Exhibit 1.1
1,250,000 Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
_________________, 1998
X.X. Xxxxxxx & Sons, Inc.
As Representative of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, Electronic Processing, Inc., a Missouri corporation
(the "Company") and the persons listed on Schedule I hereto (the "Selling
Shareholders"), hereby address you as the representative (the
"Representative") of each of the persons, firms and corporations listed on
Schedule II hereto (collectively, the "Underwriters") and hereby confirm
their agreement with the several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell
to the Underwriters 1,000,000 shares of its Common Stock, par value $0.01 per
share (the "Common Stock"), and the Selling Shareholders propose to sell to
the Underwriters a total of 250,000 shares of Common Stock, as set forth on
Schedule I hereto (such 1,250,000 shares of Common Stock are herein referred
to as the "Firm Shares"). Solely for the purpose of covering
over-allotments in the sale of the Firm Shares, the Company further proposes
to grant to the Underwriters the right to purchase up to an additional
187,500 shares of Common Stock (the "Option Shares"), as provided in
Section 3 of this Agreement. The Firm Shares and the Option Shares are herein
sometimes referred to as the "Shares" and are more fully described in the
Prospectus hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM 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 and each
Selling Shareholder agrees, severally and not jointly, to sell to the
Underwriters, and each such Underwriter agrees, severally and not jointly,
(a) to purchase from the Company and from each of the Selling Shareholders,
pro rata, at a purchase price of $___ per share, the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule II hereto and (b)
to purchase from the Company any additional number of Option Shares which
such Underwriter may become obligated to purchase pursuant to Section 3
hereof.
The Company and the Selling Shareholders will deliver definitive
certificates for the Firm Shares at the office of X.X. Xxxxxxx & Sons, Inc.,
00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
("Xxxxxxx' Office"), or such other place as you and the Company may
mutually agree upon, for the accounts of the Underwriters against payment to
the Company and the Selling Shareholders of the purchase price for the Firm
Shares sold by them to the several Underwriters by wire transfer or certified
or bank cashiers' check in clearing house (next day available) funds payable
to the order of the Company and the Selling Shareholders, respectively, and
delivered to Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, or at
such other place as may be agreed upon between you and the Company (the
"Place of Closing"), at 10:00 a.m., St. Louis time, on _____________, 1998,
or at such other time and date not later than five (5) full business days
thereafter as you and the Company may agree, such time and date of payment
and delivery being herein called the "Closing Date."
The certificates for the Firm Shares so to be delivered will be made
available to you for inspection at Xxxxxxx' Office (or such other place as
you and the Company may mutually agree upon) at least one (1) full business
day prior to the Closing Date and will be in such names and denominations as
you may request at least two (2) full business days prior to the Closing Date.
It is understood that an Underwriter, individually, may (but shall not
be obligated to) make payment on behalf of the other Underwriters whose funds
shall not have been received prior to the Closing Date for Shares to be
purchased by such Underwriter. Any such payment by an Underwriter shall not
relieve the other Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Shares to
the public upon the terms and conditions set forth in the Registration
Statement hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. The Company
hereby grants options to the Underwriters to purchase from it on a pro rata
basis up to 187,500 Option Shares at the same per share purchase price and on
the same terms and conditions as the Firm Shares; provided, however, that
such options may be exercised only for the purpose of covering any
over-allotments which may be made by them in the sale of the Firm Shares. No
Option Shares shall be sold or delivered unless the Firm Shares previously
have been, or simultaneously are, sold and delivered.
The options are exercisable on behalf of the several Underwriters by
you, as Representative, at any time, and from time to time, before the
expiration of forty-five (45) days from the date of this Agreement, for the
purchase of all or part of the Option Shares covered thereby, by notice given
by you to the Company in the manner provided in Section 13 hereof, setting
forth the number of Option Shares as to which the Underwriters are exercising
the options, and the date of delivery of said Option Shares, which date shall
not be more than five (5) business days after such notice unless otherwise
agreed to by the parties. You may terminate the options at any time, as to
any unexercised portion thereof, by giving written notice to the Company to
such effect.
You, as Representative, shall make such allocation of the Option Shares
among the Underwriters as may be required to eliminate purchases of
fractional Shares.
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Delivery of the Option Shares with respect to which the options shall
have been exercised shall be made to or upon your order at Xxxxxxx' Office
(or at such other place as you and the Company may mutually agree upon),
against payment by you of the per share purchase price to the Company by wire
transfer or certified or bank cashier's check or checks, payable in clearing
house (next day available) funds. Such payment and delivery shall be made at
10:00 a.m., St. Louis time, on the date designated in the notice given by you
as above provided for, unless some other date and time are agreed upon, which
date and time of payment and delivery are called the "Option Closing Date."
The certificates for the Option Shares so to be delivered will be made
available to you for inspection at Xxxxxxx' Office at least one (1) full
business day prior to the Option Closing Date and will be in such names and
denominations as you may request at least two (2) full business days prior to
the Option Closing Date. On the Option Closing Date, the Company shall
provide the Underwriters such representations, warranties, agreements,
covenants, opinions, letters, certificates and other documents with respect
to the Option Shares as are required to be delivered on the Closing Date with
respect to the Firm Shares.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND
THE SELLING SHAREHOLDERS.
(a) The Company represents and warrants to and agrees with each
Underwriter that:
(i) A registration statement (Registration No. 333-_____) on Form
SB-2 with respect to the Shares, including a preliminary prospectus, and such
amendments to such registration statement as may have been required to the
date of this Agreement, has been carefully prepared by the Company pursuant
to and in conformity 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 under the Act. Copies of
such registration statement, including any amendments thereto, each related
preliminary prospectus (meeting the requirements of Rule 430 or 430A of the
Rules and Regulations) contained therein and the financial statements,
exhibits and schedules thereto have heretofore been delivered by the Company
to you. If such registration statement has not become effective under the
Act, a further amendment to such registration statement, including a form of
final prospectus, necessary to permit such registration statement to become
effective will be filed promptly by the Company with the Commission. If such
registration statement has become effective under the Act, a final prospectus
containing information permitted to be omitted at the time of effectiveness
by Rule 430A of the Rules and Regulations will be filed promptly by the
Company with the Commission in accordance with Rule 424(b) of the Rules and
Regulations. The term "Registration Statement" as used in this Agreement
means the registration statement as amended at the time it becomes or became
effective under the Act (the "Effective Date"), including financial
statements and all exhibits and schedules thereto and, if applicable, the
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
the information deemed to be included therein by Rule 430A of the Rules and
Regulations. The term "Prospectus" as used in this Agreement means (i) the
prospectus as first filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations or (ii) if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective Date
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or (iii) if a Term Sheet (as such term is defined in Rule 434(b) of the Rules
and Regulations) is filed with the Commission pursuant to Rule 424(b)(7) of
the Rules and Regulations, the Term Sheet and the last Preliminary Prospectus
filed with the Commission prior to the time the Registration Statement became
effective, taken together. The term "Preliminary Prospectus" as used in
this Agreement shall mean a preliminary prospectus as contemplated by Rule 430
or 430A of the Rules and Regulations included at any time in the Registration
Statement.
(ii) The Commission has not issued, and is not to the knowledge of
the Company threatening to issue, an order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus nor instituted proceedings
for that purpose. Each Preliminary Prospectus at its date of issue, the
Registration Statement and the Prospectus and any amendments or supplements
thereto contain or will contain, as the case may be, all statements which are
required to be stated therein by, and in all material respects conform or
will conform, as the case may be, to the requirements of, the Act and the
Rules and Regulations. Neither the Registration Statement nor any amendment
thereto, as of the applicable Effective Date, and neither the Prospectus nor
any supplement thereto contains or will contain, as the case may be, any
untrue statement of a material fact or omits or will omit, as the case may
be, to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no
representation or warranty as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, information relating to
the Underwriters and furnished to the Company in writing by or on behalf of
the Underwriters expressly for use therein.
