included in the Registration Statement. The
financial data set forth in the Prospectus under the captions
"Prospectus Summary--Summary Consolidated Financial Data," "Selected
Consolidated Financial Data" and "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the
audited financial statements contained in the Registration Statement.
(j) Incorporation and Good Standing of the Company and the
Subsidiaries. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Massachusetts and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement. Each Subsidiary has been duly
organized and is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction of its
organization and has power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus.
Each of the Company and the Subsidiaries is duly qualified to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a
Material Adverse Change. The Company is the legal and beneficial owner
of the capital stock or membership interest in each Subsidiary, as
described in the Registration Statement. The Company owns its capital
stock or membership interest in each Subsidiary free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim.
Except as described in the Prospectus, the Company has no obligation
to contribute capital to any Subsidiary pursuant to the organizational
documents, operating agreement or certificate of formation of such
Subsidiary or any contractual arrangement with any third party. The
Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the Subsidiaries.
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(k) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company as of
May 14, 1999 was as set forth in the Prospectus under the caption
"Capitalization." The Common Stock (including the Common Shares)
conforms in all material respects to the description thereof contained
in the Prospectus. All of the issued and outstanding shares of Common
Stock (including the shares of Common Stock owned by Selling
Stockholders) have been duly authorized and validly issued, are
(except, in the case of shares purchased by officers of the Company
under agreements which provide for the purchase price to be paid in
installments, to the extent of the installments which are not yet due
and payable) fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights
of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or any Subsidiary other than those
accurately described in the Prospectus. The description of the
Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set
forth in the Prospectus is an accurate and fair description in all
material respects of such plans, arrangements, options and rights.
(l) Exchange Act and Nasdaq National Market Listing. The
Common Stock (including the Common Shares) is registered pursuant to
Section 12(g) of the Exchange Act and is listed on the Nasdaq National
Market and the Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock
under the Exchange Act or delisting the Common Stock from the Nasdaq
National Market, nor has the Company received any notification that
the Commission or the National Association of Securities Dealers, Inc.
(the "NASD") is contemplating terminating such registration or
listing.
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any
Subsidiary is in violation of its charter or by-laws or is in default
(or, with the giving of notice or lapse of time, would be in default)
("Default") under any indenture, mortgage, loan or credit agreement,
note, contract, franchise, lease or other instrument to which the
Company or such Subsidiary is a party or by which it or any of them may
be bound or to which any of the property or assets of the Company or
such Subsidiary is subject (each, an "Existing Instrument"), except for
such Defaults as would not, individually or in the aggregate, result in
a Material Adverse Change. The Company's execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby and by
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the Prospectus (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the
provisions of the charter or by-laws of the Company or any Subsidiary,
(ii) will not conflict with or constitute a breach of, or Default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to, or require the consent of any other party to,
any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances (i) as to which the Company
has obtained prior to the date hereof a valid waiver or consent, a
copy of which has been delivered to counsel for the Underwriters, or
(ii) as would not, individually or in the aggregate, result in a
Material Adverse Change and (iii) will not result in any violation of
any law, administrative regulation or administrative or court decree
applicable to the Company or any Subsidiary. No consent, approval,
authorization or other order of, or registration or filing with, any
court or other governmental or regulatory authority or agency, is
required for the Company's execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby and
by the Prospectus, except such as have been obtained or made by the
Company and are in full force and effect under the Securities Act or
applicable state securities or blue sky laws and from the NASD.
(n) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened (i) against the Company or any
Subsidiary, (ii) which has as the subject thereof any officer or
director of, or property owned or leased by, the Company or any
Subsidiary or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility
that such action, suit or proceeding might be determined adversely to
the Company or any Subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected
to result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No
material labor dispute with the employees of the Company or any
Subsidiary exists or, to the best of the Company's knowledge, is
threatened or imminent.
(o) Intellectual Property Rights. The Company and each Subsidiary
own or possess sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar
rights (collectively, "Intellectual Property Rights") reasonably
necessary to conduct their businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights would
not result in a Material Adverse Change. Neither the Company nor any
Subsidiary has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which
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infringement or conflict, if the subject of an unfavorable decision,
would result in a Material Adverse Change.
(p) All Necessary Permits, etc. The Company and each Subsidiary
possess such valid and current certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct their respective businesses,
except where any failure to possess the same, individually or in the
aggregate, would not result in a Material Adverse Change, and neither
the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with,
any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, could result in a Material Adverse Change.
(q) Title to Properties. The Company and each Subsidiary have
good and marketable title to all the properties and assets reflected
as owned in the financial statements referred to in Section 1(A)(i)
above (or elsewhere in the Prospectus), in each case free and clear of
any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except such as are disclosed in the
Prospectus or as do not materially and adversely affect the value of
such property and do not materially interfere with the use made or
proposed to be made of such property by the Company or such
Subsidiary. The real property, improvements, equipment and personal
property held under lease by the Company or any Subsidiary are held
under valid and enforceable leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed
to be made of such real property, improvements, equipment or personal
property by the Company or such Subsidiary.
(r) Tax Law Compliance. The Company and each Subsidiary have
filed all necessary federal, state and foreign income and franchise
tax returns and have paid all taxes due and payable by any of them
and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them, except as may be being contested
in good faith and by appropriate proceedings. The Company has made
adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(A)(i) above in respect of all
federal, state and foreign income and franchise taxes for all periods
as to which the tax liability of the Company or any Subsidiary has not
been finally determined.
(s) Company Not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The Company is
not, and after receipt of payment for the Common Shares will not be,
an
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"investment company" within the meaning of the Investment Company Act
and will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(t) Insurance. The Company and each Subsidiary are insured by
recognized, financially sound and reputable institutions with policies
in such amounts and with such deductibles and covering such risks as
are generally deemed adequate and customary for their businesses
including, but not limited to, policies covering real and personal
property owned or leased by the Company and any Subsidiary against
theft, damage, destruction, acts of vandalism and earthquakes. The
Company has no reason to believe that it or the Subsidiaries will not
be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a
Material Adverse Change. Since November 27, 1993, neither the Company
nor any Subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.
