EXHIBIT 1.1
K&S DRAFT: 7/23/97
CHS ELECTRONICS, INC.
12,000,000 SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
, 1997
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXXXXX SECURITIES
X.X. XXXXXXXX & CO.
XXXXXX GULL XXXXXXX & XxXXXXXX INC.
as Representatives of the several
U.S. Underwriters listed on Schedule I
c/o Raymond Xxxxx & Associates, Inc.,
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Dear Sirs:
Subject to the terms and conditions stated herein, CHS ELECTRONICS, INC., a
Florida corporation (the "Company") proposes to issue and sell (the "U.S.
Offering") to the several underwriters named in SCHEDULE I (the "U.S.
Underwriters") an aggregate of 9,000,000 shares (the "U.S. Firm Shares") of the
Company's authorized common stock, par value $.001 per share ("Common Stock").
It is understood that the Company is concurrently entering into a
Subscription Agreement, dated the date hereof (the "Subscription Agreement"),
with Xxxxxxx Xxxxx & Associates, Inc. and the other managers named therein (the
"International Managers") relating to the concurrent offering and sale of
3,000,000 shares of Common Stock (the "International Firm Shares") outside the
United States and Canada (the "International Offering", and together with the
U.S. Offering, the "Offering").
In addition, the Company proposes to issue and sell (i) to the U.S.
Underwriters, at the option of the U.S. Underwriters and subject to the terms
and conditions stated herein, up to an aggregate of 1,350,000 additional shares
of Common Stock (the "U.S. Optional Shares") and (ii) to the International
Managers, at the option of the International Managers and subject to the terms
and conditions stated in the Subscription Agreement, up to an aggregate of
450,000 additional shares of Common Stock (the "International Optional Shares").
The U.S. Firm Shares and the U.S. Optional Shares are hereinafter called the
"U.S. Shares"; the International Firm Shares and the International Optional
Shares are hereinafter called the "International Shares"; the U.S. Firm Shares
and the International Firm Shares are hereinafter called the "Firm Shares"; the
U.S. Optional Shares and the International Optional Shares are hereinafter
called the "Optional Shares"; and the Firm Shares and the Optional Shares are
hereinafter called the "Shares".
To provide for the coordination of their activities, the U.S. Underwriters
and the International Managers have entered into an Agreement Between U.S.
Underwriters and International Managers which permits them, among other things,
to sell the Shares to each other for purposes of resale.
1. REPRESENTATIONS AND WARRANTIES
(A) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to, and agrees with, each of the U.S. Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-29779)
with respect to the Shares, including prospectuses subject to
completion relating to the U.S. Shares and the International Shares,
respectively, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the "Act"), and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (A) if
such registration statement, as it may have been amended, has become
effective under the Act and information has been omitted therefrom in
accordance with Rule 430A under the Act, prospectuses relating to the
U.S. Shares and the International Shares in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement) with
such changes or insertions as are required by Rule 430A or permitted by
Rule 424(b) under the Act and as have been provided to and approved by
the U.S. Underwriters, or (B) if such registration statement, as it may
have been amended, has not become effective under the Act, an amendment
to such registration statement, including forms of prospectuses
relating to the U.S. Shares and the International Shares, a copy of
which amendment has been provided to and approved by the U.S.
Underwriters prior to the execution of this Agreement. In the case of
(A) above, all of the Shares have been duly registered under the Act.
In the case of (B) above, all of the Shares will be duly registered
under the Act. As used in this Agreement, the term "Registration
Statement" means such registration statement, including all information
incorporated by reference therein, as amended at the time when it was
or is declared effective, together with any registration statement
filed by the Company pursuant to Rule 462(b) of the Act, including all
financial statement schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectuses (as hereinafter defined); the term "U.S.
Preliminary Prospectus"
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means such prospectus relating to the U.S. Shares subject to
completion, including all information incorporated by reference
therein, included in such registration statement or any amendment or
post-effective amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement); the term
"International Preliminary Prospectus" means such prospectus relating
to the International Shares subject to completion, including all
information incorporated by reference therein, included in such
registration statement or any amendment or post-effective amendment
thereto (including the prospectus subject to completion, if any,
included in the Registration Statement) (such prospectus included by
filing the U.S. Preliminary Prospectus, to which the International
Prospectus is identical except for those pages following the U.S.
Preliminary Prospectus separately captioned "Alternate Page for
International Prospectus"); the term "U.S. Prospectus" means the
prospectus relating to the U.S. Shares, including all information
incorporated by reference therein, first filed with the Commission
pursuant to Rule 424(b) under the Act or, if no prospectus is required
to be so filed, such term means the prospectus relating to the U.S.
Shares included in the Registration Statement; and the term
"International Prospectus" means the prospectus relating to the
International Shares, including all information incorporated by
reference therein, first filed with the Commission pursuant to Rule
424(b) under the Act or, if no prospectus is required to be so filed,
such term means the prospectus relating to the International Shares
included in the Registration Statement. The term "Preliminary
Prospectuses" means the U.S. Preliminary Prospectus and the
International Preliminary Prospectus. The term "Prospectuses" means the
U.S. Prospectus and the International Prospectus.
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission or the
securities authority of any state or other jurisdiction. If the
Registration Statement has become effective under the Act, no stop
order suspending the effectiveness of the Registration Statement or any
part thereof has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, threatened or
contemplated by the Commission or the securities authority of any state
or other jurisdiction.
(iii) When any Preliminary Prospectus was filed with the
Commission, it (A) contained all statements required to be stated
therein in accordance with, and complied in all material respects with
the requirements of, the Act and the rules and regulations of the
Commission thereunder, and (B) did not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein in the light of the circumstances under
which they were made, not misleading. When the Registration Statement
or any amendment thereto was or is declared effective, and at each Time
of Delivery (as hereinafter defined), it (C) contained or will contain
all statements required to be stated therein in accordance with and
complied or will comply in all material respects with the requirements
of, the
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Act and the rules and regulations of the Commission thereunder, and (D)
did not or will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. When any
Prospectus or any amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) (or, if a Prospectus or such
amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such
amendment or supplement to a Prospectus was or is declared effective)
and at each Time of Delivery, such Prospectus, as amended or
supplemented at any such time, (E) contained or will contain all
statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements
of, the Act and the rules and regulations of the Commission thereunder,
and (F) did not or will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Items B, D and F of this paragraph (iii) do
not apply to statements or omissions made in any Preliminary
Prospectus, the Registration Statement or any amendment thereto or any
Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by any
of the U.S. Underwriters or International Managers specifically for use
therein, it being understood that the only such information is that
listed in the second parenthetical statement in Section 8(b) hereof.
(iv) The descriptions in the Registration Statement and the
Prospectuses of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown; and there are no statutes or legal or
governmental proceedings required to be described in the Registration
Statement or the Prospectuses that are not described as required and no
contracts or documents of a character that are required to be described
in the Registration Statement or the Prospectuses or to be filed as
exhibits to the Registration Statement that are not described and filed
as required.
(v) The Company and each of its subsidiaries has been duly
incorporated or organized, as the case may be, is validly existing as a
corporation or other legal entity, is in good standing under the laws
of its jurisdiction of incorporation or organization (with respect to
subsidiaries, only to the extent that such concepts are recognized in
each such subsidiary's jurisdiction of organization) and has full power
and authority (corporate and other) to own or lease its properties and
conduct its business as described in the Prospectus. The Company has
full power and authority (corporate and other) to enter into this
Agreement and to perform its obligations hereunder. The Company and
each of its subsidiaries is duly qualified to transact business as a
foreign corporation or other legal entity and is in good standing under
the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification (with respect to subsidiaries, only to
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the extent that such concepts are recognized in such jurisdictions),
except where the failure to so qualify would not have a material
adverse effect on the financial position, results of operations or
business of the Company (a "Material Adverse Effect").
