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EXHIBIT 1.1
2,625,000 Shares
XXXXXXX TXEN CORPORATION
Common Stock
UNDERWRITING AGREEMENT
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July , 1999
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CIBC World Markets Corp.
Friedman, Billings, Xxxxxx & Co.
The Xxxxxxxx-Xxxxxxxx Company, LLC
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
Xxxxxxx TXEN Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions contained herein, to
sell to you and the other underwriters named on Schedule I to this Agreement
(the "Underwriters"), for whom you are acting as Representatives (the
"Representatives"), an aggregate of 2,625,000 shares (the "Firm Shares") of the
Company's Common Stock, $0.01 par value (the "Common Stock"). The respective
amounts of the Firm Shares to be purchased by each of the several Underwriters
are set forth opposite their names on Schedule I hereto. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 375,000 shares (the "Option Shares") of Common Stock from it for the
purpose of covering over-allotments in connection with the sale of the Firm
Shares. The Firm Shares and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a
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price of $_____ per share (the "Initial Price"), the number of Firm
Shares set forth opposite the name of such Underwriter under the
column "Number of Firm Shares to be Purchased from the Company" on
Schedule I to this Agreement, subject to adjustment in accordance
with Section 11 hereof.
(b) The Company grants to the several Underwriters an option
to purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted
by the Representatives to eliminate fractions) of the total number of
Option Shares to be purchased by the Underwriters as such Underwriter
is purchasing of the Firm Shares. Such option may be exercised only
to cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on
or before 12:00 noon, New York City time, on the business day before
the Firm Shares Closing Date (as defined below), and from time to
time thereafter within 30 days after the date of this Agreement, in
each case upon written, facsimile or telegraphic notice, or verbal or
telephonic notice confirmed by written, facsimile or telegraphic
notice, by the Representatives to the Company no later than 12:00
noon, New York City time, on the business day before the Firm Shares
Closing Date or at least two business days before the Option Shares
Closing Date (as defined below), as the case may be, setting forth
the number of Option Shares to be purchased and the time and date (if
other than the Firm Shares Closing Date) of such purchase.
2. Delivery and Payment. Delivery by the Company of the Firm
Shares to the Representatives for the respective accounts of the Underwriters,
and payment of the purchase price by certified or official bank check or checks
payable in New York Clearing House (same day) funds drawn to the order of the
Company for the shares purchased from the Company, against delivery of the
respective certificates therefor to the Representatives, shall take place at the
offices of CIBC World Markets Corp., at CIBC World Markets Tower, World
Financial Center, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time,
on the third business day following the date of this Agreement, or at such time
on such other date, not later than 10 business days after the date of this
Agreement, as shall be agreed upon by the Company and the Representatives (such
time and date of delivery and payment are called the "Firm Shares Closing
Date").
In the event the option with respect to the Option Shares is
exercised in whole or in part on one or more occasions, delivery by the Company
of the Option Shares to the Representatives for the respective accounts of the
Underwriters and payment of the purchase price thereof in immediately available
funds by wire transfer or by certified or official bank check or checks payable
in New York Clearing House (same day) funds to the Company shall take place at
the offices of CIBC World Markets Corp. specified above at the time and on the
date (which may be the same date as, but in no event shall be earlier than, the
Firm Shares Closing Date) specified in the notice referred to in Section 1(b)
(such time and date of delivery and payment are called the "Option Shares
Closing Date"). The Firm Shares Closing Date and the Option Shares
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Closing Date are called, individually, a "Closing Date" and, together, the
"Closing Dates."
Certificates evidencing the Shares shall be registered in such
names and shall be in such denominations as the Representatives shall request at
least two full business days before the Firm Shares Closing Date or, in the case
of Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
3. Registration Statement and Prospectus; Public Offering. The
Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a Registration Statement (as hereinafter
defined) on Form S-1 (No. 333-71031), including a preliminary prospectus
relating to the Shares, and such amendments thereof as may have been required to
the date of this Agreement. Copies of such Registration Statement (including all
amendments thereof) and of the related Preliminary Prospectus (as hereinafter
defined) have heretofore been delivered by the Company to you. The term
"Preliminary Prospectus" means any preliminary prospectus (as described in Rule
430 of the Rules) included at any time as a part of the Registration Statement
or filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules. The term "Registration
Statement" as used in this Agreement means the initial registration statement
(including all exhibits, financial schedules and information deemed to be a part
of the Registration Statement through incorporation by reference or otherwise),
as amended at the time and on the date it becomes effective (the "Effective
Date") and as thereafter amended by post effective amendments. If the Company
has filed an abbreviated registration statement to register additional Shares
pursuant to Rule 462(b) under the Rules (the "462(b) Registration Statement")
then any reference herein to the Registration Statement shall also be deemed to
include such 462(b) Registration Statement. The term "Prospectus" as used in
this Agreement means the prospectus in the form included in the Registration
Statement at the time of effectiveness or, if Rule 430A of the Rules is relied
on, the term Prospectus shall also include the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules.
