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EXHIBIT 1
2,420,000 SHARES
F.Y.I. INCORPORATED
COMMON STOCK
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UNDERWRITING AGREEMENT
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November __, 1996
XXXXXXXXXX SECURITIES
BEAR, XXXXXXX & CO. INC.
XXXXXXX XXXXX & COMPANY, L.L.C.
As Representatives of the Several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
SECTION 1. Introductory. F.Y.I Incorporated, a Delaware
corporation (the "Company"), proposes to issue and sell an aggregate of
2,000,000 shares of its authorized but unissued common stock, $.01 par value
per share (the "Common Stock"), and certain stockholders of the Company named
in Schedule B annexed hereto (the "Selling Stockholders") propose to sell an
aggregate of 420,000 shares of the Company's issued and outstanding Common
Stock to you as underwriters (the "Underwriters"). Said aggregate of 2,420,000
shares are herein called the "Firm Shares." In addition, the Company proposes
to grant to the Underwriters an option to purchase up to 363,000 additional
shares of Common Stock (the "Additional Shares"), as provided in Section 5
hereof. The Firm Shares and, to the extent such option is exercised, the
Additional Shares are hereinafter collectively referred to as the "Common
Shares."
You have advised the Company that the Underwriters propose to
make a public offering of the Common Shares on the effective date of the
registration statement hereinafter referred to, or as soon thereafter as in
your judgment is advisable.
The Company and each of the Selling Shareholders hereby confirms
their respective agreement with respect to the purchase of the Common Shares by
the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The
Company and each of Messrs. Melanson, Walker, Shaw, Lowenstein, and Bellenghi
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(the "Management Selling Shareholders") represent and warrant to the several
Underwriters that:
(a) A registration statement on Form S-1 (Registration
No. 333-_____) with respect to the Common Shares has been prepared by the
Company in accordance with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Company has prepared
and has filed or proposes to file prior to the effective date of such
registration statement an amendment or amendments to such registration
statement, which amendment or amendments have been or will be similarly
prepared. There have been delivered to each of you a signed copy of such
registration statement and amendments, together with a copy of each exhibit
filed therewith. Conformed copies of such registration statement and
amendments (but without exhibits) and of the related preliminary prospectus
have been delivered to you in such reasonable quantities as you have requested
for each of the Underwriters. The Company will next file with the Commission
one of the following: (i) prior to effectiveness of such registration
statement, a further amendment thereto, including the form of final prospectus,
or (ii) a final prospectus in accordance with Rules 430A and 424(b) of the
Rules and Regulations, or (iii) a term sheet (the "Term Sheet") as described in
and in accordance with Rules 434 and 424(b) of the Rules and Regulations. As
filed, the final prospectus, if one is used, or the Term Sheet and Preliminary
Prospectus, if a final prospectus is not used, shall include all Rule 430A
Information (as hereinafter defined) and, except to the extent that you shall
agree in writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the date and time that this Agreement was
executed and delivered by the parties hereto, or, to the extent not completed
at such date and time, shall contain only such specific additional information
and other changes (beyond that contained in the latest Preliminary Prospectus
(as hereinafter defined)) as the Company shall have previously advised you in
writing would be included or made therein.
The term "Registration Statement" as used in this Agreement shall
mean such registration statement (including all financial schedules and
exhibits) at the time such registration statement becomes effective and, in the
event any post-effective amendment thereto becomes effective prior to the First
Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term shall also include
(i) all Rule 430A Information deemed to be included in such registration
statement at the time such registration statement becomes effective as provided
by Rule 430A of the Rules and Regulations, and (ii) a registration statement,
if any, filed pursuant to Rule 462(b) of the Rules and Regulations relating to
the Common Shares. The term "Preliminary Prospectus" shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean either (i) the prospectus relating to the
Common Shares in the form in which it is first filed
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with the Commission pursuant to Rule 424(b) of the Rules and Regulations or,
(ii) if a Term Sheet is not used and no filing pursuant to Rule 424(b) of the
Rules and Regulations is required, the form of final prospectus included in the
Registration Statement at the time such registration statement becomes
effective, or (iii) if a Term Sheet is used, the Term Sheet in the form in
which it is first filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations, together with the Preliminary Prospectus included in the
Registration Statement at the time it becomes effective. The term "Rule 430A
Information" means information with respect to the Common Shares and the
offering thereof permitted to be omitted from the Registration Statement when
it becomes effective pursuant to Rule 430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements of the
Act and the Rules and Regulations and, as of its date, has not included any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and at the time the Registration
Statement becomes effective, and at all times subsequent thereto up to and
including each Closing Date hereinafter mentioned, the Registration Statement
and the Prospectus, and any amendments or supplements thereto, will contain all
material statements and information required to be included therein by the Act
and the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, will include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, no representation or
warranty contained in this subsection 2(b) shall be applicable to information
contained in or omitted from any Preliminary Prospectus, the Registration
Statement, the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter specifically for use in the preparation thereof.
(c) The Company is a corporation organized and validly
existing in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus; the Company is duly registered and qualified to do business and in
good standing as a foreign corporation in each jurisdiction or place where the
ownership or leasing of its properties or the conduct of its business requires
such registration or qualification, except where the failure so to qualify or
register would not have a material adverse effect on the condition (financial
or other), business, properties, net worth or results of operations of the
Company and the Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect"); and no proceeding has been instituted in any such
jurisdiction or place, revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or registration or qualification.
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(d) All the Company's subsidiaries are listed in Exhibit
21.1 to the Registration Statement (each a "Subsidiary" and collectively, the
"Subsidiaries"). Each Subsidiary is a corporation duly organized, validly
existing and in good standing in the jurisdiction of its incorporation, with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and is duly
registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the ownership or leasing of its properties or
the conduct of its business requires such registration or qualification, except
where the failure so to register or qualify would not have a Material Adverse
Effect and no proceeding has been instituted in any such jurisdiction or place,
revoking, limiting or curtailing or seeking to revoke, limit or curtail, such
power and authority or registration or qualification; all the outstanding
shares of capital stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned directly by
the Company free and clear of any lien, adverse claim, security interest,
equity, or other encumbrance. Other than with respect to the Subsidiaries, the
Company does not own or control, directly or indirectly, any corporation,
partnership, joint venture, association or other business organization.
Subsequent to January 30, 1996, the Company, through direct or indirect
wholly-owned subsidiaries, has acquired (i) substantially all of the assets of
Xxxxxx X. Xxxx and Staff, Inc. and RAC Services, Inc., (ii) by merger, all of
the outstanding shares of B&B Information and Image Management, Inc., (iii) by
merger, Premier Document Management, Inc. and PDM Services, Inc., (iv) by
merger, all of the outstanding shares of C.M.R.S. Incorporated, Texas Medical
Record Service, Inc. and Minnesota Medical Record Service, Inc., (v) by merger,
all of the outstanding shares of ZIA Information Analysis Group, (vi) by
merger, all of the outstanding shares of Carton-Hodgson, Inc. and substantially
all of the assets of CH Direct, Inc., and (vii) by merger, all of the
outstanding shares of Data Input Services Corporation, Inc. Except as provided
in the preceding sentence the Company has not directly or indirectly through
its subsidiaries acquired any assets or entity which acquisition, as of the
date of its completion, would require the furnishing in the Registration
Statement of financial statements of the acquired business for one or more
fiscal years in accordance with Rule 3-05 of the Commission's Regulation S-X.
(e) Effective on the First Closing Date, the Company
will have authorized capital stock consisting of 26,000,000 shares of Common
Stock, par value $.01 per share, and 1,000,000 shares of preferred stock, par
value $.01 per share (the "Preferred Stock"); as of the date hereof the Company
has outstanding ___________ shares of Common Stock and as of the First Closing
Date will have outstanding such number of shares plus such number of shares of
Common Stock issued upon the exercise of stock options outstanding on the date
hereof, and all of such outstanding shares of Common Stock, including, without
limitation, the Common Shares being sold hereunder by the Selling Stockholders,
will have been duly authorized, validly issued, fully paid and nonassessable,
issued in compliance with all federal and state securities laws, and not issued
in violation of or subject to any preemptive rights to subscribe for
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or purchase securities and will conform to the description thereof contained in
the Prospectus.
