Exhibit 1.1
TRM CORPORATION
4,500,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
August ___, 2004
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXX XXXXXXX & CO.
as Representatives of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
TRM Corporation, an Oregon corporation (the "Company"), confirms its
agreement with each of the Underwriters listed on Schedule I hereto
(collectively, the "Underwriters"), for whom Friedman, Billings, Xxxxxx & Co.,
Inc. and Xxxxx Xxxxxxx & Co. are acting as representatives (in such capacity,
the "Representatives"), with respect to (i) the sale by the Company of 4,500,000
shares (the "Initial Shares") of Common Stock, no par value per share, of the
Company ("Common Stock"), and the purchase by the Underwriters, acting severally
and not jointly, of the respective number of shares of Common Stock set forth
opposite the names of the Underwriters in Schedule I hereto, and (ii) the grant
of the option described in Section 1(b) hereof to purchase all or any part of
675,000 additional shares of Common Stock to cover over-allotments (the "Option
Shares"), if any, from the Company to the Underwriters, acting severally and not
jointly, in proportion to the respective numbers of shares of Common Stock set
forth opposite the names of the Underwriters in Schedule I hereto. The 4,500,000
shares of Common Stock to be purchased by the Underwriters and all or any part
of the 675,000 shares of Common Stock subject to the option described in Section
l(b) hereof are hereinafter called, collectively, the "Shares."
The Company understands that the Underwriters propose to make a
public offering of the Shares as soon as the Underwriters deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission"), a registration statement on Form S-3 (No. 333-116748) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder (the "Securities Act Regulations"). The Company has
prepared and filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been
declared effective under the Securities Act by the Commission. The registration
statement as amended at the time it became effective (including all information
deemed (whether by incorporation by reference or otherwise) to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
of the Securities Act Regulations) is hereinafter called the "Registration
Statement," except that, if the Company files a post-effective amendment to such
registration statement which becomes effective prior to the Closing Time (as
defined below), "Registration Statement" shall refer to such registration
statement as so amended. Any registration statement filed pursuant to Rule
462(b) of the Securities Act Regulations is hereinafter called the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the 462(b) Registration Statement. Each prospectus included in the
Registration Statement, or amendments thereof or supplements thereto, before it
became effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant to Rule
424(a) of the Securities Act Regulations is hereinafter called the "Preliminary
Prospectus." The term "Prospectus" means the final prospectus, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Securities Act Regulations, and any amendments thereof or supplements thereto.
The Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, at the purchase price per
share of $________, the Company agrees to sell to each of the Underwriters the
number of Initial Shares set forth opposite its name on Schedule I, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
number of Initial Shares set forth in Schedule I opposite such Underwriter's
name, plus any additional number of Initial Shares which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 8 hereof,
subject, in each case, to such adjustments among the Underwriters as the
Representatives in their sole discretion shall make to eliminate any sales or
purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the
purchase price per share set forth in paragraph (a), the Company hereby grants
an option to the Underwriters, acting severally and not jointly, to purchase
from the Company, all or any part of the Option Shares, plus any additional
number of Option Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 8 hereof. The option hereby granted will
expire 30 days after the date of the Prospectus and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Shares upon notice by the Representatives to the Company
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setting forth the number of Option Shares as to which the several Underwriters
are then exercising the option and the time and date of payment and delivery
for such Option Shares. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but shall not be later
than three full business days (or earlier, without the consent of the Company,
than two full business days) after the exercise of such option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Shares, the Company will sell
to each of the Underwriters, and each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of Option Shares
then being purchased which the number of Initial Shares set forth in Schedule I
opposite the name of such Underwriter bears to the total number of Initial
Shares, subject in each case to such adjustments among the Underwriters as the
Representatives in their sole discretion shall make to eliminate any sales or
purchases of fractional shares.
2. Payment and Delivery
(a) Initial Shares. The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of The Depository Trust Company ("DTC")
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representatives by the Company
upon at least forty-eight hours' prior notice. The Company will cause the
certificates representing the Initial Shares to be made available for checking
and packaging at least twenty-four hours prior to the Closing Time (as defined
below) with respect thereto at the office of Friedman, Billings, Xxxxxx & Co.,
Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or at the office of
DTC or its designated custodian, as the case may be (the "Designated Office").
The time and date of such delivery and payment shall be 9:30 a.m., New York
City time, on the third (fourth, if pricing occurs after 4:30 p.m., New York
City time) business day after the date hereof (unless another time and date
shall be agreed to by the Representatives and the Company). The time at which
such payment and delivery are actually made is hereinafter sometimes called the
"Closing Time" and the date of delivery of both Initial Shares and Option
Shares is hereinafter sometimes called the "Date of Delivery" with respect to
such shares.
(b) Option Shares. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified to the Representatives by the Company upon at least
forty-eight
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hours' prior notice. The Company will cause the certificates representing the
Option Shares to be made available for checking and packaging at least
twenty-four hours prior to the Date of Delivery with respect thereto at the
Designated Office. The time and date of such delivery and payment shall be 9:30
a.m., New York City time, on the date specified by the Representatives in the
notice given by the Representatives to the Company of the Underwriters'
election to purchase such Option Shares or on such other time and date as the
Company and the Representatives may agree upon in writing.
(c) Directed Shares. It is understood that approximately 100,000 shares of
the Initial Shares ("Directed Shares") will initially be reserved by the
Underwriters for offer and sale to the Company's directors, officers and their
affiliates and to affiliates of the Company ("Directed Share Participants")
upon the terms and conditions set forth in the Prospectus and in accordance
with the rules and regulations of the National Association of Securities
Dealers, Inc. (the "Directed Share Program"). Under no circumstances will the
Representatives or any Underwriter be liable to the Company or to any Directed
Share Participant for any action taken or omitted to be taken in good faith in
connection with such Directed Share Program. To the extent that any Directed
Shares are not affirmatively reconfirmed for purchase by any Directed Share
Participant on or immediately after the date of this Agreement, such Directed
Shares may be offered to the public as part of the public offering contemplated
herein.
