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EXHIBIT 1
CREDIT MANAGEMENT SOLUTIONS, INC.
2,600,000 SHARES(1)
COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
December __, 1996
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
UNTERBERG HARRIS
as Representatives of the Several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
Potomac Tower
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Credit Management Solutions, Inc., a Delaware corporation (the
"Company"), and the stockholders of the Company named in Schedule II hereto
(collectively, the "Selling Securityholders"), hereby confirm their agreement
with the several underwriters named in Schedule I hereto (the "Underwriters"),
for whom you have been duly authorized to act as representatives (in such
capacity, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to
be to the Underwriters.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
an aggregate of 2,200,000 shares (the "Company Firm Securities") of the
Company's Common Stock, $0.01 par value per share (the "Common Stock"), and the
Selling Securityholders propose to sell to the several Underwriters an
aggregate of 400,000 shares of Common Stock (collectively with the Company Firm
Shares, the "Firm Securities"). The Company also proposes to grant to the
several Underwriters an option to purchase up to an aggregate of 390,000
additional shares of Common Stock (the "Option Securities" and collectively
with the Firm Securities, the "Securities") if requested by the Representatives
as provided in Section 3 of this Agreement. The Common Stock is more fully
described in the Registration Statement and the Prospectus hereinafter
mentioned.
2. Representations and Warranties of the Company and the Selling
Securityholders
(a) The Company hereby represents and warrants to, and
agrees with, each of the several Underwriters and the Selling Securityholders
that:
(i) A registration statement on Form S-1 (File
No. 333-14007) with respect to the Securities, including a prospectus
subject to completion, has been filed by the Company with the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), and one or more
amendments to such registration statement have been so filed, if
applicable. Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary
prospectus (meeting the requirements of Rule 430A under the Act)
heretofore filed by the Company with the Commission have been
delivered to you. After the execution of this Agreement, the Company
will file with the Commission either (i) if such registration
statement, as it may have been amended, has been declared by the
Commission to be effective under the Act, either (A) if the Company
relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined)
relating to the Securities, that shall identify the Preliminary
Prospectus (as hereinafter defined) that it supplements containing
such information as is required or permitted by Rules 434, 430A and
424(b) under the Act, or (B) if the Company does not rely
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(1) Plus an option to purchase from the Company up to 390,000 additional
shares to cover over-allotments, if any.
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on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no
such amendment shall have been filed, in such registration statement),
with such changes or insertions as are required by Rule 430A under the
Act or permitted by Rule 424(b) under the Act, and in the case of
either clause (i)(A) or (i)(B) of this sentence, as have been provided
to and approved by the Representatives prior to the execution of this
Agreement, or (ii) if such registration statement, as it may have been
amended, has not been declared by the Commission to be effective under
the Act, an amendment to such registration statement, including a form
of prospectus, a copy of which amendment has been furnished to and
approved by the Representatives prior to the execution of this
Agreement. The Company may also file a related abbreviated
registration statement with the Commission pursuant to Rule 462(b)
under the Act for the purpose of registering certain additional
Securities, which registration statement shall be effective upon
filing with the Commission. If the Company has elected to rely on
Rule 462(b) under the Act and the Rule 462(b) Registration Statement
(as hereinafter defined) has not been declared effective: (i) the
Company has filed a Rule 462(b) Registration Statement in compliance
with the Act and the rules and regulations of the Commission
promulgated thereunder and that the Rule 462(b) Registration Statement
is effective upon filing pursuant to Rule 462(b) under the Act and the
Company has received confirmation of its receipt and (ii) the Company
has given irrevocable instructions for transmission of the applicable
filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under
the Act or the Commission has received payment of such filing fee. As
used in this Agreement, the term "Original Registration Statement"
means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared
effective, including all financial schedules and exhibits thereto and
including any information omitted therefrom pursuant to Rule 430A
under the Act and included in the Prospectus (as hereinafter defined);
the term "Rule 462(b) Registration Statement" means any abbreviated
registration statement filed with the Commission pursuant to Rule
462(b) under the Act (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time
such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any
Rule 462(b) Registration Statement; the term "Preliminary Prospectus"
means each prospectus subject to completion filed with such
registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was or is declared
effective); the term "Prospectus" means: (A) if the Company relies on
Rule 434 under the Act, the Term Sheet relating to the Securities that
is first filed pursuant to Rule 424(b)(7) under the Act, together with
the Preliminary Prospectus identified therein that such Term Sheet
supplements; (B) if the Company does not rely on Rule 434 under the
Act, the prospectus first filed with the Commission pursuant to Rule
424(b) under the Act; or (C) if the Company does not rely on Rule 434
under the Act and if no prospectus is required to be filed pursuant to
Rule 424(b) under the Act, the prospectus included in the Registration
Statement; and the term "Term Sheet" means any term sheet that
satisfies the requirements of Rule 434 under the Act. Any reference
herein to the "date" of a Prospectus that includes a Term Sheet shall
mean the date of such Term Sheet.
(ii) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus or
instituted proceedings for such purpose. When any Preliminary
Prospectus was filed with the Commission it: (A) contained all
statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act
and the rules and regulations of the Commission promulgated
thereunder, and (B) did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (A) contained all
statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act
and the rules and regulations of the Commission promulgated
thereunder, and (B) did not include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term
Sheet that is a part thereof or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or,
if the Prospectus or any part thereof or such amendment or supplement
is not required to be so filed, when the Registration Statement or the
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amendment thereto containing such amendment or supplement to the
Prospectus was or is declared effective) and on the Firm Closing Date
and any Option Closing Date (both as hereinafter defined), the
Prospectus or any Term Sheet, if applicable, as amended or
supplemented at any such time, (A) contained all statements required
to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Act and the rules and
regulations of the Commission promulgated thereunder and (B) did not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The foregoing provisions of this paragraph (ii) do not
apply to statements in, or omissions from, any Preliminary Prospectus,
the Registration Statement or any amendment thereto or the Prospectus
or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Underwriters specifically for use therein.
(iii) Each of the Company and its subsidiary has
been duly incorporated and is validly existing and in good standing
under the laws of its jurisdiction of organization and is duly
qualified to transact business as a foreign entity and is in good
standing under the laws of all other jurisdictions where the ownership
or leasing of its properties or the conduct of its businesses requires
such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, properties,
business prospects, financial condition or results of operations of
the Company and its subsidiary, taken as a whole.
(iv) Each of the Company and its subsidiary has
the power (corporate and other) and authority to own or lease its
properties and conduct its businesses as described in the Registration
Statement and the Prospectus; and the Company has the legal right,
power (corporate and other) and authority to enter into this Agreement
and to perform the transactions contemplated hereby.
(v) All issued and outstanding shares of the
Company's subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable, and have not been issued in violation of
or subject to any preemptive right, co-sale right, registration right,
right of first refusal or other similar right and are owned by the
Company free and clear of any pledge, security interests, liens,
encumbrances, claims or equitable interests. The Company does not own
or control, directly or indirectly, any corporation, association or
other entity other than Credit Connection, Inc.
(vi) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus under the
caption "Capitalization." All of the issued and outstanding shares of
capital stock of the Company (including the Securities to be sold by
the Selling Securityholders) have been duly authorized and validly
issued and are fully paid and nonassessable, have been issued in
compliance with all Federal and state securities laws, and were not
issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities. The Company Firm
Securities and the Option Securities have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement, and
at the Firm Closing Date or the related Option Closing Date (as the
case may be), when issued and delivered by the Company after payment
therefor in accordance herewith, will be duly and validly issued,
fully paid and nonassessable, and will be sold free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable
interest; and no preemptive right, co-sale right, registration right,
right of first refusal or other similar right of stockholders exists
with respect to any of the Common Stock hereunder or the issuance and
sale thereof other than those that have been expressly waived prior to
the date hereof and those that will automatically expire upon the
consummations of the transactions contemplated by this Agreement. No
further approval or authorization of any stockholder, the Board of
Directors of the Company or others is required for the issuance of the
Company Firm Securities or the Option Securities except as may be
required under the Act or state securities or Blue Sky laws.
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(vii) The capital stock of the Company conforms to
the description thereof and statements relating thereto contained in
the Prospectus (and such statements correctly state the substance of
the instruments defining the capitalization of the Company).
