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EXHIBIT 1.1
4,000,000 Shares
XXXXXXXX XXXXXXXXXXXX
Common Stock
UNDERWRITING AGREEMENT
July ___, 1999
XXXXXX BROTHERS INC.
XXXXXXX, XXXXX & CO.
c/x XXXXXX BROTHERS INC.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
XXXXXXXX Xxxxxxxxxxxx, a Delaware corporation (the "Company"), proposes
to issue and sell severally to the underwriters named in Schedule I hereto (the
"Underwriters") 4,000,000 shares (the "Firm Shares") of Common Stock ($.0001 par
value) (the "Common Stock") of the Company. In addition, for the sole purpose of
covering over-allotments in connection with the sale of the Firm Shares, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 600,000 shares (the "Option Shares") of Common Stock. The Firm Shares
and any Option Shares purchased pursuant to this Underwriting Agreement are
herein called the "Shares."
This is to confirm the agreement concerning the purchase of the Shares
from the Company by the Underwriters.
1. REPRESENTATIONS AND WARRANTIES. The Company represents, warrants and
agrees that:
(a) A registration statement on Form S-3 (File No. 333-82715)
with respect to the Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the Rules and Regulations (as
defined herein) of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission under
the Securities Act. Copies of such registration statement as amended to
date have been delivered by the Company to
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you, the Underwriters. The Company will next file with the Commission
one of the following: (i) prior to effectiveness of such registration
statement, a further amendment to such registration statement,
including a form of final prospectus, (ii) a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4), or (iii) a
registration statement under Rule 462(b) (as defined herein) and final
prospectus in accordance with Rules 430A and 424(b)(1) or (4). In the
case of clauses (ii) and (iii), the Company has included in such
registration statement, as amended at the Effective Date (as defined
herein), all information (other than Rule 430A Information (as defined
herein)) required by the Securities Act and the Rules and Regulations
thereunder to be included in the Prospectus with respect to the Shares
and the offering thereof. As filed, such amendment and form of final
prospectus, or such final prospectus, or such registration statement
and final prospectus, shall contain all Rule 430A Information, together
with all other such required information, with respect to the Shares
and the offering thereof and, except to the extent the Underwriters
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the date hereof or, to
the extent not completed at the date hereof, shall contain only such
specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the date hereof, will be included or made
therein.
For purposes of this Agreement, "Effective Time" means the date and the
time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was deemed effective or
declared effective by the Commission. "Effective Date" means the date
of the Effective Time. "Preliminary Prospectus" means each prospectus
included in such registration statement or in a registration statement
filed under Rule 462(b), or amendments thereof, before the Effective
Date and any prospectus included in such registration statement at the
Effective Date that omits Rule 430A Information. "Prospectus" means the
form of prospectus relating to the Shares, as first filed pursuant to
Rule 424(b), or as filed in a registration statement under Rule 462(b)
or, if no filing pursuant to Rule 424(b) or 462(b) is required, the
form of final prospectus included in the Registration Statement at the
Effective Date. "Registration Statement" means (i) such registration
statement, as amended at the Effective Time, (ii) any registration
statement filed pursuant to Rule 462(b), and (iii) any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A. "Rule 424," "Rule 430A" and "Rule 462(b)" refer
to such rules under the Securities Act. "Rule 430A Information" means
information with respect to the Shares and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of the Registration Statement, such Preliminary Prospectus or
Prospectus, as the case may be,
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and any reference to any amendment or supplement to the Registration
Statement, any Preliminary Prospectus or Prospectus shall be deemed to
refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Commission thereunder (collectively, the
"Exchange Act"), and so incorporated by reference (such incorporated
documents, financial statements and schedules being herein called the
"Incorporated Documents").
The Commission has not issued any stop order preventing or suspending
the use of the Preliminary Prospectus or the Prospectus or the
effectiveness of the Registration Statement, and no proceeding for any
such purpose has been initiated or, to the best of the Company's
knowledge, threatened by the Commission. For purposes of this
Agreement: "Rules and Regulations" means the rules and regulations
adopted by the Commission under either the Securities Act or the
Exchange Act, as applicable; "U.S. Person" means any resident or
national of the United States or Canada and its provinces, any
corporation, partnership or other entity created or organized in or
under the laws of the United States or Canada and its provinces, or any
estate or trust the income of which is subject to United States or
Canada federal income taxation regardless of the source of its income
(other than the foreign branch of any U.S. Person), and includes any
United States or Canadian branch of a person other than a U.S. Person;
and "United States" means the United States of America (including the
states thereof and the District of Columbia) and its territories, its
possessions and other areas subject to its jurisdiction.
(b) On the Effective Date, the Registration Statement and the
Prospectus did, and any further amendments or supplements to the
Registration Statement or the Prospectus will, conform in all material
respects to the requirements of the Securities Act and the Rules and
Regulations thereunder and did not and will not, as of the applicable
Effective Date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, 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 not misleading;
provided, however, that this representation and warranty shall not
apply to any statements in or omissions from the Registration Statement
or the Prospectus made in reliance upon and in conformity with written
information furnished to the Company through any Underwriter,
specifically for use in the preparation thereof.
(c) The accountants who certified the financial statements and
supporting schedules included in or incorporated by reference into the
Registration Statement are independent public accountants as required
by the Securities Act and the Rules and Regulations thereunder.
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(d) The financial statements (including the related notes and
supporting schedules) and the summary financial information included in
or incorporated by reference into the Registration Statement, any
Preliminary Prospectus or the Prospectus, present (or in the case of
any amendment or supplement to any such document filed with the
Commission after the date as of which this representation is being
made, will present) fairly and in accordance with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved, the financial condition and results of operations of
the entities purported to be shown thereby, at the dates and for the
periods indicated and have been or will be, as the case may be,
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except
as otherwise stated therein).