(iii) The filing of the Registration Statement and the execution and
delivery of this Agreement have been duly authorized by the Board of
Directors of the Company; this Agreement constitutes a valid and legally
binding agreement of the Company enforceable in accordance with its terms
(except to the extent the enforceability of the indemnification and
contribution provisions of Section 7 hereof may be limited by public policy
considerations as expressed in the Act as construed by courts of competent
jurisdiction, and except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors' rights generally and by general principles of equity); the
issuance and sale of the Shares by the Company and the performance of this
Agreement and the consummation of the transactions herein contemplated will
not result in a violation of the Company's articles of incorporation or
bylaws or result in a breach or violation of any of the terms and provisions
of, or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any properties or assets of the Company
under, any statute, any bond, debenture, note or other evidence of
indebtedness, or any agreement, indenture, mortgage, deed of trust, sale and
leaseback arrangement, joint venture or other instrument to which the Company
is a party or by which it is bound or to which any of the properties or
assets of the Company is subject, or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
its properties, except to such extent as does not materially adversely affect
the business of the Company; no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required for the consummation of the transactions herein
contemplated, except such as may be required by
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the National Association of Securities Dealers, Inc. (the "NASD") or under
the Act or the Rles and Regulations or any state securities laws.
(iv) Except as described in the Prospectus, the Company has not
sustained since the date of the latest audited financial statements included
in the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree. Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company has not
incurred any material liabilities or material obligations, direct or
contingent, other than in the ordinary course of business, or entered into
any material transactions not in the ordinary course of business, and there
has not been any material change in the capital stock or long-term debt of
the Company taken as a whole or any material adverse change in the condition
(financial or other), net worth, business, affairs, management, prospects or
results of operations of the Company. The Company has filed all necessary
federal, state and foreign income and franchise tax returns and paid all
taxes shown as due thereon; all tax liabilities are adequately provided for
on the books of the Company except to such extent as would not materially
adversely affect the business of the Company; the Company has made all
necessary payroll tax payments and is current and up-to-date with respect
thereto as of the date of this Agreement; and the Company has no knowledge of
any tax proceeding or action pending or threatened against the Company which
might materially adversely affect its business or properties.
(v) Except as described in the Prospectus, there is not now pending
or, to the knowledge of the Company, threatened or contemplated, any action,
suit or proceeding to which the Company is a party before or by any court or
public, regulatory or governmental agency or body which might be expected to
result (individually or in the aggregate) in any material adverse change in
the condition (financial or other), business or prospects of the Company, or
might be expected to materially and adversely affect (individually or in the
aggregate) the properties or assets thereof; and there are no contracts or
documents of the Company which would be required to be filed as exhibits to
the Registration Statement under the Act or the Rules and Regulations which
have not been filed as exhibits to the Registration Statement.
(vi) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar right which has
not been waived; and the Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as provided by
this Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or similar
rights.
(vii) Except as disclosed in the Prospectus, no holder of any
security of the Company has any right (not heretofore waived) to require
registration of shares of Common Stock or any other security of the Company
because of the filing of the Registration Statement or the consummation of
the transactions contemplated hereby and, except as disclosed in the
Prospectus, no person has the right to require registration under the Act of
any shares of Common Stock or other securities of the Company. No person has
the right, contractual or
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otherwise, to cause the Company to permit such person to underwrite the sale
of any of the Shares. Except as disclosed in the Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or liens related to or entitling any person
to purchase or otherwise to acquire any shares of, or any security
convertible into or exchangeable or exercisable for, the capital stock of, or
other ownership interest in, the Company.
(viii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Missouri,
with full power and authority (corporate and other) to own, lease and operate
its properties and conduct its business as described in the Registration
Statement; the Company is duly qualified to do business as a foreign
corporation and is in good standing in each state or other jurisdiction in
which its ownership or leasing of property or conduct of business legally
requires such qualification, except where the failure to be so qualified
would not have a material adverse effect on the ability of the Company to
conduct its business as described in the Registration Statement.
(ix) The Company has no subsidiaries and, except as disclosed in the
Prospectus, is not affiliated with any corporation, partnership, limited
liability company or other business entity.
(x) Xxxxx, Xxxxx & Xxxxxx, the accounting firm which has certified
the financial statements filed with the Commission as a part of the
Registration Statement, is an independent public accounting firm within the
meaning of the Act and the Rules and Regulations.
(xi) The financial statements and schedules of the Company,
including the notes thereto, filed with and as a part of the Registration
Statement, are accurate in all material respects and present fairly the
financial position of the Company as of the respective dates thereof and the
results of operations and statements of cash flow for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved,
except as otherwise disclosed in the Prospectus. The selected financial data
included in the Registration Statement and Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements in the Registration Statement and
Prospectus.
(xii) The Company maintains and keeps accurate books and records
reflecting its assets and maintains internal accounting controls which
provide reasonable assurance that (1) transactions are executed in accordance
with management's authorization, (2) transactions are recorded as necessary
to permit the preparation of the Company's financial statements and to
maintain accountability for the assets of the Company, (3) access to the
assets of the Company is permitted only in accordance with management's
authorization, and (4) the recorded accounts of the assets of the Company are
compared with existing assets at reasonable intervals.
(xiii) The Company is not (i) in violation of its articles of
incorporation or bylaws or (ii) in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or
any other evidence of indebtedness or in any other contract, indenture,
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mortgage, deed of trust, sale and leaseback arrangement, joint venture or
other instrument, in each case material to the conduct of the business of the
Company, to which the Company is a party or by which it or any of its
properties is bound, except where such defaults, individually or in the
aggregate, would not have a material adverse effect on the condition
(financial or other), business or prospects of the Company.
(xiv) The Company is not in violation of any other laws, ordinances
or governmental rules or regulations to which it is subject, and neither the
Company nor any subsidiary has failed to obtain any other license, permit,
franchise, easement, consent, or other governmental authorization necessary
to the ownership, leasing and operation of its properties or to the conduct
of its business, which violation or failure would materially adversely affect
the business, operations, affairs, properties, prospects, profits or
condition (financial or other) of the Company. The Company has not, at any
time during the past five years, (A) made any unlawful contributions to any
candidate for any political office, or failed fully to disclose any
contribution in violation of law, or (B) made any payment to any state,
federal or foreign government official, or other person charged with similar
public or quasi-public duty (other than payment required or permitted by
applicable law).
(xv) Except as described in the Prospectus, the Company owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
licenses, software, software licenses, trademarks, service marks, trade names
and copyrights necessary to conduct the business now operated by it, and the
Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, patent licenses,
software, software licenses, trademarks, service marks, trade names or
copyrights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect
on the conduct of the business, operations, financial condition or income of
the Company. The Company owns or has obtained licenses for all intellectual
property, including all patents and patent applications, described in the
Prospectus as being owned or used by or licensed to it. Except as described
in the Prospectus, (A) there are no rights of third parties to any
intellectual property described in the Prospectus as being owned by or
licensed to the Company and that is necessary for the conduct of its
business; (B) there is no infringement by third parties of any such
intellectual property; (C) there is no pending or threatened action, suit,
proceeding or claim by others challenging the rights of the Company in or to
such intellectual property; and (D) there is no pending or threatened action,
suit, proceeding or claim by others challenging the validity or scope of such
intellectual property.