(viii) Except as disclosed in the Prospectus, there
are no outstanding (A) securities or obligations of the Company or its
subsidiary convertible into or exchangeable for any capital stock or
ownership interests of the Company or its subsidiary, (B) warrants,
rights or options to subscribe for or purchase from the Company or its
subsidiary any such capital stock or ownership interest or any such
convertible or exchangeable securities or obligations, or (C)
obligations of the Company or its subsidiary to issue any shares of
capital stock or any ownership interests, any such convertible or
exchangeable securities or obligations, or any such warrants, rights
or options. The description of the Company's stock option and
purchase plans, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately and fairly presents
the information required to be shown with respect to such plans,
arrangements, options and rights.
(ix) The audited consolidated financial statements
of the Company and its subsidiary, together with the related schedules
and notes, and the unaudited consolidated financial information,
included in the Registration Statement and the Prospectus present
fairly the financial position of the Company and its subsidiary, the
results of operations and changes in financial condition as of the
dates and periods therein specified. Such financial statements and
schedules have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein). The consolidated and
summary financial and statistical data included in the Registration
Statement present fairly the information included therein and have
been compiled on a basis consistent with the audited financial
statements presented therein. No other financial statements or
schedules are required to be included in the Registration Statement.
(x) Ernst & Young LLP, who have certified certain
consolidated financial statements of the Company and its subsidiary
and delivered their report with respect to the audited consolidated
financial statements, together with the related schedules and notes,
included in the Registration Statement and the Prospectus are
independent accountants within the meaning of the Act and the
applicable rules and regulations thereunder.
(xi) The execution and delivery of this Agreement
have been duly authorized by the Company, and this Agreement has been
duly executed and delivered by the Company and is the valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnification and
contribution hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally, or by general equitable
principles.
(xii) No legal or governmental action, suit, claim
or other proceedings are pending to which the Company or its
subsidiary is a party or to which the property of the Company or its
subsidiary is subject that would have a material adverse effect in the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, and no such actions, suits or proceedings have been threatened
against the Company or its subsidiary or with respect to any of their
respective properties or is required to be described in the
Registration Statement or the Prospectus and is not so described; and
no contract or other document is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement that is not described therein or filed
as required and any such description of such contracts or agreements
conforms in all material respects to the terms of such contracts or
agreements.
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(xiii) Neither the Company nor its subsidiary is (i)
in violation of its certificate of incorporation or bylaws, or (ii) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness, which default would have a material adverse
effect on the business, properties, business prospects, financial
condition or results of operations of the Company and its subsidiary,
taken as a whole, or (iii) in default in the performance or observance
of any contract, indenture, mortgage, loan agreement, joint venture or
other agreement or instrument to which it is a party or by which it or
any of its properties are bound, which default would have a material
adverse effect on the business, properties, business prospects,
financial condition or results of operations of the Company and its
subsidiary, taken as a whole, or (iv) in violation of any law, order,
rule, regulation, writ, injunction, judgment or decree of any court or
governmental agency or body to which the Company is subject.
(xiv) The issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance and performance by the Company with the
other provisions of this Agreement and the consummation of the other
transactions herein contemplated do not and will not (A) require the
consent, approval, authorization, registration or qualification of or
with any governmental authority, domestic or foreign, except such as
have been obtained, or such as may be required under the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
under state securities or blue sky laws, all of which requirements
have been satisfied, or (B) result in a breach or violation of any of
the terms and provisions of, or constitute a default under the
certificate of incorporation or bylaws of the Company, or (C) result
in a breach or violation of any of the terms and provisions of, or
constitute a default under any obligation, agreement, covenant or
condition contained in any bond, debenture, note or other evidence of
indebtedness, which default would have a material adverse effect on
the business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, or (D) result in a breach or violation of any of the terms and
provisions of, or constitute a default under any law, order, rule,
regulation, writ, injunction, judgment or decree of any court or
governmental agency or body to which the Company is subject.
(xv) Subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been (a) any material adverse change in the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, (b) any transaction that is material to the Company and its
subsidiary, taken as a whole, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
that is material to the Company and its subsidiary, taken as a whole,
incurred by the Company or its subsidiary, except obligations incurred
in the ordinary course of business, (d) any change in the capital
stock or outstanding indebtedness of the Company or its subsidiary
that is material to the Company and its subsidiary, taken as a whole,
(e) any dividend or distribution of any kind declared, paid or made on
the capital stock of the Company or its subsidiary, or (f) any loss or
damage (whether or not insured) to the property of the Company or its
subsidiary which has been sustained or will have been sustained which
has a material adverse effect on the business, properties, business
prospects, financial condition or results of operations of the Company
and its subsidiary, taken as a whole.
(xvi) The Company has not directly or indirectly,
(i) taken any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities, or (ii)
since the filing of the Registration Statement (A) other than amounts
to be paid to the Underwriters pursuant to the terms hereof, sold, bid
for, purchased, or paid anyone any compensation for soliciting
purchases of, the Securities, or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
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(xvii) Neither the Company nor its subsidiary have
at any time during the last five (5) years (i) made any unlawful
contribution to any candidate for foreign office or failed to disclose
fully any contribution in violation of law, or (ii) made any payment
to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof.
(xviii) (a) The Company and its subsidiary possess
all certificates, authorizations, licenses, franchises and permits
issued by the appropriate Federal, state or foreign regulatory
authorities necessary to own, lease and operate their respective
properties and to conduct their respective businesses described in the
Prospectus, and (b) neither the Company nor its subsidiary has
received any notice of proceedings relating to, the revocation or
modification of any such certificate, authorization, license,
franchise or permit, except as described in the Prospectus. Except as
described in the Prospectus, none of the Company's or its subsidiary's
certificates, authorizations, licenses, franchises or permits contain
any restrictions that, if effective, would result in any material
adverse effect on the business, properties, business prospects,
financial condition or results of operations of the Company and its
subsidiary, taken as a whole.
(xix) The Company is familiar with the Investment
Company Act of 1940, as amended, and has in the past conducted its
affairs, and will in the future conduct its affairs, in such a manner
to ensure that the Company was not and will not be an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder.
(xx) The Company and its subsidiary have timely
filed all foreign, Federal, state and local tax returns that are
required to be filed and have paid all taxes and assessments required
to be paid by them and any other assessment, fine or penalty levied
against them. Prior to its reincorporation in Delaware, the Company
had validly elected to be treated as a Subchapter S Corporation for
Federal and state income tax purposes since its inception and
continued to qualify as a Subchapter S Corporation until the
termination of its Subchapter S Corporation status for Federal and
state income tax purposes upon its reincorporation in Delaware.
(xxi) Except for the shares of its subsidiary owned
by the Company, neither the Company nor its subsidiary owns any shares
of stock or any other equity securities of any corporation or has any
equity interest in any firm, partnership, association or other entity.
(xxii) Each of the Company and its subsidiary
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that: (A) transactions are executed in
accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (C) access to assets
is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxiii) Except as described in the Registration
Statement and the Prospectus, (i) the agreements to which the Company
or its subsidiary is a party described in the Registration Statement
and Prospectus are valid agreements, enforceable by the Company and
its subsidiary (as applicable), except as the enforcement thereof may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles and the other
contracting party or parties thereto are not in breach or default
under any of such agreements, and (ii) no default exists, and no event
has occurred which, with notice or lapse of time or both, would
constitute a default, in the due performance and observance of any
term, covenant or condition of any
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indenture, mortgage, deed of trust, lease, contract, loan agreement,
joint venture or other agreement or instrument to which the Company or
its subsidiary is a party or by which the Company or its subsidiary or
any of their respective properties is bound or may be affected, in any
respect which would result in any material adverse effect on the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole.
(xxiv) The Company has not distributed and will not
distribute, prior to the later of (A) the Firm Closing Date, or any
date on which the Option Securities are to be purchased, as the case
may be, and (B) the completion of the distribution of the Securities,
any offering material in connection with the offering and sale of the
Securities other than any Preliminary Prospectus, the Prospectus, the
Registration Statement or Term Sheet or any amendment or supplement
thereto, or other materials, if any, permitted by the Act.
(xxv) Except as set forth in the Registration
Statement and Prospectus, (i) each of the Company and its subsidiary
has good and marketable title to all properties and assets described
in the Registration Statement and Prospectus as owned by it, free and
clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, other than such as would not have a material
adverse effect on the business, properties, business prospects,
financial condition or results of operations of the Company and its
subsidiary taken as a whole, and (iii) each of the Company and its
subsidiary has valid and enforceable leases for all properties
described in the Registration Statement and Prospectus as leased by
it, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by
general equitable principles. Except as set forth in the Registration
Statement and Prospectus, the Company and its subsidiary owns or
leases all such properties as are necessary to its operations as now
conducted or as proposed to be conducted.