(e) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (excluding the
Incorporated Documents), except as otherwise stated or contemplated
therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, assets, affairs
or business prospects of the Company, whether or not arising in the
ordinary course of business, (B) there have been no transactions,
entered into by the Company, other than those in the ordinary course of
business, which are material with respect to the Company, (C) there has
been no extraordinary dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock, (D)
there has not been any change in the capital stock (other than
issuances of shares of Common Stock pursuant to employee benefit plans
or existing options), or any increase in the short-term indebtedness
for borrowed money (except increases due to long-term debt becoming
short-term debt through the passage of time) or long-term debt, or any
issuance of options, warrants, convertible securities or other rights
to purchase the capital stock (other than the grant of options pursuant
to existing option plans or rights pursuant to the Company's 1991
Employee Stock Purchase Plan), of the Company, and (E) the Company has
not sustained any material loss or damage to its property or
interference with its business, whether or not any of the foregoing is
insured.
(f) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Delaware,
and has full corporate power and authority to own or hold its
properties and conduct its business as described in the Registration
Statement; and the Company is duly qualified to transact business and
is in good standing in each jurisdiction in which failure so to qualify
could have a material adverse effect upon the Company or on its
earnings, assets, affairs or business prospects. Except as may be set
forth on Exhibit 21 to the Company's most recent Annual Report on Form
10-K filed with the Commission, the Company has no significant
subsidiaries.
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(g) The Company is not in violation of its corporate charter
or by-laws or, except as otherwise described or contemplated in the
Registration Statement, in default under any agreement, indenture or
instrument, the effect of which violation or default would be
materially adverse to the Company; and the issuance and sale of the
Shares and the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action and will
not conflict with, result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to
the terms of, or constitute a default under, any agreement, indenture
or instrument (the effect of which conflict, lien, charge, encumbrance,
default or violation would be materially adverse to the Company, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement) or result in a violation
of the corporate charter or by-laws of the Company, nor will the
performance by the Company of its obligations hereunder violate any
law, rule, administrative regulation or decree of any court or
governmental agency having jurisdiction over the Company or its
properties. Except as required by the Securities Act, the Exchange Act
and applicable state securities laws or "Blue Sky" laws of any
jurisdiction, no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required in
connection with the consummation of the transactions contemplated by
this Agreement.
(h) Other than as disclosed in the Registration Statement,
there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened against or affecting the
Company, which is required to be disclosed in the Registration
Statement or which might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, assets, affairs
or business prospects of the Company, or which might materially and
adversely affect its properties or assets or which might materially and
adversely affect the consummation of the transactions contemplated by
this Agreement; all summaries or descriptions of legal or governmental
proceedings or contingencies contained in the Registration Statement
are accurate in all material respects with respect to such matters; and
there are no contracts or other documents of the Company which are
required to be filed as exhibits to the Registration Statement which
have not been so filed.
(i) The Company is not in violation of any law, ordinance,
governmental rule or regulation or court decree to which it is subject,
other than violations (if any) that individually or in the aggregate
are not material to the Company. Other than as disclosed in the
Registration Statement, the Company possesses such certificates,
authorizations or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies the absence of which would have a
material adverse effect on its business, and the Company has not
received any notice of proceedings relating to the revocation or
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modification of any such certificate, authority or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially and adversely affect the conduct of the
business, operations, financial condition or income of the Company.
(j) At and after the First Closing Date, there will be no
holders of securities of the Company who, by reason of the filing of
the Registration Statement or any Preliminary Prospectus or the
Prospectus under the Securities Act, have the right to request the
Company to register under the Securities Act securities held by them,
other than holders who have agreed in writing to waive such rights, or
other than where the failure to waive such rights, singly or in the
aggregate, would not materially and adversely affect the conduct of the
business, operations, financial condition or income of the Company.
(k) All outstanding shares of Common Stock have been, and the
Shares, upon issuance and delivery and payment therefor in the manner
herein described, will be, duly authorized, validly issued, fully paid
and nonassessable. Upon the closing of the offering, no preemptive
rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, any shares of Common Stock, will exist pursuant
to the Company's corporate charter, by-laws or any agreement or other
instrument to which the Company is a party or by which it may be bound.
The capitalization of the Company as of March 28, 1999, is as set forth
in the Company's Form 10-Q report for the quarter ended March 28, 1999,
which is incorporated by reference into each Preliminary Prospectus and
the Prospectus. The appropriate number of shares of Common Stock
issuable upon exercise of the outstanding options to employees and
directors has been duly reserved for issuance, and such shares have
been duly and validly authorized and will when issued upon exercise in
accordance with their terms, be validly issued, fully paid and
nonassessable. There are no other rights to subscribe for or to
purchase any shares of Common Stock pursuant to the Company's corporate
charter or by-laws or any agreement or other instrument to which the
Company is a party or by which it may be bound or has knowledge, other
than conversion rights of the holders of outstanding Trust Convertible
Preferred Securities and outstanding options to employees and directors
and rights pursuant to the Company's 1991 Employee Stock Purchase Plan.
(l) The Company has full right, corporate power and authority
to enter into this Agreement and to perform and discharge its
obligations hereunder, and this Agreement has been duly authorized,
executed and delivered by the Company and constitutes the valid and
legally binding agreement of the Company, except as rights to
indemnification may be limited by federal or state securities laws and
except for the effect of bankruptcy,
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insolvency, reorganization, moratorium and other similar laws relating
to or affecting the rights of creditors generally.
(m) Except as otherwise stated in the Registration Statement
and the Prospectus, the Company has good and marketable title, free and
clear of all liens, encumbrances or claims of which the Company has
knowledge, to all of the real and personal property described in the
Registration Statement and the Prospectus as being owned by it, except
liens, encumbrances and equities which are not material in the
aggregate and do not materially affect the value of such property or
interfere with the conduct of the business of the Company and, except
as otherwise stated in the Registration Statement and Prospectus, the
Company has valid and binding leases to all of the real and personal
property described in the Registration Statement and Prospectus as
under lease to it with such exceptions as are not material and do not
interfere with the conduct of the business of the Company.
