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$30,000,000(1)
SIMULA, INC.
___ % Senior Subordinated Convertible Notes Due _______________
UNDERWRITING AGREEMENT
April ____, 1997
H.D. XXXXX & CO., INC.
XXXXX XXXXXX & CO., INC.
L.H. FRIEND, WEINRESS, XXXXXXXX & XXXXXXX, INC.
as Representatives of the
several Underwriters
0000 X. Xxxxxxx Xxxxxx, Xxx. 0000
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
Simula, Inc., an Arizona corporation (the "Company") hereby confirms
its agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom you have been duly authorized to act as representative
(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 $30,000,000 in aggregate principal amount of the Company's ___% Senior
Subordinated Convertible Notes Due ____________, 2004 (the "Firm Securities").
The Company also proposes to sell to the several Underwriters not more than
$_________ additional aggregate principal amount of ___% Senior Subordinated
Convertible Notes Due ___________, 2004 if requested by the Representatives as
provided in Section 3(b) of this Agreement. (Such Notes are referred to herein
as the "Option Securities," and the Firm Securities and any Option Securities
are collectively referred to herein as the "Securities.")
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) A registration statement on Form S-3 under the Securities
Act of 1933, as amended (the "Act") (File No. 333-13499) with respect to the
Securities, including a prospectus
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(1) Plus an option to purchase from the Company up to 180,000 additional shares
to cover over-allotments.
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subject to completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Act and one or more amendments
to such registration statement may have been so filed. Copies of such
registration statement and any amendments, and all forms of the related
prospectuses contained therein, 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, 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 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. As used in this Agreement, the term "Registration Statement" means
such registration statement, as amended at the time when it was or is declared
effective, including all exhibits and financial schedules thereto, each
Preliminary Prospectus contained therein, and any information omitted therefrom
pursuant to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); 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); and the term "Prospectus" means the prospectus first filed
with the Commission pursuant to Rule 424(b) and Rule 430A under the Act or, if
no prospectus is required to be filed pursuant to said Rule 424(b), such term
means the prospectus included in the Registration Statement.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When the Registration
Statement or any amendment thereto was or is declared effective, and when the
Prospectus or any amendment or supplement thereto is filed with the Commission
pursuant to Rule 424(b), on the date when the Prospectus is otherwise amended or
supplemented and on the Firm Closing Date and any Option Closing Date (both as
hereinafter defined), both the Registration Statement and the Prospectus, as
amended or supplemented at any such time, (i) contained or will contain all
statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act and the
rules and regulations of the Commission thereunder and (ii) did not or will 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 foregoing
provisions of this paragraph (b) do not apply to statements or omissions made in
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 any Underwriter
through the Representatives specifically for use therein.
(c) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation and are duly qualified
to transact business as foreign corporations and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and
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its subsidiaries, taken as a whole; and each of the Company and its subsidiaries
holds all material licenses, certificates and permits from governmental
authorities necessary for the conduct of their respective businesses. The
Company's only subsidiaries are Simula Technologies, Inc., Simula Government
Products, Inc., Simula Transportation Equipment Corporation (fka Intaero, Inc.),
Airline Interiors, Inc., Coach and Car Equipment Corporation, Artcraft
Industries Corp., Southtech, Inc., ViaTech, Inc., Safety Equipment, Inc., ICSE,
Inc., Simula Automotive Safety Devices, Inc., Simula Automotive Safety Devices,
Limited, Intaero, Ltd., and Sedona Scientific, Inc. (collectively, the
"Subsidiaries"). Complete and correct copies of the articles of incorporation
and the bylaws of the Company and each of its subsidiaries, and all amendments
thereto, have been delivered to you, and no changes therein will be made
subsequent to the date hereof and prior to the Firm Closing Date or the Option
Closing Date.
(d) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and the
Prospectus; and the Company has full power (corporate and other) to enter into
this Agreement and to carry out all the terms and provisions hereof to be
carried out by it.
(e) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except as described in the Registration Statement
and the Prospectus, are owned, directly or indirectly by wholly owned
subsidiaries, of record and beneficially by the Company, free and clear of any
security interests, liens, encumbrances, equities or claims whatsoever.
(f) The Company has an authorized, issued and outstanding
capitalization as set forth in the Registration Statement and the Prospectus.