(xvi) The Company has good and marketable title to all property owned
by it, free and clear of all liens, encumbrances, restrictions and defects,
except such as are described in the Registration Statement or do not
interfere with the use made and proposed to be made of such property; and any
property held under lease or sublease by the Company is held under valid,
subsisting and enforceable leases or subleases with such exceptions as are
not material and do not interfere with the use made and proposed to be made
of such property by the Company, and the Company has no notice or knowledge
of any material claim of any sort which has been, or may be, asserted by
anyone adverse to the Company's rights as lessee or sublessee under any lease
or sublease described above, or affecting or questioning the Company's rights
to the
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continued possession of the leased or subleased premises under any such lease
or sublease in conflict with the terms thereof.
(xvii) Except as described in the Prospectus, there is no factual
basis for any action, suit or other proceeding involving the Company or any
of its material assets for any failure of the Company, or any predecessor
thereof, to comply with any requirements of federal, state or local
regulation relating to air, water, solid waste management, hazardous or toxic
substances, or the protection of health or the environment. Except as
described in the Prospectus, none of the property owned or leased by the
Company is, to the knowledge of the Company, contaminated with any waste or
hazardous substances, and the Company may not be deemed an "owner or
operator" of a "facility" or "vessel" which owns, possesses, transports,
generates or disposes of a "hazardous substance" as those terms are defined
in Section 9601 of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 et seq.
(xviii) No labor disturbance exists with the employees of the Company
or is imminent which would have a material adverse effect on the Company.
(xix) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock, and the Company is not aware of any such action taken or to be taken
by affiliates of the Company.
(xx) The Company is not, and upon the sale of the Shares to be
issued and sold by it hereunder and application of the net proceeds from such
sale as described in the Prospectus under the caption "Use of Proceeds,"
will not be, an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(xxi) The Company maintains insurance reasonably deemed adequate for
its business.
(xxii) The Company has filed an application to list the Shares on The
Nasdaq Stock Market National Market System [and has received notification
that the listing has been approved, subject to official notice of issuance of
the Shares].
(xxiii) Each of the Company's directors and executive officers has
executed and delivered a letter in the form of Schedule IV hereto.
(xxiv) The Company is in compliance with all provisions of Florida
Statutes Section 517.075 and the regulations thereunder, relating to issuers
doing business with Cuba.
(b) Each Selling Shareholder severally represents and warrants to and
agrees with each Underwriter and the Company that:
(i) All authorizations and consents necessary for the execution and
delivery by it of this Agreement and the sale and delivery of the Shares to
be sold by such Selling Shareholder
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hereunder have been given and are in full force and effect on the date hereof
and will be in full force and effect on the Closing Date.
(ii) Such Selling Shareholder has full legal right, power and
authority, and any approval required by law, except such as may be required
under the Act or the Rules and Regulations or as may be required by the NASD
or under state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters, to enter into this Agreement,
the Custody Agreement (as defined herein) and the Power of Attorney (as
defined herein) and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder.
(iii) Such Selling Shareholder has, and immediately prior to the
Closing Date such Selling Shareholder will have, good and valid title to such
Shares to be sold by such Selling Shareholder hereunder, free and clear of
all liens, mortgages, pledges, encumbrances, claims, equities and security
interests whatsoever; and, upon delivery of and payment for such Shares
hereunder, the several Underwriters will acquire good and valid title to such
Shares to be sold by such Selling Shareholder hereunder, free and clear of
all liens, mortgages, pledges, encumbrances, claims, equities and security
interests whatsoever.
(iv) The consummation by such Selling Shareholder of the
transactions contemplated herein and the fulfillment by such Selling
Shareholder of the terms hereof will not result in a violation or breach of
any terms or provisions of, or constitute a default under, any statute, any
bond, debenture, note or other evidence of indebtedness, or any agreement,
indenture, mortgage, deed of trust, sale and leaseback arrangement, joint
venture or other instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder is bound, or to which any of the property
or assets of such Selling Shareholder is subject, or of any order, rule or
regulation applicable to such Selling Shareholder of any court or of any
regulatory body of an administrative agency or other governmental body having
jurisdiction over such Selling Shareholder or the property or assets of such
Selling Shareholder.
(v) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to or which might be reasonably
expected to cause or result in stabilization or manipulation of the price of
the Common Stock, and such Selling Shareholder is not aware of any such
action taken or to be taken by affiliates of such Selling Shareholder.
(vi) When the Registration Statement becomes effective and at all
times subsequent thereto, such information in the Registration Statement and
Prospectus and any amendments or supplements thereto as specifically refers
to such Selling Shareholder will not contain 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.
(vii) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Shareholder hereunder have been placed in the
custody of ________________ (the "Custodian") under a Custody Agreement in
the form heretofore furnished to you (the "Custody Agreement"), duly
executed and delivered by such Selling Shareholder, with the Custodian having
the authority to deliver the Shares to be sold by such Selling Shareholder
hereunder, and
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that such Selling Shareholder has duly executed and delivered a Power of
Attorney in the form heretofore furnished to you (the "Power of Attorney")
appointing ______________ as such Selling Shareholder's attorney-in-fact (the
"Attorney-in-Fact") with the Attorney-in-Fact having authority to execute
and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Shareholders as provided in Section 2, to authorize the delivery of the
Shares to be sold by it hereunder and otherwise to act on behalf of such
Selling Shareholder in connection with the transactions contemplated by this
Agreement and such Custody Agreement.
(viii) The Shares represented by the certificates held in custody for
such Selling Shareholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder, and the arrangements made by such
Selling Shareholder for such custody, and the appointment by such Selling
Shareholder of the Custodian under the Custody Agreement and of the
Attorney-in-Fact by the Power of Attorney, are to that extent irrevocable.
(ix) The obligations of such Selling Shareholders hereunder shall
not be terminated by operation of law, whether by the death or incapacity of
any individual Selling Shareholder or by the occurrence of any other event,
and if any Selling Shareholder should die or become incapacitated, or if any
other such event should occur before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or on behalf of
each Selling Shareholder in accordance with the terms and conditions of this
Agreement and of the Custody Agreement, and actions taken by the Custodian
pursuant to the Custody Agreement or by the Attorney-in-Fact pursuant to the
Power of Attorney shall be as valid as if such death, incapacity or other
event had not occurred, regardless of whether or not the Custodian or
Attorney-in-Fact, or any of them, shall have received notice of such death,
incapacity or other event.
(x) Such Selling Shareholder is not prompted to sell shares of
Common Stock by any information concerning the Company which is not included
in the Registration Statement.
(xi) Such Selling Shareholder has executed and delivered to the
Representative a letter in the form of Schedule IV hereto.
(xii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of applicable federal tax laws with
respect to the transactions herein contemplated, such Selling Shareholder has
delivered or, prior to the Closing Date, will deliver to you a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(c) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby; and any certificate signed by or on behalf of the
Selling Shareholders as such and delivered to you or to counsel for the
Underwriters shall be deemed a representation and warranty by the Selling
Shareholders to each Underwriter as to the matters covered thereby.
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5. ADDITIONAL COVENANTS. The Company and, where expressly
indicated, the Selling Shareholders, covenant and agree with the several
Underwriters that:
(a) If the Registration Statement is not effective under the Act,
the Company will use its best efforts to cause the Registration Statement to
become effective as promptly as possible, and it will notify you, promptly
after it shall receive notice thereof, of the time when the Registration
Statement has become effective. The Company (i) will prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations, if
required, a Prospectus containing information previously omitted at the time
of effectiveness of the Registration Statement in reliance on Rule 430A of
the Rules and Regulations or otherwise or a Term Sheet, as applicable; (ii)
will not file any amendment to the Registration Statement or supplement to
the Prospectus of which the Underwriters shall not previously have been
advised and furnished with a copy or to which the Underwriters shall have
reasonably objected in writing or which is not in compliance with the Rules
and Regulations; and (iii) will promptly notify you after it shall have
received notice thereof of the time when any amendment to the Registration
Statement becomes effective or when any supplement to the Prospectus has been
filed.