3. Representations and Warranties of the Company:
The Company represents and warrants to the Underwriters that:
(a) the Company has an authorized capitalization as set forth in the
Prospectus; the outstanding shares of capital stock of the Company and each
subsidiary of the Company (each, a "Subsidiary") have been duly and validly
authorized and issued and are fully paid and non-assessable, and all of the
outstanding shares of capital stock of the Subsidiaries are directly or
indirectly owned of record and beneficially by the Company; except as disclosed
in the Prospectus, there are no outstanding (i) securities or obligations of
the Company or any of the Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any such Subsidiary, (ii) warrants, rights or
options to subscribe for or purchase from the Company or any such Subsidiary
any such capital stock or any such convertible or exchangeable securities or
obligations, or (iii) obligations of the Company or any such Subsidiary to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligation, or any such warrants, rights or options;
(b) each of the Company and the Subsidiaries (all of which are named in
Exhibit 21.1 to the Registration Statement) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation with full corporate power and
authority to own its respective properties and to conduct its respective
businesses as described in the Registration Statement and Prospectus and, in
the case of the Company, to execute and deliver this Agreement and to
consummate the transactions contemplated herein;
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(c) the Company and all of the Subsidiaries are duly qualified or licensed
and are in good standing in each jurisdiction in which they conduct their
respective businesses or in which they own or lease real property or otherwise
maintain an office and in which the failure, individually or in the aggregate,
to be so qualified or licensed could have a material adverse effect on the
assets, business, operations, earnings, prospects, properties or condition
(financial or otherwise), present or prospective, of the Company and the
Subsidiaries taken as a whole (any such effect or change, where the context so
requires, is hereinafter called a "Material Adverse Effect" or "Material
Adverse Change"); except as disclosed in the Prospectus, no Subsidiary is
prohibited or restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such
Subsidiary's capital stock or from repaying to the Company or any other
Subsidiary any amounts which may from time to time become due under any loans
or advances to such Subsidiary from the Company or such other Subsidiary, or
from transferring any such Subsidiary's property or assets to the Company or to
any other Subsidiary; other than as disclosed in the Prospectus, 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 association;
(d) the Company and the Subsidiaries are in compliance in all material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates;
(e) neither the Company nor any Subsidiary is in breach of or in default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its respective organizational
documents, or in the performance or observance of any obligation, agreement,
covenant or condition contained in any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their
respective properties is bound, except for such breaches or defaults which
could not have a Material Adverse Effect , and to the best knowledge of the
Company, TRM Inventory Funding Trust is not in breach of or in default under
(nor has any event occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), its organizational documents, or in
the performance or observance of any obligation, agreement, covenant or
condition contained in any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which TRM Inventory
Funding Trust is a party or by which it or its properties is bound, except for
such breaches or defaults that could not have a Material Adverse Effect;
(f) the execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein will not (A) conflict
with, or result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time, or both would constitute a breach
of, or default under), (i) any provision of the organizational documents of the
Company or any Subsidiary, or (ii) any
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provision of any license, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their respective properties
may be bound or affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the Company
or any Subsidiary, except in the case of this clause (ii) for such breaches or
defaults which could not have a Material Adverse Effect; or (B) result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or any Subsidiary;
(g) this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and by general equitable principles, and except to the extent
that the indemnification and contribution provisions of Section 9 hereof may be
limited by federal or state securities laws and public policy considerations in
respect thereof;
(h) no approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the Company's execution,
delivery and performance of this Agreement, its consummation of the
transactions contemplated herein, and its sale and delivery of the Shares,
other than (A) such as have been obtained, or will have been obtained at the
Closing Time or the relevant Date of Delivery, as the case may be, under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (B) such approvals as have been obtained in connection with
the approval of the quotation of the Shares on the Nasdaq National Market and
(C) any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters;
(i) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state or local law, regulation or rule, and has
obtained all necessary authorizations, consents and approvals from other
persons, required in order to conduct their respective businesses as described
in the Prospectus, except to the extent that any failure to have any such
licenses, authorizations, consents or approvals, to make any such filings or to
obtain any such authorizations, consents or approvals could not, individually
or in the aggregate, have a Material Adverse Effect; neither the Company nor
any of the Subsidiaries is required by any applicable law to obtain
accreditation or certification from any governmental agency or authority in
order to provide the products and services which it currently provides or which
it proposes to provide as set forth in the Prospectus; neither the Company nor
any of the Subsidiaries is in violation of, in default under, or has received
any notice regarding a possible violation, default or revocation of any such
license, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to
the Company or any of the Subsidiaries the effect of which could result in a
Material
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Adverse Change; and no such license, authorization, consent or approval
contains a materially burdensome restriction that is not adequately disclosed
in the Registration Statement and the Prospectus;
(j) each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are threatened by the Commission, and the Company has
complied to the Commission's satisfaction with any request on the part of the
Commission for additional information;
(k) the Preliminary Prospectus and the Registration Statement comply, and
the Prospectus and any further amendments or supplements thereto will, when
they have become effective or are filed with the Commission, as the case may
be, comply, in all material respects with the requirements of the Securities
Act and the Securities Act Regulations; the Registration Statement did not, and
any amendment thereto will not, in each case as of the applicable effective
date, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and the Preliminary Prospectus does not, and the Prospectus or any
amendment or supplement thereto will not, as of the applicable filing date and
at the Closing Time and on each Date of Delivery (if any), contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no warranty or representation with respect to any
statement contained in the Registration Statement or the Prospectus in reliance
upon and in conformity with the information concerning the Underwriters and
furnished in writing by or on behalf of the Underwriters through the
Representatives to the Company expressly for use in the Registration Statement
or the Prospectus (that information being limited to that described in the
penultimate sentence of the first paragraph of Section 9(c) hereof);
(l) each document incorporated by reference in the Prospectus, when it
became effective or was filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act
and the Securities Act Regulations or the Exchange Act and the rules and
regulations thereunder (the "Exchange Act Regulations"), as applicable, and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
Securities
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Act Regulations and the Exchange Act Regulations and will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(m) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
versions of the Preliminary Prospectus and Prospectus created to be transmitted
to the Commission for filing via the Electronic Data Gathering Analysis and
Retrieval System ("XXXXX"), except to the extent permitted by Regulation S-T
promulgated by the Commission;
(n) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary or any of their respective officers and directors or to which
the properties, assets or rights of any such entity are subject, at law or in
equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority, arbitral panel or agency which
could result in a judgment, decree, award or order having a Material Adverse
Effect;
(o) the financial statements, including the notes thereto, included in (or
incorporated by reference into) the Registration Statement and the Prospectus
present fairly the consolidated financial position of the entities to which
such financial statements relate (the "Covered Entities") as of the dates
indicated and the consolidated results of operations and changes in financial
position and cash flows of the Covered Entities for the periods specified; such
financial statements have been prepared in conformity with generally accepted
accounting principles as applied in the United States and on a consistent basis
during the periods involved and in accordance with Regulation S-X promulgated
by the Commission; the financial statement schedules included in the
Registration Statement and the amounts in the Prospectus under the captions
"Prospectus Summary - Summary Financial Data" and "Selected Consolidated
Financial Data" fairly present the information shown therein and have been
compiled on a basis consistent with the financial statements included in the
Registration Statement and the Prospectus; no other financial statements or
supporting schedules are required to be included in the Registration Statement;
the unaudited pro forma financial information included in the Prospectus and
any Preliminary Prospectus under the headings "Prospectus Summary - Summary
Financial Data," "Capitalization" and "Selected Consolidated Financial Data"
and in the notes to the Company's unaudited interim financial statements
included in the Prospectus and any Preliminary Prospectus complies as to form
in all material respects with the applicable accounting requirements of the
Securities Act and the Securities Act Regulations; such pro forma adjustments