(f) The Common Shares to be issued and sold by the
Company have been duly authorized and, when issued, delivered and paid for in
the manner set forth in this Agreement, will be duly authorized, validly issued
and fully paid, and conform in all respects to the description thereof
contained in the Prospectus. No preemptive rights or other rights to subscribe
for or purchase exist with respect to the issuance and sale of the Common
Shares by the Company pursuant to this Agreement. No stockholder of the
Company has any right which has not been waived to require the Company to
register the sale of any shares owned by such stockholder under the Act in the
public offering contemplated by this Agreement. No further approval or
authority of the stockholders or the Board of Directors of the Company will be
required for the transfer and sale of the Common Shares to be sold by the
Selling Stockholders or the issuance and sale of the Common Shares to be issued
and sold by the Company as contemplated herein.
(g) Neither the Company nor any of the Subsidiaries has
outstanding any options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations convertible
into, or any contracts, commitments, plans or arrangements to issue or sell,
shares of its capital stock or any such options, rights, convertible securities
or obligations, except for options and warrants to purchase Common Stock of the
Company in the amounts disclosed in the Prospectus. The description of the
Company's stock option, stock bonus and other stock plans or arrangements, and
the options or other rights granted and exercised thereunder, set forth in the
Prospectus accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(h) The Company has legal right, power and authority to
enter into this Agreement and perform the transactions contemplated hereby.
This Agreement has been duly and validly authorized by all necessary corporate
action by the Company, has been duly and validly executed and delivered by and
on behalf of the Company and constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms. Neither
the making and performance of this Agreement by the Company, nor the
consummation of the transactions contemplated herein will (i) violate any
provisions of the certificate or articles of incorporation or bylaws, or other
organizational documents, of the Company or any of the Subsidiaries, (ii)
conflict with or result in the breach or violation of any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to
the Company or any of the Subsidiaries or any of their respective properties,
or (iii) except to the extent that it would not have a Material Adverse Effect,
conflict with, result in the breach of, or constitute, either by itself or upon
notice or the passage of time or both, a default under any agreement, mortgage,
deed of trust, lease, franchise, license, indenture,
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permit or other instrument to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries or any of their
respective properties may be bound or affected or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of the Subsidiaries. No consent, approval, authorization,
order, registration, filing, qualification, license, permit of or with any
court, regulatory body, administrative agency or other governmental body or
official is required for the issuance and sale of the Common Shares, the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except, with respect to the public offering
of the Common Shares by the several Underwriters for, compliance with the Act,
the applicable Blue Sky laws and the clearance of such offering with the
National Association of Securities Dealers, Inc. (the "NASD").
(i) Xxxxxx Xxxxxxxx LLP, who have expressed their
opinion with respect to the financial statements and schedules filed with the
Commission as a part of the Registration Statement and included in the
Prospectus and in the Registration Statement, are independent accountants as
required by the Act and the Rules and Regulations.
(j) The financial statements, together with related
notes and schedules, included in the Registration Statement and the Prospectus,
present fairly the consolidated financial position, results of operations and
changes in financial position of the Company and the Subsidiaries and of the
respective entities or businesses acquired by the Company for whom such
financial statements are required in the Registration Statement pursuant to the
Commission's Regulation S-X, as the case may be, and the combined financial
position, results of operations and changes in financial position of the
Founding Companies (as defined in Note 1 of the Founding Company Notes to
Financial Statements contained in the Registration Statement) on the basis
stated in the Registration Statement at the respective dates or for the
respective periods to which they apply. Such statements, schedules and related
notes have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis as certified by Xxxxxx Xxxxxxxx LLP.
No other financial statements or schedules are required to be included in the
Registration Statement. The selected financial data set forth in the
Prospectus under the captions "Capitalization" and "Selected Financial Data"
fairly present the information set forth therein on the basis stated in the
Registration Statement.
(k) Except as disclosed in the Prospectus, and except as
to defaults and breaches which individually or in the aggregate would not have
a Material Adverse Effect, neither the Company nor any of the Subsidiaries is
in violation or default of any provision of its certificate or articles of
incorporation or bylaws, or other organizational documents, or is in breach of
or default with respect to any provision of any agreement, judgment, decree,
order, mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their properties are bound; and there does
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not exist any state of facts which constitutes an event of default on the part
of the Company or any of the Subsidiaries as defined in such documents or
which, with notice or lapse of time or both, would constitute such an event of
default.
(l) There are no contracts or other documents required
to be described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have
not been described or filed as required. The descriptions of the contracts and
other documents in the Prospectus are accurate and complete in all material
respects; all such contracts and other documents are in full force and effect
on the date hereof; and neither the Company or any of the Subsidiaries, nor, to
the best of the Company's knowledge, any other party is in breach of or default
under any of such contracts or other documents.
(m) Except as described in the Prospectus, there are no
legal or governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened against the Company or any of the
Subsidiaries or to which the Company or any of the Subsidiaries is or may be a
party or of which property owned or leased by the Company or any of the
Subsidiaries is or may be the subject, or related to environmental or
discrimination matters, which actions, suits or proceedings might, individually
or in the aggregate, prevent or adversely affect the transactions contemplated
by this Agreement or result in a Material Adverse Effect; and no labor
disturbance by the employees of the Company or any of the Subsidiaries exists
or to our knowledge is threatened which might be expected to have a Material
Adverse Effect. Neither the Company nor any of the Subsidiaries is a party or
subject to the provisions of any material injunction, judgment, decree or order
of any court, regulatory body, administrative agency or other governmental
body.
(n) The Company and each of the Subsidiaries has good
and marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the Prospectus),
subject to no lien, mortgage, pledge, charge, claim, security interest or
encumbrance of any kind except (i) those, if any, reflected in such financial
statements (or elsewhere in the Prospectus), or (ii) those which are not
material in amount to the Company and the Subsidiaries taken as a whole and do
not adversely affect the use made and proposed to be made of such property by
the Company or any of the Subsidiaries in a manner or to an extent that would
have a Material Adverse Effect. The Company and each of the Subsidiaries, as
applicable, holds its leased properties under valid, subsisting and enforceable
leases except where the failure to do so would not have a Material Adverse
Effect. Except as disclosed in the Prospectus, each of the Company and the
Subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted or as proposed to be conducted.
(o) Since the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as described
in or specifically contemplated by the Prospectus or as would not have a
Material Adverse Effect:
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(i) neither the Company nor any of the Subsidiaries has incurred any
liabilities or obligations, indirect, direct or contingent, or entered into any
verbal or written agreement or other transaction which is not in the ordinary
course of business; (ii) neither the Company nor any of the Subsidiaries has
sustained any loss or interference with their respective businesses or
properties from fire, flood, windstorm, accident or other calamity, whether or
not covered by insurance; (iii) neither the Company nor any of the Subsidiaries
has paid or declared any dividends or other distributions with respect to its
capital stock or is in default in the payment of principal or interest on any
outstanding debt obligations; (iv) there has not been any change in the capital
stock or indebtedness material to the Company or any of the Subsidiaries (other
than in the ordinary course of business including, without limitation, pursuant
to acquisitions described in the Registration Statement); and (v) there has not
been any change in the condition (financial or otherwise), business,
properties, net worth, results of operations or prospects of the Company and
the Subsidiaries.
(p) The Company has not been advised, and has no reason
to believe, that it or any Subsidiary is not conducting business in compliance
with all applicable laws, rules and regulations of the jurisdictions in which
it is conducting business, including, without limitation, all applicable local,
state and federal environmental laws and regulations; except where failure to
be so in compliance would not have a Material Adverse Effect.