(b) The Company will advise the Underwriters promptly, after it
shall receive notice or obtain knowledge thereof, of any request of the
Commission for amendment of the Registration Statement or for supplement to
the Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution or threatening
of any proceedings for that purpose, and the Company will use its best
efforts to prevent the issuance of any such stop order preventing or
suspending the use of the Prospectus and to obtain as soon as possible the
lifting thereof, if issued.
(c) The Company will cooperate with the Underwriters and their
counsel in endeavoring to qualify the Shares for sale under the securities
laws of such jurisdictions as they may have designated and will make such
applications, file such documents, and furnish such information as may be
necessary for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to
file such a consent or to subject itself to taxation as doing business in any
jurisdiction where it is not now so taxed. The Company will, from time to
time, file such statements, reports, and other documents, as are or may be
required to continue such qualifications in effect for so long a period as
the Underwriters may reasonably request.
(d) The Company will deliver to, or upon the order of, the
Underwriters, without charge from time to time, as many copies of any
Preliminary Prospectus as they may reasonably request. The Company will
deliver to, or upon the order of, the Underwriters without charge as many
copies of the Prospectus, or as it thereafter may be amended or supplemented,
as they may from time to time reasonably request. The Company consents to the
use of such Prospectus by the Underwriters and by all dealers to whom the
Shares may be sold, both in connection with the offering or sale of the
Shares and for such other purposes and for such period of time thereafter as
the Prospectus is required by law to be delivered in connection with the
offering or sale of the
11
Shares. The Company will deliver to the Underwriters at or before the
Closing Date two signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver
to the Underwriters such number of copies of the Registration Statement,
without exhibits, and of all amendments thereto, as they may reasonably
request.
(e) If, during the period in which a prospectus is required by law
to be delivered by an Underwriter or dealer, any event shall occur as a
result of which, in the judgment of the Company or in your judgment or in the
opinion of counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in light
of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company promptly will
prepare and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that the Prospectus
as so amended or supplemented will not, in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will comply
with law.
(f) The Company will make generally available to its shareholders
and will file as an exhibit in a report pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), as soon as it is practicable to
do so, but in any event not later than 15 months after the Effective Date of
the Registration Statement, an earnings statement in reasonable detail,
covering a period of at least 12 consecutive months beginning after the
Effective Date of the Registration Statement, which earnings statement shall
satisfy the requirements of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and will advise the Underwriters in writing when such
statement has been so made available.
(g) The Company will, for a period of five(5) years from the
Closing Date, deliver to the Underwriters at their principal executive
offices a reasonable number of copies of annual reports, quarterly reports,
current reports and copies of all other documents, reports and information
furnished by the Company to its shareholders or filed with any securities
exchange pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the 1934 Act. The Company will deliver to the
Underwriters similar reports with respect to any significant subsidiaries, as
that term is defined in the Rules and Regulations, which are not consolidated
in the Company's financial statements. Any report, document or other
information required to be furnished under this paragraph (g) shall be
furnished as soon as practicable after such report, document or information
becomes available.
(h) The Company will apply the proceeds from the sale of the Shares
as set forth in the description under "Use of Proceeds" in the Prospectus,
which description complies in all respects with the requirements of Item 504
of Regulation S-B.
(i) The Company will supply you with copies of all correspondence
to and from, and all documents issued to and by, the Commission in connection
with the registration of the Shares under the Act.
12
(j) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Company will furnish to you, as soon as they have been
prepared, copies of any unaudited interim financial statements of the
Company for any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the Prospectus.
(k) Prior to the Closing Date (and, if applicable, the Option
Closing Date), neither the Company nor any Selling Shareholder will issue any
press releases or other communications, directly or indirectly, and will hold
no press conferences with respect to the Company, the financial condition,
results of operations, business, properties, assets or liabilities of the
Company, or the offering of the Shares, without your prior written consent.
(l) The Company will use its best efforts to obtain approval for
and maintain the quotation of the Shares on The Nasdaq Stock Market
[National Market System].
(m) The Company will maintain and keep accurate books and records
reflecting its assets and will maintain internal accounting controls which
provide reasonable assurance that (1) transactions are executed in accordance
with management's authorization, (2) transactions are recorded as necessary
to permit the preparation of the Company's financial statements and to
maintain accountability for the assets of the Company, (3) access to the
assets of the Company is permitted only in accordance with management's
authorization, and (4) the recorded accounts of the assets of the Company are
compared with existing assets at reasonable intervals.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase and pay for the Shares, as
provided herein, shall be subject to the accuracy in all material respects,
as of the date hereof and as of the Closing Date (and, if applicable, the
Option Closing Date), of the representations and warranties of the Company
and the Selling Shareholders contained herein, to the performance in all
material respects by the Company and the Selling Shareholders of their
covenants and obligations hereunder, and to the following additional
conditions:
(a) All filings required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made. No stop order suspending the effectiveness
of the Registration Statement, as amended from time to time, shall have been
issued and no proceeding for that purpose shall have been initiated or, to
the knowledge of the Company or any Underwriter, threatened or contemplated
by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus
or otherwise) shall have been complied with to the reasonable satisfaction of
the Underwriters.
(b) No Underwriter shall have disclosed in writing to the Company
on or prior to the Closing Date (and, if applicable, the Option Closing
Date), that the Registration Statement or Prospectus or any amendment or
supplement thereto contains an untrue statement of fact which, in the opinion
of counsel to the Underwriters, is material, or omits to state a fact which,
in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
13
(c) On the Closing Date (and, if applicable, the Option Closing
Date), you shall have received the opinion of counsel for the Company,
addressed to you and dated the Closing Date (and, if applicable, the Option
Closing Date), to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Missouri,
with full power and authority (corporate and other) to own, lease and operate
its properties and conduct its business as described in the Registration
Statement; the Company is duly qualified to do business as a foreign
corporation in good standing in each state or other jurisdiction in which its
ownership or leasing of property or conduct of business legally requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the ability of the Company to conduct its business
as described in the Registration Statement; and the Company has no
subsidiaries and, except as disclosed in the Prospectus, is not affiliated
with any corporation, partnership, limited liability company or other
business entity.
(ii) The Company has duly and validly authorized capital stock as
set forth under the heading "Capitalization" in the Prospectus; all
outstanding shares of Common Stock of the Company and the Shares conform to
the description thereof in the Prospectus under the heading "Description of
Capital Stock," and the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and non-assessable; the Shares
to be sold by the Company have been duly authorized and, when delivered and
paid for in accordance with this Agreement, will be validly issued, fully
paid and non-assessable, and the shareholders of the Company have no
preemptive or similar rights with respect to the Shares.
(iii) Such counsel has been advised by the staff of the Commission
that the Registration Statement has become effective under the Act and, to
the knowledge of such counsel after due inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act.
(iv) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements and
related schedules and any other financial data therein, as to which such
counsel need express no belief), as of their respective Effective Date or
issue date, comply as to form and appear on their face to be appropriately
responsive in all material respects to the requirements of the Act and the
applicable Rules and Regulations.