(u) No Price Stabilization or Manipulation. The Company has not
taken and will not take, directly or indirectly, any action designed
to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
(v) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company or
any Subsidiary or any other person required to be described in the
Prospectus which have not been described as required.
(w) No Unlawful Contributions or Other Payments. Neither the
Company nor any Subsidiary nor, to the best of the Company's
knowledge, any employee or agent of the Company or any Subsidiary, has
made any contribution or other payment to any official of, or
candidate for, any federal, state or foreign office in violation of
any law or of the character required to be disclosed in the
Prospectus.
(x) ERISA Compliance. The Company and each Subsidiary and any
"employee benefit plan" (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, any Subsidiary or their
"ERISA Affiliates" (as defined below) are in compliance in all
material respects with ERISA. "ERISA Affiliate" means, with respect to
the Company or any Subsidiary, any member of any group of
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organizations described in Sections 414(b),(c),(m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the "Code") of which the Company
or any Subsidiary is a member. No "reportable event" (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to
any "employee benefit plan" established or maintained by the Company,
any Subsidiary or any of their ERISA Affiliates. No "employee benefit
plan" established or maintained by the Company, any Subsidiary or any
of their ERISA Affiliates, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities"
(as defined under ERISA). Neither the Company, any Subsidiary nor any
of their ERISA Affiliates has incurred or reasonably expects to incur
any liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "employee benefit plan" or (ii) Sections
412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, any Subsidiary or any of
their ERISA Affiliates that is intended to be qualified under Section
401(a) of the Code is so qualified and nothing has occurred, whether
by action or failure to act, which would cause the loss of such
qualification.
(y) Exchange Act Compliance. The Company has filed on a timely
basis all reports and other documents required to be filed by it under
the Exchange Act. All such reports and documents, as well as any such
reports and documents filed by the Company from the date of this
Agreement through the Second Closing Date, at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the Exchange Act, and
when filed, did not or will not contain an untrue statement of the
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Any certificate signed by an officer of the Company and delivered
to the Representatives or to counsel for the Underwriters on the First Closing
Date or the Second Closing Date shall be deemed to be a representation and
warranty by the Company to each Underwriter as to the matters set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, hereby represents, warrants and
covenants to each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly
executed and delivered by or on behalf of such Selling Stockholder and
is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to
indemnification or contribution hereunder may be limited by applicable
law and except as the enforcement
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hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights
and remedies of creditors or by general equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of the (i)
Custody Agreement signed by or on behalf of such Selling Stockholder
and BankBoston N.A., as custodian (the "Custodian"), relating to the
deposit of the Common Shares to be sold by such Selling Stockholder
(the "Custody Agreement") and (ii) Power of Attorney appointing
certain individuals named therein as such Selling Stockholder's
attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set
forth therein relating to the transactions contemplated hereby and by
the Prospectus (the "Power of Attorney"), has been duly executed and
delivered by or on behalf of such Selling Stockholder and is a valid
and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification or
contribution thereunder may be limited by applicable law and except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(c) Title to Common Shares to be Sold; All Authorizations
Obtained. Such Selling Stockholder has, and on the First Closing Date
and the Second Closing Date (as defined below) will have, good and
valid title to all of the Common Shares which may be sold by such
Selling Stockholder pursuant to this Agreement on such date and the
legal right and power, and all authorizations and approvals required
by law to enter into this Agreement, the Custody Agreement and its
Power of Attorney, to sell, transfer and deliver all of the Common
Shares which may be sold by such Selling Stockholder pursuant to this
Agreement and to comply with its other obligations hereunder and
thereunder.
(d) Delivery of the Common Shares to be Sold. Delivery of the
Common Shares which are sold by such Selling Stockholder pursuant to
this Agreement will pass good and valid title to such Common Shares,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance or other claim (other than any arising out of an action
taken by an Underwriter).
(e) Non-Contravention; No Further Authorizations or Approvals
Required. The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, this Agreement, the Custody Agreement and its Power of Attorney
will not contravene or conflict with, result in a breach of, or
constitute a Default under, or require the consent of any other party
to, any agreement or instrument to which such Selling Stockholder is a
party or by which it is bound or under
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which it is entitled to any right or benefit, any provision of
applicable law or any judgment, order, decree or regulation applicable
to such Selling Stockholder of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder, except for any such
contravention, conflict, breach or Default as to which the Company has
obtained prior to the date hereof a valid waiver (a copy of which has
been delivered to counsel for the Underwriters) and any such consent
as has been obtained by the Company prior to the date hereof (a copy
of which has been delivered to counsel for the Underwriters). No
consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental authority or agency, is
required for the consummation by such Selling Stockholder of the
transactions contemplated in this Agreement, except such as have been
obtained or made and are in full force and effect under the Securities
Act or applicable state securities or blue sky laws and from the NASD.
(f) No Registration or Other Similar Rights. Such Selling
Stockholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company
under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as have been
duly waived or complied with.
(g) No Further Consents, etc. No consent, approval or waiver is
required under any instrument or agreement to which such Selling
Stockholder is a party or by which it is bound or under which it is
entitled to any right or benefit, in connection with the offering,
sale or purchase by the Underwriters of any of the Common Shares which
may be sold by such Selling Stockholder under this Agreement or the
consummation by such Selling Stockholder of any of the other
transactions contemplated hereby, except any such consent, approval or
waiver as has been obtained by such Selling Stockholder prior to the
date hereof, a copy of which has been delivered to counsel for the
Underwriters.
(h) Disclosure Made by Such Selling Stockholder in the
Prospectus. All information furnished by or on behalf of such Selling
Stockholder in writing expressly for use in the Registration Statement
and Prospectus is, and on the First Closing Date and the Second
Closing Date will be, true, correct, and complete in all material
respects, and does not, and on the First Closing Date and the Second
Closing Date will not, contain any untrue statement of a material fact
or omit to state any material fact necessary to make such information
not misleading. Such Selling Stockholder confirms as accurate the
number of shares of Common Stock set forth opposite such Selling
Stockholder's name in the Prospectus under the caption "Principal and
Selling
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Stockholders" (both prior to and after giving effect to the sale of
the Common Shares).