(q) Each of the Company and the Subsidiaries has
sufficient trademarks, trade names, patent rights, mask works, copyrights,
licenses and other similar rights and proprietary knowledge (collectively, the
"Intangibles"), approvals and governmental authorizations to conduct their
respective businesses as now conducted; the expiration of any Intangibles or
such approvals or governmental authorizations would not have a material adverse
effect on the condition (financial or otherwise), business, results of
operations or prospects of the Company or any of the Subsidiaries; and the
Company has no knowledge of any material infringement by it or any of the
Subsidiaries of Intangibles or trade secrets of others, and there is no claim
being made against the Company or any of the Subsidiaries regarding the
infringement of Intangibles or trade secrets which could have a material
adverse effect on the condition (financial or otherwise), business, results of
operations or prospects of the Company or any of the Subsidiaries; except for
such exceptions to any of the foregoing as would not have a Material Adverse
Effect.
(r) The Company and each of the Subsidiaries have filed
all necessary federal, state and foreign income and franchise tax returns and
paid all taxes shown as due thereon; and the Company has no knowledge of any
tax deficiency which could have a Material Adverse Effect.
(s) The Company is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
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(t) The Company has not distributed and will not
distribute prior to the First Closing Date any offering material in connection
with the offering and sale of the Common Shares other than the Preliminary
Prospectus, the Prospectus, the Registration Statement and other materials, if
any, permitted by the Act.
(u) The Company and the Subsidiaries maintain insurance
of the types and in the amounts generally deemed adequate for their business,
including, but not limited to, insurance covering real and personal property
owned or leased, against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full
force and effect, except in the case of the Subsidiaries, where the failure to
maintain such insurance would not have a Material Adverse Effect.
(v) Neither the Company nor any of the Subsidiaries has
at any time during the last five years (i) made any unlawful contribution to
any candidate for public office, or failed to disclose fully any contribution
in violation of law, or (ii) made any payment to any governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
(w) The Company has not taken and will not take,
directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Common Shares.
(x) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; and (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets.
(y) The Common Stock is duly authorized for quotation on
the Nasdaq National Market.
(z) The Company has not done and does not do business
with the government of Cuba or any person or affiliate located in Cuba in
violation of Section 517.075 of the Florida Statutes.
SECTION 3. Representations, Warranties and Covenants of the
Selling Stockholders.
(a) Each of the Selling Stockholders represents and
warrants to, and agrees with, the several Underwriters that:
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(i) Such Selling Stockholder has, and on
the First Closing Date will have, good and marketable title to the Common
Shares proposed to be sold by such Selling Stockholder hereunder on such
Closing Date and full right, power and authority to enter into this Agreement
and to sell, assign, transfer and deliver such Common Shares hereunder, free
and clear of all voting trust arrangements, liens, encumbrances, equities,
security interests, restrictions and claims whatsoever; and upon delivery of
and payment for such Common Shares hereunder, the Underwriters will acquire
good and marketable title thereto, free and clear of all liens, encumbrances,
equities, claims, restrictions, security interests, voting trusts or other
defects of title whatsoever.
(ii) Such Selling Stockholder has
executed and delivered a Power of Attorney and caused to be executed and
delivered on his behalf a Custody Agreement (hereinafter collectively referred
to as the "Stockholders Agreement") and in connection herewith such Selling
Stockholder further represents, warrants and agrees that such Selling
Stockholder has deposited in custody, under the Stockholders Agreement, with
the agent named therein (the "Agent") as custodian, certificates in negotiable
form for the Common Shares to be sold hereunder by such Selling Stockholder,
for the purpose of further delivery pursuant to this Agreement. Such Selling
Stockholder agrees that the Common Shares to be sold by such Selling
Stockholder on deposit with the Agent are subject to the interests of the
Company and the Underwriters, that the arrangements made for such custody are
to that extent irrevocable, and that the obligations of such Selling
Stockholder hereunder shall not be terminated, except as provided in this
Agreement or in the Stockholders Agreement, by any act of such Selling
Stockholder, by operation of law, by the death or incapacity of such Selling
Stockholder or by the occurrence of any other event. If the Selling
Stockholder should die or become incapacitated, or if any other event should
occur, before the delivery of the Common Shares hereunder, the documents
evidencing Common Shares then on deposit with the Agent shall be delivered by
the Agent in accordance with the terms and conditions of this Agreement as if
such death, incapacity or other event had not occurred, regardless of whether
or not the Agent shall have received notice thereof. This Agreement and the
Stockholders Agreement have been duly executed and delivered by or on behalf of
such Selling Stockholder and the form of such Stockholders Agreement has been
delivered to you.
(iii) The performance of this Agreement
and the Stockholders Agreement and the consummation of the transactions
contemplated hereby and by the Stockholders Agreement will not result in a
breach or violation by such Selling Stockholder of any of the terms or
provisions of, or constitute a default by such Selling Stockholder under, any
indenture, mortgage, deed of trust, trust (constructive or other), loan
agreement, lease, franchise, license or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling Stockholder or any
of its properties is bound, any statute, or any judgment, decree, order, rule
or regulation of any court or governmental agency or body applicable to such
Selling Stockholder or any of its properties, or, for each Selling Stockholder
that is not a
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natural person, its certificate or articles of incorporation and bylaws,
partnership or limited liability company agreement, trust agreement or other
similar charter or founding agreement or document.
(iv) Such Selling Stockholder has not
taken and will not take, directly or indirectly, any action designed to or
which has constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Common Shares.
(v) Each Preliminary Prospectus and the
Prospectus, insofar as it has related to such Selling Stockholder has conformed
in all material respects to the requirements of the Act and the Rules and
Regulations and has not included any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made; and
neither the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, as it relates to such Selling Stockholder, will include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(b) Each Selling Stockholder that is not a Management
Selling Stockholder represents and warrants to the Underwriters that to the
best knowledge of such Selling Stockholder the representations or warranties
set forth in Section 2 above are true and accurate in all material respects.
SECTION 4. Representations and Warranties of the
Underwriters. The Underwriters represent and warrant to the Company that the
information set forth (i) on the cover page of the Prospectus with respect to
price, commissions and terms of offering and (ii) under "Underwriting" in the
Prospectus was furnished to the Company by and on behalf of the Underwriters
for use in connection with the preparation of the Registration Statement and
the Prospectus and is correct in all material respects.
SECTION 5. Purchase, Sale and Delivery of Common Shares. On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriters 2,000,000 of the Firm Shares and each
Selling Stockholder agrees to sell to the Underwriters the number of Firm
Shares set forth opposite their respective names on Exhibit B. The
Underwriters agree, severally and not jointly, to purchase from the Company and
the Selling Stockholders the number of Firm Shares described below. The
purchase price per share to be paid by the several Underwriters to the Company
shall be $_______ per share.
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The obligation of each Underwriter to the Company shall be to
purchase from the Company that number of full shares which (as nearly as
practicable, as determined by you) bears to 2,000,000 the same proportion as
the number of shares set forth opposite the name of such Underwriter in
Schedule A hereto bears to the total number of Firm Shares. The obligation of
each Underwriter to the Selling Stockholders shall be to purchase from the
Selling Stockholders that number of full shares which (as nearly as
practicable, as determined by you) bears to 420,000 the same proportion as the
number of shares set forth opposite the name of such Underwriter in Schedule A
hereto bears to the total number of Firm Shares.
Delivery of certificates for the Firm Shares to be purchased
by the Underwriters shall be made at the location specified by Xxxxxxxxxx
Securities and payment therefor shall be made at the offices of Xxxxxxxxxx
Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such other
place as may be agreed upon by the Company and the Representatives) at such
time and date, not later than the third (or, if the Firm Shares are priced, as
contemplated by Rule 15c6-1(c) of the Securities Exchange Act of 1934, after
4:30 P.M. Washington, D.C. Time, the fourth) full business day following the
first date that any of the Common Shares are released by you for sale to the
public, as you shall designate by at least 48 hours prior notice to the Company
(or at such other time and date, not later than one week after such third or
fourth, as the case may be, full business day as may be agreed upon by the
Company and the Representatives) (the "First Closing Date"); provided, however,
that if the Prospectus is at any time prior to the First Closing Date
recirculated to the public, the First Closing Date shall occur upon the later
of the third or fourth, as the case may be, full business day following the
first date that any of the Common Shares are released by you for sale to the
public or the date that is 48 hours after the date that the Prospectus has been
so recirculated.