(n) The Company has filed all necessary federal, state and
foreign income and franchise tax returns and has paid all taxes shown
as due thereon, and the Company has no knowledge of any material tax
deficiency which has been or might be asserted against the Company.
(o) The Incorporated Documents, when they became effective or
were filed (or, if an amendment with respect to any such Incorporated
Document was filed or became effective, when such amendment was filed
or became effective) with the Commission, as the case may be, complied
in all material respects with the requirements of the Exchange Act, and
any documents so filed and incorporated by reference in the
Registration Statement or the Prospectus subsequent to the effective
date of the Registration Statement will, when they are filed with the
Commission, comply in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable; no such
Incorporated Document, when it was filed or became effective (or, if an
amendment with respect to any such Incorporated Document was filed or
became effective, when such amendment was filed or became effective),
contained, and no document so filed and incorporated by reference in
the Registration Statement or Prospectus subsequent to the effective
date of the Registration Statement will contain, an untrue statement of
a material fact or omitted, or will omit, to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(p) The Company has reviewed its operations and those of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Company or any of its
subsidiaries will be affected by Year 2000 issues. As a result of such
review,
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the Company represents and warrants that the disclosure in the
Registration Statement relating to Year 2000 issues is accurate and
complies with the rules and regulations under the Act, in each case in
all material respects. "Year 2000 issues" as used herein means Year
2000 issues described in or contemplated by the Commission's
Interpretation: Disclosure of Year 2000 Issues and Consequences by
Public Companies, Investment Advisers, Investment Companies, and
Municipal Securities Issuers (Release No. 33-7558).
(q) The Company is not an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
2. PURCHASE OF THE SHARES BY THE UNDERWRITERS. (a) Subject to the terms
and conditions and upon the basis of the representations and warranties herein
set forth, the Company agrees to issue and sell to the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase at a price of
$________ per Share, the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto. The Underwriters agree to offer the
Firm Shares as set forth in the Prospectus. The Company is not obligated to
deliver any Firm Shares except upon payment for all the Firm Shares.
(b) The Company hereby grants to the Underwriters an option to purchase
from the Company, solely for the purpose of covering over-allotments in the sale
of Firm Shares, all or any portion of the Option Shares for a period of 30 days
from the date hereof at the purchase price per Share set forth above. Option
Shares shall be purchased from the Company, severally and not jointly, for the
accounts of the several Underwriters in proportion to the number of Firm Shares
set forth opposite such Underwriter's name in Schedule I hereto, except that the
respective purchase obligations of each Underwriter shall be adjusted by the
Underwriters so that no Underwriter shall be obligated to purchase Option Shares
other than in 100-Share quantities.
3. DELIVERY OF AND PAYMENT FOR SHARES. Delivery of certificates for the
Firm Shares and certificates for the Option Shares, if the option to purchase
the same is exercised on or before the second Business Day (as defined herein)
prior to the First Closing Date (as defined herein), to be purchased by the
Underwriters from the Company shall be made through the facilities of the
Depository Trust Company ("DTC") (including without limitation, by "full fast"
electronic transfers through DTC) to Xxxxxx Brothers Inc. for the respective
accounts of the Underwriters, at 10:00 a.m., New York City time, on the fourth
full Business Day following the date hereof or at such other date as shall be
determined by you and the Company (the "First Closing Date"). For purposes of
this Agreement, "Business Day" means any day on which the New York Stock
Exchange is open for trading.
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The option to purchase Option Shares granted in Section 2 hereof may be
exercised on two occasions during the term thereof by written notice to the
Company from the Underwriters. Such notice shall set forth the aggregate number
of Option Shares as to which the option is being exercised and the time and
date, as determined by the Underwriters, when such Option Shares are to be
delivered (the "Option Closing Date"), which date shall be, subject to the first
sentence of this Section 3, the third Business Day after the date on which the
option shall have been exercised and in no event earlier than the First Closing
Date. (The First Closing Date and any Option Closing Date are herein
individually referred to as a "Closing Date" and collectively referred to as the
"Closing Dates".) Delivery of such Option Shares shall be made by the Company on
the applicable Closing Date at 10:00 a.m., New York City time, in the manner set
forth above for delivery of the Firm Shares.
Delivery of certificates for the Shares shall be made by or on behalf
of the Company to you in the manner set forth above, for the respective accounts
of the Underwriters, against payment by the Underwriters of the purchase price
therefor by wire transfer of immediately available funds to such account as the
Company shall designate, at the offices of Xxxxxx Godward LLP, 0000 Xxxxxxxxx
Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000 (or at such other location as
shall be agreed upon by the Company and the Underwriters), at 10:00 a.m., New
York City time, on the applicable Closing Date. The certificates for the Shares
shall be registered in such names and denominations as you shall have requested
at least two full Business Days prior to the applicable Closing Date. For the
purpose of expediting the checking and packaging of the certificates for the
Shares, the Company shall make such certificates available for inspection by the
Underwriters at a location in New York, New York as may be designated by the
Company not later than 1:00 p.m., New York City time, on the Business Day prior
to each such Closing Date. Time shall be of the essence and delivery of the
certificates for the Shares to be purchased at the time and place specified in
this Agreement is a further condition to the obligations of each Underwriter.
If an Underwriter shall direct that any Shares be issued in a name or
names other than that of the Underwriter agreeing to purchase such Shares, such
Underwriter shall pay any transfer tax resulting from issuance.