(vi) The Company's authorized, issued and outstanding capital
stock is as set forth in the Prospectuses under the caption
"Capitalization." All of the issued shares of capital stock of the
Company and each of its subsidiaries which is a corporation and all of
the Company's ownership interests of every subsidiary which is not a
corporation have been duly authorized and validly issued, are fully
paid for and are not subject to any claim for payment by the issuing
corporation or other such entity. The Common Stock conforms to the
description of the Common Stock contained in the Prospectus. None of
the issued shares of capital stock of the Company and each of its
subsidiaries which is a corporation has been issued or is owned or held
in violation of any preemptive rights of shareholders and no person or
entity has any preemptive or other rights to subscribe for any of the
Shares.
(vii) The Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or other
entity or association other than those listed on the inside front cover
of the Prospectuses. The Company owns 100% of the issued and
outstanding capital stock of each of its subsidiaries listed on the
inside front cover of the Prospectuses, free from liens, encumbrances
and defects, except for the subsidiaries (A) organized under the laws
of England, Hungary and Uruguay, as to each of which it owns 99.2%, 51%
and 50%, respectively, of the issued and outstanding capital stock or
other type of ownership interest, as the case may be, and (B) organized
under the laws of Belgium, France and Portugal as to each of which it
owns approximately 99.997% of the issued and outstanding capital stock
or other type of ownership interest, as the case may be.
(viii) Except as disclosed in the Prospectus, there are no
outstanding (A) securities or obligations of the Company convertible
into or exchangeable for any capital stock of the Company, (B)
warrants, rights or options to subscribe for or purchase from the
Company any such capital stock or any such convertible or exchangeable
securities or obligations, or (C) obligations of the Company to issue
any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(ix) Since the date of the most recent audited financial
statements included or incorporated by reference in the Prospectus,
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as disclosed in or contemplated by the Prospectus.
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(x) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (A) the Company has not
incurred any liabilities or obligations, direct or contingent, or
entered into any transactions, not in the ordinary course of business,
that are material to the Company, (B) the Company has not purchased any
of its outstanding capital stock or declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock, (C)
there has not been any change in the capital stock, or any material
increase or decrease in the long-term debt or short-term debt of the
Company, and (D) there has not been any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the financial position, results of operations or business of
the Company, in each case other than as disclosed in or contemplated by
the Prospectus.
(xi) The Shares to be issued and sold by the Company have been
duly authorized and, when issued and delivered against payment therefor
as provided herein, will be validly issued and fully paid and
nonassessable and will conform to the description of the Common Stock
contained in the Prospectuses and the certificates evidencing the
Shares will comply with all applicable requirements of Florida law.
(xii) No person or entity has any right, not effectively satisfied
or waived, to require the Company to include any securities with the
Shares registered pursuant to the Registration Statement. No person or
entity has any right to require the Company to file a registration
statement under the Act with respect to any securities of the Company
owned or to be owned by such person. Except as described in the
Prospectus, no person or entity has any right to require the Company to
include such securities with securities to be registered pursuant to
any other registration statement filed by the Company under the Act.
(xiii)All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times duly registered under the
Act or exempt from the registration requirements of the Act and were
duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws, and the Company has taken all actions reasonably necessary
for it to assure that such exemptions from registration would continue
to be operative during all applicable periods of time required by law.
(xiv) The Company and each of its subsidiaries is not, nor with
the giving of notice or passage of time or both would be, in violation
of its Articles of Incorporation or other organizational document or
Bylaws or other self-regulatory rules or in default under any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or to which any of their respective properties or assets is
subject, which default would have a Material Adverse Effect.
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(xv) The issue and sale of the Shares and the performance by the
Company of all obligations under this Agreement and the Subscription
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with, or (with or without the giving of
notice or the passage of time or both) result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or to which their respective properties or assets are
subject, nor will such action conflict with or violate any provision of
the Articles of Incorporation or Bylaws of the Company or any statute,
rule or regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the Company or its
subsidiaries or any of their properties or assets.
(xvi) The Company and each of its subsidiaries has good title to
all personal property owned by it free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects,
except such as are disclosed in the Prospectuses or such as do not
materially and adversely affect the value of such property and do not
interfere with the use or proposed to be made of such property by the
Company and its subsidiaries; and any real property or buildings held
under lease by the Company or its subsidiaries is held under valid,
subsisting and enforceable leases, with such exceptions as are
disclosed in the Prospectuses or are not material and do not interfere
with the use made or proposed to be made of such property and
buildings. The Company and its subsidiaries do not own any real
property, except as described in the Prospectus.
(xvii) No consent, approval, authorization, order or declaration
of or from, or registration, qualification or filing with, any court or
governmental agency or body is required for the sale of the Shares of
the consummation of the transactions contemplated by this Agreement,
except the registration of the Shares under the Act (which, if the
Registration Statement is not effective as of the time of execution
hereof, shall be obtained as provided in this Agreement) and such as
may be required under state securities or blue sky laws in connection
with the offer, sale and distribution of the Shares by the U.S.
Underwriters and the International Managers.
(xviii) Other than as disclosed in the Prospectus, there is no
litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or, to the knowledge of the Company, threatened
(or any basis therefor) in which the Company or any subsidiary is a
party or of which any of their properties or assets is the subject
which, if determined adversely to the Company or such subsidiary, would
individually or in the aggregate with all other such arbitrations,
claims, proceedings or investigations, have a Material Adverse Effect
or which are otherwise material in the context of the Offering. The
Company and its subsidiaries are not in violation of, or
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in default with respect to, any statute, rule, regulation, order,
judgment or decree, except as described in the Prospectuses and except
for such violations and defaults as do not and will not individually or
in the aggregate have a Material Adverse Effect, and the Company is not
required to take any action in order to avoid any such violation or
default.
(xix) Xxxxx Xxxxxxxx, LLP, which has audited the financial
statements of the Company for the fiscal years ended December 31, 1992,
1993, 1994, 1995 and 1996, and Xxxxx Xxxxxxxx, P.C. and Deloitte &
Touche, which have audited the financial statements of certain
subsidiaries of the Company are, and were at all times during the
periods covered by their reports included or incorporated by reference
in the Registration Statement and the Prospectuses, independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(xx) The financial statements and schedules (including the related
notes) of the Company included or incorporated by reference in the
Registration Statement, any Prospectus or any Preliminary Prospectus
were prepared in accordance with generally accepted accounting
principles in the United States consistently applied (or, if not
consistently applied, as applied on the basis stated in such financial
statements and schedules of the related notes thereto) throughout the
periods involved and fairly present the financial position and results
of operations of the Company, at the dates and for the periods
presented. The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in the Prospectuses fairly
present, on the basis stated in the Prospectus, the information
included therein. The assumptions used in preparing the pro forma
financial statements included or incorporated by reference in the
Registration Statement, any Preliminary Prospectus and any Prospectus
provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein,
the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(xxi) This Agreement and the Subscription Agreement have been
duly authorized, executed and delivered by the Company.