(xxvi) No labor dispute or disturbance with the
employees of the Company or its subsidiary exists or, to the Company's
knowledge, is threatened or imminent except as described in the
Prospectus; and the Company has no actual knowledge of any existing or
imminent labor disturbance by the employees of any of its principal
subcontractors or processors that might be expected to result in any
material adverse change in the business, properties, business
prospects, financial condition or results of operations of the Company
and its subsidiary, taken as a whole. No collective bargaining
agreement exists with any of the Company's or its subsidiary's
employees and no such agreement is imminent.
(xxvii) The Company and its subsidiary own or possess
adequate rights to use all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business
now operated by them; the expiration of any of the foregoing would not
have a material adverse effect on the business, properties, business
prospects, financial condition or results of operations of the Company
and its subsidiary, taken as a whole; and neither the Company nor its
subsidiary has received any notice of infringement of or conflict with
asserted rights of any third party with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the business, properties, business prospects,
financial condition or results of operations of the Company and its
subsidiary, taken as a whole.
(xxviii) The Company and its subsidiary maintain
insurance with insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged, including, but not
limited to, insurance covering real and personal property owned or
leased by the Company against theft, damage, destruction, errors and
omissions, system interruption and acts of vandalism; neither the
Company nor its subsidiary has been
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refused any insurance coverage sought or applied for; and neither the
Company nor its subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would
result in any material adverse change in the business, properties,
business prospects, financial condition or results of operations of
the Company and its subsidiary, taken as a whole, except as described
in the Prospectus.
(xxix) Each certificate signed by any officer of the
Company and delivered to the Representatives or counsel for the
Underwriters shall be deemed to be a representation and warranty by
the Company and the Selling Securityholders to each Underwriter as to
the matters covered thereby.
(xxx) The Securities to be issued and sold by the
Company and the Securities to be transferred and sold by the Selling
Securityholders have been approved for quotation on the Nasdaq
National Market, subject to official notice of issuance.
(xxxi) Except as set forth in the Registration
Statement and Prospectus, (i) the Company and its subsidiary are in
material compliance with all rules, laws and regulations relating to
the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("Environmental Laws") which
are applicable to their respective businesses, (ii) the Company and
its subsidiary have received no notice from any governmental authority
or third party of an asserted claim under Environmental Laws, which
claim is required to be disclosed in the Registration Statement and
the Prospectus, (iii) the Company and its subsidiary have no reason to
believe that either of them will be required to make future material
capital expenditures to comply with Environmental Laws and (iv) no
property which is owned, leased or occupied by the Company or its
subsidiary has been designated as a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601, et seq.), or otherwise designated as
a contaminated site under applicable state or local law.
(xxxii) The Company has complied with all provisions
of Section 517.075, Florida Statutes, relating to doing business with
the Government of Cuba or with any person or affiliate located in
Cuba.
(xxxiii) There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course
of business) or guarantees of indebtedness by the Company to or for
the benefit of any of the officers or directors of the Company or
any of the members of the families of any of them, except as disclosed
in the Prospectus.
(b) Each of the Selling Securityholders hereby represents
and warrants to and agrees with each of the several Underwriters that:
(i) Such Selling Securityholder now has, and on
the Firm Closing Date will have, good and marketable title to all the
shares of Securities to be sold by such Selling Securityholder
hereunder, free and clear of all liens, encumbrances, equities,
security interests and claims whatsoever, with full right and
authority to deliver the same hereunder, subject, in the case of each
Selling Securityholder, to the rights of Manatt, Xxxxxx & Xxxxxxxx,
LLP, as Custodian (the "Custodian"), and that upon the delivery of and
payment for such shares of the Securities hereunder, the several
Underwriters will receive good and marketable title thereto, free and
clear of all liens, encumbrances, equities, security interests and
claims whatsoever.
(ii) Certificates in negotiable form for the
shares of the Securities to be sold by such Selling Securityholder
under this Agreement, together with a stock power or powers endorsed
in blank by
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such Selling Securityholder, have been placed in custody under an
agreement (the "Custody Agreement") for delivery under this Agreement
with the Custodian, which Custody Agreement constitutes a valid and
binding agreement on the part of such Selling Securityholder,
enforceable in accordance with its terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles; such Selling Securityholder specifically agrees that the
shares of the Securities represented by the certificates so held in
custody for such Selling Securityholder are subject to the interests
of the several Underwriters and the Company, that the arrangements
made by such Selling Securityholder for such custody, including the
power of attorney provided for in such Custody Agreement (the "Power
of Attorney"), are to that extent irrevocable, and that the
obligations of such Selling Securityholder shall not be terminated by
any act of such Selling Securityholder or by operation of law, whether
by the death or incapacity of such Selling Securityholder or the
occurrence of any other event; if any such death, incapacity,
dissolution, liquidation or other such event should occur before the
delivery of such shares of the Securities hereunder, certificates for
such shares of the Securities shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such
death, incapacity, dissolution, liquidation or other event had not
occurred, regardless of whether the Custodian shall have received
notice of such death, incapacity, dissolution, liquidation or other
event.
(iii) Each of the Selling Securityholders'
respective attorneys-in-fact (the "Attorneys") acting alone, is
authorized to execute and deliver this Agreement and the certificate
referred to in Section 3 hereof on behalf of the Selling
Securityholder, to determine the purchase price to be paid by the
several Underwriters to such Selling Securityholders as provided in
Section 3 hereof, to authorize the delivery of the Securities to be
sold by the Selling Securityholder under this Agreement and to duly
endorse (in blank or otherwise) the certificate or certificates
representing such Securities or a stock power or powers with respect
thereto, to accept payment therefor, and otherwise to act on behalf of
such Selling Securityholder in connection with this Agreement.
(iv) Such Selling Securityholder has reviewed the
Registration Statement and Prospectus and, on the Effective Date, the
Registration Statement did not contain and, on the Firm Closing Date
and any later date on which Option Securities are to be purchased will
not contain, any untrue statement of a material fact or did not omit
or will not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus did not contain
and, on the Firm Closing Date and any later date on which Option
Securities are to be purchased, will not contain any untrue statement
of a material fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(v) All consents, approvals, authorizations and
orders required for the execution and delivery by such Selling
Securityholder of the Power of Attorney and the Custody Agreement, the
execution and delivery by or on behalf of such Selling Securityholder
of this Agreement and the sale and delivery of the Securities to be
sold by such Selling Securityholder under this Agreement, other than,
at the time of the execution hereof (if the Registration Statement has
not yet been declared effective by the Commission), the issuance of
the order of the Commission declaring the Registration Statement
effective and such consents, approvals, authorizations or orders as
may be necessary under state or other securities or Blue Sky laws have
been obtained and are in full force and effect; and such Selling
Securityholder has full legal right, power and authority to enter into
and perform its obligations under this Agreement and such Power of
Attorney and Custody Agreement, and to sell, assign, transfer and
deliver the Securities to be sold by such Selling Securityholder under
this Agreement.
(vi) Except for the Securities to be sold by such
Selling Securityholder to the Underwriters hereunder, such Selling
Securityholder will not, during the 180 day period following the date
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of the Prospectus, other than with respect to Messrs. XxXxxxxxxxx and
Xxxxxxx who have agreed to lock-up certain percentages of their
holdings for a period extending to 540 days following the date of the
Prospectus (the "Lock-up Period"), directly or indirectly, sell,
offer, contract to sell, transfer the economic risk of ownership in,
make any short sale, pledge or otherwise dispose of any share of
Common Stock or any securities convertible into or exchangeable or
exercisable for or any other rights to purchase or acquire Common
Stock, without the prior written consent of the Representatives,
otherwise than as a bona fide gift or gifts, or by will or intestacy,
to such Selling Securityholder's immediate family, provided the
recipient thereof agrees in writing to be bound by this restriction.
The foregoing restriction is expressly agreed to preclude the holder
of the Securities from engaging in any hedging or other transaction
which is designed to or reasonably expected to lead to or result in a
disposition of Securities during the Lock-up Period, even if such
Securities would be disposed of by someone other than the Selling
Securityholder. Such prohibited hedging or other transactions would
include, without limitation, any short sale (whether or not against
the box) or any purchase, sale or grant of any right (including,
without limitation, any put or call option) with respect to any
Securities or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any
significant part of its value from Securities. Such Selling
Securityholder also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
the securities held by such Selling Securityholder except in
compliance with this restriction.