The Company understands that the Underwriters propose to make
a public offering of the Shares, as set forth in and pursuant to the Prospectus,
as soon after the Effective Date and the date of this Agreement as the
Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement
complied, and on the
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date of the Prospectus, the date any post-effective amendment to the
Registration Statement becomes effective, the date any supplement or
amendment to the Prospectus is filed with the Commission and each
Closing Date, the Registration Statement and the Prospectus (and any
amendment thereof or supplement thereto) will comply, in all material
respects, with the applicable provisions of the Securities Act and
the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder. The Registration Statement did not, as of the Effective
Date, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and on the other
dates referred to above neither the Registration Statement nor the
Prospectus, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether
filed as part of the Registration Statement or any amendment thereto
or pursuant to Rule 424(a) of the Rules) and when any amendment
thereof or supplement thereto was first filed with the Commission,
such preliminary prospectus as amended or supplemented complied in
all material respects with the applicable provisions of the
Securities Act and the Rules and did not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading. Notwithstanding the foregoing, none of the
representations and warranties in this paragraph 4(a) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon, and in conformity with, information
herein or otherwise furnished in writing by the Representatives on
behalf of the several Underwriters for use in the Registration
Statement or the Prospectus. With respect to the preceding sentence,
the Company acknowledges that the only information furnished in
writing by the Representatives on behalf of the several Underwriters
for use in the Registration Statement or the Prospectus is the
statements contained under the caption "Underwriting" in the
Prospectus.
(b) The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or are threatened
under the Securities Act; any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules has been
or will be made in the manner and within the time period required by
such Rule 424(b).
(c) The financial statements of the Company (including all
notes and schedules thereto) included in the Registration Statement
and Prospectus present fairly the financial position, the results of
operations, the statements of cash flows and the statements of
stockholders' equity and the other information purported to be shown
therein of the Company at the respective dates and for the respective
periods to which they apply; and such financial statements and
related schedules and notes have been
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prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of the results for such
periods have been made. The summary and selected financial data
included in the Prospectus present fairly the information shown
therein as at the respective dates and for the respective periods
specified and the summary and selected financial data have been
presented on a basis consistent with the consolidated financial
statements so set forth in the Prospectus and other financial
information.
(d) Ernst & Young LLP, whose reports are filed with the
Commission as a part of the Registration Statement, are and, during
the periods covered by their reports, were independent public
accountants as required by the Securities Act and the Rules.
(e) The Company and each of the Subsidiaries (as hereinafter
defined) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation. The Company and each such subsidiary or other entity
controlled directly or indirectly by the Company (collectively,
"Subsidiaries") is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted by it or location of the assets or
properties owned, leased or licensed by it requires such
qualification, except for such jurisdictions where the failure to so
qualify would not, individually or in the aggregate, have a material
adverse effect on the assets or properties, business, results of
operations or financial condition of the Company (a "Material Adverse
Effect"). The Company does not own, lease or license any asset or
property or conduct any business outside the United States of
America. The Company and each of its Subsidiaries has all requisite
corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of
and from all governmental or regulatory bodies or any other person or
entity (collectively, the "Permits"), to own, lease and license its
assets and properties and conduct its business, all of which are
valid and in full force and effect, as described in the Registration
Statement and the Prospectus, except where the lack of such Permits
would not have a Material Adverse Effect; the Company and each of its
Subsidiaries has fulfilled and performed in all material respects all
its material obligations with respect to such Permits and no event
has occurred that allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the Company thereunder. Except
as may be required under the Securities Act and state and foreign
Blue Sky laws, no other Permits are required to enter into, deliver
and perform this Agreement and to issue and sell the Shares.
(f) Each of the Company and its Subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, patents, licenses, know-how and other similar rights
and proprietary knowledge (collectively, "Intangibles") necessary for
the conduct of its business. Other than as set forth in the
Registration Statement and the Prospectus, neither the Company nor
any of its Subsidiaries has received any notice of, or is aware of,
any infringement of or conflict with asserted rights of others with
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respect to any Intangibles.
(g) The Company and each of its Subsidiaries has good and
marketable title in fee simple to all items of real property and good
and marketable title to all personal property described in the
Prospectuses as being owned by it and any real property and buildings
described in the Prospectuses as being held under lease by the
Company and each of its Subsidiaries is held by it under valid,
existing and enforceable leases, free and clear of all liens,
encumbrances, claims, security interests and defects, except such as
are described in the Registration Statement and the Prospectus or
would not have a Material Adverse Effect.
(h) There are no litigation or governmental proceedings to
which the Company or its Subsidiaries is subject or which is pending
or, to the knowledge of the Company, threatened, against the Company
or any of its Subsidiaries, which might have a Material Adverse
Effect, affect the consummation of this Agreement or which is
required to be disclosed in the Registration Statement and the
Prospectus that is not so disclosed.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (a) there has not been any material adverse change
with regard to the assets or properties, business, results of
operations or financial condition of the Company; (b) neither the
Company nor its Subsidiaries has sustained any loss or interference
with its assets, businesses or properties (whether owned or leased)
from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree which would
have a Material Adverse Effect; and (c) since the date of the latest
balance sheet included in the Registration Statement and the
Prospectus, except as reflected therein, neither the Company nor its
Subsidiaries has (i) issued any securities or incurred any liability
or obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of
business, (ii) entered into any transaction not in the ordinary
course of business or (iii) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire
any shares of its stock.
(j) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required by the Securities Act or
Rules. Each description of a contract, document or other agreement in
the Registration Statement and the Prospectus accurately reflects in
all respects the terms of the underlying document, contract or
agreement. Each agreement described in the Registration Statement and
Prospectus or listed in the Exhibits to the Registration Statement is
in full force and effect and is valid and enforceable by and against
the Company or a Subsidiary, as the case may be, in accordance with
its terms. Neither the Company nor a Subsidiary, if the Subsidiary is
a party, nor to the Company's
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knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any
such agreement, and no event has occurred which with notice or lapse
of time or both would constitute such a default, in any such case
which default or event would have a Material Adverse Effect. No
default exists, and no event has occurred which with notice or lapse
of time or both would constitute a default, in the due performance
and observance of any term, covenant or condition, by the Company or
a Subsidiary, if the Subsidiary is a party thereto, of any other
agreement or instrument to which the Company or a Subsidiary is a
party or by which the Company, the Subsidiary or their properties or
business may be bound or affected which default or event would have a
Material Adverse Effect.