(v) The descriptions in the Registration Statement and Prospectus
of contracts and other documents filed as exhibits to the Registration
Statement are accurate in all material respects; all other material
agreements between the Company and third parties expressly referenced in the
Prospectus are legal, valid and binding obligations of the Company.
(vi) No authorization, approval, consent, order, registration or
qualification of or with of any court or governmental body, authority or
agency is required with respect to the Company in connection with the
transactions contemplated by this Agreement, except such as may be
14
required under the Act or the Rules and Regulations or as may be required by
the NASD or under state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(vii) The filing of the Registration Statement has been duly
authorized by the Board of Directors of the Company. This Agreement has been
duly authorized, executed and delivered by the Company and constitutes a
valid and legally binding agreement of the Company enforceable in accordance
with its terms (except to the extent the enforceability of the
indemnification and contribution provisions of Section 7 hereof may be
limited by public policy considerations as expressed in the Act as construed
by courts of competent jurisdiction, and except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting creditors' rights generally or by the availability of
equitable remedies, regardless of whether such enforcement is considered in a
proceeding in equity or at law). The performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
violation of the Company's articles of incorporation or bylaws or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company under any statute,
any bond, debenture, note or other evidence of indebtedness, or any
agreement, indenture, mortgage, deed of trust, sale and leaseback
arrangement, joint venture or any other instrument known to such counsel
after due inquiry to which the Company is a party or by which it is bound or
to which any of the properties or assets of the Company is subject, or any
order, rule or regulation known to such counsel after due inquiry of any
court or governmental agency or body having jurisdiction over the Company or
its properties, except, in the case of any such violation, breach, default,
creation or imposition, to such extent as does not materially adversely
affect the business of the Company.
(viii) To the knowledge of such counsel after due inquiry, (A) there
are no material (individually or in the aggregate) legal, governmental or
regulatory proceedings pending or threatened to which the Company is a party
or of which the business or properties of the Company is the subject which
are not disclosed in the Registration Statement and Prospectus; (B) there are
no contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which are not described or filed as required; and (C)
there are no statutes or regulations required to be described in the
Registration Statement or Prospectus which are not described as required.
(ix) To the knowledge of such counsel after due inquiry, the Company
holds all licenses, certificates, permits and approvals from all state,
federal and other regulatory authorities, and have satisfied in all material
respects the requirements imposed by regulatory bodies, administrative
agencies or other governmental bodies, agencies or officials, that are
required for the Company lawfully to own, lease and operate its properties
and conduct its business as described in the Prospectus, and, to the
knowledge of such counsel after due inquiry, the Company is conducting its
business in compliance in all material respects with all of the laws, rules
and regulations of each jurisdiction in which it conducts its business.
15
(x) The statements made in the Registration Statement under the
captions "Risk Factors--Control by Principal Shareholders," "Dividend
Policy," "Capitalization," "Business--Industry" and "Description of
Capital Stock" and in Item 24 of Part II of the Registration Statement, to
the extent that they constitute summaries of documents referred to therein or
matters of law or legal conclusions, have been reviewed by such counsel and
are accurate summaries and fairly present the information disclosed therein.
(xi) The Company is not, and upon the sale of the Shares to be
issued and sold by it hereunder and application of the net proceeds from such
sale as described in the Prospectus under the caption "Use of Proceeds,"
will not be, an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(xii) To the knowledge of such counsel after due inquiry and except
as described in the Prospectus: (A) there are no rights of third parties to
any intellectual property described in the Prospectus as being owned by or
licensed to the Company and that is necessary for the conduct of its
business; (B) there is no infringement by third parties of any such
intellectual property; (C) there is no pending or threatened action, suit,
proceeding or claim by others challenging the rights of the Company in or to
such intellectual property; and (D) there is no pending or threatened action,
suit, proceeding or claim by others challenging the validity or scope of such
intellectual property.
Such counsel shall also state that, during the course of the preparation
by the Company of the Registration Statement and the Prospectus, such counsel
has participated in conferences with your representatives and counsel and
with officers and representatives of the Company, at which conferences the
contents of the Registration Statement and the Prospectus were discussed,
reviewed and revised, and, although such counsel is not passing upon, and
does not assume any responsibility for, the accuracy, completeness or
fairness of the statements made in the Registration Statement and the
Prospectus, on the basis of the information that was developed during the
course thereof, considered in the light of such counsel's understanding of
applicable law and the experience it has gained through its practice
thereunder, that such counsel has no reason to believe that, as of its
effective date, the Registration Statement or any further amendment thereto
made by the Company prior to the Closing Date (or, if applicable, the Option
Closing Date) (other than the financial statements and related schedules and
any other financial data therein, as to which such counsel need express no
belief) contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus or
any further amendment or supplement thereto made by the Company prior to such
Closing Date (or, if applicable, Option Closing Date) (other than the
financial statements and related schedules and any other financial data
therein, as to which such counsel need express no belief) contained an 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 or that, as of such Closing Date (or, if
applicable, Option Closing Date), either the Registration Statement or the
Prospectus or any further amendment or suppement thereto made by the Company
prior to such Closing Date (or, if applicable, Option Closing Date) (other
than the financial statements and related schedules and any other financial
data therein, as to which
16
such counsel need express no belief) contains an untrue statement of a
material fact or omits 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 they do not know of any amendment to the
Registration Statement required to be filed or of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as required.
In rendering the foregoing opinion, such counsel may rely, provided that
the opinion shall state that you and they are entitled to so rely, (1) as to
matters involving laws of any jurisdiction other than Missouri or the United
States, upon opinions addressed to the Underwriters of other counsel
satisfactory to them, and (2) as to all matters of fact, upon certificates of
public officials and of the executive officers of the Company.
(d) On the Closing Date (and, if applicable, the Option Closing
Date), you shall have received the opinion of counsel to the Selling
Shareholders, addressed to you and dated the Closing Date (and, if
applicable, the Option Closing Date), to the effect that:
(i) Each Selling Shareholder has duly authorized, executed and
delivered the Custody Agreement and Power of Attorney, appointing
__________________ as such Selling Shareholder's Custodian with authority to
take custody of and deliver the Shares as represented by certificates on
behalf of such Selling Shareholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement and appointing
__________________ as such Selling Shareholder's Attorney-in-Fact with
authority to execute and deliver this Agreement on behalf of such Selling
Shareholder and otherwise to act on behalf of such Selling Shareholder in
connection with the transactions contemplated by this Agreement and the
Custody Agreement; such Custody Agreement and Power of Attorney constitute
valid and legally binding agreements of each such Selling Shareholder in
accordance with their terms (except to the extent the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally or by the
availability of equitable remedies, regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(ii) This Agreement has been duly authorized, executed and delivered
by or on behalf of the Selling Shareholders, and is a valid and legally
binding agreement of the Selling Shareholders enforceable in accordance with
its terms (except to the extent the enforceability of the indemnification
provisions of Section 7 hereof may be limited by public policy considerations
as expressed in the Act and as construed by courts of competent jurisdiction
and except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally or by the availability of equitable remedies, regardless of
whether such enforcement is considered in a proceeding in equity or at law).
(iii) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law, except such as may be required
under the Act or the Rules and Regulations or as may be required by the NASD
or under state securities laws in connection with
17
the purchase and distribution of the Shares by the Underwriters, to enter
into this Agreement, the Custody Agreement and the Power of Attorney and to
sell, assign, transfer and deliver the Shares to be sold by such Selling
Shareholder.
(iv) No consent, approval, authorization or order of any court, or
governmental agency or body is required for consummation of the transactions
contemplated by this Agreement in connection with the Shares to be sold by
each Selling Shareholder hereunder except such as may be required under the
Act or the Rules and Regulations or as may be required by the NASD or under
state securities laws in connection with the purchase and distribution of the
Shares by the Underwriters.