(i) No Price Stabilization or Manipulation. Such Selling
Stockholder has not taken and will not take, directly or indirectly,
any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
(j) Registration Statement and Prospectus. Such Selling
Stockholder has reviewed the Registration Statement and the Prospectus
and, to the knowledge of such Selling Stockholder, neither the
Registration Statement nor the Prospectus contains any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. Such Selling Stockholder has no knowledge of
any material fact, condition or information not disclosed in the
Registration Statement or the Prospectus which has had or may have a
Material Adverse Effect and is not prompted to sell shares of Common
Stock by any information concerning the Company which is not set forth
in the Registration Statement and the Prospectus.
Any certificate signed by or on behalf of any Selling Stockholder
and delivered to the Representatives or to counsel for the Underwriters on the
First Closing Date or the Second Closing Date shall be deemed to be a
representation and warranty by such Selling Stockholder to each Underwriter as
to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
The Firm Common Shares. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
200,000 Firm Common Shares and (ii) the Selling Stockholders agree, severally
and not jointly, to sell to the several Underwriters an aggregate of 1,800,000
Firm Common Shares, each Selling Stockholder selling the number of Firm Common
Shares set forth opposite such Selling Stockholder's name on SCHEDULE B. On the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Underwriters
agree, severally and not jointly, to purchase from the Company and the Selling
Stockholders the respective number of Firm Common Shares set forth opposite
their names on SCHEDULE A. The purchase price per Firm Common Share to be paid
by the several Underwriters to the Company and the Selling Stockholders shall be
$______ per share.
The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices
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of BAS, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such other place as
may be agreed to by the Company and the Representatives) at 6:00 a.m. San
Francisco time, on ________, 1999 or such other time and date not later than
10:30 a.m. San Francisco time, on _____, 1999 as the Representatives shall
designate by notice to the Company (the time and date of such closing are called
the "First Closing Date"). The Company and the Selling Stockholders hereby
acknowledge that circumstances under which the Representatives may provide
notice to postpone the First Closing Date as originally scheduled include, but
are in no way limited to, any determination by the Company or the
Representatives to recirculate to the public copies of an amended or
supplemented Prospectus or a delay as contemplated by the provisions of Section
10.
The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Selling
Stockholders hereby grant, severally and not jointly, an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
300,000 Optional Common Shares from the Selling Stockholders at the purchase
price per share to be paid by the Underwriters for the Firm Common Shares. The
option granted hereunder is for use by the Underwriters solely in covering any
over-allotments in connection with the sale and distribution of the Firm Common
Shares. The option granted hereunder may be exercised at any time (but not more
than once) upon notice by the Representatives to the Company and the Selling
Stockholders, which notice may be given at any time within 30 days from the date
of this Agreement. Such notice shall set forth (i) the aggregate number of
Optional Common Shares as to which the Underwriters are exercising the option,
(ii) the names and denominations in which the certificates for the Optional
Common Shares are to be registered and (iii) the time, date and place at which
such certificates are to be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in such case the term
"First Closing Date" shall refer to the time and date of delivery of
certificates for the Firm Common Shares and the Optional Common Shares). Such
time and date of delivery, if subsequent to the First Closing Date, is called
the "Second Closing Date" and shall be determined by the Representatives and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Optional Common Shares are to be
purchased, (a) each Underwriter agrees, severally and not jointly, to purchase
the number of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Optional Common Shares to be purchased as the
number of Firm Common Shares set forth on SCHEDULE A opposite the name of such
Underwriter bears to the total number of Firm Common Shares and (b) each Selling
Stockholder agrees, severally and not jointly, to sell the number of Optional
Common Shares (subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Optional Common Shares to be sold
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as the number of Optional Common Shares set forth in SCHEDULE B opposite the
name of such Selling Stockholder bears to the total number of Optional Common
Shares. The Representatives may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to the Company and the
Selling Stockholders.
Public Offering of the Common Shares. The Representatives hereby advise
the Company and the Selling Stockholders that the Underwriters intend to offer
for sale to the public, as described in the Prospectus, their respective
portions of the Common Shares as soon after this Agreement has been executed and
the Registration Statement has been declared effective as the Representatives,
in their sole judgment, have determined is advisable and practicable.
Payment for the Common Shares. Payment for the Common Shares to be sold
by the Company shall be made at the First Closing Date by wire transfer of
immediately available funds to the order of the Company. Payment for the Common
Shares to be sold by the Selling Stockholders shall be made at the First Closing
Date (and, if applicable, at the Second Closing Date) by wire transfer of
immediately available funds to the order of the Custodian.
It is understood that the Representatives have been
authorized, for their own account and the accounts of the several Underwriters,
to accept delivery of and give receipt for, and make payment of the purchase
price for, the Firm Common Shares and any Optional Common Shares the
Underwriters have agreed to purchase. BAS, individually and not as a
Representative of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by the Representatives by the First Closing Date or
the Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay
all stock transfer taxes, stamp duties and other similar taxes, if any, payable
upon the sale or delivery of the Common Shares to be sold by such Selling
Stockholder to the several Underwriters, or otherwise in connection with the
performance of such Selling Stockholder's obligations hereunder and (ii) the
Custodian is authorized to deduct for such payment any such amounts from the
proceeds to such Selling Stockholder hereunder and to hold such amounts for the
account of such Selling Stockholder with the Custodian under the Custody
Agreement.
Delivery of the Common Shares. The Company and the Selling Stockholders
shall, severally and not jointly, deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters certificates for
the Firm Common Shares to be sold by them at the First Closing Date, against the
irrevocable
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release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company and the Selling Stockholders shall,
severally and not jointly, also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters, certificates for
the Optional Common Shares the Underwriters have agreed to purchase from them at
the First Closing Date or the Second Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The certificates for the Common
Shares shall be in definitive form and registered in such names and
denominations as the Representatives shall have requested at least two full
business days prior to the First Closing Date (or the Second Closing Date, as
the case may be) and shall be made available for inspection on the business day
preceding the First Closing Date (or the Second Closing Date, as the case may
be) at a location in New York City as the Representatives may designate. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriters.
Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
San Francisco time on the second business day following the date the Common
Shares are released by the Underwriters for sale to the public, the Company
shall deliver or cause to be delivered copies of the Prospectus in such
quantities and at such places as the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS.
A. COVENANTS OF THE COMPANY. The Company further covenants and
agrees with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and
ending on the later of the First Closing Date or such date, as in the
opinion of counsel for the Underwriters, the Prospectus is no longer
required by law to be delivered in connection with sales by an
Underwriter or dealer (the "Prospectus Delivery Period"), prior to
amending or supplementing the Registration Statement (including any
registration statement filed under Rule 462(b) under the Securities
Act) or the Prospectus (including any amendment or supplement through
incorporation by reference of any report filed under the Exchange
Act), the Company shall furnish to the Representatives for review a
copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which a
Representative reasonably objects in writing within 48 hours after
receipt.
(b) Securities Act Compliance. After the date of this Agreement,
the Company shall promptly advise the Representatives in writing (i)
of the receipt of any comments of, or requests for additional or
supplemental information
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from, the Commission relating to the Registration Statement, (ii) of
the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date
that any post-effective amendment to the Registration Statement
becomes effective and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereto or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from any securities exchange upon which it
is listed for trading or included or designated for quotation, or of
the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any
time, the Company will use its best efforts to obtain the lifting of
such order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), 430A
and 434, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company
under such Rule 424(b) were received in a timely manner by the
Commission.
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any
event shall occur or condition shall exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the
reasonable opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the
Prospectus to comply with law, the Company agrees to promptly prepare
(subject to Section 3(A)(a) hereof), file with the Commission and
furnish at its own expense to the Underwriters and to dealers,
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) Copies of any Amendments and Supplements to the Prospectus.
The Company agrees to furnish the Representatives, without charge,
during the Prospectus Delivery Period, as many copies of the
Prospectus and any amendments and supplements thereto (including any
documents incorporated or deemed incorporated by reference therein) as
the Representatives may reasonably request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or
register the Common Shares for sale under (or obtain exemptions from
the application of)
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the Blue Sky or state securities laws or Canadian provincial
securities laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as
required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise
the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares
for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Common Shares sold by it in the manner described
under the caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall maintain, at its expense, a
registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company will
make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited)
covering the twelve-month period ending November 25, 2000 that
satisfies the provisions of Section 11(a) of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the
Commission and, to the extent required under the regulations thereof,
the Nasdaq National Market all reports and documents required to be
filed under the Exchange Act.
(j) Agreement Not To Offer or Sell Additional Securities. During
the period of 90 days following the date of the Prospectus, the
Company will not, without the prior written consent of BAS (which
consent may be withheld at the sole discretion of BAS), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of or transfer, or announce the offering of, or file any registration
statement under the Securities Act in respect of, any shares of Common
Stock, options or warrants to acquire shares of the Common Stock or
securities exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this Agreement with
respect to
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the Common Shares); provided, however, that the Company may: (i) issue
shares of its Common Stock or options to purchase its Common Stock, or
Common Stock upon exercise of options, pursuant to any stock option,
stock bonus or other stock plan or arrangement described in the
Prospectus, but only if the holders of such shares, options, or shares
issued upon exercise of such options, agree in writing with BAS not to
sell, offer, dispose of or otherwise transfer any such shares or
options during such 90 day period without the prior written consent of
BAS (which consent may be withheld at the sole discretion of BAS) or,
in the case of stock options, such options may not be exercised during
such 90 day period; (ii) file one or more registration statements on
Form S-8 covering shares of Common Stock issuable pursuant to any
stock option or stock purchase plan described in the Prospectus; or
(iii) issue shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock, as payment
for all or part of the purchase price of an acquisition by the Company
of another company or business, provided the total number of shares of
Common Stock issuable in connection with such acquisition (including
shares issuable upon exchange, exercise or conversion of any other
securities of the Company issued in connection with such acquisition)
does not exceed 10% of the number of shares of Common Stock
outstanding immediately prior to such acquisition, and provided
further that each person or entity receiving any such shares or
securities in connection with such acquisition agrees in writing with
BAS not to sell, offer, dispose of or otherwise transfer any such
shares or securities during such 90 day period without the prior
written consent of BAS (which consent may be withheld at the sole
discretion of BAS).
(k) Future Reports to the Representatives. During the period of
five years hereafter the Company will furnish to each Representative
(with the copy to BAS to be sent to 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, XX 00000 Attention: Xxxxxx X. Xxxxxxxxxx): (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as
of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public or certified
public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of
its capital stock.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
further covenants and agrees, severally and not jointly, with each Underwriter:
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(a) Agreement Not to Offer or Sell Additional Securities. Such
Selling Stockholder will not, without the prior written consent of BAS
(which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer,
establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of any shares of
Common Stock, options or warrants to acquire shares of Common Stock, or
securities exchangeable or exercisable for or convertible into shares
of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Exchange, except that
a 90-day period shall be used rather than the 60-day period set forth
therein) by the undersigned, or publicly announce the undersigned's
intention to do any of the foregoing, for a period commencing on the
date hereof and continuing through the close of trading on the date 90
days after the date of the Prospectus; provided, however, that such
Selling Stockholder may sell or otherwise transfer any such shares or
securities (i) to the Company and (ii) to an officer of the Company,
provided such officer agrees in writing with BAS not to sell, offer,
dispose of or otherwise transfer any such shares or securities during
such 90-day period without the prior written consent of BAS (which
consent may be withheld at the sole discretion of BAS).
(b) Delivery of Forms W-8 and W-9. Such Selling Stockholder
will deliver to the Representatives prior to the First Closing Date a
properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States person) or Form
W-9 (if the Selling Stockholder is a United States Person).