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4. COVENANTS. The Company covenants and agrees with each Underwriter
that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the date hereof, and any
amendment thereof, to become effective. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A or Rule 462(b), or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Underwriters of such timely filing. The Company
shall prepare and file with the Commission during such period following
the date hereof as, in the reasonable opinion of counsel for the
Underwriters, the Prospectus is required by law to be delivered, any
amendments of or supplements to the Registration Statement, the
Preliminary Prospectus or the Prospectus that, in your opinion, may be
necessary or advisable in connection with the distribution of the
Shares; and the Company shall not file any amendment of or supplement
to the Registration Statement, the Preliminary Prospectus or the
Prospectus if such filing has not been consented to by you after
reasonable notice thereof, such consent not to be unreasonably withheld
or delayed.
(b) The Company shall furnish promptly to each of the
Underwriters and to counsel for the Underwriters a signed copy of the
Registration Statement as originally filed and each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith, and shall furnish to the Underwriters such number of (i)
conformed copies of the Registration Statement, as originally filed and
each amendment thereto (excluding exhibits other than this Agreement),
(ii) any Preliminary Prospectus and the Prospectus and (iii) all
amendments and supplements to any of such documents (including the
Incorporated Documents to the extent not previously provided to you),
in each case as soon as available and in such quantities as the
Underwriters may from time to time reasonably request, provided, that
the Company shall furnish to such Underwriters and counsel such copies
of the Prospectus not later than the end of the first Business Day
after the date hereof; and the Company authorizes the Underwriters and
all dealers to whom any Shares may be offered or sold by the several
Underwriters to use the Prospectus, and if supplemented or amended then
after such date as supplemented or amended, during the period referred
to in Section 4(a), in connection with the sale of the Shares in
accordance with the applicable provisions of the Securities Act, the
Rules and Regulations thereunder and this Agreement.
(c) The Company will promptly advise the Underwriters (i) when
the Registration Statement, if not effective at the date hereof, and
any amendment thereto, shall
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have been filed or become effective, (ii) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (iii) of any request by the
Commission for any amendment of the Registration Statement or
supplement to the Prospectus or for any additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any order directed to
the Prospectus or the initiation or threat of any such stop order
proceeding by the Commission, (v) of receipt by the Company of any
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose and (vi) of the happening during the period
that any Prospectus is required to be delivered under the Securities
Act of any event which makes untrue any statement of a material fact
made in the Registration Statement or the Prospectus or which requires
the making of a change in the Registration Statement or the Prospectus
in order to make any material statement therein not misleading. As long
as the Prospectus relating to the Shares is required to be delivered
under the Securities Act, the Company shall advise the Underwriters
promptly of any event which materially affects the Company or the
Shares and which should be set forth in a supplement to or an amendment
of the Prospectus relating to the Shares in order to make the
statements therein not misleading or if during such period it is
necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Securities Act or to file any document.
The Company agrees to prepare and furnish to the several Underwriters
at its own expense such amendment or amendments to such Prospectus so
as to correct such statement or omission or to effect such compliance.
(d) If during the period referred to in Section 4(a) the
Commission shall issue a stop order or other order suspending the
effectiveness of the Registration Statement, suspending or preventing
the use of any Preliminary Prospectus or the Prospectus, or if the
Commission shall institute any proceedings for any such purpose, the
Company shall make every reasonable effort to obtain the lifting of any
such order at the earliest possible time.
(e) As soon as practicable and in any event not later than 45
days after the end of its fiscal quarter in which the first anniversary
date of the Effective Date occurs, the Company shall make generally
available to its security holders in accordance with Rule 158 of the
Rules and Regulations under the Securities Act and deliver to the
Underwriters an earnings statement, conforming with the requirements of
Section 11(a) of the Securities Act and covering a period of at least
twelve consecutive months beginning after the Effective Date.
(f) The Company shall endeavor to qualify the Shares for offer
and sale under the securities laws of such jurisdictions (including
Canada and its provinces) as the Underwriters shall reasonably
designate and to continue such qualifications in effect so
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long as is required for the distribution of the Shares; provided,
however, that the Company will not be obligated to qualify the Shares
in any such jurisdiction where such qualification would require the
Company to qualify to do business as a foreign corporation or file a
general consent to service of process.
(g) The Company shall pay all costs incident to the
authorization, issuance, sale and delivery of the Shares to be sold to
the Underwriters and any taxes payable in that connection; the costs
incident to the preparation, printing and filing under the Securities
Act of the Registration Statement and any amendments, supplements and
exhibits thereto; the costs of distributing the Registration Statement
as originally filed and each amendment and post-effective amendment
thereof (including exhibits), any Preliminary Prospectus and the
Prospectus; the costs of printing this Agreement; costs of the
Company's counsel; any applicable filing fee of the National
Association of Securities Dealers, Inc.; any applicable listing or
other stock exchange fees; the fees and expenses of qualifying any
Shares under the securities laws of the several jurisdictions
(including Canada and its provinces) as provided in this Section and of
preparing and printing a Blue Sky Memorandum (including reasonable fees
and expenses of counsel to the Underwriters in connection therewith)
and all other costs and expenses incident to the performance of the
Company's obligations under this Agreement; provided that, (i) except
as provided in this Section, the Underwriters shall pay their own costs
and expenses, including the fees and expenses of their counsel, any
transfer taxes on the Shares which they may sell and the expenses of
advertising any offering of the Shares made by the Underwriters; and
(ii) if the sale of the Shares provided for herein is not consummated
by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed or because
any other condition of the Underwriters' obligations hereunder is not
fulfilled or if the Underwriters shall decline to purchase the Shares
for any reason permitted under this Agreement, the Company shall
reimburse the several Underwriters for all reasonable out-of-pocket
disbursements (including reasonable fees and disbursements of counsel)
incurred by the Underwriters in connection with their investigation of
or any preparation by them in respect of the marketing of the Shares or
in contemplation of performing their obligations hereunder; provided,
however, that in no event shall the Company be obligated to pay such
expenses of the Underwriters in the event this Agreement is terminated
by the Underwriters pursuant to Section 7 or 8(a) hereof, or pursuant
to Subsection 8(b)(iii), 8(b)(iv), 8(b)(v), 8(b)(vi) or 8(b)(vii)
hereof.