have been properly applied to the historical amounts in the compilation of the
information; no other pro forma financial information is required to be
included in the Registration Statement;
(p) PricewaterhouseCoopers LLP, whose reports on the consolidated
financial statements of the Company and the Subsidiaries are filed with the
Commission as part of
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the Registration Statement and Prospectus or are incorporated by reference
therein and any other accounting firm that has certified Company financial
statements and delivered its reports with respect thereto, are, and were during
the periods covered by their reports, independent public accountants or
independent registered public accounting firms as required by the Securities
Act and the Securities Act Regulations;
(q) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (A) any
Material Adverse Change or any development that could reasonably be expected to
result in a Material Adverse Change, whether or not arising in the ordinary
course of business, (B) any transaction that is material to the Company and the
Subsidiaries taken as a whole, contemplated or entered into by the Company or
any of the Subsidiaries, (C) any obligation, contingent or otherwise, directly
or indirectly incurred by the Company or any Subsidiary that is material to the
Company and Subsidiaries taken as a whole or (D) any dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital
stock;
(r) the Shares conform in all material respects to the description thereof
contained in the Registration Statement and the Prospectus;
(s) there are no persons with registration or other similar rights to have
any equity or debt securities, including securities which are convertible into
or exchangeable for equity securities, registered pursuant to the Registration
Statement or otherwise registered by the Company under the Securities Act,
except for those registration or similar rights which have been waived with
respect to the offering contemplated by this Agreement, all of which
registration or similar rights are fairly summarized in the Prospectus;
(t) the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will be
validly issued, fully paid and non-assessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim, and the issuance and sale
of the Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Company or under any agreement to which the Company or any Subsidiary is a
party or otherwise, except for those preemptive or similar rights which have
been waived with respect to the offering contemplated by this Agreement, all of
which preemptive rights are fairly summarized in the Prospectus;
(u) the Shares have been approved for listing on the Nasdaq National
Market, subject to official notice of issuance;
(v) the Company has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of
the Shares;
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(w) neither the Company nor any of its affiliates (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act, or the rules and regulations thereunder (the "Exchange Act
Regulations"), or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD")) any member firm of the NASD;
(x) the Company has not relied upon the Representatives or legal counsel
for the Representatives for any legal, tax or accounting advice in connection
with the offering and sale of the Shares;
(y) any certificate signed by any officer of the Company or any Subsidiary
delivered to the Representatives or to counsel for the Underwriters pursuant to
or in connection with this Agreement shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
(z) the form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the organizational documents of the Company and the
requirements of the Nasdaq National Market;
(aa) the Company and the Subsidiaries have good and marketable title in
fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except such
as are disclosed in the Prospectus or such as do not materially and adversely
affect the value of such property and do not interfere with the use made or
proposed to be made of such property by the Company and the Subsidiaries; and
any real property and buildings held under lease by the Company or any
Subsidiary are held under valid, existing and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not material to and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or such Subsidiary;
(bb) the descriptions in the Registration Statement and the Prospectus of
the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly the information required to be
shown, and there are no legal or governmental proceedings, contracts, leases or
other documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required; all agreements between
the Company or any of the Subsidiaries and third parties expressly referenced
in the Prospectus are legal, valid and binding obligations of the Company or
one or more of the Subsidiaries, enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general equitable principles;
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(cc) the Company and each Subsidiary owns or possesses adequate licenses
or other rights to use all patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company and each Subsidiary to conduct
its business as described in the Prospectus, and neither the Company nor any
Subsidiary has received notice of infringement of or conflict with (and the
Company knows of no such infringement of or conflict with) asserted rights of
others with respect to any Intangibles which could have a Material Adverse
Effect;
(dd) the Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences;
(ee) each of the Company and the Subsidiaries has filed on a timely basis
all necessary federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and have paid all taxes
shown as due thereon; and no tax deficiency has been asserted against any such
entity, nor does any such entity know of any tax deficiency which is likely to
be asserted against any such entity which, if determined adversely to any such
entity, could have a Material Adverse Effect; all tax liabilities are
adequately provided for on the respective books of such entities;
(ff) except that the Company self-insures with respect to its automated
teller machines and photocopiers and with respect to certain employee medical
benefits, each of the Company and the Subsidiaries maintains insurance (issued
by insurers of recognized financial responsibility) of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and the Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect;
(gg) neither the Company nor any of the Subsidiaries is in violation, or
has received notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business of the Company
or any of the Subsidiaries; the Company and the Subsidiaries have received all
permits, licenses or other approvals required of them under applicable federal
and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and the Subsidiaries
are in compliance with all terms and conditions of any
-11-
such permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals which could not, individually or in the aggregate, result in a
Material Adverse Change;
(hh) neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees, nor
any applicable federal or state wages and hours law, nor any state law
precluding the denial of credit due to the neighborhood in which a property is
situated, the violation of any of which could have a Material Adverse Effect;
(ii) the Company and each of the Subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company or any of the Subsidiaries would have any
liability; the Company and each of the Subsidiaries have not incurred and do
not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder ("Code"); and each
"pension plan" for which the Company and each of its Subsidiaries would have
any liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification;
(jj) neither the Company nor any of the Subsidiaries nor any officer or
director purporting to act on behalf of the Company or any of the Subsidiaries
has at any time (i) made any contributions to any candidate for political
office, or failed to disclose fully any such contributions, in violation of
law, (ii) made any payment to any state, federal or foreign governmental
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by applicable law,
or (iii) engaged in any transactions, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and records of the
Company and the Subsidiaries;
(kk) except as otherwise disclosed in the Prospectus, there are no
outstanding loans or advances or guarantees of indebtedness by the Company or
any of the Subsidiaries to or for the benefit of any of the officers or
directors of the Company or any of the Subsidiaries or any of the members of
the families of any of them;
(ll) neither the Company nor any of the Subsidiaries nor, to the knowledge
of the Company, any employee or agent of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or of any Subsidiary
or received or retained
-12-
any funds in violation of any law, rule or regulation or of a character
required to be disclosed in the Prospectus;
(mm) all securities issued by the Company, any of the Subsidiaries or any
trusts established by the Company or any Subsidiary, have been issued and sold
in compliance with (i) all applicable federal and state securities laws, (ii)
the laws of the applicable jurisdiction of incorporation of the issuing entity,
and (iii) to the extent applicable to the issuing entity, the requirements of
the Nasdaq National Market;
(nn) in connection with this offering, the Company has not offered and
will not offer its Common Stock or any other securities convertible into or
exchangeable or exercisable for Common Stock in a manner in violation of the
Securities Act. The Company has not distributed and will not distribute any
Preliminary Prospectus, Prospectus or other offering material in connection
with the offer and sale of the Shares;
(oo) the Company has complied and will comply with all the provisions of
Florida Statutes, Section 517.075 (Chapter 92-198, Laws of Florida); and
neither the Company nor any of the Subsidiaries or affiliates does business
with the government of Cuba or with any person or affiliate located in Cuba;
(pp) the Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions herein contemplated;
(qq) no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, which is required by the Securities Act and the
Securities Act Regulations to be described in the Registration Statement and
the Prospectus and which is not so described;
(rr) neither the Company nor any of the Subsidiaries is and, after giving
effect to the offering and sale of the Shares, will be an "investment company"
or an entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act");
(ss) there are no existing or, to the knowledge of the Company, threatened
labor disputes with the employees of the Company or any of the Subsidiaries
which are likely to have individually or in the aggregate a Material Adverse
Effect; and
(tt) no consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is required
in connection with the offering of the Directed Shares in any jurisdiction
where the Directed Shares are being offered. The Company has not offered, or
caused the Representatives to offer, Shares to any person pursuant to the
Directed Share Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or
-13-
supplier's level or type of business with the Company or (ii) a trade
journalist or publication to write or publish favorable information about the
Company or its products.