(vii) This Agreement is a valid and binding
agreement of each Selling Securityholder, enforceable in accordance
with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or
by general equitable principles; and the performance of this Agreement
and the consummation of the transactions contemplated hereby will not
result in a breach or violation of any of the terms and provisions of
or constitute a default under any bond, debenture, note or other
evidence of indebtedness, or under any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which such Selling Securityholder is a
party or by which such Selling Securityholder, or any Securities to be
sold by such Selling Securityholder hereunder, may be bound or result
in any violation of any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction
over such Selling Securityholder or over the properties of such
Selling Securityholder.
(viii) All information furnished by or on behalf of
such Selling Securityholder relating to such Selling Securityholder
and the Securities that is contained in the representations and
warranties of such Selling Securityholder in such Selling
Securityholder's Power of Attorney is, and at the time the
Registration Statement became or becomes, as the case may be,
effective and at all times subsequent thereto up to and on the Firm
Closing Date, and on any later date on which Option Securities are to
be purchased, was or will be, true, correct and complete, and does
not, and at the time the Registration Statement became or becomes, as
the case may be, effective and at all times subsequent thereto up to
and on the Firm Closing Date, and on any later date on which Option
Securities are to be purchased, will not, contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make such information not misleading.
(ix) Such Selling Securityholder will review the
Prospectus and will comply with all agreements and satisfy all
conditions on its part to be complied with or satisfied pursuant to
this Agreement on or prior to the Firm Closing Date, or any later date
on which Option Securities are to be purchased, as the case may be,
and will advise one of its Attorneys and the Representatives prior to
the Firm Closing Date or such later date on which Option Securities
are to be purchased, as the case may be, if any statement to be made
on behalf of such Selling Securityholder in the certificate
contemplated by Section 7(f)
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hereof would be inaccurate if made as of the Firm Closing Date or such
later date on which Option Securities are to be purchased, as the case
may be.
(x) Such Selling Securityholder is not aware
(without having conducted any investigation or inquiry) that any of
the representations and warranties of the Company set forth in Section
2(a) above is untrue or inaccurate in any material respect.
(xi) Such Selling Securityholder does not have, or
has waived prior to the date hereof, any preemptive right, co-sale
right or right of first refusal or other similar right to purchase any
of the Securities that are to be sold by the Company or any of the
other Selling Securityholders to the Underwriters pursuant to this
Agreement; such Selling Securityholder does not have, or has waived
prior to the date hereof, any registration right or other similar
right to participate in the offering made by the Prospectus, other
than such rights of participation as have been satisfied by the
participation of such Selling Securityholder in the transactions to
which this Agreement relates in accordance with the terms of this
Agreement; and such Selling Securityholder does not own any warrants,
options or similar rights to acquire, and does not have any right or
arrangement to acquire, any capital stock, rights, warrants, options
or other securities from the Company, other than those described in
the Registration Statement and the Prospectus.
(xii) The Selling Securityholders have not directly
or indirectly (i) taken any action designed to cause or to result in,
or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities, or (ii) since the filing of the Registration Statement (A)
sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities, or (B) paid or agreed to pay
to any person any compensation for soliciting another to purchase any
other securities of the Company.
(xiii) The Selling Securityholders have not at any
time during the last five (5) years (i) made any unlawful contribution
to any candidate for foreign office or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
federal or state governmental officer or official, or other person
charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof.
(xiv) The Selling Securityholders have not
distributed and will not distribute, prior to the later of (A) the
Firm Closing Date, or any date on which the Option Securities are to
be purchased, as the case may be, and (B) the completion of the
distribution of the Securities, any offering material in connection
with the offering and sale of the Securities other than any
Preliminary Prospectus, the Prospectus, the Registration Statement or
Term Sheet or any amendment or supplement thereto, or other materials,
if any, permitted by the Act.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company and each of the Selling
Securityholders agree, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees
to purchase from the Company and from each of the Selling Securityholders, at a
purchase price of $____ per share, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto. One or more
certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representative
request upon notice to the Company at least 48 hours prior to the Firm Closing
Date, shall be delivered by or on behalf of the Company and the Selling
Securityholders to the Representatives for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
aggregate purchase price therefor by wire
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transfer in same day funds to the respective accounts of the Company and the
Selling Securityholders. Such delivery of and payment for the Firm Securities
shall be made at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 9:30 a.m., New York City time, on ________, 1996,
or at such other place, time or date as the Representatives and the Company may
agree upon or as the Representatives may determine pursuant to Section 9
hereof, such time and date of delivery against payment being herein referred to
as the "Firm Closing Date." The Company and the Selling Securityholders will
make such certificate or certificates for the Firm Securities available for
checking and packaging by the Representatives at the offices in New York, New
York of the Company's transfer agent or registrar at least 24 hours prior to
the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as
contemplated by the Prospectus, the Company hereby grants to the several
Underwriters an option to purchase, severally and not jointly, the Option
Securities. The purchase price to be paid for any Option Securities shall be
the same price per share as the price per share for the Firm Securities set
forth above in paragraph (a) of this Section 3. The option granted hereby may
be exercised as to all or any part of the Option Securities from time to time
within thirty days after the date of the Prospectus (or, if such 30th day shall
be a Saturday or Sunday or a holiday, on the next business day thereafter when
the New York Stock Exchange is open for trading). The Underwriters shall not
be under any obligation to purchase any of the Option Securities prior to the
exercise of such option. The Representatives may from time to time exercise
the option granted hereby by giving notice in writing or by telephone
(confirmed in writing) to the Company setting forth the aggregate number of
Option Securities as to which the several Underwriters are then exercising the
option and the date and time for delivery of and payment for such Option
Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two (2) business days or later
than five (5) business days after such exercise of the option and, in any
event, shall not be earlier than the Firm Closing Date. The time and date set
forth in such notice, or such other time on such other date as the
Representatives and the Company may agree upon or as the Representative may
determine pursuant to Section 9 hereof, is herein called the "Option Closing
Date" with respect to such Option Securities. Upon exercise of the option as
provided herein, the Company shall become obligated to sell to each of the
several Underwriters, and, subject to the terms and conditions herein set
forth, each of the Underwriters (severally and not jointly) shall become
obligated to purchase from the Company, the same percentage of the total number
of the Option Securities as to which the several Underwriters are then
exercising the option as such Underwriter is obligated to purchase of the
aggregate number of Firm Securities, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares. If the option is
exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered on the related Option Closing Date in the manner,
and upon the terms and conditions, set forth in paragraph (a) of this Section
3, except that reference therein to the Firm Securities and the Firm Closing
Date shall be deemed, for purposes of this paragraph 3(b), to refer to such
Option Securities and Option Closing Date, respectively.
(c) It is understood that you, individually and not as
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
(d) Each of the Company and the Selling Securityholders
hereby acknowledges that the wire transfer by or on behalf of the Underwriters
of the purchase price for any Securities does not constitute closing of a
purchase and sale of the Securities. Only execution and delivery of a receipt
for the Securities by the Underwriters indicates completion of the closing of a
purchase of the Securities from the Company or the Selling Securityholders, as
the case may be. Furthermore, in the event that the Underwriters wire funds to
the Company or the Selling Securityholders prior to the completion of the
closing of a purchase of Securities, each of the Company and the Selling
Securityholders hereby acknowledges that until the Underwriters execute and
deliver a receipt for the Securities, by facsimile or otherwise, the Company or
the Selling Securityholders, as the case may be, will not be entitled to the
wired funds and shall return the wired funds to the Underwriters as soon as
practicable
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(by wire transfer of same-day funds) upon demand. In the event that the
closing of a purchase of Securities is not completed and the wire funds are not
returned by the Company or the Selling Securityholders, as the case may be, to
the Underwriters on the same day the wired funds were received by the Company
or the Selling Securityholders, as the case may be, each of the Company and the
Selling Securityholders agrees to pay to the Underwriters in respect of each
day the wire funds are not returned by it, in same-day funds, interest on the
amount of such wire funds in an amount representing the Underwriters' cost of
financing as reasonably determined by the Representatives.
4. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus. The Underwriters may from time to time change the public offering
price after the closing of the initial public offering and increase or decrease
the concessions and discounts to dealers as they may determine.
5. Covenants of the Company and the Selling Securityholders. The
Company (with respect only to paragraphs 5(a) through and including 5(n) below)
and the Selling Securityholders (with respect only to paragraphs 5(o) and 5(p)
below) covenant and agree with each of the Underwriters that:
(a) The Company will use its best efforts to cause any
amendments to the Registration Statement to become effective as promptly as
possible. The Company will file the Prospectus or any Term Sheet and any
amendment or supplement thereto with the Commission in the manner and within
the time period required by Rules 424(b) and 434 under the Act. During any
time when a prospectus relating to the Securities is required to be delivered
under the Act, the Company (i) will comply with all requirements imposed upon
it by the Act and the rules and regulations of the Commission thereunder to the
extent necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and of the Prospectus, as
then amended or supplemented, and (ii) will not file with the Commission the
Prospectus, Term Sheet or the amendment referred to in the second sentence of
Section 2(a) hereof, any amendment or supplement to such Prospectus, Term Sheet
or any amendment to the Registration Statement or any Rule 462(b) Registration
Statement of which the Representatives shall not previously have been advised
and furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendments to the
Registration Statement or amendments or supplements to the Prospectus that may
be necessary or advisable in connection with the distribution of the Securities
by the several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide to the Representative copies of each such filing.