(h) The Company shall not take, directly or indirectly, any
action designed to cause or result in, or which might reasonably be
expected to constitute, the stabilization or manipulation of the price
of the shares of Common Stock to facilitate the sale or resale of the
Shares.
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(i) During a period of five years from the Effective Date, the
Company shall furnish to the Underwriters copies of all reports,
documents and financial statements furnished by the Company to
stockholders or to any securities exchange or the National Association
of Securities Dealers, Inc., pursuant to requirements of or agreements
with such organizations, or to the Commission pursuant to the Exchange
Act or any of the Rules and Regulations thereunder.
(j) The Company shall apply the net proceeds of the sale of
the Shares as set forth in any Preliminary Prospectus and the
Prospectus.
(k) The Company will for a period of at least five years after
the Effective Date maintain a registration with the Commission pursuant
to Section 12(g) of the Exchange Act and will provide to you, at the
same time as filed, copies of all filings made with the Commission
pursuant to the Exchange Act.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters hereunder are subject to the accuracy, as of the date
hereof and each Closing Date (as if made at such Closing Date), of the
representations and warranties of the Company contained herein, to the
performance by the Company of its obligations hereunder and to the following
additional terms and conditions:
(a) If the Registration Statement has not become effective
prior to the date hereof, unless the Underwriters agree in writing to a
later time, the Registration Statement will become effective not later
than 11:00 a.m., New York City time, on the first full Business Day
following the date hereof; all post-effective amendments to the
Registration Statement shall have become effective; all filings
required by Rule 424 shall have been made within the time period
required by such Rule; no stop order suspending the effectiveness of
the Registration Statement shall have been issued and prior to that
time no stop order proceeding shall have been initiated or threatened
by the Commission; any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
or otherwise shall have been complied with or adequately disposed of
following discussions with the Commission's staff; and after the date
hereof the Company shall not have filed with the Commission any
amendment or supplement to the Registration Statement or the Prospectus
without the consent of the Underwriters, which consent will not have
been unreasonably withheld or delayed.
(b) No Underwriter shall have discovered and disclosed to the
Company that the Registration Statement, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact that, in the reasonable
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opinion of counsel for the Underwriters, is material or omits to state
a fact that, in the reasonable opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Shares,
and the form of the Registration Statement, the Prospectus (other than
financial statements and other financial data) and all other legal
matters relating to this Agreement, such other documents and the
transactions contemplated hereby shall be reasonably satisfactory in
all material respects to counsel for the Underwriters, and the Company
shall have furnished to such counsel all documents and information that
such counsel may reasonably request to enable it to pass upon such
matters.
(d) The Company shall have furnished to you a certificate,
dated such Closing Date and addressed to the Underwriters, of its Chief
Executive Officer and Chief Financial Officer, certifying that the
signers of said certificate have carefully examined the Registration
Statement, the any Preliminary Prospectus and the Prospectus, and any
amendments or supplements thereto, and that:
(i) There has not been, since the respective dates as
of which information is given in the Registration Statement,
any material adverse change in the condition, financial or
otherwise, or the earnings, assets, affairs or business
prospects of the Company, whether or not arising in the
ordinary course of business, except as set forth in, or
contemplated by, the Registration Statement and the
Preliminary Prospectus and the Prospectus;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and
as of such Closing Date;
(iii) The Company has complied with all agreements
and satisfied all conditions on its part to be performed or
satisfied at or prior to such Closing Date;
(iv) No stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for such purpose have been initiated or threatened by the
Commission; and
(v) Such documents do not include any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading.
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The delivery of the certificate provided for in this subparagraph (d)
shall be and constitute a representation and warranty of the Company as
to the facts required in the immediately foregoing clauses (i), (ii),
(iii), (iv) and (v) of this subparagraph (d) to be set forth in such
certificate.
(e) On such Closing Date you shall have received a letter of
PricewaterhouseCoopers, LLP, addressed to the Underwriters and dated
such date, confirming that they are independent public accountants with
respect to the Company within the meaning of the Securities Act and
restating, as of the date of such letter (or with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of
a date not more than five days prior to the date of such letter), their
conclusions and findings with respect to the financial information and
other matters covered by their letter delivered to the Underwriters
concurrently with the execution of this Agreement and confirming in all
material respects the conclusions and findings set forth in such prior
letter.
(f) Since the latest date as of which such condition is set
forth in the Registration Statement, the Preliminary Prospectus and the
Prospectus, there shall have been no material adverse change in the
condition, financial or otherwise, or the earnings, affairs or business
prospects of the Company, except in all cases for changes or
developments that the Prospectus discloses or expressly contemplates.
(g) The inclusion of the Company in the Standard & Poor's
Corporation 500 Composite Price Index shall not have been withdrawn,
nor shall the inclusion date have been delayed from that heretofore
announced.
(h) Xxxxxx Godward LLP, counsel for the Company, shall have
furnished to the Underwriters their opinion, addressed to the
Underwriters, dated such Closing Date and in form and substance
reasonably satisfactory to counsel for the Underwriters, to the effect
that:
(i) the Company (A) has been duly incorporated and is
validly existing in good standing under the laws of the State
of Delaware, (B) is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the owning
or leasing of properties or the conduct of business makes such
qualification necessary, except where the failure to so
qualify would not have a material adverse effect on the
Company, and (C) has full corporate power and authority to
carry on its business as described in the Prospectus and to
own and operate the properties used in said business. The
Company has full corporate power and authority to enter into
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and perform this Agreement and to issue, sell and deliver the
Shares. To the best of such counsel's knowledge, except as may
be set forth on Exhibit 21 to the Company's most recent Annual
Report on Form 10-K filed with the Commission, the Company has
no significant subsidiaries.