BAS, on behalf of the several Underwriters, may, in its sole
discretion, waive in writing the performance by the Company or any Selling
Stockholder of any one or more of the foregoing covenants or extend the time for
their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares sold by it (including all printing and engraving costs), (ii) all
fees and expenses of the registrar and transfer agent of the Common Stock, (iii)
all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel, independent public or certified public
accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each preliminary prospectus and the
Prospectus, and all amendments and supplements
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thereto, and this Agreement, (vi) all filing fees, attorneys' fees and expenses
incurred by the Company or the Underwriters in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Common Shares for offer and sale under the Blue Sky laws
and the Canadian provincial securities laws, and, if requested by the
Representatives, preparing and printing a "Blue Sky Survey" or memorandum, and
any supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the
reasonable fees and expenses of counsel for the Underwriters in connection with,
the NASD's review and approval of the Underwriters' participation in the
offering and distribution of the Common Shares, (viii) the fees and expenses
associated with listing the Common Shares on the Nasdaq National Market, and
(ix) all other fees, costs and expenses referred to in Item 14 of Part II of the
Registration Statement. Except as provided in this Section 4, Section 6, Section
8 and Section 9 hereof, the Underwriters shall pay their own expenses, including
the fees and disbursements of their counsel.
The Selling Stockholders further agree, severally and not
jointly, with each Underwriter to pay (directly or by reimbursement) all fees
and expenses incident to the performance of their respective obligations under
this Agreement which are not otherwise specifically provided for herein,
including but not limited to (i) fees and expenses of counsel and other advisors
for such Selling Stockholders, (ii) fees and expenses of the Custodian and (iii)
expenses and taxes incident to the sale and delivery of the Common Shares to be
sold by such Selling Stockholders to the Underwriters hereunder (which taxes, if
any, may be deducted by the Custodian under the provisions of Section 2 of this
Agreement). This Section 4 shall not affect or modify any separate, valid
agreement relating to the allocation of payment of expenses between the Company,
on the one hand, and the Selling Stockholders, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares (if not purchased on the First Closing Date), the Second
Closing Date, shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders set forth in
Sections 1(A) and 1(B) hereof as of the date hereof and as of the First Closing
Date as though then made and, with respect to the Optional Common Shares (if not
purchased on the First Closing Date), as of the Second Closing Date as though
then made, to the timely performance by the Company and the Selling Stockholders
of their respective covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Ernst & Young LLP, independent
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public or certified public accountants for the Company, a letter dated
the date hereof addressed to the Underwriters, in form and substance
satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus
(and each Representative shall have received an additional conformed
copy of such accountants' letter).
(b) Compliance with Registration Requirements; No Stop Order;
No Objection from NASD. For the period from and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares (if not purchased on the First Closing
Date), the Second Closing Date:
(i) the Company shall have filed the Prospectus with
the Commission (including the information required by Rule
430A under the Securities Act) in the manner and within the
time period required by Rule 424(b) under the Securities Act;
or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required
by such Rule 430A, and such post-effective amendment shall
have become effective; or, if the Company elected to rely upon
Rule 434 under the Securities Act and obtained the
Representatives' consent thereto, the Company shall have filed
a Term Sheet with the Commission in the manner and within the
time period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of
the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and no proceedings for such
purpose shall have been instituted or threatened by the
Commission; and
(iii) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and
arrangements.
(c) No Material Adverse Change. For the period from and after
the date of this Agreement and prior to the First Closing Date and,
with respect to the Optional Common Shares (if not purchased on the
First Closing Date), the Second Closing Date, in the judgment of the
Representatives there shall not have occurred any Material Adverse
Change.
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(d) Opinion of Counsel for the Company. On each of the First
Closing Date and, with respect to the Optional Common Shares (if not
purchased on the First Closing Date), the Second Closing Date the
Representatives shall have received the opinion of Xxxxx, Xxxx & Xxxxx
LLP, counsel for the Company, dated as of such Closing Date, the form
of which is attached as Exhibit A (and each Representative shall have
received an additional conformed copy of such counsel's legal opinion).
(e) Opinion of Counsel for the Underwriters. On each of the
First Closing Date and, with respect to the Optional Common Shares (if
not purchased on the First Closing Date), the Second Closing Date the
Representatives shall have received the opinion of Xxxx and Xxxx LLP,
counsel for the Underwriters, dated as of such Closing Date, with
respect to such matters as may be reasonably requested by the
Representatives (and each Representative shall have received an
additional conformed copy of such counsel's legal opinion).
(f) Officers' Certificate. On each of the First Closing Date
and, with respect to the Optional Common Shares (if not purchased on
the First Closing Date), the Second Closing Date the Representatives
shall have received a written certificate executed by the Chairman of
the Board, Chief Executive Officer or President of the Company and the
Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of such Closing Date, to the effect set forth in subsection
(b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not
occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of
the Company set forth in Section 1(A) of this Agreement are
true and correct with the same force and effect as though
expressly made on and as of such Closing Date; and
(iii) the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date.
(g) Bring-down Comfort Letter. On each of the First Closing
Date and, with respect to the Optional Common Shares (if not purchased
on the First Closing Date), the Second Closing Date the Representatives
shall have received from Ernst & Young LLP, independent public or
certified public accountants for the Company, a letter dated such date,
in form and substance satisfactory
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to the Representatives, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection
(a) of this Section 5, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three
business days prior to the First Closing Date or Second Closing Date,
as the case may be (and each Representative shall have received an
additional conformed copy of such accountants' letter).
(h) Opinion of Counsel for the Selling Stockholders. On each
of the First Closing Date and, with respect to the Optional Common
Shares (if not purchased on the First Closing Date), the Second Closing
Date the Representatives shall have received opinions of Xxxxx, Xxxx &
Eliot LLP and other attorneys reasonably acceptable to the
Representatives, in each case as special counsel for the Selling
Stockholders, dated as of such Closing Date, the form of which is
attached as EXHIBIT B (and each Representative shall have received an
additional conformed copy of each such counsel's legal opinion).