(b) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (ii) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose, or (iv) any request made
by the Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing the Prospectus or
for additional information. The Company will use its best efforts to prevent
the issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(c) The Company will cooperate with you and your counsel
to qualify or register the Securities for offering and sale under the
securities or blue sky laws of such jurisdictions as the Representatives may
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designate and will continue such qualifications in effect for as long as may be
necessary to complete the distribution of the Securities; provided, however,
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to execute a general consent to service of process in
any jurisdiction.
(d) If, at any time prior to the later of (i) the final
date when a prospectus relating to the Securities is required to be delivered
under the Act, or (ii) the Option Closing Date, any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Prospectus to comply with the
Act or the rules or regulations of the Commission thereunder, the Company will
promptly notify the Representatives thereof and, subject to Section 5(a)
hereof, will prepare and file with the Commission, at the Company's expense, an
amendment to the Registration Statement or an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a signed copy of the
Original Registration Statement filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) and any Rule 462(b)
Registration Statement, (ii) to each other Underwriter, a conformed copy of
such registration statement and any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as
a prospectus relating to the Securities is required to be delivered under the
Act, as many copies of each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Representatives may reasonably request;
without limiting the application of clause (iii) of this sentence, the Company,
not later than (A) 6:00 p.m., New York City time, on the date of determination
of the initial public offering price, if such determination occurred at or
prior to 10:00 a.m., New York City time, on such date or (B) 12:00 noon, New
York City time, on the business day following the date of determination of the
initial public offering price, if such determination occurred after 10:00 a.m.,
New York City time, on such date, will deliver to the Underwriters, without
charge, as many copies of the Prospectus and any amendment or supplement
thereto as the Representatives may reasonably request for purposes of
confirming orders that are expected to settle on the Firm Closing Date. The
Company will provide or cause to be provided to each of the Representatives,
and to each Underwriter that so requests in writing, a copy of each report on
Form SR filed by the Company as required by Rule 463 under the Act.
(f) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees in
accordance with Rule 111 promulgated under the Act by the earlier of (i) 10:00
p.m., New York City time, on the date of this Agreement and (ii) the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(g) The Company, as soon as practicable, will make
generally available to its securityholders and to the Representatives a
consolidated earnings statement of the Company and its subsidiaries that
satisfies the provisions of Section 11(a) of the Act and Rule 158 thereunder.
(h) During a period of five (5) years after the date
hereof, the Company, within the periods prescribed by applicable law, will
furnish to its stockholders annual reports (including financial statements
audited by independent certified public accountants) and will furnish to its
stockholders unaudited quarterly reports of operations for each of the first
three quarters of the fiscal year as required of companies with a class of
securities registered under the Exchange Act, and will furnish to you and the
other several Underwriters hereunder (i) concurrently with making such reports
available to its stockholders, statements of operations of the Company for each
of the first three quarters in the form made available to the Company's
stockholders; (ii) concurrently with the furnishing thereof to its
stockholders, a balance sheet of the Company as of the end of such fiscal year,
together with statements of operations, of stockholders' equity and of cash
flow of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of nationally recognized independent certified
public accountants; (iii) concurrently with the furnishing of such reports to
its stockholders, copies of all reports (financial
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or other) mailed to stockholders; (iv) as soon as they are available, copies of
all reports and financial statements furnished to or filed with the Commission,
any securities exchange or the Nasdaq National Market by the Company (except
for documents for which confidential treatment is requested); and (v) every
material press release and every material news item or article in respect of
the Company or its affairs which was generally released to stockholders or
prepared for general release by the Company. During such five (5) year period,
if the Company shall have any active subsidiaries, the foregoing financial
statements shall be on a consolidated basis to the extent that the accounts of
the Company are consolidated with any subsidiaries, and shall be accompanied by
similar financial statements for any significant subsidiary that is not so
consolidated.
(i) The Company will apply the net proceeds from the sale
of the Company Firm Securities substantially as set forth under "Use of
Proceeds" in the Prospectus.
(j) The Company will not, directly or indirectly, without
the prior written consent of the Representatives, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 180 days after the effective date of the Registration Statement
except pursuant to this Agreement and except for issuances pursuant to the
exercise of warrants or employee stock options outstanding on the date hereof,
or pursuant to the terms of convertible securities of the Company outstanding
on the date hereof.
(k) The Company will not, directly or indirectly, (i)
take any action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities, or (ii)(A) sell, bid for, purchase, or pay anyone
any compensation for soliciting purchases of, the Securities or (B) pay or
agree to pay to any person any compensation for soliciting another to purchase
any other securities of the Company (except for the sale of Securities by the
Selling Securityholders under this Agreement).
(l) The Company will obtain the lockup agreements
described in Section 7(g) hereof prior to the Firm Closing Date.
(m) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the Option
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your reasonable opinion 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), the Company will, after written
notice from you advising the Company to the effect set forth above, and in
accordance with applicable law and the rules and policies of The Nasdaq Stock
Market, Inc., forthwith prepare, consult with you concerning the substance of,
and disseminate a press release or other public statement, reasonably
satisfactory to you, your counsel and counsel to the Company responding to or
commenting on such rumor, publication or event.
(n) The Company will cause the Securities to be duly
included for quotation on the Nasdaq National Market prior to the Firm Closing
Date. The Company will use its best efforts to ensure that the Securities
remain included for quotation on the Nasdaq National Market following the Firm
Closing Date.
(o) The Selling Securityholders will not, directly or
indirectly, without the prior written consent of the Representatives, on behalf
of the Underwriters, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose of (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) any Securities legally or beneficially
owned by
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such Selling Securityholders or any securities convertible into, or
exchangeable or exercisable for, Securities during the Lock-Up Period.
(p) The Selling Securityholders will not, directly or
indirectly, (i) take any action designed to cause or result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (ii) (A) sell, bid for,
purchase, or pay anyone any compensation for soliciting purchases of, the
Securities or (B) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities by the Selling Securityholders under this Agreement).
6. Expenses. The Company will pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the Registration Statement
originally filed with respect to the Securities and any amendment thereto, any
Rule 462(b) Registration Statement, any Preliminary Prospectus and the
Prospectus and any amendment or supplement thereto, this Agreement and any blue
sky memoranda and a reasonable quantity of prospectuses or offering circulars
as determined by the Representatives, (ii) all arrangements relating to the
delivery to the Underwriters of copies of the foregoing documents, (iii) the
fees and disbursements of its counsel, the accountants and any other experts or
advisors retained by the Company, (iv) the reasonable fees and disbursements of
the Underwriters' counsel, (v) the preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (vi) the qualification of the Securities under
state securities and blue sky laws, including filing fees and reasonable fees
and disbursements of counsel for the Underwriters relating thereto, (vii) the
filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Securities, (viii) the filing and other fees of
securing quotation of the Securities on the Nasdaq National Market, (ix) any
meetings with prospective investors in the Securities (other than as shall have
been specifically approved by the Representatives to be paid for by the
Underwriters) and (x) advertising relating to the offering of the Securities
(other than as shall have been specifically approved by the Representatives to
be paid for by the Underwriters). If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11 hereof or because of any
failure, refusal or inability on the part of the Company or the Selling
Securityholders to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder other than by reason of a default
by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for their documented out-of-pocket expenses (not
including counsel fees) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities up to a maximum of
$100,000. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations
of the several Underwriters to purchase and pay for the Firm Securities shall
be subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling Securityholders
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's officers made pursuant to the provisions hereof, to the
performance by the Company of its covenants and agreements hereunder and to the
following additional conditions:
(a) If the Original Registration Statement or any
amendment thereto filed prior to the Firm Closing Date has not been declared
effective as of the time of execution hereof, the Registration Statement or
such amendment, and if the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement, shall have been declared effective not
later than the earlier of: (i) 11:00 a.m., New York City time, on the date on
which the amendment to the Registration Statement originally filed with respect
to the Securities or to the Registration
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Statement, as the case may be, containing information regarding the initial
public offering price of the Securities has been filed with the Commission, and
(ii) the time confirmations are sent or given as specified by Rule 462(b) or,
with respect to the Original Registration Statement, such later time and date
as shall have been consented to by Representative; if required, the Prospectus
or any Term Sheet that constitutes a part thereof and any amendment or
supplement thereto shall have been filed with the Commission in the manner and
within the time period required by Rules 434 and 424(b) under the Act; no stop
order suspending the effectiveness of the Registration Statement or any
amendment thereto shall have been issued, and no proceedings for that purpose
shall have been instituted or threatened or, to the knowledge of the Company or
the Selling Securityholders, shall be contemplated by the Commission; and the
Company shall have complied to the satisfaction of Underwriters' Counsel with
any request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise).