(k) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its charter or by-laws or of
any franchise, license, permit, judgment, decree, order, statute,
rule or regulation, where the consequences of such violation would
have a Material Adverse Effect.
(l) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due
under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or
require any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or
assets of the Company or any Subsidiary pursuant to the terms of, any
indenture, mortgage, deed of trust or other agreement or instrument
to which the Company or any Subsidiary is a party or by which either
the Company or any Subsidiary or any of their properties or
businesses is bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company
or any Subsidiary or violate any provision of the charter or by-laws
of the Company or any Subsidiary, except for such consents or waivers
which have already been obtained and are in full force and effect.
(m) The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Prospectus.
The certificates evidencing the Shares are in due and proper legal
form and have been duly authorized for issuance by the Company. All
of the issued and outstanding shares of Common Stock have been duly
and validly issued and are fully paid and nonassessable. There are no
statutory preemptive or other similar rights to subscribe for or to
purchase or acquire any shares of Common Stock of the Company or its
Subsidiaries or any such rights pursuant to its Certificate of
Incorporation or by-laws or any agreement or instrument to or by
which the Company or any of its Subsidiaries is a party or bound. The
Shares, when issued and sold pursuant to this Agreement, will be duly
and validly issued, fully paid and nonassessable and none of them
will be issued in violation of any preemptive or other similar right.
Except as disclosed in the Registration Statement and the Prospectus,
there is no outstanding option, warrant or other right calling for
the issuance of, and
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there is no commitment, plan or arrangement to issue, any share of
stock of the Company or its Subsidiaries or any security convertible
into, or exercisable or exchangeable for, such stock. The Common
Stock and the Shares conform in all material respects to all
statements in relation thereto contained in the Registration
Statement and the Prospectus. All outstanding shares of capital stock
of each Subsidiary have been duly authorized and validly issued, and
are fully paid and nonassessable and are owned directly by the
Company or by another wholly-owned subsidiary of the Company free and
clear of any security interests, liens, encumbrances, equities or
claims, other than those described in the Prospectus.
(n) No holder of any security of the Company has the right to
have any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such
holder during the period ending 180 days after the date of this
Agreement. Each stockholder, director and executive officer of the
Company, Xxxxxxx Research Corporation ("Parent") and each executive
officer and director of Parent has delivered to the Representatives
his enforceable written lock-up agreement in the form attached to
this Agreement ("Lock-Up Agreement").
(o) All necessary corporate action has been duly and validly
taken by the Company and the Parent to authorize the execution,
delivery and performance of this Agreement and the issuance and sale
of the Shares. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitute and will
constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective
terms, except (i) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles and (ii) to the extent that rights to
indemnity or contribution under this Agreement may be limited by
Federal and state securities laws or the public policy underlying
such laws.
(p) The Company or any of its Subsidiaries are is not involved
in any labor dispute nor, to the knowledge of the Company, is any
such dispute threatened, which dispute would have a Material Adverse
Effect. The Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or
contractors which would have a Material Adverse Effect. The Company
is not aware of any threatened or pending litigation between the
Company or its Subsidiaries and any of its officers which, if
adversely determined, could have a Material Adverse Effect and has no
reason to believe that such officers will not remain in the
employment of the Company.
(q) No transaction has occurred between or among (i) the
Company and (ii) the Parent, any affiliate of the Company or Parent
and any of the Company's officers or directors or any affiliate or
affiliates of any such officer or director that is required to be
described in and is not described in the Registration Statement and
the Prospectus.
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(r) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Stock to facilitate the sale
or resale of any of the Shares.
(s) The Company and its Subsidiaries has filed all Federal,
state, local and foreign tax returns which are required to be filed
through the date hereof, or has received extensions thereof, and has
paid all taxes shown on such returns and all assessments received by
it to the extent that the same are material and have become due, and
there are no tax audits or investigations pending, which if adversely
determined would have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company and
any of its Subsidiaries.
(t) The Shares have been duly authorized for quotation on
Nasdaq National Market, subject to official Notice of Issuance, and a
registration statement has been filed on Form 8-A pursuant to Section
12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which registration statement complies in all material respects
with the Exchange Act.
(u) The Company has complied with all of the requirements and
filed the required forms as specified in Florida Statutes Section
517.075.
(v) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results
of operations of, the Company and its Subsidiaries. The Company and
each of its Subsidiaries 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 authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in accordance with
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(w) The Company and its Subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the transactions
described in the Prospectus; and neither the Company nor any
Subsidiary of the Company has reason to believe that it will not be
able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not
have a Material Adverse Effect. Neither the Company nor any
Subsidiary has been denied any insurance coverage which it has sought
or for which it has applied.
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(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative
or other governmental body necessary in connection with the execution
and delivery by the Company of this Agreement and the consummation of
the transactions herein contemplated required to be obtained or
performed by the Company (except such additional steps as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or may be necessary to qualify the Shares for public offering
by the Underwriters under the state securities or Blue Sky laws) has
been obtained or made and is in full force and effect.