All of the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. The Firm
Securities and the Option Securities have been duly authorized and at the Firm
Closing Date or the related Option Closing Date (as the case may be), after
payment therefor in accordance herewith, will be validly issued, fully paid and
nonassessable. At the Firm Closing Date or the related Option Closing Date (as
the case may be), the Firm Securities or the Option Securities (as the case may
be) will be listed, together with all other outstanding shares of Common Stock,
on the New York Stock Exchange ("NYSE"). No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or other
rights to subscribe for or to purchase any of the Securities, there are no
restrictions upon the voting or transfer of the Securities or any of the capital
stock of the Company (other than the applicable provisions of Rule 144), and no
holder of securities of the Company has the right to require the Company (now or
in the future) to register such holder's securities under the Act, except as
waived by such holder or as described in the Registration Statement and the
Prospectus.
(g) The capital stock of the Company and its subsidiaries
conforms in all material respects to the description thereof contained in the
Prospectus.
(h) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries, Airline Interiors, Inc., Coach and
Car Equipment Corporation, and Artcraft Industries Corp. (including the notes
thereto) included in the Registration Statement and the Prospectus fairly
present in all material respects the financial position of the Company and its
consolidated subsidiaries and their results of operation and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared
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in accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise noted therein). The
supporting schedules and summary financial data set forth in the Registration
Statement or the Prospectus fairly present in all material respects, on the
basis stated in the Registration Statement or the Prospectus, the information
included therein. The pro forma financial information included in the
Registration Statement or the Prospectus has been prepared in accordance with
SEC rules and guidelines with respect to pro forma financial information, has
been properly compiled on the pro forma basis described therein and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
(i) Deloitte & Touche LLP has certified certain financial
statements of the Company and its consolidated subsidiaries and delivered its
report with respect to the audited consolidated financial statements and
schedules included or incorporated by reference in the Registration Statement
and the Prospectus, and is an independent public accountant as required by the
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
the related rules and regulations thereunder.
(j) The Company has corporate power and corporate authority to
enter into this Agreement and to carry out all the terms and provisions of this
Agreement to be carried out by it. 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 is a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to (i) bankruptcy, insolvency or similar laws
generally affecting the enforcement of creditors' rights, (ii) equitable
principles limiting the right to obtain specific performance or similar
equitable relief, and (iii) limitations imposed by applicable laws regarding
rights to indemnity and contribution.
(k) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not described
therein, and no such proceedings have been threatened against the Company or any
of its subsidiaries or with respect to any of their respective properties; 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 has not been filed as required.
(l) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement applicable to it and the
consummation of the other transactions herein contemplated do not (i) require
the consent, approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained and such as may be
required under state securities or blue sky laws and applicable regulations of
the National Association of Securities Dealers, Inc. (the "NASD") and the NYSE
or (ii) conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (A) any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Company
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or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound, (B) the articles
of incorporation or bylaws of the Company or any of its subsidiaries, (C) any
statute, rule or regulation or (D) any judgment, decree or order of any court or
other governmental authority or any arbitrator to which the Company or any of
its subsidiaries is a party or is subject, or to which their respective
properties are subject.
(m) The Company and its subsidiaries own, possess or have the
right to use pursuant to valid license agreements all patents, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with, and that
are material to the conduct of, their respective businesses, and neither the
Company nor any such subsidiary has received, or has reason to believe that it
may receive, 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 condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except as described in the Registration
Statement or the Prospectus.
(n) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
(except where the failure to possess any such certificate, authorization or
permit would not, singly or in the aggregate, have a material adverse effect
upon the Company and its subsidiaries, taken as a whole), and neither the
Company nor any such subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit 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
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, except as
described in the Registration Statement and the Prospectus.
(o) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) the Company and
its subsidiaries have not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the ordinary
course of business; (ii) there has been no material adverse change in the
condition (financial or otherwise) of the Company or any of its subsidiaries,
taken as a whole, or in the earnings, business affairs or business prospects of
the Company or any of its subsidiaries, whether or not arising in the ordinary
course of business; (iii) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock; and (iv) there has not been any material
change in the capital stock, short-term debt or long-term debt of the Company
and its consolidated subsidiaries, taken as a whole, except in each case as
described in the Registration Statement and the Prospectus.
(p) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items of real property and marketable
title to all personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims and other
defects, except such as are described in the Prospectus or such as do not
materially and adversely affect the value of such property and do not interfere
with the use made or proposed to be made of such property by the Company or such
subsidiary, and any real property and buildings
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held under lease by the Company or any such subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as are not material and
do not interfere in any material respect with the use made or proposed to be
made of such property and buildings by the Company or such subsidiary, in each
case except as described in the Registration Statement and the Prospectus.