(ii) this Agreement has been duly 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 rights to indemnification hereunder may be
limited by Federal or state securities laws;
(iii) all legally required corporate proceedings in
connection with the authorization and issuance of the Shares
and the sale of the Shares by the Company in accordance with
the terms of this Agreement have been taken and all orders,
consents or other authorizations or approvals of any public
board or body legally required for the validity of the Shares
or for the issuance, sale and distribution of the Shares
hereunder have been obtained (except that no opinion need be
expressed with respect to such orders, consents or other
authorizations or approvals as may be required by the Blue Sky
or securities laws of any jurisdiction in connection with the
issuance of the Shares);
(iv) all the outstanding shares of the Company's
Common Stock have been, and the Shares, upon issuance and
delivery and payment therefor in the manner herein described,
will be, duly authorized, validly issued, fully paid and
nonassessable. Upon the closing of the offering, no preemptive
rights to subscribe for or to purchase, or any restriction
upon the voting or transfer of, any shares of Common Stock
will exist pursuant to the Company's corporate charter or
by-laws, or, to the best of such counsel's knowledge, pursuant
to any agreement or other instrument to which the Company is a
party or by which it may be bound;
(v) the certificates for the Shares are in valid and
sufficient form under applicable law;
(vi) the Registration Statement has become effective
under the Act, the applicable provisions of Rule 424, Rule
430A and Rule 462(b) under the Act have been fully complied
with in a timely manner, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or
contemplated;
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(vii) there are no contracts or other documents known
to such counsel which are required to be filed as exhibits to
the Registration Statement other than those filed as exhibits
thereto, and there are no legal or governmental proceedings
known to such counsel pending or, to the best of such
counsel's knowledge, threatened against the Company required
to be disclosed in the Prospectus which are not so disclosed;
(viii) the execution and delivery of this Agreement
by the Company, and the issuance and sale of the Shares and
the fulfillment of this Agreement by the Company will not
conflict with or constitute a breach of or a default (with the
passage of time or otherwise) under (i) the charter or by-laws
of the Company (ii) any statute, law or regulation to which
the Company or any of its properties may be subject or any
judgment, decree or order, known to such counsel, of any court
or governmental agency or authority entered in any proceeding
to which the Company was or is now a party or by which it is
bound, except for any conflict, breach or default that would
not have a material adverse effect on the Company or (iii) to
the best of such counsel's knowledge, any agreement or
document filed as an exhibit to the Registration Statement,
except for any conflict, breach or default that would not have
a material adverse effect on the Company;
(ix) to the best of such counsel's knowledge, the
Company is not in violation of its charter or by-laws; and
(x) except as to financial statements and schedules
included therein, as to which such counsel need not express
any opinion, such counsel is of the opinion that the
Registration Statement and the Prospectus and any supplements
or amendments thereto (including the Incorporated Documents)
comply as to form in all material respects with the Securities
Act and the Exchange Act.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel for
the Underwriters, representatives of the independent public accountants for the
Company, and you, 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 any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Prospectus and has not made any independent check or verification
thereof, on the basis of the foregoing, no facts have come to such counsel's
attention that lead them to believe that either the Registration Statement
(including the Incorporated Documents) at the time such Registration Statement
became effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or
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the Prospectus (including the Incorporated Documents) as of its date or the
Closing Date contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that such
counsel need express no opinion with respect to the financial statements,
schedules and other financial data included in the Registration Statement or
Prospectus.
In rendering such opinion such counsel may rely (A) as to questions of
the law of jurisdictions other than the State of California or the United States
upon an opinion (dated the Closing Date, addressed to the Underwriters) of
counsel acceptable to counsel to the Underwriters and (B) as to matters of fact,
to the extent they deem proper, upon certificates of officers of the Company and
public officials. Such opinion may also be limited as to the effect thereon of
laws relating to bankruptcy or insolvency, the application of equitable
principles and limitations on the effectiveness of indemnification and
contribution provisions and may contain such other customary exceptions or
qualifications as are acceptable to counsel for the Underwriters. Such opinion
of counsel to the Company shall state that the opinion of such other counsel is
in form and substance satisfactory to counsel to the Company and, in their
opinion, the Underwriters are justified in relying thereon.
(i) You shall have received from Xxxxxx & Xxxxxxx, counsel for
the Underwriters, their opinion, addressed to the Underwriters and
dated such Closing Date, with respect to the Shares, the Registration
Statement, the Prospectus, and other related matters as you reasonably
may request, and the Company shall have furnished to such counsel such
papers and information as they request to enable them to pass upon such
matters.
Any such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Underwriters and to counsel for the Underwriters.