4. Certain Covenants:
The Company hereby agrees with each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities
or blue sky laws of such jurisdictions (both domestic and foreign) as the
Representatives may designate and to maintain such qualifications in effect as
long as requested by the Representatives for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as
soon as possible and will advise the Representatives promptly and, if requested
by the Representatives, will confirm such advice in writing, when such
post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriters and
file such Prospectus (or a term sheet as permitted by Rule 434 under the
Securities Act) with the Commission pursuant to Rule 424(b) under the
Securities Act not later than 10:00 a.m. (New York City time), on the day
following the execution and delivery of this Agreement or on such other day as
the parties may mutually agree and to furnish promptly (and with respect to the
initial delivery of such Prospectus, not later than 10:00 a.m. (New York City
time) on the day following the execution and delivery of this Agreement or on
such other day as the parties may mutually agree to the Underwriters copies of
the Prospectus (or of the Prospectus as amended or supplemented if the Company
shall have made any amendments or supplements thereto after the effective date
of the Registration Statement) in such quantities and at such locations as the
Underwriters may reasonably request for the purposes contemplated by the
Securities Act Regulations, which Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the version created
to be transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T;
(d) to advise the Representatives promptly and (if requested by the
Representatives) to confirm such advice in writing, when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective under the Securities Act Regulations;
(e) to advise the Representatives immediately, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for
-14-
amendments or supplements to the Registration Statement or Prospectus or for
additional information with respect thereto, or (ii) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, or of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes and, if the Commission
or any other government agency or authority should issue any such order, to
make every reasonable effort to obtain the lifting or removal of such order as
soon as possible; to advise the Representatives promptly of any proposal to
amend or supplement the Registration Statement or Prospectus and to file no
such amendment or supplement to which the Representatives shall reasonably
object in writing;
(f) to furnish to the Underwriters for a period of five years from the
date of this Agreement (i) as soon as available, copies of all annual,
quarterly and current reports or other communications supplied to holders of
shares of Common Stock, (ii) as soon as practicable after the filing thereof,
copies of all reports filed by the Company with the Commission, the NASD or any
securities exchange and (iii) such other information as the Underwriters may
reasonably request regarding the Company and the Subsidiaries;
(g) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Securities Act Regulations which,
in the judgment of the Company or in the reasonable opinion of the
Representatives or counsel for the Underwriters, would require the making of
any change in the Prospectus then being used so that the Prospectus would not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend or supplement the Prospectus to comply
with any law and, during such time, to promptly prepare and furnish to the
Underwriters copies of the proposed amendment or supplement before filing any
such amendment or supplement with the Commission and thereafter promptly
furnish at the Company's own expense to the Underwriters and to dealers, copies
in such quantities and at such locations as the Representatives may from time
to time reasonably request of an appropriate amendment to the Registration
Statement or supplement to the Prospectus so that the Prospectus as so amended
or supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the law;
(h) to file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in
the judgment of the Company or the Representatives, be required by the
Securities Act or requested by the Commission;
(i) prior to filing with the Commission any amendment to the Registration
Statement or supplement to the Prospectus or any Prospectus pursuant to Rule
424 under
-15-
the Securities Act, to furnish a copy thereof to the Representatives and
counsel for the Underwriters and obtain the consent of the Representatives to
the filing;
(j) to furnish promptly to the Representatives a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein) and such number of conformed copies of the
foregoing as the Representatives may reasonably request;
(k) to furnish to the Representatives, not less than two business days (or
such shorter period as is reasonably practicable) before filing with the
Commission subsequent to the effective date of the Prospectus and during the
period referred to in paragraph (f) above, a copy of any document proposed to
be filed with the Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act and during such period to file all such documents in the manner
and within the time periods required by the Exchange Act and the Exchange Act
Regulations;
(l) to apply the net proceeds of the sale of the Shares in accordance with
its statements under the caption "Use of Proceeds" in the Prospectus;
(m) to make generally available to its security holders and to deliver to
the Representatives as soon as practicable, but in any event not later than the
end of the fiscal quarter first occurring after the first anniversary of the
effective date of the Registration Statement an earnings statement complying
with the provisions of Section 11(a) of the Securities Act (in form, at the
option of the Company, complying with the provisions of Rule 158 of the
Securities Act Regulations,) covering a period of 12 months beginning after the
effective date of the Registration Statement;
(n) to use its best efforts to maintain the quotation of the Shares on the
Nasdaq National Market and to file with the Nasdaq National Market all
documents and notices required by the Nasdaq National Market of companies that
have securities that are traded in the over-the-counter market and quotations
for which are reported by the Nasdaq National Market;
(o) to engage and maintain, at its expense, a registrar and transfer agent
for the Shares;
(p) to refrain during a period of 90 days from the date of the Prospectus,
without the prior written consent of Friedman, Billings, Xxxxxx & Co., Inc.,
from, directly or indirectly, (i) offering, pledging, selling, contracting to
sell, selling any option or contract to purchase, purchasing any option or
contract to sell, granting any option for the sale of, or otherwise disposing
of or transferring (or entering into any transaction or device which is
designed to, or could be expected to, result in the disposition by any person
at any time in the future of), any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or filing any
registration statement under the Securities Act with respect to any of the
foregoing, or
-16-
(ii) entering into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Shares to be sold hereunder, or (B) any
shares of Common Stock issued by the Company upon the exercise of an option
outstanding on the date hereof and referred to in the Prospectus;
(q) not to, and to use its best efforts to cause its officers, directors
and affiliates not to, (i) take, directly or indirectly prior to termination of
the underwriting syndicate contemplated by this Agreement, any action designed
to stabilize or manipulate the price of any security of the Company, or which
may cause or result in, or which might in the future reasonably be expected to
cause or result in, the stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of any of the Shares,
(ii) sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of the Shares or (iii) pay or agree to pay to any person any
compensation for soliciting any order to purchase any other securities of the
Company;
(r) to cause each executive officer and director of the Company to furnish
to the Representatives, prior to the first Date of Delivery, a letter or
letters, substantially in the form of Exhibit A hereto, pursuant to which each
such person shall agree not to, directly or indirectly, (i) offer for sale,
sell, pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or (ii) enter into any swap
or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or other securities, in cash
or otherwise, in each case for a period of 90 days from the date of the
Prospectus, without the prior written consent of Friedman, Billings, Xxxxxx &
Co., Inc. on behalf of the Underwriters;
(s) to cause each holder of Series A preferred stock of the Company to
furnish to the Representatives, prior to the first Date of Delivery, a letter
or letters, substantially in the form of Exhibit B hereto, pursuant to which
each such person or entity shall agree not to, directly or indirectly, (i)
offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any shares of
Series A preferred stock of the Company or related warrants or Common Stock
into which such securities are convertible or for which such securities are
exercisable or (ii) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits of
risks of ownership of such shares of Series A preferred stock, related warrants
or underlying Common Stock, whether any such transaction described in clause
(i) or (ii) above is to settled by delivery of Series A preferred stock, the
related warrants or Common Stock, in cash or otherwise, in each case for a
period of
-17-
180 days from the date of the Prospectus, without prior written consent of
Friedman, Billings, Xxxxxx & Co., Inc. on behalf of the Underwriters;
(t) that the Company shall obtain or maintain, as appropriate, Directors
and Officers liability insurance in amounts customary to the Company's
industry, which shall apply to the offering contemplated herein;
(u) if at any time during the 90-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in the reasonable
opinion of the Representatives, 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 a supplement to or amendment of the
Prospectus) and after written notice from the Representatives advising the
Company to the effect set forth above, to forthwith prepare, consult with the
Representatives concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to the Representatives,
responding to or commenting on such rumor, publication or event;
(v) that the Company will comply with all of the provisions of any
undertakings in the Registration Statement; and
(w) that the Company (i) will comply with all applicable securities and
other applicable laws, rules and regulations, including without limitation, the
rules and regulations of the NASD, in each jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program and (ii) will
pay all reasonable fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program, subject to the
limitations of Section 5 of this Agreement, and any stamp duties, similar taxes
or duties or other taxes, if any, incurred by the Underwriters in connection
with the Directed Share Program.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Shares to the Underwriters, (iii) the printing of this Agreement and any
dealer agreements and furnishing of copies of each to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of
the Shares for offering and sale under state laws that the Company and the
Representatives have mutually agreed are appropriate and the determination of
their eligibility for investment
-18-
under state law as aforesaid (including the reasonable legal fees and the
filing fees and other reasonable disbursements of counsel for the Underwriters
and the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers), (v) filing for review
of the public offering of the Shares by the NASD (including the reasonable
legal fees and the filing fees and other reasonable disbursements of counsel
for the Underwriters relating thereto), (vi) the fees and expenses of any
transfer agent or registrar for the Shares and miscellaneous expenses referred
to in the Registration Statement, (vii) the fees and expenses incurred in
connection with the inclusion of the Shares in the Nasdaq National Market,
(viii) making road show presentations with respect to the offering of the
Shares, (ix) preparing and distributing bound volumes of transaction documents
for the Representatives and their legal counsel and (x) the performance of the
Company's other obligations hereunder. Upon the request of the Representatives,
the Company will provide funds in advance for filing fees.