(v) Each Selling Shareholder has good and valid title to the Shares
being sold by such Selling Shareholder hereunder, free and clear of all
liens, mortgages, pledges, encumbrances, claims, equities and security
interests, and has transferred to the Underwriters good and valid title to
the Shares being sold by such Selling Shareholder on the Closing Date (and,
if applicable, the Option Closing Date), free and clear of all liens,
mortgages, pledges, encumbrances, claims, equities and security interests
whatsoever.
In rendering the foregoing opinion, such counsel may rely, provided that
the opinion shall state that you and they are entitled to so rely, (1) as to
matters involving laws of any jurisdiction other than Missouri or the United
States, upon opinions addressed to the Underwriters of other counsel
satisfactory to them, and (2) as to all matters of fact, upon certificates of
the Selling Shareholders.
(e) You shall have received on the Closing Date (and, if
applicable, the Option Closing Date), from Xxxxx Xxxx LLP, counsel to the
Underwriters, such opinion or opinions, dated the Closing Date (and, if
applicable, the Option Closing Date) with respect to the incorporation of the
Company, the validity of the Shares and other related matters as you may
reasonably require; the Company and Selling Shareholders shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass on such matters.
(f) You shall have received at or prior to the Closing Date from
Xxxxx Xxxx LLP a memorandum or memoranda, in form and substance satisfactory
to you, with respect to the qualification for offering and sale by the
Underwriters of the Shares under state securities or Blue Sky laws of such
jurisdictions as the Underwriters may have designated to the Company.
(g) On the date of the Prospectus at a time prior to the execution
of this Agreement and on the Closing Date (and, if applicable, the Option
Closing Date), you shall have received from Xxxxx, Xxxxx & Xxxxxx a letter or
letters, dated the date of this Agreement and the Closing Date (and, if
applicable, the Option Closing Date), respectively, in form and substance
satisfactory to you, confirming that they are independent public accountants
with respect to the Company within the meaning of the Act and the published
Rules and Regulations, and the answer to Item 509 of Regulation S-B set forth
in the Registration Statement is correct insofar as it relates to them, and
stating to the effect set forth in Schedule III hereto.
18
(h) Except as contemplated in the Prospectus, (i) the Company shall
not have sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree; and (ii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, the
Company shall not have incurred any liability or obligation, direct or
contingent, or entered into transactions, and there shall not have been any
change in the capital stock or long-term debt of the Company or any change in
the condition (financial or other), net worth, business, affairs, management,
prospects or results of operations of the Company, the effect of which, in
any such case described in clause (i) or (ii), is in your judgment so
material or adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered on
such Closing Date (and, if applicable, the Option Closing Date) on the terms
and in the manner contemplated in the Prospectus.
(i) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange or The Nasdaq Stock Market or the establishing on
such exchange by the Commission or by such exchange or on such market by the
NASD of minimum or maximum prices which are not in force and effect on the
date hereof; (ii) a suspension or material limitation in trading in the
Company's securities on The Nasdaq Stock Market; (iii) a general moratorium
on commercial banking activities declared by either federal or state
authorities; (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this clause (iv) in your
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares in the manner contemplated in the
Prospectus; (v) any calamity or crisis, change in national, international or
world affairs, act of God, change in the international or domestic markets,
or change in the existing financial, political or economic conditions in the
United States or elsewhere, if the effect of any such event specified in this
clause (v) makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares in the manner contemplated in the
Prospectus; or (vi) the enactment, publication, decree, or other promulgation
of any federal or state statute, regulation, rule, or order of any court or
other governmental authority, or the taking of any action by any federal,
state or local government or agency in respect of fiscal or monetary affairs,
if the effect of any such event specified in this clause (vi) in your
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares in the manner contemplated in the
Prospectus.
(j) You shall have received certificates, dated the Closing Date
(and, if applicable, the Option Closing Date) and signed by the President and
the Chief Financial Officer of the Company stating that (i) they have
carefully examined the Registration Statement and the Prospectus as amended
or supplemented and nothing has come to their attention that would lead them
to believe that either the Registration Statement or the Prospectus, or any
amendment or supplement thereto as of their respective effective or issue
dates, contained, and the Prospectus as amended or supplemented at such
Closing Date, contains any untrue statement of a material fact, or omits to
state a material fact required to be stated therein or necessary in order to
make the
19
statements therein, in light of the circumstances under which they were made,
not misleading, and that (ii) all representations and warranties made herein
by the Company are true and correct in all material respects at such Closing
Date, with the same effect as if made on and as of such Closing Date, and all
agreements herein to be performed by the Company on or prior to such Closing
Date have been duly performed in all material respects.
(k) The Company and each of the Selling Shareholders shall not have
failed, refused, or been unable, at or prior to the Closing Date (and, if
applicable, the Option Closing Date) to have performed in all material
respects any agreement on their part to be performed or any of the conditions
herein contained and required to be performed or satisfied by them at or
prior to such Closing Date.
(l) The Company and the Selling Shareholders shall have furnished
to you at the Closing Date (and, if applicable, the Option Closing Date) such
other certificates as you may have reasonably requested as to the accuracy,
on and as of such Closing Date (and, if applicable, the Option Closing Date),
of the representations and warranties of the Company and the Selling
Shareholders herein and as to the performance by the Company and the Selling
Shareholders of their obligations hereunder.
(m) The Shares shall have been duly approved for quotation, subject
to official notice of issuance, on The Nasdaq Stock Market
[National Market System].
(n) The letters in the form set forth on Schedule IV hereto and
dated the date hereof or earlier have been executed and delivered to you by
the Company's directors and executive officers and by the Selling
Shareholders.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably
satisfactory to you and to Xxxxx Xxxx LLP, counsel for the several
Underwriters. The Company and Selling Shareholders will furnish you with
such conformed copies of such opinions, certificates, letters and documents
as you may request.
If any of the conditions specified above in this Section 6 shall not
have been satisfied at or prior to the Closing Date (and, if applicable, the
Option Closing Date) or waived by you in writing, this Agreement may be
terminated by you on notice to the Company and the Selling Shareholders.
7. INDEMNIFICATION. (a) The Company will indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act, against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or in any blue sky application or other document executed by the
Company or based on any information furnished in writing by the Company,
filed in any jurisdiction in order to qualify any
20
or all of the Shares under the securities laws thereof ("Blue Sky
Application"), 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, in the light of the circumstances
under which they were made, not misleading; and will reimburse each
Underwriter and each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
such Preliminary Prospectus or the Prospectus, or such amendment or
supplement, or any Blue Sky Application in reliance upon and in conformity
with information furnished in writing to the Company by you or by any
Underwriter through you, expressly for use therein; and provided, further,
that if any Preliminary Prospectus or the Prospectus contaned any alleged
untrue statement or allegedly omitted to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading and such statement or omission shall have been corrected in a
revised Preliminary Prospectus or in the Prospectus or in an amended or
supplemented Prospectus, the Company shall not be liable to any Underwriter
or controlling person under this subsection (a) with respect to such alleged
untrue statement or alleged omission to the extent that any such loss, claim,
damage or liability of such Underwriter or controlling person results from
the fact that such Underwriter sold Shares to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, such
revised Preliminary Prospectus or Prospectus or amended or supplemented
Prospectus. This indemnity agreement shall be in addition to any liabilities
which the Company may otherwise have.