(i) Selling Stockholders' Certificate. On each of the First
Closing Date and, with respect to the Optional Common Shares (if not
purchased on the First Closing Date), the Second Closing Date the
Representatives shall have received a written certificate executed by
an Attorney-in-Fact of each Selling Stockholder, dated as of such
Closing Date, to the effect that:
(i) the representations, warranties and covenants of
such Selling Stockholder set forth in Section 1(B) of this
Agreement are true and correct with the same force and effect
as though expressly made by such Selling Stockholder on and as
of such Closing Date; and
(ii) such Selling Stockholder has complied with all
the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such Closing Date.
(j) Selling Stockholders' Documents. On the date hereof, the
Company and the Selling Stockholders shall have furnished for review by
the Representatives copies of the Powers of Attorney and Custody
Agreement executed by or on behalf of each of the Selling Stockholders
and such further information, certificates and documents as the
Representatives may reasonably request.
(k) Lock-Up Agreement from Certain Stockholders of the Company
Other Than Selling Stockholders. On the date hereof, the Company shall
have furnished to the Representatives an agreement in the form of
EXHIBIT C hereto from each director, each officer and each beneficial
owner of at least 25,000 shares of Common Stock (as defined and
determined according to Rule 13d-3 under the Exchange Act, except that
a 90-day period shall be used rather than
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the 60-day period set forth therein) who is an employee of the
Company, other than the Selling Stockholders, and such agreement shall
be in full force and effect on each of the First Closing Date and the
Second Closing Date.
(l) Additional Documents. On or before each of the First
Closing Date and, with respect to the Optional Common Shares (if not
purchased on the First Closing Date), the Second Closing Date, the
Representatives and counsel for the Underwriters shall have received
such other information and documents as they may reasonably require for
the purposes of enabling them to pass upon the issuance and sale of the
Common Shares as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and an Attorney-in-Fact at any time on
or prior to the First Closing Date and, with respect to the Optional Common
Shares (if not purchased on the First Closing Date), at any time prior to the
Second Closing Date, which termination shall be without liability on the part of
any party to any other party, except that this paragraph, Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement
is terminated by the Representatives pursuant to Section 5, clauses (i), (v) or
(vi) of Section 11 or Section 17, or if the sale to the Underwriters of the
Common Shares on the First Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company or a Selling
Stockholder to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse the Representatives and the other
Underwriters severally, upon demand for all out-of-pocket expenses that shall
have been reasonably incurred by the Representatives and the other Underwriters
in connection with the proposed purchase and the offering and sale of the Common
Shares, including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of
(i) the execution of this Agreement by the parties hereto and (ii) notification
by the Commission to the Company of the effectiveness of the Registration
Statement under the Securities Act, and the notification by the Company to the
Representatives of the receipt of such notification by the Commission.
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Prior to such effectiveness, this Agreement may be terminated
by any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the
Selling Stockholders to any Underwriter, except that the Company shall be
obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Section 4 hereof, (b) of any Underwriter to the Company or any
Selling Stockholder, or (c) of any party hereto to any other party, except that
the provisions of this paragraph, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company and each
of the Selling Stockholders, jointly and severally, agree to indemnify
and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of
the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or
such controlling person may become subject, under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of
the Company), insofar as such loss, claim, damage, liability or expense
(or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment
thereto, including any information deemed to be a part thereof pursuant
to Rule 430A or Rule 434 under the Securities Act, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or
(ii) upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; or (iii) in whole or in part
upon any inaccuracy in the representations and warranties of the
Company or the Selling Stockholders contained herein; or (iv) in whole
or in part upon any failure of the Company or the Selling Stockholders
to perform their respective obligations hereunder or under law; or (v)
any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the
offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising
out of or based upon any matter covered by clause (i) or (ii) above;
and to reimburse each Underwriter and each such controlling person for
any and all expenses (including the reasonable fees and disbursements
of counsel chosen by BAS) as such expenses are reasonably incurred by
such Underwriter
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or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. Notwithstanding the foregoing:
(A) neither the Company nor any Selling Stockholder shall be liable
under clause (v) of the preceding sentence to the extent that a court
of competent jurisdiction shall have determined by a final judgment
that such loss, claim, damage, liability or action resulted directly
from any such acts or failures to act undertaken or omitted to be
taken by such Underwriter through its bad faith, negligence or willful
misconduct; (B) the indemnity and reimbursement agreements in the
preceding sentence shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising
out of or based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); (C) with respect to any preliminary prospectus,
the indemnity and reimbursement agreements in the preceding sentence
shall not inure to the benefit of any Underwriter from whom the person
asserting any loss, claim, damage, liability or expense purchased
Common Shares, or any person controlling such Underwriter, if copies
of the Prospectus were timely delivered to the Underwriter pursuant to
Section 2 and a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Common Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss,
claim, damage, liability or expense; (D) the indemnity and
reimbursement agreements of a Selling Stockholder set forth in clauses
(iii) and (iv) of the preceding sentence shall not apply to any
inaccuracy in the representations and warranties of the Company or any
other Selling Stockholder or to any failure of the Company or any
other Selling Stockholder to perform their respective obligations
hereunder or under law; (E) the liability of each Selling Stockholder
under the indemnity and reimbursement agreements in the preceding
sentence, or otherwise for a breach of such Selling Stockholder's
representations or warranties set forth in this Agreement, shall be
limited to an amount equal to the public offering price of the Common
Shares sold by such Selling Stockholder, less the underwriting
discount, as set forth on the front cover page of the Prospectus; and
(F) the Company and the Selling Stockholders may agree, as among
themselves and without limiting the rights of the Underwriters under
this Agreement, as to the respective amounts of such liability for
which they each shall be responsible. The indemnity and reimbursement
agreements set forth in this Section 8(a) shall be in addition to any
liabilities that the Company and the Selling Stockholders may
otherwise have.