(xxii) None of the Company or any of its subsidiaries, or to the
knowledge of the Company any of its officers, directors or Affiliates,
as the term is defined under the Act and the Rules and Regulations of
the Commission promulgated thereunder (the "Rules and Regulations") has
(A) taken, directly or indirectly, any action designed to cause or
result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares
or (B) since the filing of the Registration Statement (1) sold, bid
for, purchased or paid anyone any compensation
8
for soliciting purchases of, the Shares or (2) paid or agreed to pay to
any person any compensation for soliciting another to purchase any
other securities of the Company.
(xxiii) The Company has obtained for the benefit of the Company
and the U.S. Underwriters and International Mangers from each of its
directors, officers and certain other shareholders of the Company a
written agreement (a "Lockup Letter") that for 90 days from the date of
the Prospectuses, such persons or entities will not, without the prior
written consent of Xxxxxxx Xxxxx & Associates, Inc., pledge, sell,
contract to sell, grant any option for sale of, or otherwise dispose of
(or announce any offer, pledge, sale, grant of an option to purchase or
other disposition), directly or indirectly, any shares of Common Stock
or securities convertible into, or exercisable or exchangeable for,
share of Common Stock.
(xxiv) Neither the Company nor any of its subsidiaries, nor, to
the knowledge of the Company or any of its subsidiaries, any other
director, officer, agent, employee, Affiliate or other person
associated with or acting on behalf of the Company or any of its
subsidiaries has, directly or indirectly, used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, or established or maintained any
unlawful or unrecorded funds in violation of Section 30A of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); made
any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff,
influence payment kickback or other payment unlawful under the laws of
the United States or any foreign jurisdiction.
(xxv) The Company and each of its subsidiaries are in compliance
with all material respects with foreign, federal, state, and local
laws, treaties, ordinances, rules, and regulations and Executive Orders
(collectively, "Laws"). The Company and each of its subsidiaries have
all licenses, permits and authorizations necessary to operate under all
Laws, and have not received notice of proceedings relating to the
revocation or modification of any such license, permit or
authorization, except where the failure to have such license, permit or
authorization would not (individually or in the aggregate with respect
to all such failures) have a Material Adverse Effect. The Company and
each of its subsidiaries are in compliance in all material respects
with all terms and conditions of such licenses, permits and
authorizations. Neither the Company nor any of its subsidiaries has
authorized, conducted or has knowledge of the generation,
transportation, storage, use, treatment, disposal or release of any
hazardous substance, hazardous waste, hazardous material constituents,
toxic substance, pollutant, contaminant, petroleum product, natural
gas, liquefied gas or synthetic gas defined or regulated under any
environmental law; and there is no pending or, to the knowledge of the
Company and each of its subsidiaries, threatened claim, litigation or
any administrative agency proceeding, nor has the Company or any
9
of its subsidiaries received any written or oral notice from any
governmental entity or third party, that without limiting the
generality of the foregoing; (A) alleges a violation of any Laws by the
Company or any of its subsidiaries; (B) alleges that the Company or any
of its subsidiaries is a liable party under the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss.
9602 ET SEQ. or any state superfund law; (C) alleges possible
contamination of the environment by the Company or any of its
subsidiaries; or (D) alleges any violation of any export control Laws
or Executive Orders issued pursuant to such Laws by the Company or any
of its subsidiaries.
(xxvi) The Company owns or has the right to use all patents,
patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, franchises, trade secrets, proprietary or
other confidential information and intangible properties and assets
(collectively, "Intellectual Property Rights") necessary to conduct its
business as presently conducted and as described in the Prospectuses,
and as the Prospectuses indicate the Company proposes to conduct its
business, except where the failure to own or have such rights would not
have a Material Adverse Effect; and to the knowledge of the Company,
the Company has not infringed and is not infringing, and the Company
has not received notice of infringement with respect to, asserted
Intellectual Property Rights of others and there is no infringement by
others of Intellectual Property Rights of the Company, in either case
which might result in a Material Adverse Effect.
(xxvii) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
management of the Company deems prudent and in the best interests of
the Company and its shareholders; and the Company has no reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a comparable cost, except as disclosed in the Prospectus.
(xxvii)The Company and each of its subsidiaries makes and keeps
accurate books and records reflecting its assets and maintains internal
accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of the Company's financial statements in accordance with
generally accepted accounting principles and to maintain accountability
for the assets of the Company, (C) access to the assets of the Company
is permitted only in accordance with management's authorization, and
(D) the recorded accountability for assets of the Company is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
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(xxix) The Company and each of its subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be
filed by it and has paid all taxes shown as due on such returns as well
as all other taxes, assessments and governmental charges that are due
and payable; and no deficiency with respect to any such return has been
assessed or, to the knowledge of the Company, proposed which might
result in a Material Adverse Effect.
(xxx) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(xxxi) The Company and each of its affiliates, as that term is
defined in Section 517.021(l), Florida Statutes, has complied with all
provisions of Section 517.075, Florida Statutes, relating to doing
business with the Government of Cuba and certain other persons and
entities.
(xxxii) All employee benefit plans (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) established, maintained or contributed to by the Company
comply with all material respects with the requirements of ERISA and no
employee pension benefit plan (as defined in Section 3(2) of ERISA) has
incurred or assumed an "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or has incurred or assumed any material
liability (other than for the payment of premiums) to the Pension
Benefit Guaranty Corporation.
(xxxii) The Shares have been duly included for trading, subject to
notice of issuance, on the Nasdaq National Market.
(xxxiv) Except where such failures to comply or violations would
not in the aggregate have a Material Adverse Effect on the Company, (i)
the Company has complied with the Immigration Reform and Control Act of
1986 and all Regulations promulgated thereunder ("IRCA") with respect
to the completion and maintenance of Forms I-9, Employment Eligibility
Verification Forms, for all of its current employees and reverification
of the employment status of any and all employees whose employment
authorization documents indicated a limited period of employment
authorization; (ii) with respect to all former employees who left the
Company's employment within three years prior to the date hereof, the
Company has complied with IRCA with respect to the maintenance of Forms
I-9 for at least three years or for one year beyond the date of
termination, whichever is later; (iii) the Company has had no
immigration violations and has employed only individuals authorized to
work in the United States and has never been the subject of any
inspection or investigation relating to its compliance with or
violation of IRCA; and (iv) it has not been warned,
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fined or otherwise penalized by reason of any failure to comply with
IRCA, and no such proceeding is pending or threatened.
(xxxv) Except as disclosed in the Prospectuses, there are no
contracts, agreements or understanding between the Company and any
person that would give rise to a valid claim against the Company or any
U.S. Underwriter or International Manager for a brokerage commission,
finders' fee or other like payment in connection with the Offering.
(xxxvi) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions herein
set forth, the Company agrees to sell to each of the U.S. Underwriters, and each
of the U.S. Underwriters agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $_____ per share, the number of the Firm Shares
set forth opposite the name of each U.S. Underwriter on SCHEDULE I.
The Company hereby grants to the U.S. Underwriters the right to
purchase at their election in whole or in part up to an aggregate of 1,350,000
U.S. Optional Shares at the purchase price per share set forth in the paragraph
above for the sole purpose of covering over-allotments in the sale of U.S. Firm
Shares. Any such election to purchase Optional Shares may be exercised by a
written notice or notices delivered from time to time by Xxxxxxx Xxxxx &
Associates, Inc. to the Company, given within a period of 30 calendar days after
the date of this Agreement and setting forth the aggregate number of Optional
Shares to be purchased and the date on which such Optional Shares are to be
delivered. The U.S. Optional Shares to be purchased by the U.S. Underwriters on
any such date shall be in the same proportion to all the Optional Shares to be
purchased by the U.S. Underwriters and the International Managers on such date
as the U.S. Firm Shares bear to all the Firm Shares. Such U.S. Optional Shares
shall be purchased for the account of each U.S. Underwriter in the same
proportion as the number of U.S. Firm Shares set forth opposite such U.S.