(b) The Representatives shall have received an opinion,
dated the Firm Closing Date, of Manatt, Xxxxxx & Xxxxxxxx, LLP, counsel for the
Company, to the effect that:
(i) each of the Company and its subsidiary,
Credit Connection, Inc. (the "Subsidiary"), has been duly incorporated
and is validly existing and in good standing under the laws of its
jurisdiction of organization and is duly qualified to transact
business as a foreign entity and is in good standing under the laws of
all other jurisdictions where the ownership or leasing of its
properties or the conduct of its businesses requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the business, properties, business
prospects, financial condition or results of operations of the Company
and its subsidiary, taken as a whole;
(ii) each of the Company and the Subsidiary has
the power (corporate and other) and authority to own or lease its
properties and conduct its businesses as described in the Registration
Statement and the Prospectus; and the Company has the legal right,
power (corporate and other) and authority to enter into this Agreement
and to perform the transactions contemplated hereby;
(iii) the issued and outstanding shares of the
Subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable, and have not been issued in violation of or
subject to any preemptive right, co-sale right, registration right,
right of first refusal or other similar right and are owned by the
Company free and clear of any pledge, security interests, liens,
encumbrances, claims or equitable interests. The Company does not own
or control, directly or indirectly, any corporation, association or
other entity other than the Subsidiary;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus. All of the
issued and outstanding shares of capital stock of the Company
(including the Securities to be sold by the Selling Securityholders)
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all Federal and
state securities laws, and were not issued in violation of or subject
to any preemptive rights or other rights to subscribe for or purchase
securities. The Company Firm Securities and the Option Securities
have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement, and at the Firm Closing Date, when issued
and delivered by the Company after payment therefor in accordance
herewith, will be duly and validly issued, fully paid and
nonassessable, and will be sold free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest; and no
preemptive right, co-sale right, registration right, right of first
refusal, registration rights, or other similar right of stockholders
exists with respect to any of the Common Stock hereunder or the
issuance and sale thereof other than those that have been expressly
waived prior to the date hereof and those that will automatically
expire upon the consummations of the transactions contemplated by this
Agreement. No further approval or authorization of any stockholder,
the Board of Directors of the Company or others is required for the
issuance of the Company Firm Securities
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or the Option Securities except as may be required under the Act or
state securities or Blue Sky laws; the Securities have been approved
for quotation on the Nasdaq National Market, subject to official
notice of issuance;
(v) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as such
statements purport to summarize certain provisions of the capital
stock and the stock option and purchase plans of the Company, provide
a fair summary of such provisions; and the statements set forth under
the heading "Business -- Intellectual Property and Other Proprietary
Rights," "Business -- Government Regulation," "Shares Eligible for
Future Sale" and "Certain Transactions" in the Prospectus, insofar as
such statements constitute a summary of the legal matters, documents
or proceedings referred to therein, provide a fair summary of such
legal matters, documents and proceedings in all material respects;
(vi) the execution and delivery of this Agreement
have been duly authorized by all necessary corporate action of the
Company and this Agreement has been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery by
you, is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as rights to indemnification and
contribution hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally, or by general equitable
principles;
(vii) to the best of such counsel's knowledge,
there are no legal or governmental actions, suits, claims or other
proceedings pending or threatened against or affecting the Company,
its subsidiary or any of their properties, which are required,
individually or in the aggregate, to be disclosed in the Registration
Statement or the Prospectus, other than those disclosed therein;
(viii) to the best of such counsel's knowledge,
there are no contracts, indentures, mortgages, agreements, notes,
leases or other instruments required to be described or referred to in
the Registration Statement or Prospectus or to be filed as exhibits to
the Registration Statement other than those described or referred to
therein or filed as exhibits thereto, and any description of or
reference to any such instrument in the Registration Statement or
Prospectus conforms in all material respects to the terms of such
instrument;
(ix) neither the Company nor its subsidiary is (i)
in violation of its certificate of incorporation or bylaws, or (ii) to
the best of such counsel's knowledge, in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of
indebtedness to which the Company or its subsidiary is a party or
pursuant to which the Company's or the subsidiary's properties are
bound, which default would have a material adverse effect on the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, or, which default would have a material adverse effect on the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, or (iii) in default in the performance or observance of any
contract, indenture, mortgage, loan agreement, joint venture or other
agreement or instrument to which the Company or its subsidiary is a
party or by which the Company's or its subsidiary's properties are
bound, which default would have a material adverse effect on the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, or (iv) in violation of any law, order, rule, regulation, writ,
injunction, judgment or decree of any court or governmental agency or
body to which the Company is subject;
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(x) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance and performance by the Company with the
other provisions of this Agreement and the consummation of the other
transactions herein contemplated do not and will not (A) require the
consent, approval, authorization, registration or qualification of or
with any governmental authority, domestic or foreign, except such as
have been obtained, such as may be required under the Act, the
Exchange Act, or under state securities or blue sky laws, all of which
requirements have been satisfied, or (B) result in a breach or
violation of any of the terms and provisions of, or constitute a
default under the certificate of incorporation or bylaws of the
Company, or (C) to the best of such counsel's knowledge, result in a
breach or violation of any of the terms and provisions of, or
constitute a default under any obligation, agreement, covenant or
condition contained in any bond, debenture, note or other evidence of
indebtedness to which the Company or its subsidiary is a party or
pursuant to which the Company's or the subsidiary's properties are
bound, which default would have a material adverse effect on the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, or (D) result in a breach or violation of any of the terms and
provisions of, or constitute a default under any law, order, rule,
regulation, writ, injunction, judgment or decree of any court or
governmental agency or body to which the Company is subject;
(xi) (a) to the best of such counsel's knowledge,
the Company and its subsidiary possess all certificates,
authorizations, licenses, franchises and permits issued by the
appropriate Federal, state or foreign regulatory authorities necessary
to own, lease and operate their respective properties and to conduct
their respective businesses described in the Prospectus, and (b)
neither the Company nor its subsidiary has received any notice of
proceedings relating to, the revocation or modification of any such
certificate, authorization, license, franchise or permit, except as
described in the Prospectus, except for such certificates,
authorizations, licenses, franchises and permits, the loss of which
would not have a material adverse effect on the business, properties,
business prospects, financial condition or results of operations of
the Company and its subsidiary, taken as a whole. To the best of such
counsel's knowledge, except as described in the Prospectus, none of
the Company's or its subsidiary's certificates, authorizations,
licenses, franchises or permits contain any restrictions that, if
effective, would result in any material adverse effect on the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole;
(xii) the Registration Statement is effective under
the Act; any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, pursuant to Rules 424(b) and 434 has been
made in the manner and within the time period required by Rules 424(b)
and 434; and no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or to the best of
such counsel's knowledge, threatened by the Commission;
(xiii) the Registration Statement originally filed
with respect to the Securities and each amendment thereto, any Rule
462(b) Registration Statement and the Prospectus (in each case, other
than the financial statements and other financial and statistical
information contained therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
applicable requirements of the Act and the rules and regulations of
the Commission thereunder;
(xiv) if the Company elects to rely on Rule 434,
the Prospectus is not "materially different," as such term is used in
Rule 434, from the prospectus included in the Registration Statement
at the time of its effectiveness or an effective post-effective
amendment thereto (including such information that is permitted to be
omitted pursuant to Rule 430A);
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(xv) the issuances and sales by the Company of the
securities described in Item 15 of the Registration Statement were
exempt from the registration requirements of the Act, and, to such
counsel's knowledge, no event (including, without limitation, the
offering and sale of the Securities) has occurred or is contemplated
by the Company which has rendered or will render such exemptions
unavailable;
(xvi) the Company is not, and the transactions
contemplated by this Agreement will not cause the Company to become,
an investment company subject to registration under the Investment
Company Act of 1940, as amended; and
(xvii) the specimen stock certificate of the Company
filed as an exhibit to the Registration Statement is in due and proper
form to evidence shares of Common Stock, has been duly authorized and
approved by the Board of Directors of the Company and complies with
all legal requirements applicable under the corporate laws of the
State of Delaware;
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date and the date of such opinion,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of its date and the date of
such opinion, included or includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deem(s) proper, on certificates of
responsible officers of the Company and public officials.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at the
date of such opinion.