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(b) Indemnification of the Company, its Directors and Officers
and the Selling Stockholders. Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement,
the Selling Stockholders and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company, or any such director,
officer, Selling Stockholder or controlling person may become subject,
under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon: (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A or Rule
434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, in each case under clause (i) above and this clause (ii)
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
the Registration Statement, any preliminary prospectus, the Prospectus
(or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by a
Representative expressly for use therein; or (iii) any failure of the
Underwriters to perform their respective obligations hereunder or
under law; and to reimburse the Company, and each such director,
officer, Selling Stockholder and controlling person for any and all
legal and other expenses as such expenses are reasonably incurred by
the Company, or any such director, officer, Selling Stockholder or
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company and each of the Selling
Stockholders hereby acknowledge that the only information that the
Underwriters have furnished to the Company expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) are the statements set forth
in the table in the first paragraph and as the second and seventh
through tenth paragraphs under the caption "Underwriting" in the
Prospectus; and the Underwriters confirm that such statements are
correct. The
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indemnity and reimbursement agreements set forth in this Section 8(b)
shall be in addition to any liabilities that each Underwriter may
otherwise have.
(c) Notifications and Other Indemnification Procedures.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing
of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent
it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and
to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval
by the indemnified party of counsel, the indemnifying party will not
be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in accordance with the proviso to
the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the fees and expenses of
more than one separate counsel (together with local counsel), approved
by the indemnifying party (BAS in the case of Section 8(b) and Section
9), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, in each of which cases the
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reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) Settlements. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment;
provided that in the case of a final judgment, such indemnity shall be
only to the extent provided in Section 8(a), 8(b) or 8(c), as the case
may be. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 8(c) hereof, the indemnifying party agrees that
it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the
specific terms of such settlement at least 15 days prior to such
settlement being effected, and (iii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which
any indemnified party is or could have been a party and indemnity was
or could have been sought hereunder by such indemnified party, unless
such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION. If the indemnification provided for in Section
8 is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Common Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders,
on the one hand, and the Underwriters, on the other hand, in connection with the
statements in or omissions from any preliminary prospectus, the
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Prospectus or the Registration Statement (or any amendment or supplement to any
of the foregoing) or inaccuracies in the representations and warranties herein
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the Common
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Common Shares
pursuant to this Agreement (before deducting expenses) received by the Company
and the Selling Stockholders, and the total underwriting discount received by
the Underwriters, in each case as set forth on the front cover page of the
Prospectus (or, if Rule 434 under the Securities Act is used, the corresponding
location on the Term Sheet) bear to the aggregate public offering price of the
Common Shares as set forth on such cover page or such Term Sheet, as the case
may be. The relative fault of the Company and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company or the Selling Stockholders, on
the one hand, or the Underwriters, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating, defending, settling or compromising any action or claim. The
provisions set forth in Section 8(c) with respect to notice of commencement of
any action shall apply if a claim for contribution is to be made under this
Section 9; provided, however, that no additional notice shall be required with
respect to any action for which notice has been given under Section 8(c) for
purposes of indemnification.
The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 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 in this
Section 9.
Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting discount received by such Underwriter in connection with the Common
Shares underwritten by it and distributed to the public nor shall any Selling
Stockholder be required to contribute any amount in excess of the public
offering price of the Common Shares sold by such
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Selling Stockholder, less the underwriting discount, as set forth on the front
cover page of the Prospectus. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several, and not joint, in proportion to their respective
underwriting commitments as set forth opposite their names in SCHEDULE A. For
purposes of this Section 9, each officer and employee of an Underwriter and each
person, if any, who controls an Underwriter within the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act and the Exchange Act shall have
the same rights to contribution as the Company, and each person, if any, who
controls a Selling Stockholder within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as such Selling
Stockholder.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on SCHEDULE A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any non-defaulting
party to any other party except that the provisions of this sentence, Section 4,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination. In any such case either the Representatives or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
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As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date this Agreement may be terminated by the Representatives by notice given to
the Company and the Custodian if at any time (i) trading or quotation in any of
the Company's securities shall have been suspended or limited by the Commission
or by the Nasdaq Stock Market; (ii) trading in securities generally on either
the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended
or limited, or minimum or maximum prices shall have been generally established
on any of such stock exchanges by the Commission or the NASD; (iii) a general
banking moratorium shall have been declared by any of federal, New York or
California authorities; (iv) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions, as
in the judgment of the Representatives is material and adverse and makes it
impracticable to market the Common Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(v) in the judgment of the Representatives there shall have occurred any
Material Adverse Change; or (vi) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representatives may interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company or the Selling Stockholders
to any Underwriter, except that the Company and the Selling Stockholders shall
be obligated to reimburse the expenses of the Representatives and the other
Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to the
Company or any Selling Stockholder, or (c) of any party hereto to any other
party except that the provisions of this sentence, Section 8 and Section 9 shall
at all times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or the Selling Stockholders or any of
their partners, officers or directors or any controlling person, as the case may
be, and will survive
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delivery of and payment for the Common Shares sold hereunder and any termination
of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company:
Xxxxxxx River Associates Incorporated
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: President
With a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
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If to the Selling Stockholders:
BankBoston, N.A.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx XxXxxx
With a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and personal representatives, and no
other person will have any right or obligation hereunder. No assignment shall
relieve any party of its obligations hereunder. The term "successors" shall not
include any purchaser of the Common Shares as such from any of the Underwriters
merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL
AND DELIVER COMMON SHARES. If one or more of the Selling Stockholders shall fail
to sell and deliver to the Underwriters the Common Shares to be sold and
delivered by
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40
such Selling Stockholders at the First Closing Date pursuant to this Agreement,
then the Underwriters may at their option, by written notice from the
Representatives to the Company and the Custodian, either (i) terminate this
Agreement without any liability on the part of any Underwriter or, except as
provided in Sections 4, 6, 8 and 9 hereof, the Company or the Selling
Stockholders (other than such defaulting Selling Stockholders), or (ii) purchase
the shares which the Company and the other Selling Stockholders have agreed to
sell and deliver in accordance with the terms hereof. If one or more of the
Selling Stockholders shall fail to sell and deliver to the Underwriters the
Common Shares to be sold and delivered by such Selling Stockholders pursuant to
this Agreement at the First Closing Date or the Second Closing Date, then the
Underwriters shall have the right, by written notice from the Representatives to
the Company and the Custodian, to postpone the First Closing Date or the Second
Closing Date, as the case may be, but in no event for longer than seven days in
order that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section and paragraph headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
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41
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to the Company and the Custodian the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.