Underwriter's name bears to the total number of U.S. Firm Shares (with the
resulting number to be adjusted by Xxxxxxx Xxxxx & Associates, Inc. so as to
eliminate fractional shares). No Optional Shares shall be sold or delivered
unless the U.S. Firm Shares and the International Firm Shares previously have
been, or simultaneously are, sold and delivered.
3. OFFERING BY THE U.S. UNDERWRITERS. Upon the authorization by the U.S.
Underwriters of the release of the Shares, the several U.S. Underwriters propose
to offer the Shares for sale upon the terms and conditions disclosed in the U.S.
Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for the
U.S. Shares to be purchased by each U.S. Underwriter hereunder, and in such
denominations and registered in such names as Xxxxxxx Xxxxx & Associates, Inc.
may request upon at least 48 hours prior notice to the
12
Company, shall be delivered by or on behalf of the Company to the U.S.
Underwriters for the account of such U.S. Underwriters, against payment by such
U.S. Underwriter on its behalf as provided herein. Payment shall be made to the
Company in Federal (same day) funds by wire transfer to an account at a bank
acceptable to Xxxxxxx Xxxxx & Associates, Inc. The closing of the sale and
purchase of the U.S. Shares shall be held at the offices of Xxxxxxx Xxxxx &
Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000 (the
"Representatives' Office"), or at such location in Miami, Florida as Xxxxxxx
Xxxxx & Associates, Inc. may designate, except that any physical delivery of
certificates for the Shares shall be made at the direction of the U.S.
Underwriters either at the Representatives' Office or at the office of Interwest
Transfer Company, 1981 East 0000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000
(the "Interwest Office"), or shall be made to The Depository Trust Company
("DTC"), 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, for the account of the U.S.
Underwriters or for such other accounts as the U.S. Underwriters shall specify
to DTC. The time and date of such delivery and payment shall be, with respect to
the Firm Shares, at 10:00 a.m., Eastern time, on _______________, 1997 or at
such other time and date as of the U.S. Underwriters and the Company may agree
upon in writing, and, with respect to the U.S. Optional Shares, 10:00 a.m,
Eastern time, on the date specified by the U.S. Underwriters in the written
notice given by Xxxxxxx Xxxxx & Associates, Inc. of the U.S. Underwriters'
election to purchase all or part of such Optional Shares, or at such other time
and date as the U.S. Underwriters and the Company may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery," and such time and date for delivery of any Optional Shares,
if not the First Time of Delivery, is herein called a "Subsequent Time of
Delivery," and each such time and date for delivery is herein called a "Time of
Delivery." The Company will make certificates for the Shares available for
checking and packaging at least 24 hours prior to each Time of Delivery at the
Interwest Office or the office of DTC in New York, New York or at such other
location in New York, New York specified by the U.S. Underwriters in writing at
least 48 hours prior to such Time of Delivery.
For purposes of Rule 15c6-1 under the Securities Exchange Act of
1934, the First Time of Delivery (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery
of securities for all of the Shares sold pursuant to the Offering.
5. COVENANTS. The Company covenants and agrees with each of the U.S.
Underwriters that:
(i) If the Registration Statement has been declared effective
prior to the execution and delivery of this Agreement, the Company will
file the Prospectuses with the Commission pursuant to and in accordance
with subparagraph (1) (or, if applicable and if consented to by Xxxxxxx
Xxxxx & Associates, Inc., subparagraph (4)) of Rule 424(b) not later
than the earlier of (A) the second business day following the execution
and delivery of this Agreement or (B) the fifth business day after the
date on which the Registration Statement is declared effective. The
Company will advise the U.S. Underwriters promptly of any such filing
pursuant to Rule 424(b).
13
(ii) The Company will not file with the Commission the
Prospectuses or the amendment referred to in the second sentence of
Section 1(a)(i) hereof, any amendment or supplement to the Prospectuses
or any amendment to the Registration Statement unless the U.S.
Underwriters have received a reasonable period of time to review any
such proposed amendment or supplement and consented to the filing
thereof, such consent not be unreasonably delayed or withheld. The
Company will use its best efforts to cause any such amendment to the
Registration Statement to be declared effective as promptly as
possible. Upon the reasonable request of the U.S. Underwriters or
counsel for the U.S. Underwriters, the Company will promptly prepare
and file with the Commission, in accordance with the rules and
regulations of the Commission, any amendments to the Registration
Statement or amendments or supplements to the Prospectuses that may be
necessary or advisable in connection with the distribution of the
Shares by the several U.S. Underwriters and will use its best efforts
to cause any such amendment to the Registration Statement to be
declared effective as promptly as possible. If required, the Company
will file any amendment or supplement to the Prospectuses with the
Commission in the manner and within the time period required by Rule
424(b) under the Act. The Company will advise the U.S. Underwriters,
promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectuses or any amendment or supplement
thereto has been filed and will provide evidence to the U.S.
Underwriters of each such filing or effectiveness.
(iii) The Company will advise the U.S. Underwriters promptly after
receiving notice or obtaining knowledge of (A) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any part thereof or any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or any
amendment or supplement thereto, (B) the suspension of the
qualification of the Shares for offer or sale in any jurisdiction or of
the initiation or threatening of any proceeding for any such purpose,
or (C) any request made by the Commission or any securities authority
of any other jurisdiction for amending the Registration Statement, for
amending or supplementing a Prospectus or for additional information.
The Company will use its best efforts to prevent the issuance of any
such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(iv) If the delivery of a prospectus relating to the Shares is
required under the Act at any time prior to the expiration of nine
months after the date of the Prospectuses and if at such time any
events have occurred as a result of which the Prospectuses as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or if for any reason it is necessary during such
same period to amend or supplement the Prospectuses to comply with the
Act or the rules and regulations
14
thereunder, the Company will promptly notify the U.S. Underwriters and
upon their request (but at the Company's expense) prepare and file with
the Commission amendments or supplements to the Prospectuses that
correct such statement or omission or effects such compliance and will
furnish without charge to each U.S. Underwriter and to any dealer in
securities as many copies of such amended or supplemented Prospectuses
as the U.S. Underwriters may from time to time reasonably request. If
the delivery of a prospectus relating to the Shares is required under
the Act at any time nine months or more after the date of the
Prospectuses, upon request of the U.S. Underwriters but at the expense
of the U.S. Underwriters, the Company will prepare and deliver to the
U.S. Underwriters as many copies as the U.S. Underwriters may request
of amended or supplemented Prospectuses complying with Section 10(a)(3)
of the Act. Neither the U.S. Underwriters' consent to, nor the U.S.
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 7.
(v) The Company promptly from time to time will take such action
as the U.S. Underwriters may reasonably request to qualify the Shares
for offering and sale under the securities or blue sky laws of such
jurisdictions as the U.S. Underwriters may request and will continue
such qualification in effect for as long as may be necessary to
complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.
(vi) The Company will promptly provide each Representative,
without charge, (A) two manually executed copies of the Registration
Statement as originally filed with the Commission and of each amendment
thereto, (B) for each other U.S. Underwriter a conformed copy of the
Registration Statement as originally filed and of each amendment
thereto, without exhibits, and (C) so long as a prospectus relating to
the Shares is required to be delivered under the Act, as many copies of
each Preliminary Prospectus or the Prospectuses or any amendment or
supplement thereto as the U.S. Underwriters may reasonably request.