Delivery of certificates for the Firm Shares shall be made by
or on behalf of the Company and the Selling Stockholders to you against payment
by you, for the accounts of the several Underwriters, of the purchase price
therefor by wire transfer of same day funds to the order of the Company and of
the Agent in proportion to the number of Firm Shares to be sold by the Company
and the Selling Stockholders, respectively. The certificates for the Firm
Shares shall be registered in such names and denominations as you shall have
requested at least two full business days prior to the First Closing Date, and
shall be made available for checking and packaging on the business day
preceding the First Closing Date at a location in New York, New York, as may be
designated by you. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Underwriters.
In addition, on the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 363,000 Additional
Shares at the purchase price
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per share to be paid for the Firm Shares, for use solely in covering any
overallotments made by you for the account of the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the first date that
any of the Common Shares are released by you for sale to the public, upon
notice by you to the Company setting forth the aggregate number of Additional
Shares as to which the Underwriters are exercising the option, the names and
denominations in which the certificates for such shares are to be registered
and the time and place at which such certificates will be delivered. Such time
of delivery (which may not be earlier than the First Closing Date), being
herein referred to as the "Second Closing Date," shall be determined by you,
but if at any time other than the First Closing Date shall not be earlier than
three nor later than five full business days after delivery of such notice of
exercise. The number of Additional Shares to be purchased by each Underwriter
shall be determined by multiplying the number of Additional Shares to be sold
by the Company pursuant to such notice of exercise by a fraction, the numerator
of which is the number of Firm Shares to be purchased by such Underwriter as
set forth opposite its name in Schedule A and the denominator of which is the
number of Firm Shares (subject to such adjustments to eliminate any fractional
share purchases as you in your discretion may make). Certificates for the
Additional Shares will be made available for checking and packaging on the
business day preceding the Second Closing Date at a location in New York, New
York, as may be designated by you. The manner of payment for and delivery of
the Additional Shares shall be the same as for the Firm Shares purchased from
the Company as specified in the two preceding paragraphs. At any time before
lapse of the option, you may cancel such option by giving written notice of
such cancellation to the Company. If the option is cancelled or expires
unexercised in whole or in part, the Company will deregister under the Act the
number of Additional Shares as to which the option has not been exercised.
You, individually, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Subject to the terms and conditions hereof, the Underwriters
propose to make a public offering of their respective portions of the Common
Shares as soon after the effective date of the Registration Statement as in the
judgment of the Representatives is advisable and at the public offering price
set forth on the cover page of and on the terms set forth in the final
prospectus, if one is used, or on the first page of the Term Sheet, if one is
used.
The Company shall deliver, or cause to be delivered, to the
Underwriters, copies of the Prospectus requested by them for the purpose of
confirming sales of the Common Shares that are expected to settle on the First
Closing Date not later than 4:00 p.m. San Francisco time on the next business
day following
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the later of the date of this Agreement or the date that the Common Shares are
first released by the Underwriters for sale to the public.
SECTION 6. Covenants of the Company. The Company covenants
and agrees that:
(a) The Company will use its best efforts to
cause the Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the parties
hereto, to become effective. If the Registration Statement has become or
becomes effective pursuant to Rule 430A of the Rules and Regulations, or the
filing of the Prospectus is otherwise required under Rule 424(b) of the Rules
and Regulations, the Company will file the Prospectus, properly completed,
pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. The Company will promptly advise
you in writing (i) of the receipt of any comments of the Commission, (ii) of
any request of the Commission for amendment of or supplement to the
Registration Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus or for additional information, (iii)
when the Registration Statement shall have become effective, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the institution of any proceedings for that
purpose. If the Commission shall enter any such stop order at any time, the
Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. The Company will not file any amendment or
supplement to the Registration Statement (either before or after it becomes
effective), any Preliminary Prospectus or the Prospectus of which you have not
been furnished with a copy a reasonable time prior to such filing or to which
you reasonably object or which is not in compliance with the Act and the Rules
and Regulations.
(b) Subject to the Company's consent, which shall
not be unreasonably withheld, the Company will prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statement or the Prospectus which in your judgment may be
necessary or advisable to enable the several Underwriters to continue the
distribution of the Common Shares and will use its best efforts to cause the
same to become effective as promptly as possible. The Company will fully and
completely comply with the provisions of Rule 430A of the Rules and Regulations
with respect to information omitted from the Registration Statement in reliance
upon such Rule.
(c) If at any time within the nine-month period
referred to in Section 10(a)(3) of the Act during which a prospectus relating
to the Common Shares is required to be delivered under the Act any event
occurs, as a result of which the Prospectus, including any amendments or
supplements, would include an untrue statement of a material fact, or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, or if it is necessary
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at any time to amend the Prospectus, including any amendments or supplements,
to comply with the Act or the Rules and Regulations, the Company will promptly
advise you thereof and will promptly prepare and file with the Commission, at
its own expense, an amendment or supplement which will correct such statement
or omission or an amendment or supplement which will effect such compliance and
will use its best efforts to cause the same to become effective as soon as
possible; and, in case any Underwriter is required to deliver a prospectus
after such nine-month period, the Company upon request, but at the expense of
such Underwriter, will promptly prepare such amendment or amendments to the
Registration Statement and such Prospectus or Prospectuses as may be necessary
to permit compliance with the requirements of Section 10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45
days after the end of the first quarter ending after one year following the
"effective date of the Registration Statement" (as defined in Rule 158(c) of
the Rules and Regulations), the Company will make generally available to its
security holders an earnings statement (which need not be audited) covering a
period of 12 consecutive months beginning after the effective date of the
Registration Statement which will satisfy the provisions of the last paragraph
of Section 11(a) of the Act.
(e) During such period as a prospectus is
required by law to be delivered in connection with sales by an Underwriter or
dealer, the Company, at its expense, but only for the nine-month period
referred to in Section 10(a)(3) of the Act, will furnish to you or mail to your
order copies of the Registration Statement, the Prospectus, the Preliminary
Prospectus and all amendments and supplements to any such documents in each
case as soon as available and in such quantities as you may request, for the
purposes contemplated by the Act.
(f) The Company shall cooperate with you and your
counsel in order to qualify or register the Common Shares for sale under (or
obtain exemptions from the application of) the Blue Sky laws of such
jurisdictions as you designate (including those of Canada) and under the
applicable securities laws of such other nations as you may designate, will
comply with such laws and will continue such qualifications, registrations and
exemptions in effect so long as reasonably required for the distribution of the
Common Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not presently qualified. The Company will advise you
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Common Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company, with your cooperation,
will use its best efforts to obtain the withdrawal thereof.
(g) During the period of five years hereafter,
the Company will furnish to the Underwriters: (i) as soon as practicable after
the end of each fiscal
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year, copies of the Annual Report of the Company containing the balance sheet
of the Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its Common Stock.
(h) During the period of 90 days after the first
date that any of the Common Shares are released by you for sale to the public,
without the prior written consent of either Xxxxxxxxxx Securities or each of
the Underwriters (which consent may be withheld at the sole discretion of
Xxxxxxxxxx Securities), (i) the Company will not issue, offer, sell, or
otherwise dispose of any of the Company's equity securities or any other
securities convertible into or exchangeable with its Common Stock or other
equity security, or register under the Act any such securities, other than (1)
in connection with future acquisitions of entities or businesses as
contemplated by the Prospectus or (2) pursuant to currently outstanding stock
options and warrants and (ii) the Company will not release any stockholder,
optionholder or warrantholder of the Company from or otherwise modify, amend or
waive the provisions of any agreement entered into with any such stockholder,
optionholder or warrantholder, restricting the sale, transfer or other
disposition of shares of Common Stock, options or warrants of the Company by
any such person.
(i) The Company will apply the net proceeds of
the sale of the Common Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
(j) To the extent required by law the Company
will use its best efforts to qualify or register its Common Stock for sale in
nonissuer transactions under (or obtain exemptions from the application of) the
Blue Sky laws of the State of California (and thereby permit market making
transactions and secondary trading in the Company's Common Stock in
California), will comply with such Blue Sky laws and will continue such
qualifications, registrations and exemptions in effect for a period of five
years after the date hereof.