(b) The Company agrees to reimburse the Representatives for up to $500,000
of their reasonable out-of-pocket expenses in connection with the performance
of their activities under this Agreement, including, but not limited to, costs
such as printing, facsimile, courier service, direct computer expenses,
accommodations and travel, provided that with respect to the fees and expenses
of the Underwriters' outside legal counsel and any other advisors, accountants,
appraisers, etc. (other than the reasonable fees and expenses of counsel with
respect to state securities or blue sky laws and filing the offering with the
NASD for its review, all of which shall be reimbursed by the Company pursuant
to the provisions of subsection (a) above) such reimbursement shall be limited
to $250,000.
(c) If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
all reasonable out-of-pocket expenses (such as printing, facsimile, courier
service, direct computer expenses, accommodations, travel and the fees and
disbursements of Underwriters' counsel) and any other advisors, accountants,
appraisers, etc. reasonably incurred by such Underwriters in connection with
this Agreement or the transactions contemplated herein.
6. Conditions of the Underwriters' Obligations:
The obligations of the Underwriters hereunder to purchase Shares at the
Closing Time or on each Date of Delivery, as applicable, are subject to the
accuracy of the representations and warranties on the part of the Company
hereunder on the date hereof and at the Closing Time and on each Date of
Delivery, as applicable, the performance by the Company of its obligations
hereunder and to the satisfaction of the following further conditions at the
Closing Time or on each Date of Delivery, as applicable:
-19-
(a) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Ledgewood Law Firm, P.C., counsel for
the Company and the Subsidiaries, addressed to the Underwriters and dated the
Closing Time and each Date of Delivery and in form and substance satisfactory
to Xxxx Xxxxxxx LLP, counsel for the Underwriters, stating that:
(i) the Company has an authorized capitalization as set forth
in the Prospectus; the outstanding shares of capital stock of the
Company and the Subsidiaries incorporated in the United States (the
"U.S. Subsidiaries") have been duly and validly authorized and
issued and are fully paid and non-assessable. The issued share
capital of the Subsidiaries incorporated in the United Kingdom (the
"U.K. Subsidiaries") is fully paid and, to the best of such
counsel's knowledge, has been duly and validly authorized and issued
and is non-assessable. To the best of such counsel's knowledge, the
outstanding shares of the Subsidiaries incorporated in Canada or a
province thereof (the "Canadian Subsidiaries") have been duly and
validly issued and are fully paid and non-assessable. All of the
outstanding shares of capital stock of the Subsidiaries are directly
or indirectly owned of record and, to the best of such counsel's
knowledge, beneficially by the Company; except as disclosed in the
Prospectus, to the best of such counsel's knowledge, there are no
outstanding (i) securities or obligations of the Company or any of
the Subsidiaries convertible into or exchangeable for any capital
stock of the Company or any such Subsidiary, (ii) warrants, rights
or options to subscribe for or purchase from the Company or any such
Subsidiary any such capital stock or any such convertible or
exchangeable securities or obligations, or (iii) obligations of the
Company or any such Subsidiary to issue any shares of capital stock,
any such convertible or exchangeable securities or obligation, or
any such warrants, rights or options;
(ii) each of the Company, the U.S. Subsidiaries and the U.K.
Subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its respective
jurisdiction of incorporation. Each Canadian Subsidiary is a
corporation incorporated and existing under the laws of its
respective jurisdiction of incorporation. The Company and each
Subsidiary has full corporate power and authority to own its
respective properties and to conduct its respective businesses as
described in the Registration Statement and Prospectus and, in the
case of the Company, to execute and deliver this Agreement and to
consummate the transactions described in this Agreement;
(iii) the Company and the U.S. Subsidiaries are duly qualified
or licensed by each jurisdiction in which, to the best of such
counsel's knowledge, they conduct their respective businesses and in
which the failure, individually or in the aggregate, to be so
licensed could have a
-20-
Material Adverse Effect, and the Company and the U.S. Subsidiaries
are duly qualified, and are in good standing, in each jurisdiction
in which, to the best of such counsel's knowledge, they own or lease
real property or maintain an office and in which such qualification
is necessary except where the failure to be so qualified and in good
standing could not have a Material Adverse Effect, and to the best
of such counsel's knowledge, except where the failure to be so
qualified would not have a Material Adverse Effect, no such
qualification is required with respect to the U.K. Subsidiaries or
the Canadian Subsidiaries other than TRM Copy Centres (Canada) Ltd.
TRM Copy Centres (Canada) Ltd. is duly qualified, licensed or
registered to carry on business as an extra-provincial corporation
in the Provinces of Ontario, Quebec and British Columbia, Canada.