(c) The Representatives shall have received an opinion,
dated the Firm Closing Date, of Manatt, Xxxxxx & Xxxxxxxx, LLP, counsel to the
Selling Securityholders, to the effect that:
(i) each of the Selling Securityholders has full
power to enter into this Agreement, the Custody Agreement and the
Power-of-Attorney and to sell, transfer and deliver the Securities
being sold by such Selling Securityholder hereunder in the manner
provided in this Agreement and to perform their obligations under the
Custody Agreement; the execution and delivery of this Agreement, the
Custody Agreement and the Power-of-Attorney has been duly authorized
by all necessary action of each of the Selling Securityholders; this
Agreement, the Custody Agreement and the Power-of-Attorney have been
duly executed and delivered by each of the Selling Securityholders or
their respective Attorneys; assuming due authorization, execution and
delivery by the Custodian, the Custody Agreement and the
Power-of-Attorney are the legal, valid, binding and enforceable
instruments of each of the Selling Securityholders, except as the
enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally, or by general equitable
principles;
(ii) the delivery by each of the Selling
Securityholders to the several Underwriters of certificates for the
Securities being sold hereunder by the Selling Securityholders against
payment therefor as provided herein, will convey good and marketable
title to such Securities to the several Underwriters, free and clear
of any pledge, security interests, liens, encumbrances, claims or
equitable interests; and
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(iii) the sale of the Securities to the
Underwriters by each of the Selling Securityholders pursuant to this
Agreement, the compliance by each of the Selling Securityholders with
the other provisions of this Agreement and the Custody Agreement, and
the consummation of the other transactions herein contemplated do not
(a) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, domestic or
foreign, except such as have been obtained, such as may be required
under the Act, the Exchange Act, or under state securities or blue sky
laws, all of which requirements have been satisfied, or (b) to the
best of such counsel's knowledge, result in a breach or violation of
any of the terms and provisions of, or constitute a default under any
obligation, agreement, covenant or condition contained in any bond,
debenture, note or other evidence of indebtedness to which any of the
Selling Securityholders are a party or by which any of the Selling
Securityholders or any of their respective properties are bound, or
any statute, judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator applicable to the
Selling Securityholders.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deem(s) proper, on certificates of
the Selling Securityholders or of the Company and of the representations of the
Company and the Selling Securityholders contained herein, in the Custody
Agreement, or in the Power-of-Attorney..
References to the Registration Statement and the Prospectus in
this paragraph (c) shall include any amendment or supplement thereto at the
date of such opinion.
(d) The Representatives shall have received from Ernst &
Young LLP a letter or letters dated, respectively, the date hereof and the Firm
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) they are independent public accountants with
respect to the Company and its consolidated subsidiary within the
meaning of the Act and the applicable rules and regulations
thereunder;
(ii) in their opinion, the audited consolidated
financial statements and schedules examined by them and included in
the Registration Statement and the Prospectus comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(iii) on the basis of carrying out certain
specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (iii), a reading of the minute
books of the stockholders, the Board of Directors and any committees
thereof of the Company and its consolidated subsidiary, and inquiries
of certain officials of the Company and its consolidated subsidiary
who have responsibility for financial and accounting matters, nothing
came to their attention that caused them to believe that at a specific
date not more than five business days prior to the date of such
letter, there were any changes in the capital stock or long-term debt
of the Company and its consolidated subsidiary or any decreases in net
current assets or stockholders' equity of the Company and its
consolidated subsidiary, in each case compared with amounts shown on
the December 31, 1995 consolidated balance sheet included in the
Registration Statement and the Prospectus, or for the period from
January 1, 1996 to such specified date there are any decreases, as
compared to total revenues, net income or pro forma net income per
share, respectively, of the Company and its consolidated subsidiary,
except in all instances for changes, decreases or increases set forth
in such letter; and
(iv) they have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information that are derived from
the general
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accounting records of the Company and its consolidated subsidiary and
are included in the Registration Statement and the Prospectus, and
have compared such amounts, percentages and financial information with
such records of the Company and its consolidated subsidiary and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof.
References to the Registration Statement and the Prospectus in
this paragraph (d) with respect to either letter referred to above shall
include any amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received a
certificate, dated the Firm Closing Date, of the principal executive officer,
the principal financial or accounting officer, respectively, of the Company to
the effect that:
(i) the representations and warranties of the
Company in this Agreement are true and correct as if made on and as of
the Firm Closing Date and the Company has performed all covenants and
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement or any amendment thereto has been issued,
and no proceedings for that purpose have been instituted or threatened
or, to the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) when the Registration Statement or any
amendment thereto was declared effective, and at all times subsequent
thereto up to the delivery of such certificate, the Registration
Statement and the Prospectus, and any amendments or supplements
thereto, contained all statements required to be stated therein in
accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the
Commission promulgated thereunder, the Registration Statement, and any
amendment or supplement thereto, did not and does not include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, the
Prospectus, and any amendment or supplement thereto, did not and does
not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended 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 the
Prospectus, there has not been (a) any material adverse change in the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, (b) any transaction that is material to the Company and its
subsidiary, taken as a whole, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
that is material to the Company and its subsidiary, taken as a whole,
incurred by the Company or its subsidiary, except obligations incurred
in the ordinary course of business, (d) any change in the capital
stock or outstanding indebtedness of the Company or its subsidiary
that is material to the Company and its subsidiary, taken as a whole,
(e) any dividend or distribution of any kind declared, paid
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or made on the capital stock of the Company or its subsidiary, or (f)
any loss or damage (whether or not insured) the property of the
Company or its subsidiary which has been sustained or will have been
sustained which has a material adverse effect on the business,
properties, business prospects, financial condition or results of
operations of the Company and its subsidiary, taken as a whole.
(f) The Representatives shall have received a
certificate, dated the Firm Closing Date, of the Attorneys for each of the
Selling Securityholders to the effect that the representations and warranties
of such Selling Securityholder in this Agreement are true and correct as if
made on and as of the Firm Closing Date; the Registration Statement, as amended
as of the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented as of the Firm Closing Date, does not include any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and such Selling Securityholder has performed all
covenants and agreements on his or her part to be performed or satisfied at or
prior to the Closing Date.
(g) The Representatives shall have received from each
person who is a director or officer of the Company an agreement to the effect
that such person will not, except to the extent otherwise specifically
permitted by the terms of each such person's agreement, directly or indirectly,
without the prior written consent of the Representatives, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or otherwise sell
or dispose (or announce any offer, sale, offer of sale, contract of sale,
pledge, grant of an option to purchase or other sale or disposition) of any
shares of Common Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock during the Lock-Up Period.
(h) The Representatives shall have received from each of
Xx. Xxxxx X. XxXxxxxxxxx and Xx. Xxxxx X. Xxxxxxx tax indemnification
agreements providing that such individuals will indemnify the Company for any
taxes payable by the Company as a result of the Company's termination of its
Subchapter S Corporation status.
(i) The Representatives and counsel for the Underwriters
shall have received such further certificates, documents or other information
as they may have reasonably requested from the Company and the Selling
Securityholders.
(j) Prior to the commencement of the offering of the
Securities, the Securities shall have been approved for quotation on the Nasdaq
National Market, subject to official notice of issuance.
(k) The Representatives shall have received an opinion,
dated the Firm Closing Date, of Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for
the Underwriters, with respect to the issuance and sale of the Firm Securities,
the Registration Statement and Prospectus, and such other related matters as
the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to
purchase and pay for any Option Securities shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm
Securities, except that all references to the Firm Securities and the Firm
Closing Date shall be deemed to refer to such Option Securities and the related
Option Closing Date, respectively.
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8. Indemnification and Contribution.