You may, in your sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance, provided that no such extension shall
extend the Company's obligations hereunder.
SECTION 7. Payment of Expenses. Whether or not the
transactions contemplated hereunder are consummated or this Agreement becomes
effective or is terminated, the Company agrees to pay, all costs, fees and
expenses incurred in
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connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limiting the
generality of the foregoing, (i) all expenses incident to the issuance and
delivery of the Common Shares (including all printing and engraving costs),
(ii) all fees and expenses of the registrar and transfer agent of the Common
Stock, (iii) all necessary issue, transfer and other stamp taxes in connection
with the issuance and sale of the Common Shares to the Underwriters, (iv) all
costs and expenses incurred in connection with the printing, filing, shipping
and distribution of the Registration Statement, each Preliminary Prospectus and
the Prospectus (including all exhibits and financial statements) and all
amendments and supplements provided for herein, this Agreement, the Master
Agreement Among Underwriters, the Selected Dealers Agreement, the Master
Underwriters' Questionnaire, the Underwriters' Power of Attorney and the Blue
Sky memorandum, (v) all filing fees, attorneys' fees and expenses incurred by
the Company or the Underwriters in connection with qualifying or registering
(or obtaining exemptions from the qualification or registration of) all or any
part of the Common Shares for offer and sale under the Blue Sky laws (including
those of Canada) and under the applicable securities laws of such other nations
as you may designate, (vi) the filing fee of the National Association of
Securities Dealers, Inc., and (vii) all other fees, costs and expenses referred
to in Item 14 of the Registration Statement. Except as provided in this
Section 7, Section 9 and Section 11 hereof, the Underwriters shall pay all of
their own expenses, including the fees and disbursements of their counsel
(excluding those relating to qualification, registration or exemption under the
Blue Sky laws (including those of Canada) and under the applicable securities
laws of such other nations as you may designate, and the Blue Sky memorandum
referred to above).
SECTION 8. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for the Firm
Shares on the First Closing Date and the Additional Shares on the Second
Closing Date shall be subject to the accuracy of the representations and
warranties on the part of the Company herein set forth as of the date hereof
and as of the First Closing Date or the Second Closing Date, as the case may
be, to the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:00 p.m. (or, in the case of a registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations relating to the
Common Shares, not later than 10 p.m.), Washington, D.C. time, on the date of
this Agreement, or at such later time as shall have been consented to by you;
if the filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b) of the Rules and Regulations, the Prospectus shall have
been filed in the manner and within the time period required by Rule 424(b) of
the Rules and Regulations; and prior to such Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company or you, shall be contemplated by
the Commission; and
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any request of the Commission for inclusion of additional information in the
Registration Statement, or otherwise, shall have been complied with to your
satisfaction.
(b) You shall be satisfied that since the
respective dates as of which information is given in the Registration Statement
and Prospectus, (i) there shall not have been any change in the capital stock
of the Company or any of the Subsidiaries, other than pursuant to the exercise
of outstanding options disclosed in the Prospectus or the issuance of shares of
Common Stock in connection with the acquisitions of businesses by the Company
as described in the Registration Statement and the Prospectus or, except as
would not have a Material Adverse Effect, any change in the indebtedness (other
than in the ordinary course of business) of the Company or any of the
Subsidiaries, (ii) except as set forth or contemplated by the Registration
Statement or the Prospectus, no verbal or written agreement or other
transaction shall have been entered into by the Company or any of the
Subsidiaries which is not in the ordinary course of business and which is
material to the Company and the Subsidiaries taken as a whole, (iii) no loss or
damage (whether or not insured) to the property of the Company or any of the
Subsidiaries shall have been sustained which materially and adversely affects
the condition (financial or otherwise), business, results of operations or
prospects of the Company and the Subsidiaries taken as a whole, (iv) no legal
or governmental action, suit or proceeding affecting the Company or any of the
Subsidiaries which would have a Material Adverse Effect or which affects or may
affect the transactions contemplated by this Agreement shall have been
instituted or threatened, and (v) there shall not have been any change in the
condition (financial or otherwise), business, management, results of operations
or prospects of the Company or any of the Subsidiaries which is material to the
Company and the Subsidiaries taken as a whole and makes it impractical or
inadvisable in the judgment of the Underwriters to proceed with the public
offering or purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you, as
Representatives of the Underwriters, on each Closing Date, in form and
substance satisfactory to you, except as otherwise expressly provided below:
(i) An opinion of Xxxxxx, Xxxxx &
Bockius LLP, counsel for the Company and the Selling Stockholders, addressed to
the Underwriters and dated the First Closing Date, or the Second Closing Date,
as the case may be, to the effect that:
(1) The descriptions in the
Prospectus under "The Company" of the agreements by which the Company has
acquired the described businesses and entities are accurate in all material
respects;
(2) The Company is a corporation
duly incorporated and validly existing in good standing under the laws of the
State of
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Delaware, is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction or place where the ownership or leasing of
its properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify would not
have a Material Adverse Effect and has the corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus; and
(3) Each of the Subsidiaries is a
corporation duly incorporated and validly existing in good standing under the
laws of the jurisdiction of its organization with corporate power and authority
to own, lease, and operate its properties and to conduct its business as
described in the Registration Statement; and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or place
where the ownership or leasing of its properties or the conduct of its business
requires such registration or qualification, except where the failure so to
qualify or register would not have a Material Adverse Effect; and all the
outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, and are owned
directly by the Company, free and clear of any security interest, lien, adverse
claim, equity or other encumbrance;
(4) The Company has authorized
capital stock consisting of 26,000,000 shares of Common Stock, par value $.01
per share, and 1,000,000 shares of Preferred Stock, par value $.01 per share
and _________ shares of Common Stock and no shares of Preferred Stock are
issued and outstanding; all of the outstanding shares of Common Stock (other
than the Common Shares) have been duly authorized, validly issued, fully paid
and nonassessable, have been issued in compliance with all federal securities
laws, were not issued in violation of or subject to any statutory preemptive
rights or, to your knowledge, other rights to subscribe for or purchase
securities and conform to the description thereof contained in the Prospectus;
(5) The certificates evidencing the
Common Shares to be delivered hereunder are in due and proper form under
Delaware law, and when duly countersigned by the Company's transfer agent and
registrar and delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of this Agreement, the
Common Stock represented thereby will be duly authorized and validly issued and
fully paid and nonassessable and will not have been issued in violation of or
subject to any statutory preemptive rights or to your knowledge other rights to
subscribe for or purchase any of the Common Shares. To the knowledge of such
counsel, no stockholder of the Company has any right which has not been waived
to require the Company to register the sale of any shares owned by such
stockholder under the Act in the public offering contemplated by this
Agreement;
(6) Except as disclosed in the
Prospectus, to the best of such counsel's knowledge, neither the Company nor
any of the Subsidiaries has
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outstanding any options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations convertible
into, or any contracts, commitments, plans or arrangements to issue or sell,
any shares of its capital stock or any such options, rights, convertible
securities or obligations;
(7) (a) The Registration
Statement has become effective under the Act, and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement or preventing the use of the Prospectus has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated by the Commission; any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) of the Rules and Regulations has
been made in the manner and within the time period required by such Rule
424(b);
(b) The Registration Statement,
the Prospectus and each amendment or supplement thereto (except for the
financial statements, schedules and other financial and statistical data
included therein as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the Rules
and Regulations;
(c) To the best of such
counsel's knowledge, there are no franchises, leases, contracts, agreements, or
other documents of a character required to be disclosed in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement which are not disclosed or filed, as required; and
(d) To the best of such
counsel's knowledge, there are no legal or governmental actions, suits or
proceedings pending or threatened against the Company or any of the
Subsidiaries which are required to be described in the Prospectus which are not
described as required.