Except as disclosed in the Prospectus, to the best of such counsel's
knowledge, no Subsidiary is prohibited or restricted, directly or
indirectly, from paying dividends to the Company, or from making any
other distribution with respect to such Subsidiary's capital stock
or from repaying to the Company or any other Subsidiary any amounts
which may from time to time become due under any loans or advances
to such Subsidiary from the Company or such other Subsidiary, or
from transferring any such Subsidiary's property or assets to the
Company or to any other Subsidiary. To the best of such counsel's
knowledge, other than as disclosed in the Prospectus, 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 association;
(iv) to the best of such counsel's knowledge, the Company and
the Subsidiaries are in compliance in all material respects with all
applicable laws, orders, rules, regulations and orders, including
those relating to transactions with affiliates;
(v) to the best of such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in violation of any term or
provision of its organizational documents, is in breach of, or in
default under (nor has any event occurred which with notice, lapse
of time, or both would constitute a breach of, or default under),
any license, indenture, mortgage, deed of trust, loan or credit
agreement or any other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected or under any
law, regulation or rule or any decree, judgment or order applicable
to the Company or any of the Subsidiaries, except such breaches or
defaults which would not have a Material Adverse Effect;
(vi) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the
-21-
transactions contemplated by this Agreement do not and will not (A)
conflict with, or result in any breach of, or constitute a default
under (nor constitute any event which with notice, lapse of time, or
both would constitute a breach of or default under), (i) any
provisions of the articles or certificate of incorporation, charter
or by-laws of the Company, any U.S. Subsidiary, any U.K. Subsidiary
or, to the best of such counsel's knowledge, any Canadian
Subsidiary, (ii) any provision of any license, indenture, mortgage,
deed of trust, loan, credit or other agreement or instrument known
to such counsel and to which the Company or any Subsidiary is a
party or by which any of them or their respective properties or
assets may be bound or affected except such conflicts, breaches or
defaults that could not, individually or in the aggregate, have a
Material Adverse Effect, (iii) any law or regulation binding upon or
applicable to the Company or, to the best of such counsel's
knowledge, any Subsidiary or, to the best of such counsel's
knowledge, any of their respective properties or assets (other than
securities or blue sky laws and the rules and regulations of the
NASD, as to which such counsel need not express an opinion, or the
federal securities laws, as to which such counsel need only express
the opinions contained in subparagraphs (viii), (x), (xiv) and (xvi)
through (xxii) and the penultimate paragraph of this section 6(a)),
or (iv) any decree, judgment or order known to such counsel to be
applicable to the Company or any Subsidiary, except such conflicts,
breaches or defaults that could not, individually or in the
aggregate, have a Material Adverse Effect; or (B) to the best of
such counsel's knowledge, result in the creation or imposition of
any lien, charge, claim or encumbrance upon any property or assets
of the Company or the Subsidiaries;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement
of the Company enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, and by
general principles of equity, and except that enforceability of the
indemnification and contribution provisions set forth in Section 9
of this Agreement may be limited by the federal or state securities
laws of the United States or public policy underlying such laws;
(viii) no approval, authorization, consent or order of or
filing with any federal or state governmental or regulatory
commission, board, body, authority or agency is required in
connection with the execution, delivery and performance of this
Agreement, the consummation of the transactions contemplated herein,
and the sale and delivery of the Shares by the Company as
contemplated herein, other than such as have been obtained or made
under the Securities Act and the Securities Act Regulations and the
Exchange Act and Exchange Act Regulations, and
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except that such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters or any approval of the underwriting terms and
arrangements for the offering of the Shares by the NASD;
(ix) to the best of such counsel's knowledge, each of the
Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary
filings required under any federal, state or local law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, required to conduct their respective
businesses, as described in the Prospectus, except to the extent the
failure to have such licenses, authorizations, consents or approvals
could not, individually or in the aggregate, have a Material Adverse
Effect; to the best of such counsel's knowledge, neither the Company
nor any Subsidiary is in violation of, in default under, or has
received any notice regarding a possible violation, default or
revocation of any such license, authorization, consent or approval
or any federal, state, local or foreign law, regulation or decree,
order or judgment applicable to the Company or any of the
Subsidiaries, except any such violation, default or revocation that
could not, individually or in the aggregate, have a Material Adverse
Effect;
(x) the Company is not subject to registration as an
investment company under the Investment Company Act of 1940, as
amended, and the transactions contemplated by this Agreement will
not cause the Company to become an investment company subject to
registration under such Act;
(xi) the Shares have been duly authorized and when the Shares
have been issued and duly delivered against payment therefor as
contemplated by this Agreement, the Shares will be validly issued,
fully paid and non-assessable, and, except as a result of any action
which may have been taken by the Underwriters, the Underwriters will
acquire good and marketable title to the Shares, free and clear of
any pledge, lien, encumbrance, security interest, or other claim;
(xii) the issuance and sale of the Shares by the Company is
not subject to preemptive or other similar rights arising by
operation of law, under the articles of incorporation, charter or
by-laws of the Company, or under any agreement known to such counsel
to which the Company or any of the Subsidiaries is a party or, to
such counsel's knowledge, otherwise, except for those preemptive
rights which have been waived with respect to the offering
contemplated by this Agreement;
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(xiii) to the best of such counsel's knowledge, there are no
persons with registration or other similar rights to have any equity
or debt securities, including securities that are convertible into
or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under
the Securities Act, except for those registration or similar rights
which have been waived with respect to the offering contemplated by
this Agreement;
(xiv) the Shares conform in all material respects as to legal
matters to the descriptions thereof contained in the Registration
Statement and Prospectus under the caption "Description of Capital
Stock - Common Stock";
(xv) the form of certificate used to evidence the Common Stock
complies in all material respects with the requirements of the
Oregon Business Corporations Act, with any applicable requirements
of the organizational documents of the Company and the requirements
of the Nasdaq National Market;
(xvi) the Registration Statement has become effective under
the Securities Act and no stop order suspending the effectiveness of
the Registration Statement has been issued and, to the best of such
counsel's knowledge, no proceedings with respect thereto have been
commenced or threatened;
(xvii) as of the effective date of the Registration Statement,
the Registration Statement and the Prospectus, excluding the
documents incorporated therein by reference, (except as to the
financial statements and other financial and statistical data
contained therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the requirements
of the Securities Act, the Exchange Act, the Securities Act
Regulations and the Exchange Act Regulations
(xviii) each document incorporated by reference in the
Registration Statement and the Prospectus (except as to the
financial statements and other financial and statistical data
included therein, as to which such counsel need express no opinion),
when it became effective or at the time it was filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Securities Act and the
Securities Act Regulations or the Exchange Act and the Exchange Act
Regulations;
(xix) the statements under the captions "Risk Factors - Risks
Related to Our Common Stock - Our charter documents and Oregon law
may inhibit a takeover that shareholders may consider favorable,"
"Capitalization" and "Description of Capital Stock" in the
Registration
-24-
Statement and the Prospectus, insofar as such statements constitute
a summary of the legal matters referred to therein, constitute
accurate summaries thereof in all material respects;
(xx) the Company's Registration Statement on Form 8-A (the
"8-A Registration Statement"), at the time it was filed with the
Commission, and any amendment thereto, at the time it was filed with
the Commission, complied as to form in all material respects with
the requirements of the Exchange Act; the 8-A Registration Statement
has become effective under the Exchange Act;
(xxi) to the best of such counsel's knowledge, there are no
actions, suits or proceedings, inquiries, or investigations pending
or threatened against the Company or any of the Subsidiaries or any
of their respective officers and directors or to which the
properties, assets or rights of any such entity are subject, at law
or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority,
arbitral panel or agency which are required to be described in the
Prospectus but are not so described;
(xxii) to the best of such counsel's knowledge, there are no
contracts or documents of a character which are required to be filed
as exhibits to the Registration Statement or are required to be
described or summarized in the Prospectus which have not been so
filed, summarized or described, and all such summaries and
descriptions, in all material respects, fairly and accurately set
forth the material provisions of such contracts and documents;
(xxiii) to the best of such counsel's knowledge, the Company
and each Subsidiary owns or possesses adequate licenses or other
rights to use all patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights and
know-how (collectively "Intangibles") necessary to entitle the
Company and each Subsidiary to conduct its business as described in
the Prospectus, and neither the Company, nor any Subsidiary, has
received notice of infringement of or conflict with (and knows of no
such infringement of or conflict with) asserted rights of others
with respect to any Intangibles which could materially and adversely
affect the business, prospects, properties, assets, results of
operations or condition (financial or otherwise) of the Company or
any Subsidiary; and
(xxiv) to the best of such counsel's knowledge, each of the
Company, and the Subsidiaries has filed on a timely basis all
material federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and have paid
all taxes shown as due thereon; and no tax deficiency has been
asserted against any such entity,
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nor does any such entity know of any tax deficiency which is likely
to be asserted against any such entity which, if determined
adversely to any such entity, could materially and adversely affect
the business, prospects, properties, assets, results of operations
or condition (financial or otherwise) of any such entity,
respectively.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, independent
public accountants of the Company and representatives of the Representatives, at
which the contents of the Registration Statement and Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus (except as and
to the extent stated in subparagraphs (xiv), (xvii), and (xix) above), no facts
have come to their attention that lead them to believe that the Registration
Statement, the Preliminary Prospectus or the Prospectus, as of their respective
effective or issue date, and as of the date of such counsel's opinion, contained
or contains an untrue statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that, in each case, such counsel need
express no view with respect to the financial statements and other financial and
statistical data included in the Registration Statement, Preliminary Prospectus
or Prospectus).