(b) Each Selling Shareholder will indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter or controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or any Blue Sky
Application or arise out of or are based upon the omission or the 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, such Preliminary Prospectus or the Prospectus, or such amendment
or supplement, or any Blue Sky Application, in reliance upon and in
conformity with information furnished in writing to the Company or any
Underwriter by such Selling Shareholder expressly for use therein; and will
reimburse any legal or other expenses reasonably incurred by each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
the Act, in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity contained
in this subsection (b) with respect to any Preliminary Prospectus shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) in respect of any action or claim asserted by a
person who purchased any Shares from such Underwriter, if, within the time
required by the Act such person
21
was not sent or given a copy of the Prospectus, as then amended or
supplemented. This indemnity agreement shall be in addition to any
liabilities which the Selling Shareholders may otherwise have.
(c) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration
Statement and, each person, if any, who controls the Company within the
meaning of the Act, and each Selling Shareholder, against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director, officer or controlling person or any such Selling Shareholder may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, any amendment or supplement thereto, or any Blue Sky Application
or arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, 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, such Preliminary
Prospectus or the Prospectus, such amendment or supplement, or any Blue Sky
Application in reliance upon and in conformity with information furnished in
writing to the Company by any such Underwriter expressly for use therein; and
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer or controlling person or any such Selling
Shareholder in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement shall be in
addition to any liabilities which the Underwriters may otherwise have.
(d) Any party which proposes to assert the right to be indemnified
under this Section 7 shall, within ten (10) days 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 under this
Section 7, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served, but the
omission so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve such indemnifying party from any liability which
it may have to any indemnified party otherwise than under this Section 7. In
case any such action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of 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, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses, other than 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 own 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 at the expense of the
indemnifying party has been authorized by the indemnifying party, (ii) the
indemnified party shall have been advised by such counsel in a written
opinion that there may be
22
a conflict of interest between the indemnifying party and the indemnified
party in the conduct of the defense, or certain aspects of the defense, of
such action (in which case the indemnifying party shall not have the right to
direct the defense of such action with respect to those matters or aspects of
the defense on which a conflict exists or may exist on behalf of the
indemnified party) or (iii) the indemnifying party shall not in fact have
employed counsel to assume the defense of such action, in any of which events
such fees and expenses to the extent applicable shall be borne by the
indemnifying party. An indemnifying party shall not be liable for any
settlement of any action or claim effected without its consent. Each
indemnified party, as a condition of such indemnity, shall cooperate in good
faith with the indemnifying party in the defense of any such action or claim.
(e) If the indemnification provided for in this Section 7 is for
any reason, other than pursuant to the terms thereof, judicially determined
(by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right to appeal) to be unavailable to an indemnified party under subsections
(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company, the Selling Shareholders and the
Underwriters from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault, as
applicable, of the Company, the Selling Shareholders and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
other relevant equitable considerations. The relative benefits received by,
as applicable, the Company, the Selling Shareholders and the Underwriters
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company and the
Selling Shareholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Shareholders or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection
(e) 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
in this subsection (e). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (e) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), no Underwriter shall
be required to contribute any amount in excess of the
23
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter. 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 in this subsection (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company and the Selling
Shareholders contained in Sections 7 and 11 herein or in certificates
delivered pursuant hereto, and the agreements of the Underwriters contained
in Section 7 hereof, shall remain operative and in full force and effect
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any Underwriter or any controlling
person, the Company or any of its officers, directors or any controlling
persons, or the Selling Shareholders, and shall survive delivery of the
Shares to the Underwriters hereunder.
9. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter shall
default in its obligation to purchase the Shares which it has agreed to
purchase hereunder, you may in your discretion arrange for you or another
party or other parties to purchase such Shares on the terms contained herein.
If within thirty-six (36) hours after such default by any Underwriter you do
not arrange for the purchase of such Shares, then the Company and the Selling
Shareholders shall be entitled to a further period of thirty-six (36) hours
within which to procure another party or parties reasonably satisfactory to
you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company and the Selling
Shareholders that you have so arranged for the purchase of such Shares, or
the Company and the Selling Shareholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Shareholders shall have the right to postpone the Closing Date for a period
of not more than seven days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any persons substituted under this Section 9
with like effect as if such person had originally been a party to this
Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters made by you or the
Company and the Selling Shareholders as provided in subsection (a) above, the
aggregate number of Shares which remains unpurchased does not exceed one
tenth (1/10th) of the total Shares to be sold on the Closing Date, then the
Company and the Selling Shareholders shall have the right to require each
non-defaulting Underwriter to purchase the Shares which such Underwriter
agreed to purchase hereunder and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares
which such Underwriter agreed to purchase hereunder) of the Shares of such
defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
24
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters made by you or the
Company and the Selling Shareholders as provided in subsection (a) above, the
number of Shares which remains unpurchased exceeds one tenth of the total
Shares to be sold on the Closing Date, or if the Company and the Selling
Shareholders shall not exercise the right described in subsection (b) above
to require the non-defaulting Underwriters to purchase Shares of the
defaulting Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company and the Selling Shareholders except for the expenses to be borne
by the Company and the Underwriters as provided in Section 11 hereof and the
indemnity and contribution agreements in Section 7 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. EFFECTIVE DATE AND TERMINATION OF AGREEMENT. (a) This
Agreement shall become effective at 1:00 p.m., St. Louis time, on the first
business day following the Effective Date of the Registration Statement, or
at such earlier time after the Effective Date of the Registration Statement
as you in your discretion shall first release the Shares for offering to the
public; provided, however, that the provisions of Section 7 and 11 shall at
all times be effective. For the purposes of this Section 10(a), the Shares
shall be deemed to have been released to the public upon release by you of
the publication of a newspaper advertisement relating to the Shares or upon
release of telegrams, facsimile transmissions or letters offering the Shares
for sale to securities dealers, whichever shall first occur.
(b) This Agreement may be terminated by you at any time before it
becomes effective in accordance with Section 10(a) by notice to the Company
and the Selling Shareholders; provided, however, that the provisions of this
Section 10 and of Section 7 and Section 11 hereof shall at all times be
effective. In the event of any termination of this Agreement pursuant to
Section 9 or this Section 10(b) hereof, the Company and the Selling
Shareholders shall not then be under any liability to any Underwriter except
as provided in Section 7 or Section 11 hereof.
(c) This Agreement may be terminated by you at any time at or
prior to the Closing Date by notice to the Company and the Selling
Shareholders if any condition specified in Section 6 hereof shall not have
been satisfied on or prior to the Closing Date. Any such termination shall
be without liability of any party to any other party except as provided in
Sections 7 and 11 hereof.
(d) This Agreement also may be terminated by you, by notice to the
Company and the Selling Shareholders, as to any obligation of the
Underwriters to purchase the Option Shares, if any condition specified in
Section 6 hereof shall not have been satisfied at or prior to the Option
Closing Date or as provided in Section 9 hereof.
If you terminate this Agreement as provided in Sections 10(b), 10(c) or
10(d), you shall notify the Company and the Selling Shareholders by telephone
or telegram, confirmed by letter.