(8) The Company has the corporate
power and authority to enter into this Agreement and sell the Common Shares to
the several Underwriters. This Agreement has been duly and validly authorized
by all necessary corporate action by the Company, has been duly and validly
executed and delivered by and on behalf of the Company; no consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court, regulatory body, administrative agency or other governmental
body or official is required for the issuance and sale of the Common Shares,
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except (i) such as have been obtained and are
in full force and effect under the Act, and (ii) such as may be required under
applicable Blue Sky laws in connection with the purchase and distribution of
the Common Shares by the Underwriters and the clearance of such offering with
the NASD as to which no opinion need be expressed;
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(9) Neither the Company nor any of
the Subsidiaries is in violation of its respective certificate of incorporation
or bylaws, or to the best of such counsel's knowledge after reasonable inquiry,
in breach of or default with respect to any provision of any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or other
instrument known to such counsel to which the Company or any of the
Subsidiaries is a party or by which they or any of their properties may be
bound or affected, except where such breach or default would not materially
adversely affect the Company and the Subsidiaries taken as a whole;
(10) The execution and delivery of
this Agreement by the Company and the sale of the Common Shares to the several
Underwriters will not conflict with, result in the breach of, or constitute,
either by itself or upon notice or the passage of time or both, a default
under, any agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument filed as an exhibit to the Registration
Statement, or violate any of the provisions of the certificate of incorporation
or bylaws of the Company or the corresponding charter documents of any of the
Subsidiaries or cause the Company or any Subsidiary to violate any statute,
judgment, decree, order, rule or regulation of any court or governmental body
having jurisdiction over the Company, any of the Subsidiaries or any of their
respective properties;
(11) This Agreement has been duly
executed and delivered by or on behalf of each of the Selling Stockholders.
(12) Assuming mental capacity to act
for each Selling Stockholder that is an individual, each Selling Stockholder
has full legal right, power and authority, and any approval required by law
(other than as required by State securities and Blue Sky laws as to which such
counsel need express no opinion), to sell, assign, transfer and deliver the
portion of the Firm Shares to be sold by such Selling Stockholder.
(xv) The Stockholders Agreement has
been duly executed and delivered by each Selling Stockholder.
(xvi) The Underwriters (assuming that
they are bona fide purchasers within the meaning of the Uniform Commercial
Code) have acquired good and marketable title to the Firm Shares being sold by
each Selling Stockholder on the First Closing Date, free and clear of all
claims, liens, encumbrances and security interests whatsoever.
In rendering their opinion as aforesaid, such counsel may rely
upon an opinion or opinions, each dated the applicable Closing Date, of other
counsel retained by them or the Company or the Selling Stockholders as to laws
of any jurisdiction other than New York and the General Corporation Law of
Delaware, provided that (i) each such local counsel is acceptable to the
Underwriters, (ii) such reliance is
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expressly authorized by each opinion so relied upon, and (iii) counsel shall
state in their opinion that they have reviewed such opinions and found them to
be satisfactory in form and scope; as to matters of fact, such counsel may rely
on certificates of officers of the Company and of governmental officials. Such
counsel shall also include a statement to the effect that nothing has come to
such counsel's attention that would lead such counsel to believe that the
Registration Statement at the effective date thereof, or the Prospectus at the
date thereof or at the applicable Closing Date, or any such amendment or
supplement, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(ii) Such opinion or opinions of Howard,
Rice, Nemerovski, Canady, Xxxx & Xxxxxx, A Professional Corporation, counsel
for the Underwriters, dated the First Closing Date or the Second Closing Date,
as the case may be, with respect to the incorporation of the Company, the
sufficiency of all corporate proceedings and other legal matters relating to
this Agreement, the validity of the Common Shares, the Registration Statement
and the Prospectus and other related matters as you may reasonably require, and
the Company and the Selling Stockholders shall have furnished to such counsel
such documents and shall have exhibited to them such papers and records as they
may reasonably request for the purpose of enabling them to pass upon such
matters. In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company, the Selling
Stockholders and governmental officials.
(iii) A certificate of the Company
executed by the Chairman of the Board, the President and Chief Executive
Officer, and the Executive Vice President--Corporate Development and
Acquisitions of the Company, dated the First Closing Date or the Second Closing
Date, as the case may be, to the effect that:
(1) The representations and
warranties of the Company set forth in Section 2 of this Agreement are true and
correct as of the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be performed
or satisfied on or prior to such Closing Date;
(2) The Commission has not
issued any order preventing or suspending the use of the Prospectus or any
Preliminary Prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the best of the knowledge of the
respective signers, no proceedings for that purpose have been instituted or are
pending or contemplated under the Act;
(3) The Registration Statement
and the Prospectus and any amendments or supplements thereto contain all
statements required to be stated therein regarding the Company or any of the
Subsidiaries; and neither the
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Registration Statement nor the Prospectus nor any amendment or supplement
thereto includes any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading;
(4) Since the initial date on
which the Registration Statement was filed, no agreement, written or oral,
transaction or event has occurred which should have been set forth in an
amendment to the Registration Statement or in a supplement to or amendment of
any prospectus which has not been disclosed in such a supplement or amendment;
(5) Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, and except as disclosed in or contemplated by the Prospectus, there
has not been any change or a development involving the Company or any of the
Subsidiaries that has had a Material Adverse Effect and no legal or
governmental action, suit or proceeding is pending or threatened against the
Company or any of the Subsidiaries which is material to the Company and the
Subsidiaries (taken as a whole) or which may adversely affect the transactions
contemplated by this Agreement; since such dates and except as so disclosed,
neither the Company nor any of the Subsidiaries has entered into any verbal or
written agreement or other transaction which is not in the ordinary course of
business or made any change in its capital stock, repurchased or otherwise
acquired any of the Company's capital stock, or, except as would not have a
Material Adverse Effect, incurred any liability or obligation, direct,
contingent or indirect or made any change in its short-term debt or funded
debt; and the Company has not declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock payable to stockholders of
record on a date prior to the First Closing Date or Second Closing Date;
(6) Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus and except as disclosed in or contemplated by the Prospectus, none
of the Company nor any of the Subsidiaries have sustained a material loss or
damage by strike, fire, flood, windstorm, accident or other calamity (whether
or not insured).
(iv) On the date before this Agreement is
executed and also on the First Closing Date and the Second Closing Date a
letter addressed to the Underwriters, from Xxxxxx Xxxxxxxx LLP, independent
accountants, the first one to be dated the day before the date of this
Agreement, the second one to be dated the First Closing Date and the third one
(in the event of a Second Closing) to be dated the Second Closing Date, in form
and substance satisfactory to you.
(v) On or before the First Closing Date,
letters in form and substance satisfactory to you, from each, stockholder,
director and officer of the Company designated by the Representatives,
confirming that, for a period of 90 days
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after the first date that any of the Common Shares are released by you for sale
to the public, such person will not directly or indirectly sell or offer to
sell or otherwise dispose of any Common Stock or any right to acquire such
shares without the prior written consent of either Xxxxxxxxxx Securities or
each of the Underwriters, which consent may be withheld at the sole discretion
of Xxxxxxxxxx Securities or each of the Underwriters, as the case may be.
(vi) Such further certificates and
documents as you shall have reasonably requested.
(d) There shall have been delivered to you the
Firm Shares and, if any Additional Shares are purchased, the Additional Shares.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are satisfactory to
you and to Howard, Rice, Nemerovski, Canady, Xxxx & Rabkin, A Professional
Corporation, counsel for the Underwriters. The Company shall furnish you with
such manually signed or conformed copies of such opinions, certificates,
letters and documents as you request. Any certificate signed by any officer of
the Company and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed to be a representation and warranty by the Company
to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you as
Representatives to the Company without liability on the part of any Underwriter
or the Company except for the expenses to be paid or reimbursed by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided in
Section 10 hereof.
SECTION 9. Reimbursement of Underwriters' Expenses.