(y) There are no affiliations or associations with the NASD
among the Company, the Company's officers or directors or the Parent,
except as set forth in the Registration Statement or otherwise
disclosed in writing to the Representatives of the Underwriters.
(z) (i) Each of the Company and its Subsidiaries is in
compliance in all material respects with all rules, laws and
regulation relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment
("Environmental Law") which are applicable to its business; (ii) none
of the Company or its Subsidiaries has received any notice from any
governmental authority or third party of an asserted claim under
Environmental Laws; (iii) each of the Company and its Subsidiaries
has received all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its business and is in
compliance with all terms and conditions of any such permit, license
or approval; (iv) to the Company's knowledge, no facts currently
exist that will require the Company or its Subsidiaries to make
future material capital expenditures to comply with Environmental
Laws; and (v) no property which is or has been owned, leased or
occupied by the Company or its Subsidiaries has been designated as a
Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section
9601, et. seq.) or otherwise designated as a contaminated site under
applicable state or local law.
(aa) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds
thereof as described in the Prospectus, will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(bb) Other than as set forth in the Prospectus, the Company's
information technology, which includes, without limitation, its
internal systems, software, hardware and the network connections it
maintains, is Year 2000 Compliant. To the knowledge of the Company,
the information technology of the Company's suppliers, customers,
sub-contractors, payment clearing houses and payors with whom it
electronically interacts, are Year 2000 Compliant, other than
non-compliance which, individually or in the aggregate, would not
have a Material Adverse Effect. "Year 2000 Compliant" means the
information technology is designed to be used prior to, during and
after the calendar Year 2000, and the information technology used
during each such time period will accurately receive,
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provide and process date/time data (including, but not limited to,
calculating, comparing and sequencing) from, into and between the
20th and 21st centuries, including the years 1999 and 2000, and
leap-year calculations and will not malfunction, cease to function,
or provide invalid or incorrect results as a result of date/time
data. The Company has conducted surveys of its managed care clients,
physician practice management clients, suppliers, sub-contractors,
payment clearing houses and payors with whom it electronically
interacts regarding Year 2000 compliance.
(cc) Neither the Company, its Subsidiaries nor any other
person associated with or acting on behalf of the Company or its
Subsidiaries including, without limitation, any director, officer,
agent or employee of the Company or its Subsidiaries has, directly or
indirectly, while acting on behalf of the Company or its Subsidiaries
(i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political
activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended;
or (iv) made any other unlawful payment.
(dd) The Company and each of its Subsidiaries have operated
and currently operate their business in conformity with all
applicable laws, rules and regulations of each jurisdiction in which
it is conducting business, including all state and federal health
care laws, except where the failure to so be in compliance would not
reasonably be expected to have a Material Adverse Effect.
(ee) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable
event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would have
any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
5 Conditions of the Underwriters' Obligations. The
obligations of the Underwriters under this Agreement are several and not joint.
The respective obligations of the Underwriters to purchase the Shares are
subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a) of this Agreement.
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(b) No order preventing or suspending the use of any
preliminary prospectus or the Prospectus shall have been or shall be
in effect and no order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the Commission, and
any requests for additional information on the part of the Commission
(to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Commission and the Representatives.
(c) The representations and warranties of the Company
contained in this Agreement and in the certificates delivered
pursuant to Section 5(d) shall be true and correct when made and on
and as of each Closing Date as if made on such date and the Company
shall have performed all covenants and agreements and satisfied all
the conditions contained in this Agreement required to be performed
or satisfied by it at or before such Closing Date.
(d) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives and dated such
Closing Date, of the chief executive or chief operating officer and
the chief financial officer or chief accounting officer of the
Company to the effect that (i) the signers of such certificate have
carefully examined the Registration Statement, the Prospectus and
this Agreement and that the representations and warranties of the
Company in this Agreement are true and correct on and as of such
Closing Date with the same effect as if made on such Closing Date and
the Company has performed all covenants and agreements and satisfied
all conditions contained in this Agreement required to be performed
or satisfied by it at or prior to such Closing Date, and (ii) no stop
order suspending the effectiveness of the Registration Statement has
been issued and to the best of their knowledge, no proceedings for
that purpose have been instituted or are pending under the Securities
Act.
(e) [Intentionally Blank]
(f) The Representatives shall have received on the Effective
Date, at the time this Agreement is executed and on each Closing Date
a signed letter from Ernst & Young LLP addressed to the
Representatives and dated, respectively, the Effective Date, the date
of this Agreement and each such Closing Date, in form and substance
reasonably satisfactory to the Representatives, confirming that they
are independent accountants within the meaning of the Securities Act
and the Rules, that the response to Item 10 of the Registration
Statement is correct insofar as it relates to them and stating in
effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Registration
Statement and the Prospectus and reported on by them comply as
to form in all material respects with the applicable
accounting requirements of the Securities Act and the Rules;
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(ii) on the basis of a reading of the amounts included
in the Registration Statement and the Prospectus under the
headings "Summary Financial Information" and "Selected
Financial Data," carrying out certain procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter, a reading of the minutes of the meetings of the
stockholders and directors of the Company, and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters of the Company as to
transactions and events subsequent to the date of the latest
audited financial statements, except as disclosed in the
Registration Statement and the Prospectus, nothing came to
their attention which caused them to believe that:
(A) the amounts in "Summary Financial
Information," and "Selected Financial Data" included in
the Registration Statement and the Prospectus do not
agree with the corresponding amounts in the audited and
unaudited financial statements from which such amounts
were derived; or
(B) with respect to the Company, there were, at
a specified date not more than five business days prior
to the date of the letter, any increases in the current
liabilities and long-term liabilities of the Company or
any decreases in net income or in working capital or
the stockholders' equity in the Company, as compared
with the amounts shown on the Company's audited balance
sheet for the fiscal year ended 1998 and the nine
months ended May 31, 1999 included in the Registration
Statement; and
(iii) they have performed certain other procedures as
may be permitted under Generally Acceptable Auditing Standards
as a result of which they determined that certain information
of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information
derived from the general accounting records of the Company)
set forth in the Registration Statement and the Prospectus and
reasonably specified by the Representatives agrees with the
accounting records of the Company.