(vii) As soon as practicable, but in any event not later than the
last day of the fifteenth month after the effective date of the
Registration Statement, the Company will make generally available to
its security holders an earnings statement of the Company covering a
period of at least 12 months beginning after the effective date of the
Registration Statement (which need not be audited) conforming with
Section 11(a) of the Act and Rule 158 thereunder.
(viii) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectuses, the Company will not, without the prior written consent
of Xxxxxxx Xxxxx & Associates, Inc., offer, pledge, issue, sell,
contract to sell, grant any option for the sale of, or otherwise
15
dispose of (or announce any offer, pledge, sale, grant of an option to
purchase or other disposition), directly or indirectly, any shares of
Common Stock or securities convertible into, exercisable or
exchangeable for, shares of Common Stock, except (a) as provided in
Sections 2 and 11 hereof and except for the issuance of Common Stock
upon the exercise of stock options or warrants outstanding on the date
of this Agreement to the extent that such stock options or warrants
were issued pursuant to plans or agreements which are disclosed in the
Prospectuses, (b) the grant of options to employees or directors under
existing stock option plans, (c) shares of Common Stock, securities
convertible into, exercisable or exchangeable for, or any other rights
to receive shares of Common Stock issued as full or partial
consideration for the acquisition of interests in business entities in
connection with the expansion of the Company's business, or (d) as
otherwise disclosed or contemplated by the Prospectus. Holders of
shares issued pursuant to item (c) of this subsection shall not be
granted the right to require registration of such shares and shall not
be permitted to sell such shares prior to the expiration of such 90-day
period.
(ix) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to the U.S.
Underwriters, without charge, (A) copies of all reports or other
communications (financial or other) furnished to shareholders
generally, (B) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or the
National Association of Securities Dealers, Inc. or any national
securities exchange or quotation service upon which trading in shares
of the Common Stock is listed or reported, and (C) such additional
information concerning the business and financial condition of the
Company as the U.S. Underwriters may reasonably request subject to
appropriate confidentiality provisions with respect to material
non-public information.
(x) The Company will not (A) take, directly or indirectly, prior
to the termination of the underwriting syndicate contemplated by this
Agreement, any action designed to cause or to result in, or that
reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of any of the Shares, (B) sell, bid for, purchase or pay anyone
any compensation for soliciting purchases of, the Shares, or (C) pay or
agree to pay to any person any compensation for soliciting another to
purchase any other securities of the Company
(xi) The Company will apply the net proceeds from the offering in
the manner set forth under "Use of Proceeds" in the Prospectuses.
(xii) The Company will cause the Shares to be duly included for
trading on the Nasdaq National Market at each Time of Delivery and
maintain such status on
16
the Nasdaq National Market or be listed on a national securities
exchange, on a continuous basis for at least three years from the
date hereof.
(xiii) If at any time during the period beginning on the date the
Registration Statement becomes effective and ending on the later of (A)
the date 25 days after such effective date (or if the U.S.
Underwriter's option granted pursuant to Section 2 hereof has not been
exercised by such date, then 30 days after such effective date) or (B)
the date that is the earlier of (1) the date on which the Company first
files with the Commission a Quarterly Report on Form 10-Q after such
effective date and (2) the date on which the Company first issues a
quarterly financial report to shareholders after such effective date,
any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in the reasonable opinion of Xxxxxxx
Xxxxx & Associates, Inc. the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such
rumor, publication or event necessitates an amendment of or supplement
to the Prospectus), the Company will, after written notice from Xxxxxxx
Xxxxx & Associates, Inc. advising the Company to the effect set forth
above, forthwith prepare, consult with the U.S. Underwriters concerning
the substance of, and consult with Company counsel to determine whether
or not is advisable, under the circumstances, to disseminate a press
release or other public statement, reasonably satisfactory to the U.S.
Underwriters, responding to or commenting on such rumor, publication or
event.
6. EXPENSES. The Company will pay all costs and expenses incident to the
performance of its obligations under this Agreement whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including, without limitation, all costs and
expenses incident to (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and,
if applicable, filing of the Registration Statement (including all amendments
thereto), any Preliminary Prospectus or Prospectus and any amendments and
supplements thereto, and any blue sky memoranda; (ii) the delivery of copies of
the foregoing documents and this Agreement to the U.S. Underwriters; (iii) the
filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Shares; (iv) the preparation, issuance and
delivery to the U.S. Underwriters of any certificates evidencing the Shares,
including transfer agent's and registrar's fees; (v) the qualification of the
Shares for offering and sale under state securities and blue sky laws, including
filing fees and the reasonable fees and disbursements of counsel for the U.S.
Underwriters relating thereto; (vi) any listing of the Shares on the Nasdaq
National Market and (vii) any expense for travel, lodging and meals incurred by
the Company and any of its officers, directors and employees in connection with
any meetings with prospective investors in the Shares. It is understood,
however, that, except as provided in this Section, Section 8 and Section 10
hereof, the U.S. Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Shares by them, and any advertising expenses relating to the offer and sale
of the Shares.
17
7. CONDITIONS OF THE U.S. UNDERWRITERS' OBLIGATIONS. The several
obligations of the U.S. Underwriters hereunder to purchase and pay for the
Shares to be delivered at each Time of Delivery shall be subject, in their
discretion, to the accuracy of the representations and warranties of the Company
contained herein as of the date hereof and as of such Time of Delivery, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its covenants and agreements
hereunder, and to the following additional conditions precedent:
(a) If the Registration Statement as amended to date has not become
effective prior to the execution of this Agreement, such Registration Statement
shall have been declared effective not later than 11:00 a.m., Eastern time, on
the date of this Agreement or such later date and/or time as shall have been
consented to by Xxxxxxx Xxxxx & Associates, Inc. in writing. If required, the
Prospectuses and any amendment or supplement thereto shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing and in accordance with Section 5(a) of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceedings for that
purpose shall have been instituted, threatened or, to the knowledge of the
Company and the U.S. Underwriters, contemplated by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the U.S. Underwriters.
(b) King & Spalding, counsel for the U.S. Underwriters, shall have
furnished to the U.S. Underwriters such opinion or opinions, dated such Time of
Delivery, with respect to the incorporation of the Company, the validity of the
Shares being delivered at such Time of Delivery, the Registration Statement, the
Prospectuses, and other related matters as the U.S. Underwriters may reasonably
request which opinion the U.S. Underwriters shall use their best efforts to
cause said firm to furnish, and the Company shall have furnished to such counsel
such documents as such counsel or the U.S. Underwriters request prior to such
Time of Delivery for the purpose of enabling them to pass upon such matters.
(c) The U.S. Underwriters shall have received an opinion, dated at each
Time of Delivery, of Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Xxxxxxx, P.A.,
counsel to Company, to the effect that:
(i) The Company and each of its subsidiaries has been duly
organized, is validly existing under the laws of its jurisdiction of
organization (with respect to subsidiaries, only to the extent that
such concepts are recognized in each such subsidiary's jurisdiction or
organization) and has the power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectuses and the Company has the power and
authority to enter into this Agreement and perform its obligations
hereunder. The Company and each of its subsidiaries is duly qualified
to transact business under the laws of each jurisdiction in which it
owns or leases property, or conducts any business, so as to require
such
18
qualification (with respect to subsidiaries, only to the extent that
such concepts are recognized in each such jurisdictions), except where
the failure to so qualify would not have a Material Adverse Effect.