Notwithstanding any other provisions hereof, if this Agreement shall be
terminated by you pursuant to Section 8, or if the sale to the Underwriters of
the Common Shares at the First Closing is not consummated because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholders to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse the Underwriters upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Underwriters in connection with the proposed purchase and the sale of the
Common Shares, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile charges, telegraph
charges and telephone charges relating directly to the offering contemplated by
the Prospectus. Any such termination shall be without liability of any party
to any other party except that the provisions of this Section 9, Section 7 and
Section 11 shall at all times be effective and shall apply.
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SECTION 10. Effectiveness of Registration Statement. The
Underwriters and the Company and the Selling Stockholders each will use their
best efforts to cause the Registration Statement to become effective, to
prevent the issuance of any stop order suspending the effectiveness of the
Registration Statement and, if such stop order be issued, to obtain as soon as
possible the lifting thereof.
SECTION 11. Indemnification.
(a) The Company and each of the Selling Stockholders,
jointly and severally, 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, liabilities or expenses, joint or
several, to which such Underwriter or such controlling person may become
subject, under the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon 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 arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them not
misleading; and will reimburse each Underwriter and each such controlling
person for any legal and other expenses as such expenses are reasonably
incurred by such Underwriter or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that neither
the Company nor the Selling Stockholders will be liable in any such case to the
extent that any such loss, claim, damage, liability or expense 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 any amendment or supplement thereto in reliance
upon and in conformity with the information furnished to the Company pursuant
to Section 4 hereof; and provided further, that the indemnity provided in this
Section 10(a) with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any loss, claim,
charge, liability or litigation based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state
therein a material fact purchased Shares, if a copy of the Prospectus in which
such untrue statement or alleged untrue statement or omission or alleged
omission was corrected was not sent or given to such person within the time
required by the Act and the Rules and Regulations thereunder; and provided,
further, that the liability of each Selling Stockholder under the foregoing
indemnity agreement shall be limited to an amount equal to the initial public
offering price of the Common Shares sold by such Selling Stockholder, less the
underwriting discount, as set forth on the front cover page of the Prospectus.
In addition to its other obligations under this
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Section 11(a), the Company and each of the Selling Stockholders agree that, as
an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, all as described in this
Section 11(a), it will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's or the Selling Stockholders' obligation to
reimburse each Underwriter for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that the untrue statement or alleged untrue
statement or omission or alleged omission that is the subject of the claim,
action, investigation, inquiry or other proceeding is determined to have been
made in reliance upon and in conformity with information furnished to the
Company pursuant to Section 4 hereof, each Underwriter shall promptly return
such interim reimbursement to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by Bank of America NT&SA, San Francisco, California (the "Prime Rate"). Any
such interim reimbursement payments which are not made to an Underwriter within
30 days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. No Selling Stockholder shall be required to
provide indemnification hereunder until the Underwriter or controlling person
seeking indemnification shall have first made written demand for payment on the
Company with respect to any such loss, claim, damage, liability or expense and
the Company shall have either rejected such demand or failed to make such
requested payment within sixty (60) days after receipt thereof. In the event
the Company rejects any such demand or fails to make any such requested
payment, the Underwriter or controlling person seeking indemnification agrees
to concurrently make demand for indemnification against all Selling
Stockholders; provided that such Underwriter or controlling person shall have
sole discretion as to whether to take any fur ther action against a Selling
Stockholder and no failure by an Underwriter or controlling person to take
further action against a Selling Stockholder shall prejudice such Underwriter's
or controlling person's rights with respect to other Selling Stockholders.
This indemnity agreement will be in addition to any liability which the Company
or the Selling Stockholders may otherwise have.
(b) Each Underwriter will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who signed
the Registration Statement, the Selling Stockholders, and each person, if any,
who controls the Company or any Selling Stockholder, within the meaning of the
Act, against any losses, claims, damages, liabilities or expenses to which the
Company, or any such director, officer, Selling Stockholder or controlling
person may become subject, under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses,
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claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue 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 arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with the information furnished to the Company pursuant
to Section 4 hereof; and will reimburse the Company, or any such director,
officer, Selling Stockholder or controlling person for any legal and other
expense reasonably incurred by the Company, or any such director, officer,
Selling Stockholder or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. In addition to its other obligations under this
Section 11(b), each Underwriter severally agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(b) which relates to
information furnished to the Company pursuant to Section 4 hereof, it will
reimburse the Company (and, to the extent applicable, each officer, director,
Selling Stockholder or controlling person) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company (and,
to the extent applicable, each officer, director, Selling Stockholder or
controlling person) for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent jurisdiction.
To the extent that the untrue statement or alleged untrue statement or omission
or alleged omission that is the subject of the claim, action, investigation,
inquiry or other proceeding is determined to have been made in reliance upon
and in conformity with information furnished to the Company otherwise than in
reliance upon and in conformity with information pursuant to Section 4 hereof,
the Company (and, to the extent applicable, each officer, director, Selling
Stockholder or controlling person) shall promptly return such interim
reimbursement to the Underwriters together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Company within 30 days of a request for
reimbursement, shall bear interest at the Prime Rate from the date of such
request. 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 11 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party in writing
of the commencement thereof; but the
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omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, 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 a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf
of such indemnified party or parties (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a),
representing the indemnified parties who are parties to such action). Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence or (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action, in each of which cases the fees and expenses of counsel shall be at
the expense of the indemnifying party.
(d) If the indemnification provided for in this Section
11 is required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, the Selling Stockholders and the Underwriters from the offering
of the Common Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, the Selling Stockholders and the
Underwriters in connection with the statements or omissions or inaccuracies in
the representations and warranties herein
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which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The respective relative
benefits received by the Company, the Selling Stockholders and the Underwriters
shall be deemed to be in the same proportion, in the case of the Company and
the Selling Stockholders, as the total price paid to the Company and the
Selling Stockholders, respectively, for the Common Shares sold by them to the
Underwriters (net of underwriting commissions but before deducting expenses)
bears to the total price to the public set forth on the cover of the
Prospectus, and in the case of the Underwriters as the underwriting commissions
received by them bears to the total price to the public set forth on the cover
of the Prospectus. The relative fault of the Company, the Selling Stockholders
and the Underwriters 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 or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company, the Selling Stockholders or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in subparagraph (c) of this Section 11, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in subparagraph (c) of
this Section 11 with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this subparagraph (d);
provided, however, that no additional notice shall be required with respect to
any action for which notice has been given under subparagraph (c) for purposes
of indemnification. The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 11 were determined solely by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 11, no Underwriter shall be
required to contribute any amount in excess of the amount of the total
underwriting commissions received by such Underwriter in connection with the
Common Shares underwritten by it and distributed to the public. 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 pursuant to this Section 11 are several in proportion to their
respective underwriting commitments and not joint.
(e) It is agreed that any controversy arising out of
the operation of the interim reimbursement arrangements set forth in Sections
11(a) and 11(b) hereof, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of the Constitution and Rules of the
Board of Governors of the New York Stock Exchange, Inc. or pursuant to the Code
of Arbitration Procedure of the
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NASD. Any such arbitration must be commenced by service of a written demand
for arbitration or written notice of intention to arbitrate, therein electing
the arbitration tribunal. In the event the party demanding arbitration does
not make such designation of an arbitration tribunal in such demand or notice,
then the party responding to said demand or notice is authorized to do so.
Such an arbitration would be limited to the operation of the interim
reimbursement provisions contained in Sections 11(a) and 11(b) hereof and would
not resolve the ultimate propriety or enforceability of the obligation to
reimburse expenses which is created by the provisions of such Sections 11(a)
and 11(b) hereof.
SECTION 12. Default of Underwriters. It shall be a condition
to this Agreement and the obligation of the Company to sell and deliver the
Common Shares hereunder, and of each Underwriter to purchase the Common Shares
in the manner as described herein, that, except as hereinafter in this
paragraph provided, each of the Underwriters shall purchase and pay for all the
Common Shares agreed to be purchased by such Underwriter hereunder upon tender
to the Representatives of all such shares in accordance with the terms hereof.