(q) The Company and each of its subsidiaries have filed all
foreign, federal, state and local income tax returns that are required to be
filed and have paid all taxes required to be paid by them and any other
assessment, fine or penalty levied against them, to the extent that any of the
foregoing is due and payable, except, in all cases, for any such assessment,
fine or penalty that is currently being contested in good faith or as described
in the Registration Statement and the Prospectus.
(r) Except for the shares of capital stock of each of the
subsidiaries owned by the Company, neither the Company nor any such subsidiary
owns any material amount of any shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership, joint
venture, association or other entity, except as described in the Registration
Statement and the Prospectus.
(s) 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 indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties is bound or may be
affected, in each case in any material adverse respect with regard to property,
business or operations of the Company and its subsidiaries taken as a whole
(except for any default which would not, singly or in the aggregate, have a
material adverse effect upon the Company and its subsidiaries, taken as a
whole). Neither the Company nor any of its Subsidiaries is in violation of any
law, ordinance, governmental rule or regulation or court decree to which any of
them or their respective properties may be subject which violation might have a
material adverse effect on the condition (financial or other), properties,
prospective results of operations or net worth of the Company and its
subsidiaries, taken as a whole.
(t) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as the Company believes are prudent in the businesses in
which they are engaged; neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for; and neither the Company
nor any such 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 not materially and adversely affect the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, except as
described in the Registration Statement and the Prospectus.
(u) The Company has not (i) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement, (A) sold, bid
for,
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purchased, attempted to induce any person to purchase, 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 (except for the sale of Securities by the
Company under this Agreement).
(v) No labor dispute with the employees of the Company or any
of its subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except as described in the Registration
Statement and the Prospectus.
(w) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or any
other subsidiary of the Company, except as described in the Registration
Statement and the Prospectus.
(x) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to occupational
safety and health or to the storage, handling or transportation of hazardous or
toxic materials, and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except, in each case, where any such violation of law or regulation,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
which would not, singly or in the aggregate, result in a material adverse change
in the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, taken as a whole,
except as described in the Registration Statement and the Prospectus.
(y) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance, in
all material respects, that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(z) There are no business relationships or related party
transactions of the nature described in Item 404 of Regulation S-K under the Act
involving the Company and any person referred to in Item 401 of Regulation S-K
under the Act, except as required to be described in the Registration Statement
and the Prospectus and as so described.
(aa) Neither the Company nor any of its subsidiaries has a
defined benefit pension plan or other pension benefit plan which is subject to
the minimum funding standards of Section 302
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of the Employee Retirement Income Security Act of 1974, as amended from time to
time, except as described in the Registration Statement and the Prospectus; and
any such plans so described are in full compliance with such Section .
(bb) No person is entitled, directly or indirectly, to
compensation from the Company or any of its subsidiaries for services as a
finder in connection with the transactions contemplated by this Agreement.
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, (i) the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters, severally
and not jointly, agrees to purchase from the Company, at a purchase
price of $_______ per share less the Underwriter's discount of 7% of
the purchase price, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule 1 hereto. One or more
certificates in definitive form for the Firm Securities that the
several Underwriters have agreed to purchase hereunder, all in such
denomination or denominations and registered in such name or names as
the Representatives requests 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 to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by certified or official
bank check or checks drawn upon or by a Chicago Clearing House bank and
payable in next-day funds or, at the option of the Representatives, by
wire transfer and payable in same-day funds (in which case the Company
shall reimburse to the Underwriters the one day's interest that would
have accrued on such purchase price had the purchase price been paid in
next-day funds, such interest based on the broker call rate as reported
in the Wall Street Journal) to the order of the Company. Such delivery
of and payment for the Firm Securities shall be made at the offices of
H.D. Xxxxx & Co., Inc., 0000 X. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxx 00000, at 9:30 A.M., local time, on __________________, 1997,
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 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 or Chicago, Illinois of the Company's transfer agent or
registrar or their correspondent 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,
plus if the purchase and sale of any Option Securities takes place
after the Firm Closing Date and after the Firm Securities are trading
"ex-dividend," an amount equal to the dividend payable on such Option
Securities. The option granted hereby may be exercised as to all or any
part of the Option Securities from time to time within
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thirty days after the date of the Prospectus. It is understood that no
Option Securities shall be sold and delivered unless the Firm
Securities previously have been, or simultaneously are, sold and
delivered. 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 shares
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
business days or later than seven 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 Representatives 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 the Representatives
deems 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.
(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.
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 Representatives shall promptly advise the Company of the commencement of the
public offering.
5. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
(a) Subject to the next sentence, the Company will file the
Prospectus with the Commission pursuant to Rule 424 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 Exchange Act
and the respective 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
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file with the Commission the Prospectus, any amendment or supplement to
the Prospectus, or any amendment to the Registration Statement, of
which the Representatives shall not previously have been advised and
furnished with a copy a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given
their consent, which consent will not be unreasonably withheld. The
Company will advise the Representatives, promptly after receiving
notice thereof, of the time when (i) the Prospectus has been filed with
the Commission and (ii) any amendment to the Registration Statement has
been filed or declared effective or any amendment or supplement to the
Prospectus has been filed and will provide evidence satisfactory to the
Representatives of each such filing or effectiveness.
(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 post-effective
amendment thereto or any order directed at any document incorporated by
reference in the Registration Statement or the Prospectus or any
amendment or supplement thereto or any order preventing or suspending
the use of the Prospectus, (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 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 the Representatives in
connection with the registration or qualification of the Securities for
offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue
such qualifications in effect for as long as may be reasonably
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 when a prospectus relating to the
Securities is required to be delivered under the Act, 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, the Exchange
Act or the respective 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 to the
Representatives and to counsel for the Underwriters a signed copy of
the Registration Statement originally filed with respect to the
Securities and each amendment thereto (in each case including exhibits
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thereto), (ii) to each Underwriter, a conformed copy of such
Registration Statement and each amendment thereto (in each case without
exhibits thereto) and (iii) as 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.
(f) The Company, as soon as practicable, will make generally
available to its security holders and to the Representatives a
consolidated earnings statement of the Company and its subsidiaries
covering a period of at least 12 months after the effective date of the
Registration Statement (but in no event commencing later than 90 days
after such date), which statement shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of
the Company's Securities as set forth under "Use of Proceeds" in the
Prospectus.
(h) The Company, its directors and executive officers will
not, directly or indirectly, without the prior written consent of the
Representatives, on behalf of the Underwriters, offer, issue, sell,
contract to sell, grant any option to purchase or otherwise dispose of
(or announce any offer, issuance, sale, grant of any option to purchase
or other 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 90 days from the date of the Prospectus, except
pursuant to this Agreement and except grants of option under stock
option plans described in the Prospectus and issuances of shares of
Common Stock (x) pursuant to the exercise of stock options under stock
options plans or compensation contracts described in the Prospectus or
(y) in connection with the acquisition of assets by the Company or its
subsidiaries as described in the Prospectus.
(i) For a period of 60 days after the effective date of the
Registration Statement, the Company will not (i) take, directly or
indirectly, any action designed to cause or to result in, or that 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) bid for, purchase, attempt to induce
any person to purchase, or pay anyone any compensation for soliciting
purchases of, the Securities or (iii) pay or agree to pay to any person
any compensation for soliciting another to purchase any other
securities of the Company.
(j) The Company will file with the NYSE, as long as its
securities are quoted thereon, all documents and notices required by
the NYSE of companies that have issued securities that are traded on
the NYSE.
(k) If at any time during the 25-day period after the
Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which in your 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 to the
Prospectus), the Company will, after written notice from you advising
the Company to the effect set forth above, forthwith
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prepare, consult with you concerning the substance of, and disseminate
a press release or other public statement, reasonably satisfactory to
you, responding to or commenting on such rumor, publication or event.
(l) For five years after the date hereof, the Company will
mail as soon as practicable to the holders of its Common Stock and
Convertible Exchangeable Preferred Stock substantially all of the
following documents, which documents shall be in compliance with this
Section if they are in the form prescribed by the Exchange Act:
(i) within 75 days after the end of the
first three quarters of each fiscal year, copies of
the quarterly unaudited condensed consolidated
statements of operations and quarterly unaudited
condensed consolidated balance sheets of the Company
and any material subsidiaries; and
(ii) within 120 days after the close of each
fiscal year, appropriate consolidated financial
statements as of the close of such fiscal year for
the Company and any material subsidiary which shall
be opined to by a nationally recognized firm of
independent public accountants in such form as to
disclose the Company's consolidated financial
condition and the consolidated results of its
operations for such fiscal year.
(m) For five years after the date hereof, the Company will
furnish to the Representatives (i) concurrently with furnishing such
reports to its shareholders, the reports described in Section 5(l)
hereof; (ii) as soon as they are available, copies of all other reports
(financial or otherwise) mailed to security holders generally; and
(iii) as soon as they are available, copies of all reports and
financial statements furnished to, or filed with, the Commission, the
NASD, any securities exchange or any state securities commission by the
Company. During such period, the foregoing financial statements shall
be on a consolidated basis to the extent that the accounts of the
Company and any subsidiary or subsidiaries are consolidated and shall
be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated.