(iv) based upon the procedures set forth in clauses
(ii) and (iii) above and a reading of the amounts included in
the Registration Statement under the headings "Summary
Financial and Other Data" and "Selected Financial Data"
included in the Registration Statement and Prospectus and a
reading of the financial statements from which certain of such
data were derived, nothing has come to their attention that
gives them reason to believe that the "Summary Financial and
Other Data" and "Selected Financial Data" included in the
Registration Statement and Prospectus do not comply as to the
form in all material respects with the applicable accounting
requirements of the Securities
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Act and the Rules or that the information set forth therein is
not fairly stated in relation to the financial statements
included in the Registration Statement or Prospectus from
which certain of such data were derived are not in conformity
with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited
financial statements included in the Registration Statement
and Prospectus.
References to the Registration Statement and the
Prospectus in this paragraph (f) are to such documents as
amended and supplemented at the date of the letter.
(g) The Representatives shall have received on each Closing
Date from Xxxxxx Xxxx Xxxxxx & Xxxxx, P.C., counsel for the Company,
an opinion, addressed to the Representatives and dated such Closing
Date, and stating in effect that:
(i) Each of the Company and its Subsidiaries has been
duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and its Subsidiaries is
duly qualified and in good standing as a foreign corporation
in each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature
of its businesses makes such qualification necessary, except
for such jurisdictions where the failure to so qualify would
not have a Material Adverse Effect.
(ii) Each of the Company and its Subsidiaries has all
requisite corporate power and authority to own, lease and
license its assets and properties and conduct its business as
now being conducted and as described in the Registration
Statement and the Prospectus and, with respect to the Company,
to enter into, deliver and perform this Agreement and to issue
and sell the Shares other than those required under the
Securities Act and state and foreign Blue Sky laws.
(iii) The Company has authorized and issued capital
stock as set forth in the Registration Statement and the
Prospectus under the caption "Capitalization"; the
certificates evidencing the Shares are in due and proper legal
form and have been duly authorized for issuance by the
Company; all of the outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued and
are fully paid and nonassessable and none of them was issued
in violation of any preemptive or other similar right. The
Shares when issued and sold pursuant to this Agreement will be
duly and validly issued, outstanding, fully paid and
nonassessable and none of them will have been issued in
violation of any preemptive or other similar right. To the
best of such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, there are no
preemptive rights or any restriction upon the voting or
transfer of any securities of the Company pursuant to the
Company's
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Certificate of Incorporation or by-laws or other governing
documents or any other instrument to which the Company is a
party or by which it may be bound. To the best of such
counsel's knowledge, except as disclosed in the Registration
Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of stock
of the Company or any security convertible into, exercisable
for, or exchangeable for stock of the Company. The Common
Stock and the Shares conform in all material respects to the
descriptions thereof contained in the Registration Statement
and the Prospectus. The issued and outstanding shares of
capital stock of each of the Company's Subsidiaries have been
duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company or by another
wholly owned subsidiary of the Company, free and clear of any
perfected security interest or, to the knowledge of such
counsel, any other security interests, liens, encumbrances,
equities or claims, other than those contained in the
Registration Statement and the Prospectus.
(iv) Each of the Lock-Up Agreements executed by the
Company's directors and officers, the Parent and the executive
directors and officers of Parent has been duly and validly
delivered by such persons and constitutes the legal, valid and
binding obligation of each such person enforceable against
each such person in accordance with its terms, except as the
enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(v) All necessary corporate action has been duly and
validly taken by the Company and the Parent to authorize the
execution, delivery and performance of this Agreement and the
issuance and sale of the Shares. This Agreement has been duly
and validly authorized, executed and delivered by the Company
and this Agreement constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in
accordance with their respective terms except (A) as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and
by general equitable principles and (B) to the extent that
rights to indemnity or contribution under this Agreement may
be limited by Federal or state securities laws or the public
policy underlying such laws.
(vi) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of
the transactions contemplated hereby (including, without
limitation, the issuance and sale by the Company of the
Shares) will give rise to a right to terminate or accelerate
the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or
constitute a default (or any event which with notice
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or lapse of time, or both, would constitute a default) under,
or require consent or waiver under, or result in the execution
or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any Subsidiary pursuant
to the terms of any indenture, mortgage, deed trust, note or
other agreement or instrument of which such counsel is aware
and to which the Company or any Subsidiary is a party or by
which either the Company or any Subsidiary or any of their
properties or businesses is bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation
of which such counsel is aware or violate any provision of the
charter or by-laws of the Company or any Subsidiary.
(vii) To the best of such counsel's knowledge, no
default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, in the due
performance and observance of any term, covenant or condition
by the Company of any indenture, mortgage, deed of trust, note
or any other agreement or instrument to which the Company is a
party or by which it or any of its assets or properties or
businesses may be bound or affected, where the consequences of
such default would have a Material Adverse Effect.