(ii) The Company's authorized, issued and outstanding capital
stock is set forth in the Prospectus. All of the issued shares of
Common Stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and conform to the description
of the Common Stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the
description of the Common Stock contained in the Prospectuses. None of
the issued shares of capital stock of the Company has any statutory
preemptive or, to the knowledge of such counsel, other rights to
subscribe for any of the Shares. All of the ownership interests of each
Significant Subsidiary of the Company have been duly authorized and
validly issued, are fully paid for and are not subject to any claim for
payment by such subsidiary. The Significant Subsidiaries are
CHS-Germany, CHS Netherlands, CHS U.K., CHS France and CHS Promark.
(iii) The Company has no subsidiaries other than those listed on
the iniside front cover of the Prospectuses and, to the knowledge of
such counsel, does not have any ownership interest in any partnership,
joint venture or other entity or association. The Company owns 100% of
the issued and outstanding capital stock of each of its subsidiaries
listed on the inside front cover of the Prospectuses, except for the
subsidiaries (A) organized under the laws of England, Hungary and
Uruguay, as to each of which it owns 99.2%, 51% and 50% respectively,
of the issued and outstanding capital stock or other type of ownership
interest, as the case may be, and (B) organized under the laws of
Belgium, France and Portugal as to each of which it owns approximately
99.997% of the issued and outstanding capital stock or other type of
ownership interest, as the case may be.
(iv) Except as disclosed in the Prospectus, to the knowledge of
such counsel there are no outstanding (A) securities or obligations of
the Company convertible into or exchangeable for any capital stock of
the Company, (B) warrants, rights or options to subscribe for or
purchase from the Company and such capital stock or any such
convertible or exchangeable securities or obligations, or (C)
obligations of the Company to issue any shares of capital stock, any
such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(v) The Shares to be issued and sold by the Company have been duly
authorized and, when issued and delivered against payment therefor as
provided herein, will be validly issued and fully paid and
nonassessable and will conform to the description of the Common Stock
contained in the Prospectus, and the certificates evidencing the Shares
will comply with all applicable requirements of Florida law.
19
(vi) No person or entity has any right, not effectively satisfied
or waived, to require the Company to include any securities with the
Shares registered pursuant to the Registration Statement. No person or
entity has any right to require the Company to file a registration
statement under the Act with respect to any securities of the Company
owned or to be owned by such person. Except as described in the
Prospectuses, no person or entity has any right to require the Company
to include such securities with securities to be registered pursuant to
any other registration statement filed by the Company under the Act.
(vii) All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times duly registered under the
Act or exempt from the registration requirements of the Act and were
duly registered or qualified or were the subject of an available
exemption from the registration or qualification requirements of the
applicable state securities or blue sky laws (or are not required to be
so registered or qualified because such requirement to register or
qualify is barred by an applicable statute of limitations with respect
to any failure to so register or qualify).
(viii) The Company is not, nor with the giving of notice or
passage of time or both, will it be in violation of its Articles of
Incorporation or Bylaws or in default under any material indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument known to such counsel to which the Company is a party or to
which any of its properties or assets is subject.
(ix) The issue and sale of the Shares being issued at such Time of
Delivery and the performance of this Agreement and the consummation of
the transactions herein contemplated will not conflict with, or (with
or without the giving of notice or the passage of time or both) result
in a breach or violation of any of the terms of provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument known to
such counsel to which the Company is party or to which any of their
properties or assets is subject, nor will such action conflict with or
violate any provision of the Articles of Incorporation or Bylaws of the
Company or any statute, rule or regulation or, to the extent known to
such counsel, any order, judgment or decree of any court or
governmental agency or body known having jurisdiction over the Company
or any of its properties or assets.
(x) No consent, approval, authorization, order or declaration of
or from, or registration, qualification or filing with, any court or
governmental agency or body is required for the issue and sale of the
Shares or the consummation of the transactions contemplated by this
Agreement, except the registration of the Shares under the Act and such
as may be required under state securities or blue sky laws in
20
connection with the offer, sale and distribution of the Shares by the
U.S. Underwriters.
(xi) To such counsel's knowledge, and other than as disclosed in
or contemplated by the Prospectuses, (A) there is no litigation,
arbitration, claim, proceeding (formal or informal) or investigation
pending or threatened (or any basis therefor) in which the Company or
any of its subsidiaries is a party or of which any of its properties or
assets is the subject which, if determined adversely to the Company or
any of its subsidiaries would individually or in the aggregate have a
Material Adverse Effect; and (B) neither the Company nor any of its
subsidiaries is in violation of, or in default with respect to, any
foreign or domestic statute, rule, regulation, order, judgment or
decree, including, without limitation, the Foreign Corrupt Practices
Act of 1977, as amended, or any export control Laws or Executive Orders
issued pursuant to those Laws nor is the Company or any of its
subsidiaries required to take any action in order to avoid any such
violation or default in any case where such violations or defaults
would individually or in the aggregate have a Material Adverse Effect.
(xii) This Agreement and the Subscription Agreement have been duly
authorized, executed and delivered by the Company.
(xiii) The Registration Statement and the Prospectuses and each
amendment or supplement thereto (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion), as of their respective effective or issue dates, complied as
to form in all material respects with the requirements of the Act and
the Rules and Regulations thereunder. The Descriptions in the
Registration Statement and the Prospectuses of statutes and legal and
governmental proceedings or contracts and other documents are accurate
and fairly present the information required to be shown; and such
counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Registration Statement or
Prospectuses that are not described in the Registration Statement or
Prospectuses or to be filed as exhibits to the Registration Statement
which are not described and filed as required.
(xiv) The Registration Statement is effective under the Act, any
required filing of the Prospectuses pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and, to such counsel's
knowledge, no proceedings for that purpose have been instituted or
threatened or are contemplated by the Commission.
(xv) The Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company," or a
21
company "controlled" by an "investment company," within the meaning of
the Investment Company Act of 1940.
(xvi) Except as described in the Prospectuses, the Significant
Subsidiaries are not restricted, under the laws of their respective
jurisdictions of organization or by material agreements to which they
are a party, from making payments or distributions to the Company,
except for such restrictions that would not, individually or in the
aggregate, have a Material Adverse Effect.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on warranties, representations
and certificates of responsible officers of the Company and public officials
and, as to matters involving the application of laws of any jurisdiction other
than Florida or the United States, to the extent satisfactory in form and scope
to counsel for the U.S. Underwriters, upon the opinion of local counsel
satisfactory to counsel for the U.S. Underwriters, provided that such counsel
states that such counsel believes that the U.S. Underwriters are justified in
relying upon such opinion and copies of such opinion are delivered to the U.S.
Underwriters and counsel for the U.S. Underwriters.
In addition, such counsel shall state that (i) based solely upon a
letter from the Nasdaq Stock Market Inc. to the Company attached to such
counsel's opinion, the Firm Shares, the outstanding shares, and the Optional
Shares have been duly included for trading on the Nasdaq National Market upon
issuance of the Shares and (ii) such counsel has participated in conferences
with the officers and other representatives of the Company and the U.S.