If any Underwriter or Underwriters default in their obligations to purchase
Common Shares hereunder on either the First or Second Closing Date and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase on such Closing Date does not exceed
10% of the total number of Common Shares which the Underwriters are obligated
to purchase on such Closing Date, the non-defaulting Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder,
to purchase the Common Shares which such defaulting Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters so
default and the aggregate number of Common Shares with respect to which such
default occurs is more than the above percentage and arrangements satisfactory
to the non-defaulting Underwriters and the Company for the purchase of such
Common Shares by other persons are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders except
for the expenses to be paid by the Company pursuant to Section 7 hereof and
except to the extent provided in Section 11 hereof.
In the event that Common Shares to which a default relates are
to be purchased by the non-defaulting Underwriters or by another party or
parties, the Representatives or the Company shall have the right to postpone
the First or Second Closing Date, as the case may be, for not more than five
business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 13. Effective Date. This Agreement shall become
effective immediately as to Sections 7, 9, 11, 14 and 15 and, as to all other
provisions, (i) if at
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the time of execution of this Agreement the Registration Statement has not
become effective, at 2:00 p.m,., California time, on the first full business
day following the effectiveness of the Registration Statement, or (ii) if at
the time of execution of this Agreement the Registration Statement has been
declared effective, at 2:00 p.m., California time, on the first full business
day following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the
Company or by release of any of the Common Shares for sale to the public. For
the purposes of this Section 12, the Common Shares shall be deemed to have been
so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common Shares for sale to securities dealers, whichever
may occur first.
SECTION 14. Termination. Without limiting the right to
terminate this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by
notice to you and the Selling Stockholders or by you by notice to the Company
and the Selling Stockholders at any time prior to the time this Agreement shall
become effective as to all its provisions, and any such termination shall be
without liability on the part of the Company or the Selling Stockholders to any
Underwriter (except for the expenses to be paid or reimbursed by the Company
and the Selling Stockholders pursuant to Sections 7 and 9 hereof and except to
the extent provided in Section 11 hereof) or of any Underwriter to the Company
(except to the extent provided in Section 11 hereof).
(b) This Agreement may also be terminated by you prior
to the First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof, shall
have been imposed upon trading in securities generally or minimum or maximum
prices shall have been generally established on the New York Stock Exchange or
on the American Stock Exchange or in the over the counter market by the NASD,
or trading in securities generally shall have been suspended on either such
Exchange or in the over the counter market by the NASD, or a general banking
moratorium shall have been established by federal, New York or California
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Underwriters, to affect adversely
the marketability of the Common Shares, (iii) if any adverse event shall have
occurred or shall exist which makes untrue or incorrect in any material respect
any statement or information contained in the Registration Statement or
Prospectus or which is not reflected in the Registration Statement or
Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or (iv)
if there shall be any action, suit or proceeding pending or
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threatened, or there shall have been any development or prospective development
involving particularly the business or properties or securities of the Company
or any of the Subsidiaries or the transactions contemplated by this Agreement,
which, in the reasonable judgment of the Underwriters, may materially and
adversely affect the Company's business or earnings and makes it impracticable
or inadvisable to offer or sell the Common Shares. Any termination pursuant to
this subsection (b) shall be without liability on the part of any Underwriter
to the Company or the Selling Stockholders or on the part of the Company or the
Selling Stockholders to any Underwriter (except for expenses to be paid or
reimbursed by the Company and the Selling Stockholders pursuant to Sections 7
and 9 hereof and except to the extent provided in Section 11 hereof).
SECTION 15. Failure of the Selling Stockholders to Sell and
Deliver. If one or more of the Selling Stockholders shall fail to sell and
deliver to the Underwriters the Common Shares to be sold and delivered by such
Selling Stockholders at the First Closing Date under the terms of this
Agreement, then the Underwriters may at their option, by written notice from
you to the Company and the Selling Stockholders, either (i) terminate this
Agreement without any liability on the part of any Underwriter or, except as
provided in Sections 7, 9 and 11 hereof, the Company or the Selling
Stockholders, or (ii) purchase the shares which the Company and other Selling
Stockholders have agreed to sell and deliver in accordance with the terms
hereof. In the event of a failure by one or more of the Selling Stockholders
to sell and deliver as referred to in this Section, either you or the Company
shall have the right to postpone the Closing Date for a period not exceeding
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected.
SECTION 16. Representations and Indemnities to Survive
Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company and its officers, of the Selling
Stockholders, and of the several Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or the
Selling Stockholders or any of its or their partners, officers or directors or
any controlling person, as the case may be, and will survive delivery of and
payment for the Common Shares sold hereunder and any termination of this
Agreement.
SECTION 17. Notices. All communications hereunder shall be
in writing and, if sent to the Underwriters shall be mailed, delivered or
telegraphed and confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx, with a copy to Howard, Rice,
Nemerovski, Canady, Xxxx & Rabkin, A Professional Corporation, Three
Xxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxxxxx, XX 00000, Attention:
Xxxxxxxx X. Xxxxxx, Esq.; and if sent to the Company shall be mailed, delivered
or telegraphed and confirmed to the Company at 0000 Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X.
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Lebenberg, Esq., Vice President and General Counsel and Secretary, with a copy
to Xxxxxx, Xxxxx & Bockius LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq. The Company or you may change the
address for receipt of communications hereunder by giving notice to the others.
SECTION 18. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto, including any substitute
Underwriters pursuant to Section 12 hereof, and to the benefit of the officers
and directors and controlling persons referred to in Section 11, and in each
case their respective successors, personal representatives and assigns, and no
other person will have any right or obligation hereunder. No such assignment
shall relieve any party of its obligations hereunder. The term "successors"
shall not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 19. Representation of Underwriters. Any action under
or in respect of this Agreement taken by you jointly or by Xxxxxxxxxx
Securities, as your representative, will be binding upon all the Underwriters.
SECTION 20. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 21. Applicable Law. This Agreement shall be governed
by and construed in accordance with the internal laws (and not the laws
pertaining to conflicts of laws) of the State of California.
SECTION 22. General. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
Any person executing and delivering this Agreement as
Attorney-in-fact for the Selling Stockholders represents by so doing that he
has been duly appointed as Attorney-in-fact by such Selling Stockholder
pursuant to a validly existing and binding Power of Attorney which authorizes
such Attorney-in-fact to take such action. Any action taken under this
Agreement by any of the Attorneys-in-fact will be binding on all the Selling
Stockholders.
In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement
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are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and you.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding agreement among the Company, the Selling
Stockholders and the several Underwriters, all in accordance with its terms.
Very truly yours,
F.Y.I. INCORPORATED
By:
-----------------------------------
Xx X. Xxxxxx, Xx.,
President and
Chief Executive Officer
SELLING STOCKHOLDERS
By:
-----------------------------------
Attorney-in-Fact
The foregoing Underwriting
Agreement is hereby confirmed
and accepted by us in San
Francisco, California as of
the date first above written.
XXXXXXXXXX SECURITIES
BEAR XXXXXXX & CO. INC.
XXXXXXX XXXXX & COMPANY, L.L.C.
By XXXXXXXXXX SECURITIES
By:
------------------------------
Managing Director
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SCHEDULE A
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
Xxxxxxxxxx Securities
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
TOTAL
----- ==========
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SCHEDULE B
Number of Firm
Selling Stockholder Shares to be Sold
-----------------
Xxxx Xxxxxxxx 120,000
Xxxxxx X. Xxxxxx 67,590
Xxxxxxxx X. Xxxx 50,000
Xxxxx Xxxxxxxxxx 53,250
Xxxxxx X. Xxxxx 26,600
Xxxx Xxx Xxxxxxxxx 2,479
Xxxxxx Xxxxxxx 15,002
Xxxxxxx X. Xxxxxxx 12,500
Xxxxxx Xxxxxxx 7,950
Xxxxx Xxxxxxxxx 13,628
Xxxxxxxx X. Xxxxxxxx 13,000
G. Xxxxxxx Xxxxxxxxx 13,200
Xxxx Xxxx Xxxxxxxxx 11,000
Fairfield Management, LLC 4,000
Xxxx X. Xxxx 4,376
Xxxxxxx X. XxXxxxx 5,425
TOTAL 420,000
----- ==============
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