The Company shall furnish to the Underwriters such conformed copies of such
opinions, certificates, letters and other documents as the Underwriters shall
reasonably request. If any of the conditions specified in this Section 5 shall
not have been fulfilled when and as required by this Agreement, this Agreement
and all obligations of the Underwriters hereunder may be cancelled at, or at any
time prior to, such Closing Date, by you. Any such cancellation shall be without
liability of the Underwriters to the Company. Notice of such cancellation shall
be given to the Company in writing, or by telex or telephone and confirmed in
writing.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall indemnify
and hold harmless each Underwriter and each person, if any, who controls each
Underwriter within the meaning of the Securities Act from and against any
losses, claims, damages or liabilities,
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joint or several (and any actions in respect thereof), to which that Underwriter
or such controlling person may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (and actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or the Registration
Statement, any Preliminary Prospectus or the Prospectus as amended or
supplemented, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and shall reimburse each Underwriter
and each such controlling person promptly after receipt of invoices from such
Underwriter or such controlling person, as applicable, for any legal or other
expenses reasonably incurred by that Underwriter or such controlling person, as
applicable, in connection with investigating, defending or preparing to defend
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action, notwithstanding the possibility that
payments for such expenses might later be held to be improper, in which case the
person receiving them shall promptly refund them; provided, however, that the
Company shall not be liable under this Section 6(a) in any such case to the
extent, but only to the extent, that any such loss, claim, damage, liability or
action arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement, or
any amendment or supplement thereto in reliance upon and in conformity with
written information regarding such Underwriter or the arrangements with respect
to the underwriting of the transactions contemplated hereby furnished to the
Company through the Underwriters specifically for use in the preparation
thereof; and provided further, however, that the foregoing indemnity agreement
is subject to the condition that, insofar as it relates to any untrue
statement, alleged untrue statement, omission or alleged omission made in any
Preliminary Prospectus but eliminated or remedied in the Prospects, such
indemnity agreement shall not inure to the benefit of any Underwriter from whom
the person asserting any loss, claim, damage or liability purchased the Shares
which are the subject thereof (or to the benefit of any person who controls
such Underwriter) if a copy of the Prospectus (excluding Incorporated
Documents) was not sent or given to such person with or prior to the written
confirmation of the sale of such Shares to such person and provided that the
Company has complied with its obligations under Sections 4(b) and 4(c) hereof.
This indemnity agreement is in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter severally, but not jointly, shall indemnify and
hold harmless the Company, each of the Company's directors, each of the
Company's officers who has signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the Securities Act from and
against any losses, claims, damages or liabilities (and any actions in respect
thereof) to which the Company or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or the Registration Statement, any Preliminary
Prospectus or the Prospectus as amended or supplemented, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information regarding such Underwriter or
the arrangements with respect to the underwriting of the transactions
contemplated hereby furnished to the Company through the Underwriters
specifically for use in the preparation thereof, and
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shall reimburse the Company or any such director, officer or controlling person
promptly after receipt of invoices from the Company or any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating, defending or preparing to
defend against or appearing as a third-party witness in connection with any such
loss, claim, damage, liability or action, notwithstanding the possibility that
payments for such expenses might later be held to be improper, in which case the
Company or any such director, officer or controlling person, as applicable,
shall promptly refund them.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of the action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability that it
may have under this Section 6 except to the extent it has been prejudiced in any
material respect by such failure. If any such claim or action is brought against
an indemnified party, and it notifies the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, and
approval of counsel by the indemnified party in accordance with the foregoing,
the indemnifying party shall not be liable to the indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the indemnified party shall have
the right to employ counsel to represent itself in connection with any claim in
respect of which indemnity may be sought against the indemnifying party under
this Section 6 if the defendants with respect to any such claim shall have
reasonably concluded that there may be legal defenses available to them and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party or that there exists some other conflict of
interest between the interests of the indemnified parties and the indemnifying
party with respect to such claim that makes separate representation desirable in
the reasonable judgment of the indemnified parties, and, in the event of the
foregoing, the reasonable fees and expenses of such separate counsel shall be
paid by the indemnifying party. It is understood, however, in connection with
the indemnifying party's undertaking in the preceding proviso, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel representing all indemnified parties who are parties to the
claim referred to in such proviso in each jurisdiction in which any claim or
action is brought.
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(d) If the indemnification provided for in this Section 6 shall for any
reason be unenforceable by an indemnified party under Section 6(a) or 6(b)
hereof in respect of any loss, claim, damage or liability (or any action in
respect thereof) referred to therein, although otherwise available in accordance
with its terms, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability (or action in respect
thereof) (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Shares, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Underwriters on the other, with respect to the statements or omissions that
resulted in such loss, claim, damage or liability (or action in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters in question with respect to such offering, as set forth in the
table on the cover page of the Prospectus. Relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters in question, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be 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 into account
the equitable considerations referred to in the first sentence of this
subsection (d). The amount paid by an indemnified party as a result of the loss,
claim, damage or liability (or action in respect thereof) referred to above in
this subsection (d) shall be deemed to include, for purposes of this subsection
(d), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter and its
controlling persons in the aggregate shall be required to contribute any amount
in excess of the amount by which the total purchase price for the Shares
underwritten by such Underwriter and distributed to the public exceeds the
amount of any damages which such Underwriter and its controlling persons in the
aggregate have otherwise paid or become liable to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint. Each party entitled to contribution
agrees
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that upon the service of a summons or other initial legal process upon it in any
action instituted against it in respect of which contribution may be sought, it
shall promptly give written notice of such service to the party or parties from
whom contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom contribution
may be sought from any obligation it may have hereunder or otherwise (except as
specifically provided in subsection (c) hereof).
7. SUBSTITUTION OF UNDERWRITERS. If any Underwriter defaults in the
performance of its obligations to purchase the number of Shares which it has
agreed to purchase under this Agreement, the non-defaulting Underwriter shall be
obligated to purchase (in the respective proportions which the number of Shares
set forth opposite the name of each non-defaulting Underwriter in Schedule I
hereto bears to the total number of Shares set forth opposite the name of the
non-defaulting Underwriter in Schedule I hereto) the Shares which the defaulting
Underwriter agreed but failed to purchase; except that the non-defaulting
Underwriter shall not be obligated to purchase any of the Shares if the total
number of Shares which the defaulting Underwriter agreed but failed to purchase
exceeds 9.09% of the total number of Firm Shares, and the nondefaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
Shares set forth opposite its name in Schedule I hereto plus the total number of
Option Shares purchasable by it pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the nondefaulting Underwriter, and any other
underwriters satisfactory to you who so agree, shall have the right, but shall
not be obligated, to purchase (in such proportions as may be agreed upon among
them) all the Shares. If the non-defaulting Underwriter or the other
underwriters satisfactory to you do not elect to purchase the Shares that the
defaulting Underwriter agreed but failed to purchase, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company except for the payment of expenses to be borne by the Company and the
Underwriters as provided in Section 4(g) and the indemnity and contribution
agreements of the Company and the Underwriters contained in Section 6 hereof.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have for damages caused by its default. If the other
underwriters satisfactory to you are obligated or agree to purchase the Shares
of a defaulting Underwriter, either you or the Company may postpone the First
Closing Date for up to seven full Business Days in order to effect any changes
in the Registration Statement, any Preliminary Prospectus or the Prospectus
which in your opinion may thereby be made necessary.