(n) For a period of at least three years after the effective
date of the Registration Statement, the Company will continue to file
with the Commission all reports and other documents as may be required
by Section 13 or 15(d) of the Exchange Act.
6. Expenses. The Company will pay all costs and expenses incident to
the performance of the obligations of the Company 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 reproduction 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
Preliminary Prospectus and the Prospectus and any amendment or supplement
thereto, this Agreement, the Agreement Among Underwriters, Selected Dealers
Agreement, Underwriter's Questionnaire and Underwriter's Power of Attorney and
any blue sky memoranda, (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, accountants and any other experts or advisors
retained by the Company, (iv)
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preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the filing fees of the Commission, the NYSE and the NASD
relating to the Securities, (vii) the quotation of the Securities on the NYSE,
and (viii) expenses of Company personnel in connection with their attendance at
meetings with prospective investors in the Securities. 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 9 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 13(a)(i) or 13(a)(ii)
hereof or because of any failure, refusal or inability on the part of the
Company 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 Representatives upon demand for all
out-of-pocket expenses (including reasonable fees and reasonable disbursements
of counsel) that shall have been incurred by the Representatives in connection
with the proposed purchase and sale of the Securities. 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 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) The Prospectus and any amendment or supplement thereto
approved by the Underwriters pursuant to Section 5(a) hereof shall have
been filed with the Commission in the manner and within the time period
required by Rule 424(b) under the Act; no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement or the Prospectus or any
amendment or supplement 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 Representatives, shall be
contemplated by the Commission; and the Company shall have complied
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 Xxxxxxx Xxxx, P.A., counsel for the Company,
to the effect that:
(i) the Company and each of its subsidiaries have
been incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions
of incorporation and are duly qualified to transact business
as foreign corporations and are in good standing under the
laws of all other jurisdictions where they own or lease real
property, maintain an office or otherwise transact business,
except where the failure to be so qualified does not amount to
a material liability or disability to the Company and its
subsidiaries, taken as a whole;
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(ii) the Company and each of its subsidiaries have
the corporate power and authority to own or lease their
respective properties and conduct their respective businesses
as described in the Registration Statement and the Prospectus,
and the Company has the corporate power and authority to enter
into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it;
(iii) the issued shares of capital stock of each
subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable and, except as described in the
Registration Statement and the Prospectus, are owned of
record, and, to such counsel's knowledge (relying upon a
certificate of an officer of the Company and a review of the
stock transfer ledger of each such subsidiary), beneficially,
by the Company, free and clear of any perfected security
interests or, to the knowledge of such counsel, any other
security interests, liens, encumbrances, equities or claims
and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or
ownership interests in any such subsidiary are outstanding;
(iv) the Company has an authorized capitalization as
set forth in the Prospectus and the Securities to be issued by
the Company have been duly authorized by all necessary
corporate action of the Company and, when issued and delivered
to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and
nonassessable; the certificates for the Securities are in due
and proper form under Arizona law and the pertinent rules of
the NYSE; the Securities have been duly authorized for
quotation on the NYSE; no holders of outstanding shares of
capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for or purchase any of
the Securities; and to the knowledge of such counsel, no
holders of securities of the Company are entitled to have such
securities registered under the Registration Statement or, by
reason of the filing of the Registration Statement, have the
right to request the Company to register their securities
under the Act, except as waived by the holder or described in
the Registration Statement and the Prospectus;
(v) the statements set forth under the headings
["Business-Defense Contracts,"] "Management-Stock Options,"
["Certain Relationships and Related Transactions-Limitation on
Liability of Directors,]" and "Description of Securities" in
the Prospectus are accurate summaries and fairly and correctly
in all material respects present the information called for
with respect to such matters;
(vi) the execution, delivery and performance 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 this Agreement
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms
(such opinion may be rendered subject to the effect of
bankruptcy and other laws of general application affecting the
rights and remedies of creditors and to general principles of
equity, and no opinion need be given as to the availability of
equitable remedies or as to the enforceability of the
provisions of Section 8 hereof);
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(vii) other than as disclosed in the Registration
Statement or Prospectus, in the course of such counsel's
engagement to represent the Company and any of its
subsidiaries professionally, such counsel has not become aware
of any pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or to which any
property of any of them is subject that, if determined
adversely to the Company or any subsidiary, would have a
material adverse effect on the Company and its subsidiaries