(viii) To the best of such counsel's knowledge, the
Company and its Subsidiaries are not in violation of any term
or provision of its charter or by-laws or any franchise,
license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation would
have a Material Adverse Effect.
(ix) No consent, approval, authorization or order of
any court or governmental agency or regulatory body is
required for the execution, delivery or performance of this
Agreement by the Company or the consummation of the
transactions contemplated hereby or thereby, except such as
have been obtained under the Securities Act and such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
several Underwriters.
(x) Other than as set forth in the Registration
Statement and the Prospectus, to the best of such counsel's
knowledge, there is no litigation or governmental or other
proceeding or investigation, before any court or before or by
any public body or board pending or threatened against, or
involving the assets, properties or businesses of, the Company
which would have a Material Adverse Effect.
(xi) The statements in the Prospectus under the
captions "Description of Capital Stock," "Liquidity and
Capital Resources," "Risk Factors-If Customers Terminate or
Modify Existing Contracts, It Could Adversely Affect Our
Earnings," "Shares Eligible for Future Sale,"
"Management-Director
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Compensation," "Management-Employment Agreements,"
"Management-Employee Benefit Plans," and "Relationships and
Related Transactions," insofar as such statements constitute a
summary of documents referred to therein or matters of law,
are fair summaries in all material respects and accurately
present the information called for with respect to such
documents and matters. Accurate copies of all contracts and
other documents required to be filed as exhibits to, or
described in, the Registration Statement have been so filed
with the Commission or are fairly described in the
Registration Statement, as the case may be.
(xii) The Registration Statement, all preliminary
prospectuses and the Prospectus and each amendment or
supplement thereto (except for the financial statements and
schedules and other financial and statistical data included
therein, as to which such counsel expresses no opinion) comply
as to form in all material respects with the requirements of
the Securities Act and the Rules.
(xiii) The Registration Statement is effective under
the Securities Act, and no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are threatened, pending or contemplated. Any required filing
of the Prospectus and any supplement thereto pursuant to Rule
424(b) under the Securities Act has been made in the manner
and within the time period required by such Rule 424(b).
(xiv) The Shares have been approved for listing on the
Nasdaq National Market.
(xv) The capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock."
(xvi) The Company is not an "investment company" or an
entity controlled by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
(xvii) The agreements to which the Company or any of
the Subsidiaries is a party described in the Registration
Statement and Prospectus are valid agreements, enforceable by
the Company and the Subsidiaries (as applicable), except as
the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(xviii)(A) Each of the Company and its Subsidiaries is
in compliance in all material respects with any and all
applicable Environmental Laws; (B) none of the Company or its
Subsidiaries has received any notice from any governmental
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authority or third party of an asserted claim under any
Environmental Law; (C) each of the Company and its
Subsidiaries has received all permits, licenses or other
approvals required of it under applicable Environmental Laws
to conduct its business and is in compliance with all terms
and conditions of any such permit, license or approval, except
where such failure to receive required permits, licenses or
other approvals or failure to comply with the terms and
conditions of such permits, licenses or other approvals would
not, singly or in the aggregate, have a Material Adverse
Effect; and (D) no property which is or has been owned, leased
or occupied by the Company or its Subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation of Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.), or otherwise
designated as a contaminated site under applicable state or
local law.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of Alabama, the General Corporation Law of the State of Delaware and
the Federal laws of the United States; provided that such counsel shall state
that in their opinion the Underwriters and they are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished to the Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except as
specified in the foregoing opinion), on the basis of the foregoing, no facts
have come to the attention of such counsel which lead such counsel to believe
that the Registration Statement at the time it became effective (except with
respect to the financial statements and notes and schedules thereto and other
financial data, as to which such counsel need express no belief) contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus as amended or supplemented (except with respect to the
financial statements, notes and schedules thereto and other financial data, as
to which such counsel need make no statement) on the date thereof contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives,
and their counsel and the Underwriters shall have received from
Xxxxxx & Bird LLP a favorable opinion, addressed to the
Representatives and dated such Closing Date, with respect to the
Shares, the Registration Statement and
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the Prospectus, and such other related matters, as the
Representatives may reasonably request, and the Company shall have
furnished to Xxxxxx & Bird LLP such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters.
(i) If the Shares have been qualified for sale in Florida, the
Representatives shall have received on each Closing Date
certificates, addressed to the Representatives, and dated such
Closing Date, of an executive officer of the Company, to the effect
that the signer of such certificate has reviewed and understands the
provisions of Section 517.075 of the Florida Statutes, and represents
that the Company has complied, and at all times will comply, with all
provisions of Section 517.075 and further, that as of such Closing
Date, neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located
in Cuba.
(j) The Representatives shall have received copies of the
Lock-up Agreements executed by each entity or person described in
Section 4(n).
(k) The Company and the Parent shall have furnished or caused
to be furnished to the Representatives such further certificates or
documents as the Representatives shall have reasonably requested.
6. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company shall prepare the Prospectus in a form
approved by the Representatives and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later
than the Commission's close of business on the second business
day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the
Representatives in writing (i) when any amendment to the
Registration Statement shall have become effective, (ii) of
any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional
information, (iii) of the prevention or suspension of the use
of any preliminary prospectus or the Prospectus or of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution
or threatening of any proceeding for that purpose and (iv) of
the receipt by the Company of any notification with respect to
the suspension of the qualification of the Shares for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company shall not file any
amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished the
Representatives a copy for its review prior to filing and
shall not
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file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its
best efforts to prevent the issuance of any such stop order
and, if issued, to obtain as soon as possible the withdrawal
thereof.