Very truly yours,
XXXXXXX RIVER ASSOCIATES
INCORPORATED
By: ____________________________________
President
EACH OF THE SELLING STOCKHOLDERS
By: ____________________________________
(Attorney-in-fact)
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives in San Francisco, California as of the date
first above written.
BANC OF AMERICA SECURITIES LLC
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXX XXXXX XXXXXX INC.
Acting as Representatives of the
several Underwriters named in
the attached SCHEDULE A.
By BANC OF AMERICA SECURITIES LLC
By:_________________________________
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SCHEDULE A
NUMBER OF
FIRM COMMON SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Banc of America Securities LLC.................
Xxxxxxx Xxxxx & Company, L.L.C.................
Xxxxxxx Xxxxx Xxxxxx Inc.......................
-----------------
Total.......................................... 2,000,000
=================
43
SCHEDULE B
NUMBER OF FIRM MAXIMUM NUMBER OF
COMMON SHARES OPTIONAL COMMON
SELLING STOCKHOLDER TO BE SOLD SHARES TO BE SOLD
---------- -----------------
Xxxxx X. Xxxxxxx...................... 85,000 --
Xxxxxxxx X. Xxxxxx.................... 90,167 --
Xxxxxx X. Xxxxx....................... 120,332 22,947
Xxxxxx X. Xxxxxx...................... 90,339 20,049
Xxxxxxx X. Xxxxxxxx................... 93,122 18,493
Xxxxxxx X. Xxxxxxx.................... 91,483 20,302
Xxxx Xxxxxx........................... 19,821 4,399
Xxxxxx X. Xxxxxxxx.................... 11,041 1,692
Xxxxxxx X. Xxxxxx..................... 80,275 16,000
Xxxxxxx X. Xxxxxxx.................... 60,988 13,535
Xxxxxx X. Xxxxxxxxxx.................. 60,988 13,535
Xxxx X. Xxxxxxx....................... 55,178 12,245
Xxxxxxx X. Xxxxx...................... 32,678 7,252
Xxxxxxx X. Xxxx....................... 21,775 --
Bridger X. Xxxxxxxx................... 45,000 --
Xxxxxxx X. Xxxxxx..................... 53,363 11,843
Xxxxxx Xxxxx.......................... 35,067 7,782
Xxxxxx X. Xxxxxxx..................... 35,067 433
Xxxxxx X. Xxxx........................ 35,067 7,782
W. Xxxxx Xxxxxxxxxx................... 35,067 7,782
Xxxx X. Xxxxxxx....................... 35,067 7,782
Xxxxx X. Xxxxx........................ 35,067 7,782
Xxxxxxx X. Xxxxx...................... 15,000 --
Xxxxxx X. Xxxxxxxxxx.................. 30,494 4,506
C. Xxxxxxxxxxx Xxxxxxx................ 30,494 6,767
44
NUMBER OF FIRM MAXIMUM NUMBER OF
COMMON SHARES OPTIONAL COMMON
SELLING STOCKHOLDER TO BE SOLD SHARES TO BE SOLD
-------------- -----------------
Xxxxxx X. Xxxxx......................... 30,494 6,767
Xxxx X. Xxxxxxxx........................ 30,494 6,767
Xxxxxx X. Xxxxxxx....................... 17,500 --
Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxx.......................... 26,300 5,837
Xxxx X. Xxxxxxxxx....................... 18,000 --
Xxxxxxx X. Xxxxxx....................... 6,322 1,403
Xxxxxxx X. Xxxx......................... 19,059 4,230
Xxxx X. Xxxxxxx......................... 12,500 --
Xxxxxxx X. Xxxx......................... 7,623 1,692
Xxxxxxx X. Xxxxxxxx as Trustee of
The Xxxxx X. Xxxxxxx Qualified Annuity
Trust -- 1998.......................... 55,206 8,459
Xxxx Xxxxxxx............................ 31,793 --
Xxxxx Xxxx Xxxxxxxx as Trustee of
The Xxxxxxx X. Xxxxxxxx Qualified
Annuity Trust 1998..................... 40,250 8,237
Xxxxxx X. Xxxxxx as Trustee of
The Salop Irrevocable GST --
Exempt Trust 1998...................... 38,048 7,559
Xxxxxx X. Xxxxxx as Trustee of
The Salop Irrevocable GST --
Taxable Trust 1998..................... 38,048 7,559
Xxxxxxx X. Xxxxxx....................... 16,838 3,737
Xxxxx X. Xxxxxxx - Xxxxxx............... 15,038 3,737
Xxxxxxx X. Xxxxxx....................... 14,678 3,737
Xxxxxxx Xxxxx as Trustee of
The Besen Family Trust................. 20,685 4,591
Xxxxxx X. Xxxxxx as Trustee of
The Xxxxxx Children's Family Trust..... 21,019 4,302
Xxxx X. Xxxxxx as Trustee of
The Xxxxxxx X. Xxxxxx Irrevocable
Trust 1998............................. 16,548 3,672
Xxxxxxx X. Xxxxxx as Trustee of
the Xxxxxxx X. Xxxxxx GST Trust........ 7,219 1,602
Xxxxx X. Xxxxxxx-Xxxxxx as Trustee
of the Xxxxx X. Xxxxxx GST Trust....... 7,219 1,602
Xxxxxxx X. Xxxxxx as Trustee of
the Xxxxxxx X. Xxxxxx GST Trust........ 7,219 1,602
The Boston Foundation, Inc.............. 2,160 --
The HLA Registry Foundation, Inc........ 1,800 --
--------- -------
Total:......................... 1,800,000 300,000
========= =======