taken as a whole, nor has such counsel become aware of a
threat of any such proceedings by governmental authorities or
others, nor is such counsel aware of any contracts or
documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
and filed as required (except that such counsel need not
express any belief, comment or opinion as to the financial
statements, notes or schedules or other financial or
statistical data or information in the Registration Statement
or the Prospectus), and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are
fairly summarized in all material respects;
(viii) the compliance by the Company with the
provisions of this Agreement and the consummation of the
transactions herein contemplated do not (A) require the
consent, approval, authorization, registration or
qualification of or with any governmental authority, except
such as have been obtained and such as may be required under
state securities or blue sky laws or applicable regulations of
the NASD or (B) conflict with or result in a material breach
or violation of any of the terms and provisions of, or
constitute a default under, (1) any indenture, mortgage, deed
of trust, lease or other agreement or instrument, known to
such counsel, to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries
or any of their respective properties are bound, (2) the
articles of incorporation or bylaws of the Company or any of
the Subsidiaries, (3) any statute, rule or regulation or (4)
any judgment, decree or order of any court or other
governmental authority or any arbitrator known to such counsel
and applicable to the Company or any of its subsidiaries;
(ix) other than as described in the Registration
Statement or the Prospectus, in the course of such counsel's
engagement to represent the Company and any of its
subsidiaries professionally, such counsel has not become aware
that any subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company, or from
transferring any of such subsidiary's property or assets to
the Company or any other subsidiary of the Company;
(x) other than as disclosed in the Registration
Statement or the Prospectus, in the course of such counsel's
engagement to represent the Company and any of its
subsidiaries professionally, such counsel has not become aware
that the Company or any of its subsidiaries are in default, or
that any event has occurred which with the giving of notice or
the lapse of time or both would constitute such a default,
with respect to any statute, order, rule, regulation,
indenture, mortgage, deed of trust,
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note agreement or other agreement or instrument certified by
the Company to such counsel as material to the Company (and
such counsel advises the Representatives that they are not
aware of any other material agreements or instruments to which
the Company or any of its subsidiaries is a party or by which
any of them is bound) and where such default would expose the
Company and the subsidiaries, taken as a whole, to substantial
monetary damages or penalties or would otherwise have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(xi) the Registration Statement has become effective
under the Act; any required filing of the Prospectus and any
Preliminary Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto
has been issued, and to such counsel's best knowledge no
proceedings for that purpose have been instituted or
threatened or are contemplated by the Commission; and
(xii) the registration statement originally filed
with respect to the Securities and each amendment thereto and
the Prospectus (not including the financial statements, notes,
schedules or other financial and statistical data or
information contained therein, as to which such counsel need
express no opinion), as of its respective effective or issue
date, as applicable, on its face complied as to form in all
material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules and regulations
of the Commission thereunder.
(xiii) the Company has filed with the Commission a
Registration Statement on Form 8-A which has become effective
under the Exchange Act with respect to the Common Stock.
Such counsel shall also state that they have participated in conferences with
officers of the Company, the independent accountants for the Company, and
counsel for and the Representatives of the Underwriters in connection with the
preparation of the Registration Statement and Prospectus and have considered the
matters required to be stated therein and the statements contained or
incorporated by reference therein, although such counsel shall not be required
to have independently verified the accuracy, completeness or fairness of such
statements. Such counsel shall advise the Representatives that, on the basis of
the foregoing, no facts have come to such counsel's attention that have caused
such counsel to believe that the Registration Statement (exclusive of the
financial statements, notes and schedules and other financial and statistical
information or data included therein, as to which such counsel need express no
belief or comment), at the time it became effective or at the time of any
post-effective amendment thereto, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or that the Prospectus (exclusive of the
financial statements, notes and schedules and other financial and statistical
information or data included therein, as to which such counsel need express no
belief or comment), on the date thereof or as of the Firm Closing Date,
contained or contains an untrue statement of material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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In rendering such opinion, such counsel may rely (A) as to matters of
fact, to the extent such counsel deems proper, on certificates of executive
officers of the Company and public officials, and (B) as to matters involving
the application of laws of any jurisdiction other than the State of Arizona and
the United States, to the extent satisfactory in form and scope to counsel for
the Underwriters, upon the opinion of local counsel for the Company.
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 X'Xxxxxx, Cavanagh, Anderson, Xxxxxxxxxxxxx &
Xxxxxxxx, a professional association, counsel for the Underwriters,
with respect to the issuance and sale of the Firm Securities, the
Registration Statement and the 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.