(iii) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act
and the Rules, any event occurs as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Securities Act or the Rules,
the Company promptly shall prepare and file with the
Commission, subject to the second sentence of paragraph (ii)
of this Section 7(a), an amendment or supplement which shall
correct such statement or omission or an amendment which shall
effect such compliance.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90 days
if such 12-month period coincides with the Company's fiscal
year), an earning statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy
the provisions of Section 11(a) of the Securities Act or Rule
158 of the Rules.
(v) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including all exhibits
thereto and amendments thereof) and to each other Underwriter
a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by
the Securities Act or the Rules, as many copies of any
preliminary prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may
reasonably request.
(vi) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify
the Shares for offer and sale in connection with the offering
under the laws of such jurisdictions as the Representatives
may designate and shall maintain such qualifications in effect
so long as required for the distribution of the Shares;
provided, however, that the Company shall not be required in
connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service
of process in any jurisdiction or subject itself to taxation
as doing business in any jurisdiction.
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(vii) For a period of five years after the date of
this Agreement, the Company shall supply to the
Representatives, and to each other Underwriter who may so
request in writing, copies of such financial statements and
other periodic and special reports as the Company may from
time to time distribute generally to the holders of any class
of its capital stock and to furnish to the Representatives a
copy of each annual or other report it shall be required to
file with the Commission (including the Report on Form SR
required by Rule 463 of the Rules).
(viii) Without the prior written consent of CIBC World
Markets Corp., for a period of 180 days after the date of this
Agreement, the Company and each of its individual directors
and executive officers shall not issue, sell or register with
the Commission (other than on Form S-8 or on any successor
form), or otherwise dispose of, directly or indirectly, any
equity securities of the Company (or any securities
convertible into, exercisable for or exchangeable for equity
securities of the Company), except for the issuance of the
Shares pursuant to the Registration Statement and the issuance
of shares pursuant to the Company's existing stock option plan
or bonus plan as described in the Registration Statement and
the Prospectus. In the event that during this period, (i) any
shares are issued pursuant to the Company's existing stock
option plan or bonus plan that are exercisable during such 180
day period or (ii) any registration is effected on Form S-8 or
on any successor form relating to shares that are exercisable
during such 180 period, the Company shall obtain the written
agreement of such grantee or purchaser or holder of such
registered securities that, for a period of 180 days after the
date of this Agreement, such person will not, without the
prior written consent of CIBC World Markets Corp., offer for
sale, sell, distribute, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, or exercise any
registration rights with respect to, any shares of Common
Stock (or any securities convertible into, exercisable for, or
exchangeable for any shares of Common Stock) owned by such
person.
(ix) On or before completion of this offering, the
Company shall make all filings required under applicable
securities laws and by the Nasdaq National Market (including
any required registration under the Exchange Act).
(x) The Company shall file timely and accurate
reports in accordance with the provisions of Florida Statutes
Section 517.05, or any successor provision, and any regulation
promulgated thereunder, if at any time after the Effective
Date, the Company or any of its affiliates commences engaging
in business with the government of Cuba or any person or
affiliate located in Cuba.
(xi) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
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(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and
expenses incident to the public offering of the Shares and the
performance of the obligations of the Company under this Agreement
including those relating to: (i) the preparation, printing, filing
and distribution of the Registration Statement including all exhibits
thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus, and
the printing, filing and distribution of this Agreement; (ii) the
preparation and delivery of certificates for the Shares to the
Underwriters; (iii) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the
various jurisdictions referred to in Section 7(a)(vi), including the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such registration and qualification and the
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including
costs of shipping and mailing) to the Representatives and to the
Underwriters of copies of each preliminary prospectus, the Prospectus
and all amendments or supplements to the Prospectus, and of the
several documents required by this Section to be so furnished, as may
be reasonably requested for use in connection with the offering and
sale of the Shares by the Underwriters or by dealers to whom Shares
may be sold; (v) the filing fees of the NASD in connection with its
review of the terms of the public offering and reasonable fees and
disbursements of counsel for the Underwriters in connection with such
review; (vi) the furnishing (including costs of shipping and mailing)
to the Representatives and to the Underwriters of copies of all
reports and information required by Section 6(a)(vii); (vii)
inclusion of the Shares for quotation on the Nasdaq National Market;
and (viii) all transfer taxes, if any, with respect to the sale and
delivery of the Shares by the Company to the Underwriters. Subject to
the provisions of Section 9, the Underwriters agree to pay, whether
or not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Underwriters under this
Agreement not payable by the Company pursuant to the preceding
sentence, including, without limitation, the fees and disbursements
of counsel for the Underwriters.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other Federal
or state law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities arise out of or are based
upon (i) any untrue statement or alleged
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untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto, or arise out of or are based
upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) in whole or in part upon any
breach of the representations and warranties set forth in Section 4
hereof, or (iii) in whole or in part upon any failure of the Company
to perform any of its obligations hereunder or under law; provided,
however, that such indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on account
of any losses, claims, damages or liabilities arising from the sale
of the Shares to any person by such Underwriter if such untrue
statement or omission or alleged untrue statement or omission was
made in such preliminary prospectus, the Registration Statement or
the Prospectus, or such amendment or supplement, in reliance upon and
in conformity with information furnished in writing to the Company by
the Representatives on behalf of any Underwriter specifically for use
therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each director of
the Company, and each officer of the Company who signs the
Registration Statement, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only insofar as such
losses, claims, damages or liabilities arise out of or are based upon
any untrue statement or omission or alleged untrue statement or
omission which was made in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, contained in the last paragraph of the cover page
and the statements contained under the caption "Underwriting" in the
Prospectus; provided, however, that the obligation of each
Underwriter to indemnify the Company (including any controlling
person, director or officer thereof) shall be limited to the net
proceeds received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party
in respect of which a claim is to be made against an indemnifying
party or parties under this Section, notify each such indemnifying
party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided
for in Section 8(a) or 8(b) shall be available to any party who shall
fail to give notice as provided in this Section 8(c) if the party to
whom notice was not given was unaware of the proceeding to which such
notice would have related and was prejudiced by the failure to give
such notice but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for contribution
or otherwise than under this Section. In case any such action, suit
or proceeding shall be brought against any indemnified party and it
shall notify the indemnifying party of
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the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof and the approval by the indemnified party of such counsel,
the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses, except as provided below and except
for the reasonable costs of investigation subsequently incurred by
such indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party has been authorized in writing by
the indemnifying parties, (ii) the indemnified party shall have
reasonably concluded that there may be a conflict of interest between
the indemnifying parties and the indemnified party in the conduct of
the defense of such action (in which case the indemnifying parties
shall not have the right to direct the defense of such action on
behalf of the indemnified party) or (iii) the indemnifying parties
shall not have employed counsel to assume the defense of such action
within a reasonable time after notice of the commencement thereof, in
each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not
be liable for any settlement of any action, suit, proceeding or claim
effected without its written consent, which consent shall not be
unreasonably withheld or delayed.