In giving such opinion, such counsel may (i) rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the
Representatives, provided that such other opinions are addressed to the
Underwriters and that Xxxx Xxxxxxx LLP is entitled to rely on such opinions and
(ii) assume that the laws of the State of New York are consistent with those of
the Commonwealth of Virginia.
(b) The Representatives shall have received from PricewaterhouseCoopers,
LLP, letters dated, respectively, as of the date of this Agreement, the Closing
Time and each Date of Delivery, as the case may be, addressed to the
Representatives, in form and substance satisfactory to the Representatives,
relating to the financial statements, including any pro forma financial
statements, of the Company and the Subsidiaries, and such other matters
customarily covered by comfort letters issued in connection with registered
public offerings.
(c) The Representatives shall have received at the Closing Time and on
each Date of Delivery a favorable opinion of Xxxx Xxxxxxx LLP, dated the
Closing Time or such Date of Delivery, addressed to the Representatives and in
form and substance satisfactory to the Representatives.
(d) No amendment or supplement to the Registration Statement or Prospectus
shall have been filed to which the Underwriters shall have objected in writing.
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(e) Prior to the Closing Time and each Date of Delivery (i) no stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus
shall have been issued, and no proceedings for such purpose shall have been
initiated or threatened, by the Commission, and no suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or the
initiation or threatening of any proceedings for any of such purposes, shall
have occurred; (ii) all requests for additional information on the part of the
Commission shall have been complied with to the reasonable satisfaction of the
Representatives; and (iii) the Registration Statement and the Prospectus shall
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(f) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Time shall have been made
within the applicable time period prescribed for such filing by such Rule.
(g) Between the time of execution of this Agreement and the Closing Time
or the relevant Date of Delivery (i) there shall not have been any Material
Adverse Change, and (ii) no transaction which is material and unfavorable to
the Company shall have been entered into by the Company or any of the
Subsidiaries, in each case, which in the Representatives' sole judgment, makes
it impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Registration Statement.
(h) The Shares shall have been approved for inclusion in the Nasdaq
National Market.
(i) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(j) The Representatives shall have received lock-up agreements from each
executive officer and director of the Company, in the form of Exhibit A
attached hereto, and such letter agreements shall be in full force and effect.
(k) The Representatives shall have received lock-up agreements from each
holder of Series A preferred stock of the Company in substantially the form of
Exhibit B attached hereto, and such letter agreements shall be in full force
and effect, provided that any failure of FBR Financial Fund II, L.P., Bay Pond
Partners, L.P., Bay Pond Investors (Bermuda), L.P. or Xxxx X. Xxxxxx to execute
such an agreement shall not terminate the obligations of the Underwriters under
this Agreement.
(l) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of its Chairman of the Board, Chief
Executive Officer, Senior Vice President and Corporate Counsel or Senior Vice
President - Financial Services, to the effect that:
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(i) the representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the date of
such certificate, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the date of such certificate;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and
no order directed at any document incorporated by reference therein
("Incorporated Document") has been issued and no proceedings for
that purpose have been instituted or are pending or threatened under
the Securities Act;
(iii) when the Registration Statement became effective and at
all times subsequent thereto up to the date of such certificate, the
Registration Statement and the Prospectus, and any amendments or
supplements thereto and any Incorporated Documents, when such
Incorporated Documents became effective or were filed with the
Commission, contained all material information required to be
included therein by the Securities Act or the Exchange Act and the
applicable rules and regulations of the Commission thereunder, as
the case may be, and in all material respects conformed to the
requirements of the Securities Act or the Exchange Act and the
applicable rules and regulations of the Commission thereunder, as
the case may be; the Registration Statement and the Prospectus, and
any amendments or supplements thereto, did not and do not include
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; and, since the effective date of the
Registration Statement, there has occurred no event required to be
set forth in an amendment or supplemented Prospectus which has not
been so set forth; and
(iv) subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
there has not been (a) any Material Adverse Change, (b) any
transaction that is material to the Company and the Subsidiaries
considered as one enterprise, except transactions entered into in
the ordinary course of business, (c) any obligation, direct or
contingent, that is material to the Company and the Subsidiaries
considered as one enterprise, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary course of
business, (d) any change in the capital stock or outstanding
indebtedness of the Company or any Subsidiary that is material to
the Company and the Subsidiaries considered as one enterprise except
as specifically contemplated by this Agreement, (e) any dividend or
distribution of any kind declared, paid or made on the capital stock
of the Company or any
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Subsidiary, or (f) any loss or damage (whether or not insured) to
the property of the Company or any subsidiary which has been
sustained or will have been sustained which has a Material Adverse
Effect.
(m) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a letter dated each such date, from each
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) of any commercial paper or
other securities issued by Autobahn Funding Company, LLC in order to raise
funds under the facility described in the Prospectus under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources - U.S. Vault Cash Facility,"
confirming that no downgrading shall have occurred in the rating accorded such
securities and that such securities are not under surveillance or review,
except a surveillance or review with implications of a possible upgrading.
(n) The Company shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Company contained herein, and the performance
by the Company of its covenants contained herein, and the fulfillment of any
conditions contained herein, as of the Closing Time or any Date of Delivery, as
the Underwriters may reasonably request.
7. Termination:
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representatives, at any time prior
to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 6 of this Agreement shall not have been fulfilled when and
as required by this Agreement to be fulfilled, or (ii) if there has been since
the respective dates as of which information is given in the Registration
Statement, any Material Adverse Change, or any development involving a
prospective Material Adverse Change, or material change in management of the
Company or any Subsidiary, whether or not arising in the ordinary course of
business, or (iii) if there has occurred any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic, political or other conditions the effect of which on the financial
markets of the United States is such as to make it, in the judgment of the
Representatives, impracticable to market the Shares or enforce contracts for the
sale of the Shares, or (iv) if trading in any securities of the Company has been
suspended by the Commission or by the Nasdaq National Market, or if trading
generally on the New York Stock Exchange or in the Nasdaq over-the-counter
market has been suspended (including an automatic halt in trading pursuant to
market-decline triggers, other than those in which solely program trading is
temporarily halted), or limitations on prices for trading (other than
limitations on hours or numbers of days of trading) have been fixed, or maximum
ranges for prices for securities have been required, by such exchange or the
NASD or the over-the-counter market or by order of the Commission or any other
governmental authority, or (v) if there has been any downgrade in the rating by
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any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) of any of the Company's debt
securities or preferred stock or of any commercial paper or other securities
issued by Autobahn Funding Company, LLC in order to raise funds under the
facility described in the Prospectus under the heading "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources - U.S. Vault Cash Facility," or if any such organization has
publicly announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading) its rating of
any such securities, or (vi) any federal or state statute, regulation, rule or
order of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated which, in the reasonable opinion of the
Representatives, materially adversely affects or will materially adversely
affect the business or operations of the Company, or (vii) any action has been
taken by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which, in the reasonable opinion of the
Representatives, has a material adverse effect on the securities markets in the
United States.