(a) The Company and the Selling Securityholders, but in
the case of each Selling Securityholder only to the extent of the proceeds
received by such Selling Securityholder from the sale of his or her Securities
hereunder, jointly and severally agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the Act and the
Exchange Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue
statement made by the Company in Section 2(a) of this Agreement;
(ii) any untrue statement or alleged untrue
statement made by the Selling Securityholders in Section 2(b) of this
Agreement;
(iii) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto and including any
Rule 462(b) Registration Statement, or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or Selling Securityholders or based upon written information
furnished by or on behalf of the Company or Selling Securityholders
filed in any jurisdiction in order to qualify the Securities under the
securities or blue sky laws thereof or filed with the Commission or
any securities association or securities exchange (each an
"Application");
(iv) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; or
(v) 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 Securities,
including without limitation, slides, videos, films, tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or any other proceeding in connection with any such loss, claim, damage,
liability or action; provided, however, that the Company and Selling
Securityholders will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representative
specifically for use therein; and provided, further, that neither the Company
nor any of the Selling Securityholders will be liable to any Underwriter or any
person controlling such Underwriter with respect to any such untrue statement
or omission made in any Preliminary Prospectus that is corrected in the
Prospectus (or any amendment or supplement thereto) if the person asserting any
such loss, claim, damage or liability purchased Securities from such
Underwriter but was not sent or given a copy of the Prospectus (as amended or
supplemented) at or prior to the written confirmation of the sale of such
Securities to such person in any case where such delivery of the
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Prospectus (as amended or supplemented) is required by the Act, unless such
failure to deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with this Agreement. This indemnity agreement
will be in addition to any liability which the Company and Selling
Securityholders may otherwise have. Neither the Company nor Selling
Securityholders will, without the prior written consent of the Underwriter or
Underwriters purchasing, in the aggregate, more than 50% of the Securities,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, each of the Selling
Securityholders and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Company or any such
director, officer of the Company, Selling Securityholder or controlling person
of the Company may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representative specifically for use therein; and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person or Selling
Securityholder in connection with investigating or defending any such loss,
claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or
parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel
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in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representative in the case of
paragraph (a) of this Section 8, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party on the other from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company and Selling Securityholders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company and Selling
Securityholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, Selling
Securityholders or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company, Selling Securityholders and the Underwriters agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities
purchased by such Underwriter under this Agreement, less the aggregate amount
of any damages that such Underwriter has otherwise been required to pay in
respect of the same or any substantially similar claim, and no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Representative's Master Agreement Among
Underwriters. For the purposes of this paragraph 8(d), each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement, and each person, if any, who controls
the Company or Selling Securityholders within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company or Selling Securityholders, as the case may be.
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(e) The liability of each of the Selling Securityholders
under this Section 8 shall not exceed an amount equal to the initial public
offering price of the stock sold by such Selling Securityholder to the
Underwriter.
9. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, then the other Underwriters may
make arrangements satisfactory to the Representative for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representative), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or
Option Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase. If one or more Underwriters so default with respect to an
aggregate number of Securities that is more than ten percent of the aggregate
number of Firm Securities or Option Securities, as the case may be, to be
purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representative are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representative) of the
Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
the Company other than as provided in Section 10 hereof. In the event of any
default by one or more Underwriters as described in this Section 9, the
Representative shall have the right to postpone the Firm Closing Date or the
Option Closing Date, as the case may be, established as provided in Section 3
hereof for not more than seven business days in order that any necessary
changes may be made in the arrangements or documents for the purchase and
delivery of the Firm Securities or Option Securities, as the case may be. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 9. Nothing herein shall relieve any
defaulting Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, Selling Securityholders and the several Underwriters set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, Selling Securityholders, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination.
(a) This Agreement may be terminated with respect to the
Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date
or the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder at or
prior thereto or, if at or prior to the Firm Closing Date or, with respect to
the Company, such Option Closing Date, respectively:
(i) the Company or its subsidiary shall have, in
the sole judgment of the Representatives, sustained any material loss
or interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material adverse
change, or any development involving a prospective material adverse
change (including without limitation
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a material change in management or control of the Company), in the
business, properties, business prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a
whole, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading
in securities generally on the New York Stock Exchange or Nasdaq
National Market shall have been suspended or minimum or maximum prices
shall have been established on either such exchange or market system;
(iii) a banking moratorium shall have been declared
by New York or United States authorities;
(iv) the enactment, publication, decree or other
promulgation of any Federal or state statute, regulation, rule or
order of, or commencement of any proceeding or investigation by, any
court, legislative body, agency or other government authority which in
the Underwriters' sole opinion materially and adversely affects or
will materially or adversely affect the business or operations of the
Company; or
(v) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or
armed conflict involving the United States or (C) any other calamity
or crisis or material adverse change in general economic, political or
financial conditions having an effect on the U.S. financial markets
that, in the sole judgment of the Representatives, makes it
impractical or inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party except as
provided in Section 10 hereof.
12. Information Supplied by Underwriters. The statements set
forth (i) in the last paragraph on the front cover page, (ii) under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus and (iii) on
page 2 in any Preliminary Prospectus or the Prospectus pertaining to
stabilization (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representative to the Company for the purposes of Sections 2(b) and 8 hereof.
The Underwriters confirm that such statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Friedman, Billings,
Xxxxxx & Co., Inc., Potomac Tower, 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxxxx Xxxxxxxxxx, with a copy to Xxxxxxx,
Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxxxx X. Xxxxx, Esq.; and if sent to the Company, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Company at 0000 Xxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Chief Executive Officer with a copy to Manatt,
Xxxxxx & Xxxxxxxx, LLP, 0000 X Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000,
Attention: Xxxxx X. Xxxxxxx, Esq.; and if sent to Selling Securityholders,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to Selling Securityholders at 0000 Xxxxxxxx Xxxxx Xxxx,
Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Chief Executive Officer, with
a copy to Manatt, Xxxxxx & Xxxxxxxx, LLP, 0000 X Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx X. Xxxxxxx, Esq.
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14. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, Selling
Securityholders and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company and Selling Securityholders contained in Section 8 of this Agreement
shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Underwriters contained in Section
8 of this Agreement shall also be for the benefit of the directors of the
Company, the officers of the Company who have signed the Registration
Statement, Selling Securityholders and any person or persons who control the
Company or Selling Securityholders within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act. No purchaser of Securities from any
Underwriter shall be deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of Delaware, without
giving effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of Delaware, and
by execution and delivery of this Agreement, the Company and Selling
Securityholders each accepts for itself and in connection with their respective
properties, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and waives any defense of forum non conveniens and irrevocably
agree to be bound by any judgment rendered thereby in connection with this
Agreement. The Selling Securityholders designate and appoint Miles X. Xxxxx,
and the Company designates and appoints Miles X. Xxxxx and such other persons
as may hereafter be selected by the Company or Selling Securityholders
irrevocably agreeing in writing to so serve, as their respective agents to
receive on its behalf service of all process in any such proceedings in any
such court, such service being hereby acknowledged by the Company and Selling
Securityholders to be effective and binding service in every respect. A copy
of any such process so served shall be mailed by registered mail to the Company
and/or Selling Securityholders at their respective addresses provided in
Section 13 hereof; provided, however, that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of such process. If any agent appointed by the Company or Selling
Securityholders refuses to accept service, the Company and Selling
Securityholders each hereby agrees that service of process sufficient for
personal jurisdiction in any action against the Company or Selling
Securityholders in the State of Delaware may be made by registered or certified
mail, return receipt requested, to the Company and/or Selling Securityholders,
as applicable, at their respective addresses provided in Section 13 hereof, and
Selling Securityholders and the Company each hereby acknowledge that such
service shall be effective and binding in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of any Underwriter to bring proceedings against the Company and
Selling Securityholders in the courts of any other jurisdiction.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, the
Selling Securityholders and each of the several Underwriters.
Very truly yours,
CREDIT MANAGEMENT SOLUTIONS, INC.
By
--------------------------------------
Xxxxx X. XxXxxxxxxxx
President and Chief Executive Officer
SELLING SECURITYHOLDERS
-----------------------------------------
[Attorney-in-Fact]
-----------------------------------------
[Attorney-in-Fact]
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
By:
--------------------------------
Name:
Title:
For itself and as the Representative.
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Schedule I
UNDERWRITERS
Underwriting Number of Firm Securities to be Purchased
------------ -----------------------------------------
Friedman, Billings, Xxxxxx & Co., Inc. . . . . . . . . . .
Unterberg Harris . . . . . . . . . . . . . . . . . . . . . _________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,600,000
=========
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Schedule II
SELLING SECURITYHOLDERS
Name Number of Shares to be Sold
---- ---------------------------
Xxxxx X. XxXxxxxxxxx 200,000
Xxxxx X. Xxxxxxx 100,000
Xxxxxxx X. Xxxxxxx 20,000
Miles X. Xxxxx 20,000
Xxxxxx X. Xxxxxxx 20,000
Xxxxx X. Xxxxxxxxx, Xx. 20,000
Xxxxx X. Xxxx 20,000
-------
Total 400,000
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