8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among
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other things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8, (i) in no case shall any
Underwriter (except as may be provided in the Agreement Among Underwriters) be
liable or responsible for any amount in excess of the underwriting discount
applicable to the Shares purchased by such Underwriter hereunder; and (ii) the
Company shall be liable and responsible for any amount in excess of such
underwriting discount; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Section 15 of the Securities Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) in the immediately preceding sentence of this Section 8. Any party entitled
to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent. The Underwriter's
obligations to contribute pursuant to this Section 8 are several in proportion
to their respective underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect
to the Shares to be purchased on a Closing Date by the Representatives by
notifying the Company at any time
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any
domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Representatives will in the
future materially disrupt, the securities markets; (ii) if there has
occurred any new outbreak or material escalation of hostilities or
other calamity or crisis the effect of which on the financial markets
of the United States is such as to make it, in the judgment of the
Representatives, inadvisable to proceed with the offering; (iii) if
there shall be such a material adverse change in general financial,
political or economic conditions or the effect of international
conditions on the financial markets in the United States is such as
to make it, in the judgment of the Representatives, inadvisable or
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impracticable to market the Shares; (iv) if trading in the Shares has
been suspended by the Commission or trading generally on the New York
Stock Exchange, Inc., on the American Stock Exchange, Inc. or the
Nasdaq National Market has been suspended or limited, or minimum or
maximum ranges for prices for securities shall have been fixed, or
maximum ranges for prices for securities have been required, by said
exchanges or by order of the Commission, the National Association of
Securities Dealers, Inc., or any other governmental or regulatory
authority; or (v) if a banking moratorium has been declared by any
state or Federal authority; or (vi) if, in the judgment of the
Representatives, there has occurred a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to any Underwriter, and
no Underwriter shall be under any liability to the Company, except that (y) if
this Agreement is terminated by the Representatives or the Underwriters because
of any failure, refusal or inability on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, the Company
will reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in contemplation
of performing their obligations hereunder and (z) no Underwriter who shall have
failed or refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, shall be relieved of
liability to the Company or to the other Underwriters for damages occasioned by
its failure or refusal.
10. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 10) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated
to purchase such Shares on the terms herein set forth in proportion
to their respective obligations hereunder; provided, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section
11 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
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(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to one additional business day
within which it may, but is not obligated to, find one or more
substitute underwriters reasonably satisfactory to the
Representatives to purchase such Shares upon the terms set forth in
this Agreement.
In any such case, either the Representatives or the Company
shall have the right to postpone the applicable Closing Date for a period of not
more than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(b),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its respective
officers and of the Underwriters set forth in or made pursuant to this Agreement
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or the Company or any of the officers, directors
or controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(b), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Representatives, c/o CIBC World Markets Corp., CIBC
World Markets Tower, World Financial Center, New York, New York 10281 Attention:
Xxxxx X. Xxxxxxx, with a copy to Xxxxxx & Bird LLP, One Atlantic Center, 0000
Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000 Attention: J. Xxxxxxx Xxxxxx,
and (b) if to the Company, to its agent for service as such agent's address
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appears on the cover page of the Registration Statement with a copy to Xxxxxx
Xxxx Xxxxxx & Xxxxx, P.C., X.X. Xxx 0000, Xxxxxxxxxx, Xxxxxxx 00000 Attention:
Xxxx X. Xxxx.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
XXXXXXX TXEN CORPORATION
By
--------------------------
Title:
Confirmed:
CIBC WORLD MARKETS CORP.
-----------------------------------
Acting severally on behalf of itself and as representative of the several
Underwriters named in Schedule I annexed hereto.
By CIBC WORLD MARKETS CORP.
By
------------------------------
Title:
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SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
---- ------------
CIBC World Markets Corp.
Friedman, Billings, Xxxxxx & Co.
The Xxxxxxxx-Xxxxxxxx Company, LLC
-----------------------------------
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=======
Total
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