Underwriters and their counsel during which the contents of the Registration
Statement and the Prospectuses and related matters were discussed and reviewed,
and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectuses, on the basis of the
information that such counsel developed in the course of the performance of the
services referred to above, considered in the light of such counsel's
understanding of the applicable law, that nothing came to their attention that
caused them to believe that (1) the Registration Statement (other than the
financial statements and schedules and the other financial and statistical data
presented or incorporated by reference therein, as to which such counsel need
express no belief), on such effective date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that (2) the Prospectuses (other than the financial statements and schedules and
the other financial and statistical data presented or incorporated by reference
therein, as to which such counsel need express no belief), as amended or
supplemented, on the date of filing thereof with the Commission and on the date
of such opinion, contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(d) The U.S. Underwriters shall have received from each of Xxxxx
Xxxxxxxx, LLP, KMPG Xxxxxx Xxxxx Denetim ve Yeminli Mali Musavirlik A.S., Xxxxx
Xxxxxxxx P.C. and Deloitte & Touche, letters dated the date hereof (or, if the
Registration Statement has been declared effective
22
prior to the execution and delivery of this Agreement, dated such effective date
and the date of this Agreement) and each Time of Delivery in form and substance
satisfactory to the U.S. Underwriters, to the effect set forth in ANNEX I
hereto. In the event that the letters referred to in this Section 7(d) set forth
any changes, decreases or increases in the items specified in clause (vii) of
Annex I, it shall be a further condition to the obligations of the U.S.
Underwriters that (i) such letters shall be accompanied by a written explanation
by the Company as to the significance thereof, unless the U.S. Underwriters deem
such explanation unnecessary, and (ii) such changes, decreases or increases do
not, in the sole business judgment of the U.S. Underwriters, make it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date of such letter.
(e) Since the date of the latest audited financial statements included
or incorporated by reference in the Prospectuses, the Company shall not have
sustained (i) any loss or interference with its business from fire, explosion,
flood, hurricane or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as disclosed in or contemplated by the Prospectuses, or (ii) any change, or
any development involving a prospective change (including without limitation a
change in management or control of the Company), in or affecting the position
(financial or otherwise), results of operations, net worth or business prospects
of the Company, otherwise than as disclosed in or contemplated by the
Prospectuses, the effect of which, in either such case, is the sole business
judgment of the U.S. Underwriters so material and adverse as to make it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(f) Subsequent to the date hereof there shall not have occurred any of
the following: (i) any suspension or limitation in trading securities generally
on the New York or American Stock Exchanges, or The Nasdaq National Market or
any setting of minimum prices for trading on such exchanges or Market or trading
in the Common Stock shall have been suspended by the Commission or the Nasdaq
Stock Market; (ii) a moratorium on commercial banking activities in new York or
Florida declared by either federal or state authorities; or (iii) any outbreak
or escalation of hostilities involving the United States, declaration by the
United States of a material emergency or war or any other national or
international calamity, emergency, crisis or change in political, financial or
economic condition or other material event, if the effect of any such event
specified in this clause (iii) in the sole business judgment of the U.S.
Underwriters makes it impractical or inadvisable to proceed with the purchase,
sale and delivery of the Shares to be delivered at such Time of Delivery as
contemplated by the Registration Statement, as amended as of the date hereof,
and this Agreement.
(g) The Company shall have furnished to the U.S. Underwriters at such
Time of Delivery certificates of officers of the Company, reasonably
satisfactory to the U.S. Underwriters, as to the accuracy in all material
respects of the representations and warranties of the Company herein at and as
of such Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, and
as to such other matters as the U.S. Underwriters may reasonably request, and
the Company shall have furnished or caused to be
23
furnished certificates as to the matters set forth in subsections (a) and (e) of
this Section 7, and as to such other matters as the U.S. Underwriters may
reasonably request.
(h) The Shares shall have been approved for trading upon notice of
issuance on The Nasdaq National Market.
(i) The Lockup Letters shall have been delivered to the U.S.
Underwriters and the Company shall have noted the restrictions contained in such
Lockup Letters on the books and records of the Company relating to stock
transfers and on any certificates representing shares of Common Stock held by
such persons.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each U.S.
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such U.S. Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement made by the Company in Section 1(a) of this Agreement;
(ii) any untrue statement or alleged untrue statement of any material fact
contained in (A) the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectuses or any amendment or supplement
thereto, or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange (each an
"Application"); or (iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectuses or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each U.S. Underwriter for any legal
or other expenses reasonably incurred by such U.S. Underwriter in connection
with investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action; PROVIDED,
HOWEVER, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement or any Amendment thereto, any
Preliminary Prospectus, the Prospectuses or any amendment or supplement thereto
or any Application in reliance upon and in conformity with written information
furnished to the Company by any U.S. Underwriter expressly for use therein. The
obligation of the Company to indemnify the U.S. Underwriters (and any
controlling person of each U.S. Underwriter) pursuant to this Agreement is
subject to the condition that, insofar as such losses, claims, damages,
liabilities or expenses relate to any such untrue statement, alleged untrue
statement, omission or alleged omission made in a Preliminary Prospectus that is
corrected in the U.S. Prospectus, such indemnity agreement shall not inure to
the benefit of any U.S. Underwriter from whom the person asserting such losses,
liabilities, claims, damages or expenses purchased the Shares in the Offering,
if (i) such U.S. Underwriter failed to deliver a copy of the U.S. Prospectus to
such person at or prior to the time
24
delivery of the U.S. Prospectus is required by the Act, unless such failure was
due to the failure by the Company to provide copies of the U.S. Prospectus to
such U.S. Underwriter; and (ii) the delivery of such U.S. Prospectus to such
person would have constituted a complete defense to the losses, claims, damages,
liabilities or expenses asserted by such person. The Company will not without
the prior written consent of each U.S. Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding (or related cause of action or portion thereof) in respect of
which indemnification may be sought hereunder (whether or not such U.S.
Underwriter is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of such U.S.
Underwriter from all liability arising out of such claim, action, suit or
proceeding (or related cause of action or portion thereof).
(b) Each U.S. Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company and its directors and officers who sign the
Registration Statement and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities to which the Company may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement or any amendment thereto, any Preliminary Prospectus,
the U.S. Prospectus or any amendment or supplement thereto, or any Application
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such U.S. Underwriter expressly for use
therein (it being understood that the only such information furnished by any
U.S. Underwriter is contained in (i) the last paragraph on the cover page of the
U.S. Preliminary Prospectus and the U.S. Prospectus concerning the terms of the
U.S. Offering, (ii) the capitalized legends concerning passive market making and
stabilizing transactions on the inside front covers thereof; and (iii) the
concession and reallowance figures and the information relating to the
Intersyndicate Agreement in the seventh through ninth paragraphs appearing under
the caption "Underwriting" therein); and will reimburse the Company and its
directors and officers who sign the Registration Statement and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, for any legal or other expenses reasonably incurred by the
Company and its directors and officers who sign the Registration Statement and
any person who controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, in connection with investigating or defending
any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve if from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall
25
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to the such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party); PROVIDED, HOWEVER, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded based upon written advice of
counsel that there may be one or more legal defenses available to it or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party and such
indemnified party shall have the right to select separate counsel to defend such
action on behalf of such indemnified party, provided, further, however, that the
Company shall be liable for the fees and expenses of only one separate firm of
attorneys (in addition to local counsel) for all indemnified parties at any time
in connection with any action, suit or proceeding or in a series of separate but
substantially similar or related actions, suits or proceedings arising out of
the same general allegations and circumstances. After such notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, 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 or (ii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. Nothing in this Section 8(d) shall preclude an
indemnified party from participating at its own expense in the defense of any
such action so assumed by the indemnifying party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the U.S. Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the U.S.
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the U.S. Underwriters on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the U.S.
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information
26
supplied by the Company on the one hand or the U.S. Underwriters on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the U.S. Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the U.S. Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
(i) no U.S. Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such U.S. Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission and
(ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The U.S. Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
U.S. Underwriter within the meaning of the Act; and the obligations of the U.S.
Underwriters under this Section 8 shall be in addition to any liability which
the respective U.S. Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. DEFAULT OF U.S. UNDERWRITER.