(d) The Representatives shall have received from Deloitte &
Touche 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 accountants with respect to
the Company and its subsidiaries within the meaning of the
Act, the Exchange Act and the applicable rules and regulations
thereunder;
(ii) in their opinion, the audited consolidated
financial statements and schedules examined by them and
included and incorporated by reference 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
thereunder;
(iii) on the basis of a reading of the latest
available unaudited consolidated financial statements of the
Company and its consolidated subsidiaries, 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
shareholders, the board of directors and any committees
thereof of the Company and each of its consolidated
subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated financial
statements of the Company and its subsidiaries
included and incorporated by reference in the
Registration Statement and the Prospectus do not
comply in form in all material respects with the
applicable accounting requirements of the Act, the
Exchange Act and the related published rules and
regulations thereunder, or
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are not in conformity with generally accepted
accounting principles applied on a basis
substantially consistent with that of the audited
consolidated financial statements included and
incorporated by reference in the Registration
Statement and the Prospectus; and
(B) 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 subsidiaries
or any decreases in total assets, net current assets
or shareholders' equity of the Company and its
consolidated subsidiaries, in each case compared with
amounts shown on the December 31, 1996 audited
consolidated balance sheet included and incorporated
by reference in the Registration Statement and the
Prospectus, or for the period from January 1, 1997 to
such specified date there were any decreases, as
compared with the comparable period commencing
January 1, 1996, in revenues, income from operations,
net income or net income per common share, of the
Company and its consolidated subsidiaries, except in
all instances for changes, decreases or increases set
forth in such letter or in the Registration
Statement; 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
accounting records of the Company and its
consolidated subsidiaries and are included in the
Registration Statement and the Prospectus under the
captions "Prospectus Summary," "Use of Proceeds,"
"Capitalization," "Selected Consolidated Financial
Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations,"
"Business," "Management," "Principal Shareholders,"
"Description of Securities" and "Shares Eligible for
Future Sale," and have compared such amounts,
percentages and financial information with such
records of the Company and its consolidated
subsidiaries and with information derived from such
records and have found them to be in agreement,
excluding any questions of legal interpretation;
(v) although they are unable to and do not
express an opinion on the unaudited pro forma
condensed earnings information (the "Pro Forma
Earnings Information") included in the Registration
Statement or the Prospectus, they have (A) read the
Pro Forma Earnings Information, (B) made inquiries of
certain officials of the Company who have
responsibility for financial and accounting matters
about the basis for their determination of the pro
forma adjustments to the historical amounts in the
Pro Forma Earnings Information and whether the Pro
Forma Earnings Information comply in form in all
material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X; and (C)
proved the arithmetic accuracy of the application of
the pro forma adjustments to the historical amounts
in the Pro Forma Earnings Information; on the basis
of such procedures, and such other inquiries and
procedures as may be specified in such letter,
nothing came to their attention that caused them to
believe that
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the Pro Forma Earnings Information do not comply in
form in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X and that
the pro forma adjustments have not been properly
applied to the historical amounts in the compilation
of such statements.
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 President and the Chief Financial
Officer 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; 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, in light of the
circumstances under which they were made, 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 light of the
circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and
satisfied all conditions on its part to be performed or
satisfied under this Agreement at or prior to the Firm Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by
reference in the Registration Statement or the Prospectus, 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) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, the Company and its subsidiaries, taken as a
whole, have not 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, and there has not been any
material adverse change, or any development reasonably likely
to result in a material adverse change, in the condition
(financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries,
except in each case as described in
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or contemplated by the Prospectus (exclusive of any amendment
or supplement thereto after the date hereof).
(f) The Representatives shall have received from each
executive officer and each director of the Company an agreement to the
effect that such person will not, directly or indirectly without the
prior written consent of the Representatives of the Underwriters,
offer, sell contract to sell, grant any option to purchase or otherwise
dispose of (or announce any offer, sale, grant of an option to purchase
or other disposition of) any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for shares of Common
Stock prior to 90 days from the date of the Prospectus.
(g) On or before the Firm Closing Date, 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.
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 (i) the Firm Securities and (ii) the Firm Closing Date shall be
deemed to refer to (i) such Option Securities and (ii) the related Option
Closing Date, respectively.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages or
liabilities to which such Underwriter or such controlling person may
become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings 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, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto or any application or other
document (or amendment or supplement thereto) executed by the Company
filed in any jurisdiction to qualify the Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or exchange, or (ii) the omission or alleged
omission to state in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, a
material fact required to be stated therein or necessary to make the
statements therein not misleading, 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 or
appearing as a third party witness in connection with any such loss,
claim, damage, liability, action or proceeding; provided, however, that
the Company will not be liable in any such case to the extent that
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any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement, or omission or
alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to
the Company by or through the Representatives specifically for use in
the preparation thereof. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement, 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, any such director or officer of the Company, or any
such controlling person of the Company may become subject under the
Act, 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 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 any
Underwriter through the Representatives 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, any such director, officer or
controlling person in connection with investigating or defending or
appearing as a third party witness in connection with 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 notify the indemnifying party of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party 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 reasonably 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
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and such indemnified party or parties shall have the right to select
separate counsel, reasonably acceptable to the indemnifying party, 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 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 Representatives
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 has authorized in
writing 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, unless such indemnified party waived its rights
under this Section 8 in writing in which case the indemnified party may
effect such a settlement without such consent.