8. EFFECTIVE DATE AND TERMINATION. (a) This Agreement shall become
effective on the earlier of (i) the initial release of the public offering of
the Firm Shares, or (ii) at 11:00 A.M., New York City time, on the first full
Business Day following the date hereof. You shall notify the Company immediately
after you have taken any action which causes this Agreement to become effective.
Until this Agreement is effective, it may be terminated by the Company by
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giving notice as hereinafter provided to you, or by you by giving notice as
hereinafter provided to the Company, except that the provisions of Section 4(g)
and Section 6 shall at all times be effective. For purposes of this Agreement,
the initial release of the public offering of the Firm Shares for sale to the
public shall be deemed to have been made when you release, by telegram or
otherwise, firm offers of the Firm Shares to securities dealers or release for
publication a newspaper advertisement relating to the Firm Shares, whichever
occurs first.
(b) From the time of effectiveness of this Agreement until the First
Closing Date, this Agreement may be terminated by you in your absolute
discretion by giving notice as hereinafter provided to the Company, if (i) the
Company shall have failed, refused or been unable, at or prior to the First
Closing Date, to perform in any material respect any agreement on its part to be
performed hereunder, (ii) any other condition to the obligations of the
Underwriters hereunder is not fulfilled in any material respect, (iii) the
Company shall have sustained a loss or damage by fire, flood, accident or other
calamity which is material to the property, business or financial condition of
the Company, or the Company or any of its property shall have become a party or
subject to litigation material to the Company or there shall have been, since
the respective dates as of which information is given in the Registration
Statement or the Prospectus, any material adverse change or any development
involving a prospective material adverse change in the general affairs,
condition (financial or other), business, key personnel, capitalization,
properties, results of operations or net worth of the Company whether or not
arising in the ordinary course of business, which loss, damage or change, in
your judgment shall render it inadvisable to proceed with the delivery of the
Shares, whether or not any such loss shall have been insured, (iv) trading in
the Company's Common Stock shall have been suspended by the Commission or
trading in securities generally on the New York Stock Exchange shall have been
suspended or materially limited, or minimum prices shall have been established
on such exchange by the Commission, or by such exchange or other regulatory body
or governmental authority having jurisdiction, (v) a general banking moratorium
shall have been declared by Federal or state authorities, (vi) there is an
outbreak or escalation of hostilities involving the United States on or after
the date hereof, or the United States is or becomes engaged in hostilities which
result in the declaration of a national emergency or war, the effect of which
shall be, in your judgment, to make it inadvisable or impracticable to proceed
with the public offering or delivery of the Shares on the terms and in the
manner contemplated in the Prospectus, or (vii) there shall have been such a
material adverse change in general economic, political or financial conditions
or if the effect of international conditions on the financial markets in the
United States shall be such as, in the judgment of a majority in interest of the
several Underwriters, makes it inadvisable or impracticable to proceed with the
delivery of the Shares. Any termination of this Agreement pursuant to this
Section 8 shall be without liability on the part of the Company or any
Underwriter, except as otherwise provided in Section 4(g) and Section 6 hereof.
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Any notice referred to above may be given at the address specified in
Section 10 hereof in writing or by telecopier, telex or telephone, and if by
telecopier, telex or telephone, shall be immediately confirmed in writing.
9. SURVIVAL OF CERTAIN PROVISIONS. The agreements contained in Section
6 and the representations, warranties and agreements of the Company in Sections
1 and 4 shall survive the delivery of the Shares to the Underwriters hereunder
and shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
indemnified party.
10. NOTICES. Except as otherwise provided in this Agreement, (a)
whenever notice is required by the provisions of this Agreement to be given to
the Company, such notice shall be in writing addressed to the Company at 0000
Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: President; and (b)
whenever notice is required by the provisions of this Agreement to be given to
the Underwriters, such notice shall be in writing addressed to you in care of
Xxxxxx Brothers Inc., Eighth Floor, Three World Financial Center, New York, New
York 10285-0800, Attention: Syndicate Department and in care of Xxxxxxx, Xxxxx &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department.
11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (a) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Securities Act and (b)
the indemnity agreement of the Underwriters contained in Section 6 hereof shall
be deemed to be for the benefit of directors of the Company, officers of the
Company who signed the Registration Statement and any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement shall be construed to give any person, other than the persons referred
to in this paragraph, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. The term
"successors," as used in this Agreement, shall not include any purchaser of any
of the Shares from any of the Underwriters merely by reason of such purchase.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
choice of law or conflict of laws principles thereof.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which together shall constitute a single agreement.
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If the foregoing correctly sets forth the agreement among the Company
and the several Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
XXXXXXXX XXXXXXXXXXXX
By: _________________________
Confirmed and accepted as of the
date first above mentioned:
XXXXXX BROTHERS INC.
XXXXXXX, SACHS & CO.
By: XXXXXX BROTHERS INC.
By: ____________________________
Authorized Representative
By: XXXXXXX, SACHS & CO.
By: ____________________________
(Xxxxxxx, Xxxxx & Co.)
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SCHEDULE I
Underwriting Agreement dated July ____, 1999
4,000,000 Shares
XXXXXXXX XXXXXXXXXXXX
Common Stock
Number
Underwriter of Shares
----------- ---------
Xxxxxx Brothers Inc...........................................
Xxxxxxx, Sachs & Co...........................................
Total......................................................... 4,000,000
=========
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