(a) If any U.S. Underwriter defaults in its obligation to purchase
Shares which is has agreed to purchase at a Time of Delivery, the other U.S.
Underwriters, in their discretion, may arrange for their purchase of, or for
another party or other parties to purchase, such Shares on the terms contained
herein. If within thirty-six (36) hours after such default by any U.S.
Underwriter the U.S. Underwriters do not arrange for the purchase of such
Shares, the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the U.S.
Underwriters to purchase such Shares on such terms. In the event that, within
the respective prescribed periods, the U.S. Underwriters notify the Company that
they have so arranged for the purchase of such Shares, or the Company notifies
the U.S. Underwriters that it has so arranged for the purchase of such Shares,
the U.S. Underwriters or the Company shall have the right to postpone a Time of
Delivery for a period of not more than seven days in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees to
file promptly any amendments to the Registration Statement or the Prospectuses
that in the opinion of the U.S. Underwriters may thereby
27
be made necessary. The cost of preparing, printing and filing any such
amendments shall be paid for by the U.S. Underwriters. The term "U.S.
Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting U.S. Underwriter or U.S. Underwriters by the U.S.
Underwriters and the Company as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of Shares to be purchased at such Time of Delivery, then
the Company shall have the right to require each non-defaulting U.S. Underwriter
to purchase the number of Shares which such U.S. Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting U.S. Underwriter to purchase its pro rata share (based on the
number of Shares which such U.S. Underwriter agreed to purchase hereunder) of
the Shares of such defaulting U.S. Underwriter or U.S. Underwriters for which
such arrangements have not been made, but nothing herein shall relieve a
defaulting U.S. Underwriter from liability for its default.
10. TERMINATION.
(a) This Agreement may be terminated with respect to the (i) the Firm
Shares or (ii) any Optional Shares, in the sole discretion of the U.S.
Underwriters, by notice to the Company given prior to the First Time of Delivery
or any Subsequent Time of Delivery, respectively, in the event that (i) any
condition to the obligations of the U.S. Underwriters set forth in Section 7
hereof has not been satisfied, or (ii) the Company shall have failed, refused or
been unable to deliver the Shares or to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior to
such Time of Delivery, in either case other than by reason of a default by any
of the U.S. Underwriters. If this Agreement is terminated pursuant to this
Section 10(a), the Company will reimburse the U.S. Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable counsel fees and
disbursements) that shall have been reasonably incurred by them in connection
with the proposed purchase and sale of the Shares). The Company shall not in any
event be liable to any of the U.S. Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting U.S. Underwriter by the U.S. Underwriters and the Company
as provided in Section 9(a), the aggregate number of such Shares which remains
unpurchased exceeds one-eleventh of the aggregate number of Shares to be
purchased at such Time of Delivery, or if the Company shall not exercise the
right described in Section 9(b) to require non-defaulting U.S. Underwriters to
purchase Shares of a defaulting U.S. Underwriters or U.S. Underwriters, then
this Agreement (or, with respect to a Subsequent Time of Delivery, the
obligations of the U.S. Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting U.S. Underwriter or the Company except for the expenses to be
borne by the Company and the U.S. Underwriters as provided in Section 6 hereof
and the indemnity and
28
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting U.S. Underwriter from liability for its default.
11. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers and the several
U.S. Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any U.S. Underwriter or any controlling person
referred to in Section 8(f) or the Company or any officer or director or
controlling person of the Company referred to in Section 8(f), and shall survive
delivery of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and, if sent
to any of the U.S. Underwriters, shall be mailed, delivered by courier or faxed
and confirmed in writing to the U.S. Underwriters in care of Xxxxxxx Xxxxx &
Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxx X. Xxxx, Xx., with a copy to King & Spalding, 191 Peachtree
Street, Atlanta, Georgia, Attention Xxxxx X. Xxxxxxxxx, Esq.; and if sent to the
Company, shall be mailed, delivered by courier or faxed and confirmed in writing
to the Company at 0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000, with a copy to
Xxxxxxxxx, Traurig, Hoffman, , Xxxxxx, Xxxxx & Xxxxxxx, P.A. 0000 Xxxxxxxx
Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention Xxxx Xxxxxxxxx, Esq. Notices sent by
mail shall be effective three days after mailing, but notices otherwise
transmitted shall be effective upon receipt.
13. ACTION BY THE U.S. UNDERWRITERS. Any action under this Agreement taken
by Xxxxxxx Xxxxx & Associates, Inc. will be binding upon the U.S. Underwriters.
14. BINDING EFFECT. This Agreement shall be binding upon, and insure solely
to the benefit of, the U.S. Underwriters and the Company and to the extent
provided in Sections 8 and 10 hereof, the officers and directors and controlling
persons referred to therein and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any U.S. Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without giving effect to the
choice of law principles of any jurisdiction.
16. COUNTERPARTS. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
29
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us one of the counterparts hereof, and upon the
acceptance hereby by Xxxxxxx Xxxxx & Associates, Inc. on behalf of each of the
U.S. Underwriters, this letter will constitute a binding agreement among the
U.S. Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the U.S. Underwriters is pursuant to the authority
set forth in the Master Agreement among U.S. Underwriters, a copy of which shall
be submitted to the Company for examination, upon request, but without warranty
on the part of the U.S. Underwriters as to the authority of the signers thereof.
Very truly yours,
CHS ELECTRONICS, INC.
By: __________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
written above.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXXXXX SECURITIES
X.X. XXXXXXXX & CO.
XXXXXX GULL XXXXXXX & XxXXXXXX INC.
as Representatives of the several U.S. Underwriters
By: Xxxxxxx Xxxxx & Associates, Inc.
By: ________________________________
Name:
Title:
30
ANNEX 1
Each comfort letter delivered pursuant to Section 7(d) shall contain statements
to the following effect:
(i) the accountants audited the financial statements included in the
registration statement;
(ii) the accountants are independent certified public accountants within the
meaning of the Securities Act of 1933 (the "Act");
(iii) the audited financials included in the registration statement comply as
to form in all material respects with the accounting requirements of the
Act and the rules and regulations thereunder;
(iv) a listing of the procedures followed for any statements that were not
audited, including interim financial statements (which should include at
a minimum the SAS 71 procedures, reading of the unaudited statements and
corporate minutes, and inquiries of company officials);
(v) for such unaudited statements, (a) a statement (or negative assurance) to
the effect that no modifications need be made for such financial
statements to conform to generally accepted accounting principles and (b)
the statement set forth in (iii) above;
(vi) the procedures followed for periods subsequent to the date of the latest
audited or unaudited financial statements included in the registration
statement (which should include at a minimum a reading of any unaudited
financials prepared by the entity for such subsequent periods, such as
monthly statements, if any, readings of corporate minutes and inquiries
of company officials);
(vii) for such subsequent periods, up until a date 5 or fewer days prior to the
date of the prospectus, a statement or negative assurance that there was
no change in capital stock, decrease in consolidated assets or increase
in debt or stockholders' equity; and
(viii) for financial statements of foreign entities, a statement that the
information presented complies with the requirements as to financial
statements for foreign businesses included in Regulation S-X.
31
SCHEDULE I
NO. OF
U.S. UNDERWRITER SHARES
---------
Xxxxxxx Xxxxx & Associates, Inc...........................
Xxxxxxxxxx Securities.....................................
X.X. Xxxxxxxx & Co........................................
Xxxxxx Gull Xxxxxxx & XxXxxxxx Inc. .....................
Total............................................... 9,000,000
=========
32