(d) Only in circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is
unavailable or insufficient 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 to 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). The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (before
deducting expenses) received by the Company 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 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 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
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considerations referred to in the first sentence of 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 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 Agreement Among
Underwriters dated the date hereof among the Representatives and the
other Underwriters. For purposes of this paragraph (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 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.
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, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the nondefaulting
Underwriters, including the Representatives), 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 Representatives 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 Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter, 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 Representatives 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, and
the several Underwriters set forth
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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, 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 and (in the case of a
termination with respect to the Firm Securities) the Attorney-in-Fact
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 their part to be performed or satisfied hereunder at or
prior thereto or, if at or prior to the Firm Closing Date or such
Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have
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 a change
in control of the Company), in the condition (financial or
otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a
whole, except in each case as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement
thereto after the date hereof), which, in the sole judgment of
the Representatives, makes it impractical to offer or deliver
the Firm Securities or the Option Securities, as applicable,
on the terms contemplated by the Prospectus;
(ii) trading in the Common Stock shall have been
suspended by the Commission or the NYSE;
(iii) trading in securities generally on the NYSE
shall have been suspended or minimum or maximum prices shall
have been established on such exchange or market system;
(iv) a banking moratorium shall have been declared by
New York or United States authorities; or
(v) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any
foreign country, (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or
(C) any other calamity or crisis having an effect on the
financial markets that, in any case referred to in this clause
(v), in the sole judgment of the Representatives, makes it
impracticable or inadvisable to proceed with the public
offering or the delivery of the
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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 in
the last paragraph on the front cover page and under the heading "Underwriting'
in any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b), 8(a), and 8(b) 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 mailed or delivered or telegraphed and
confirmed in writing to H.D. Xxxxx & Co., Inc., 0000 Xx. Xxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx Xxxxxx, Syndicate Department; and
if sent to the Company, shall be mailed, delivered or telegraphed and confirmed
in writing to the Company at 0000 Xx. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, President.
14. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company 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 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, and any
person or persons who control the Company 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 THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
16. 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, and
each of the several Underwriters.
Very truly yours,
SIMULA, INC.
By_______________________
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
H.D. XXXXX & CO., INC.
XXXXX XXXXXX & CO., INC.
L.H. FRIEND, WEINRESS, XXXXXXXX & XXXXXXX, INC.
By: H.D. XXXXX & CO., INC.
By:_____________________________
Title:
As Representatives of the Underwriters
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SCHEDULE 1
UNDERWRITERS
Number of
Firm
Securities
to Be
Underwriters Purchased
------------ ---------
H.D. Xxxxx & Co., Inc...........................................................................
Xxxxx Xxxxxx & Co, Inc.. .......................................................................
L.H. Friend, Weinress, Xxxxxxxx & Xxxxxxx, Inc. . ..............................................
Total................................................................................... ==========
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LOCK-UP AGREEMENT
September ___, 1996
H.D. Xxxxx & Co., Inc.
As Representatives of the
Several Underwriters
0000 Xx. Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Proposed Issuance of 6 1/2% Series A Convertible Exchangeable Preferred Stock
of Simula, Inc.
Dear Sirs:
I am a shareholder of Simula, Inc., an Arizona corporation (the "Company").
In consideration of your acting as underwriters for the proposed public offering
of 6 1/2% Series A Convertible Exchangeable Preferred Stock of the Company, I
hereby agree that for a period of 90 days from the date of the Prospectus
included in of the registration statement on Form S-1 relating to the public
offering, I will not, directly or indirectly, offer, issue, sell, contract to
sell, grant any options to purchase or otherwise dispose of (or announce any
offer, issuance, sale, grant of an option to purchase or other disposition of)
any shares of Company Common Stock or any securities convertible into, or
exchangeable or exercisable for, share of Company Common Stock, without your
prior written consent.
This agreement shall be binding on the undersigned and his respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Officers/Directors/5% Shareholders
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