If the Representatives elect to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Closing Time or on a Date of
Delivery in its obligation to take up and pay for the Shares to be purchased by
it under this Agreement on such date, the Representatives shall have the right,
within 36 hours after such default, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Shares which such Underwriter shall have agreed but failed
to take up and pay for (the "Defaulted Shares"). Absent the completion of such
arrangements within such 36-hour period, (i) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on such
date, each non-defaulting Underwriter shall take up and pay for (in addition to
the number of Shares which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Shares agreed to
be purchased by the defaulting Underwriter on such date in the proportion that
its underwriting obligations hereunder bears to the underwriting obligations of
all non-defaulting Underwriters; and
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(ii) if the total number of Defaulted Shares exceeds 10% of such total, the
Representatives may terminate this Agreement by notice to the Company, without
liability of any party to any other party except that the provisions of Sections
5 and 9 hereof shall at all times be effective and shall survive such
termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the same effect as
if such substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises out
of or is based upon (A) any breach of any representation, warranty or covenant
of the Company contained herein, (B) any failure on the part of the Company to
comply with any applicable law, rule or regulation relating to the offering of
securities being made pursuant to the Prospectus, (C) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company), the Prospectus (the term Prospectus for the
purpose of this Section 9 being deemed to include any Preliminary Prospectus,
the Prospectus and the Prospectus as amended or supplemented by the Company),
(D) 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 (domestic or foreign) 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"), (E) any omission or alleged omission to state a material
fact required to be stated in any such Registration Statement, Prospectus or
any Application or necessary to make the statements made therein, in the
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light of the circumstances under which they were made, not misleading, or (F)
any untrue statement or alleged untrue statement of any material fact contained
in any audio or visual materials used in connection with the marketing of the
Shares, including, without limitation, slides, videos, films and tape
recordings; except insofar as any such loss, expense, liability, damage or
claim arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in and
in conformity with information furnished in writing by the Underwriters through
the Representatives to the Company expressly for use in such Registration
Statement, Prospectus or Application. The indemnity agreement set forth in this
Section 9(a) shall be in addition to any liability which the Company may
otherwise have
(b) If any action is brought against an Underwriter or controlling person
in respect of which indemnity may be sought against the Company pursuant to
subsection (a) above, such Underwriter shall promptly notify the Company in
writing of the institution of such action, and the Company shall assume the
defense of such action, including the employment of counsel and payment of
expenses; provided, however, that any failure or delay to so notify the Company
will not relieve the Company of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, or the Company shall not have
employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Company (in which case the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any
of which events such fees and expenses shall be borne by the Company and paid
as incurred (it being understood, however, that the Company shall not be liable
for the expenses of more than one separate firm of attorneys for the
Underwriters or controlling persons in any one action or series of related
actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its consent.
(c) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Company's directors, the Company's
officers that signed the Registration Statement, and any person who controls
the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any loss, expense, liability, damage
or claim (including the reasonable cost of investigation) which, jointly or
severally, the Company, or any such person may incur under the Securities Act,
the Exchange Act or otherwise, but only insofar as such loss,
-32-
expense, liability, damage or claim arises out of or is based upon (A) any
untrue statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by such Underwriter
through the Representatives to the Company expressly for use in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company), the Prospectus, or any
Application, or (B) any omission or alleged omission to state a material fact
in connection with such information required to be stated either in such
Registration Statement, Prospectus or any Application or necessary to make such
information, in the light of the circumstances under which made, not
misleading. The statements set forth in the fifth, eighth, fifteenth and
sixteenth paragraphs and the third sentence of the ninth paragraph under the
caption "Underwriting" in the Preliminary Prospectus and the Prospectus (to the
extent such statements relate to the Underwriters) constitute the only
information furnished by or on behalf of any Underwriter through the
Representatives to the Company for purposes of Section 3(k) and this Section 9.
The indemnity agreement set forth in this Section 9(c) shall be in addition to
any liabilities that such Underwriter may otherwise have.
If any action is brought against the Company, or any such person, in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company, or such person, shall promptly notify the
Representatives in writing of the institution of such action and the
Representatives, on behalf of the Underwriters, shall assume the defense of such
action, including the employment of counsel and payment of expenses. The
Company, or such person, shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company, or such person unless the employment of such counsel shall have
been authorized in writing by the Representatives in connection with the defense
of such action or the Representatives shall not have employed counsel to have
charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Underwriters (in which
case the Representatives shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that the Underwriters shall not be liable for the
expenses of more than one separate firm of attorneys in any one action or series
of related actions in the same jurisdiction (other than local counsel in any
such jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of the Representatives.
(d) If the indemnification provided for in this Section 9 is unavailable
or insufficient to hold harmless an indemnified party under subsections (a),
(b) and (c) of this Section 9 in respect of any losses, expenses, liabilities,
damages or claims referred to therein, then each applicable indemnifying party,
in lieu of indemnifying such
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indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, expenses, liabilities, damages or
claims (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, and the Underwriters from the offering of the
Shares or (ii) if (but only if) the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and of the Underwriters in connection with
the statements or omissions which resulted in such losses, expenses,
liabilities, damages or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company bear to the underwriting discounts
and commissions received by the Underwriters. The relative fault of the
Company, and of the Underwriters shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied
by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any claim or action.
(e) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in subsection (d)(i) and, if
applicable (d)(ii), above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting
commitments and not joint.
(f) The Company agrees to indemnify and hold harmless each Underwriter and
its affiliates and each person, if any, who controls each Underwriter and its
affiliates within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to participants in connection with the
Directed Share Program, or caused by any omission or alleged
-34-
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) as a result of
the failure of any participant to pay for and accept delivery of Directed
Shares that the participant has agreed to purchase; or (iii) related to,
arising out of, or in connection with the Directed Share Program.
10. Survival:
The indemnity and contribution agreements contained in Section 9 of this
Agreement and the covenants, warranties and representations of the Company
contained in Sections 3, 4 and 5 of this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter, or any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, its directors and officers, or any person who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and shall survive any termination of this Agreement or the
sale and delivery of the Shares. The Company and each Underwriter agree promptly
to notify the others of the commencement of any litigation or proceeding against
it and, in the case of the Company, against any of the Company's officers and
directors, in connection with the sale and delivery of the Shares, or in
connection with the Registration Statement or Prospectus.
11. Notices:
Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000, Attention: Syndicate Department; if to the Company, shall be
sufficient in all respects if delivered to the Company at the offices of the
Company at 0000 X.X. 000xx Xxxxxx, Xxxxxxxx, Xxxxxx 00000-0000, Attention:
Xxx Xxxxxxxx.
12. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Parties at Interest:
The Agreement herein set forth has been and is made solely for the benefit
of the Underwriters, the Company, and the controlling persons, directors and
officers referred to in Sections 9 and 10 hereof, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a
-35-
purchaser, as such purchaser, from any of the Underwriters) shall acquire or
have any right under or by virtue of this Agreement.
14. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which together
shall constitute one and the same agreement among the parties. A facsimile
signature shall constitute an original signature for all purposes.
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this Agreement shall constitute a binding agreement among the
Company and the Underwriters.
Very truly yours,
TRM CORPORATION
By:_____________________________
By:
Title:
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXX XXXXXXX & CO.
By: Friedman, Billings, Xxxxxx & Co., Inc.
By:_______________________________
Title:
For themselves and as Representatives of the other
Underwriters named on Schedule I hereto.
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SCHEDULE I
UNDERWRITER NUMBER OF INITIAL SHARES TO BE
PURCHASED
--------------------------------------------------------------------------------
Friedman, Billings, Xxxxxx & Co., Inc. [ ]
Xxxxx Xxxxxxx & Co. [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
---------
TOTAL 4,500,000
=========
I-1