11. COSTS AND EXPENSES. The Company and the Selling Shareholders
will bear and pay the costs and expenses incident to the registration of the
Shares and public offering thereof,
25
including, without limitation, (a) the fees and expenses of the Company's
accountants and the fees and expenses of counsel for the Company, (b) the
preparation, printing, filing, delivery and shipping of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto (except as otherwise expressly provided in Section 5(d)
hereof) and the printing, delivery and shipping of this Agreement, the
Agreement Among Underwriters, the Selected Dealer Agreement, Underwriters'
Questionnaires, Custody Agreements and Powers of Attorney, and Blue Sky
Memoranda, (c) the furnishing of copies of such documents (except as
otherwise expressly provided in Section 5(d) hereof) to the Underwriters, (d)
the registration or qualification of the Shares for offering and sale under
the securities laws of the various states, including the reasonable fees and
disbursements of Underwriters' counsel relating to such registration or
qualification, (e) the fees payable to the NASD and the Commission in
connection with their review of the proposed offering of the Shares, (f) all
printing and engraving costs related to preparation of the certificates for
the Shares, including transfer agent and registrar fees, (g) all initial
transfer taxes, if any, (h) all fees and expenses relating to the
authorization of the Shares for trading on The Nasdaq Stock Market National
Market System, (i) all travel expenses, including air fare and accommodation
expenses, of representatives of the Company in connection with the offering
of the Shares and (j) all of the other costs and expenses incident to the
performance by the Company of the registration and offering of the Shares;
provided, however, that the Underwriters will bear and pay the fees and
expenses of the Underwriters' counsel (other than fees and disbursements
relating to the registration or qualification of the Shares for offering and
sale under the securities laws of the various states), the Underwriters'
out-of-pocket expenses, and any advertising costs and expenses incurred by
the Underwriters incident to the public offering of the Shares; and provided,
further, that the Selling Shareholders will bear and pay the fees and
expenses of the Selling Shareholders' counsel.
If this Agreement is terminated by you in accordance with the provisions
of Section 10(c), the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel to the Underwriters.
12. DEFAULT OF SELLING SHAREHOLDERS. Failure or refusal by any of
the Selling Shareholders to sell and deliver on the Closing Date the Shares
agreed to be sold and delivered by such Selling Shareholder shall in no
manner relieve the other Selling Shareholders or the Company of their
respective obligations under this Agreement. If any Selling Shareholder
should fail or refuse to sell and deliver his Shares, the remaining Selling
Shareholders shall have the right hereby granted to increase, pro rata or
otherwise, the number of Shares to be sold by them hereunder to the total
number of Shares to be sold by all Selling Shareholders as set forth in
Schedule I. If the remaining Selling Shareholders do not fully exercise the
right to increase the number of Shares to be sold by them, the Underwriters,
at your option, will have the right to elect to purchase or not to purchase
the Shares to be sold by the Company and the remaining Selling Shareholders.
In the event the Underwriters purchase the Shares of the Company and such
other Selling Shareholders pursuant to this Section 12, the Closing Date
shall be postponed for a period of not more than seven (7) days in order that
the Registration Statement and Prospectus or other documents may be amended
or supplemented to the extent necessary under the provisions of the Act and
the Rules and Regulations or under the securities laws of any jurisdiction.
If the
26
Underwriters determine not to purchase the Shares of the Company and the
other Selling Shareholders, if any, this Agreement shall terminate and
neither the Company nor the Underwriters nor any other Selling Shareholder
shall be under any obligation under this Agreement except as provided in
Section 7 hereof and except for the obligation of the Company to pay for such
expenses as are set forth in Section 11 hereof. Nothing herein shall relieve
a defaulting Selling Shareholder from liability for his default or from
liability under Section 7 hereof or for expenses imposed by this Agreement
upon such Selling Shareholder.
13. NOTICES. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to
the Underwriters shall be mailed, delivered, sent by facsimile transmission,
or telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx
Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Syndicate, facsimile
number (000) 000-0000, or if sent to the Company shall be mailed, delivered,
sent by facsimile transmission, or telegraphed and confirmed to the Company
at 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx 00000-0000, facsimile number (913)
321-6392, or if sent to any Selling Shareholder shall be mailed, delivered,
sent by facsimile transmission or telegraphed and confirmed to such Selling
Shareholder, c/o the Attorney-in-Fact at the above address of the Company.
Notice to any Underwriter pursuant to Section 7 shall be mailed, delivered,
sent by facsimile transmission, or telegraphed and confirmed to such
Underwriter's address as it appears in the Underwriters' Questionnaire
furnished in connection with the offering of the Shares or as otherwise
furnished to the Company and the Selling Shareholder.
14. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Selling Shareholders, and the Company
and their respective successors and assigns. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person,
corporation or other entity, other than the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 7, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein
contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and assigns and said controlling
persons and said officers and directors, and for the benefit of no other
person, corporation or other entity. No purchaser of any of the Shares from
any Underwriter shall be construed a successor or assign by reason merely of
such purchase.
In all dealings with the Company and the Selling Shareholders under this
Agreement you shall act on behalf of each of the several Underwriters, the
Company, and the Selling Shareholders shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of the Underwriters,
made or given by you on behalf of the Underwriters, as if the same shall have
been made or given in writing by the Underwriters.
15. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
27
16. PRONOUNS. Whenever a pronoun of any gender or number is used
herein, it shall, where appropriate, be deemed to include any other gender
and number.
17. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Missouri.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
28
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company, each of the Selling
Shareholders and the Underwriters.
ELECTRONIC PROCESSING, INC.
By:
-------------------------------------
Title:
----------------------------------
Selling Shareholders Named in
Schedule I Hereto
By:
-------------------------------------
As Attorney-in-Fact acting on behalf
of each of the Selling Stockholders
named in Schedule I to this
Agreement
Accepted in St. Louis,
Missouri as of the date
first above written, on
behalf of ourselves and each
of the several Underwriters
named in Schedule II hereto.
X.X. XXXXXXX & SONS, INC.
By:
-----------------------------
Title:
--------------------------
29
SCHEDULE I
NAME OF NUMBER OF
SELLING SHAREHOLDER FIRM SHARES
Xxx X. Xxxxxxx 220,000
---------
Xxxxxxxxxxx X. Xxxxxxx 30,000
---------
Total 250,000
---------
---------
30
SCHEDULE II
NAME OF NUMBER OF
UNDERWRITER FIRM SHARES
X.X. Xxxxxxx & Sons, Inc.
----------
------------------------- ----------
------------------------- ----------
------------------------- ----------
------------------------- ----------
------------------------- ----------
------------------------- ----------
------------------------- ----------
------------------------- ----------
Total 1,250,000
----------
----------
31
SCHEDULE III
Pursuant to Section 6(g) of the Underwriting Agreement, Xxxxx,
Xxxxx & Xxxxxx shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial information)
examined by them and included in the Prospectus or the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Act and the applicable Rules and
Regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants ("AICPA") of the unaudited interim
financial statements, selected financial data, pro forma financial
information, prospective financial statements and/or condensed financial
statements derived from audited financial statements of the Company for
the periods specified in such letter, as indicated in their reports
thereon, copies of which [have been furnished to the Representative of
the Underwriters (the "Representative")] [are attached hereto].
(iii) They have made a review in accordance with standards
established by the AICPA of the unaudited condensed statements of
income, balance sheets and statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which [have
been separately furnished to the Representatives][are attached hereto];
and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed financial
statements referred to in paragraph (vi)(A)(i) below comply as to form
in all material respects with the applicable accounting requirements of
the Act and the related published rules and regulations, nothing came to
their attention that caused them to believe that the unaudited condensed
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect
to the results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus agrees with
the corresponding amounts (after restatements where applicable) in the
audited financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-KSB or the Company's Registration Statement on Form SB-2 (File
No. 333-______) for such fiscal years;
32
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, performing the procedures specified by
the AICPA for a review of interim financial information as discussed in
SAS No. 71, Interim Financial Information, on the latest available
interim financial statements of the Company, inspection of the minute
books of the Company since the date of the latest audited financial
statements included in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) any material modifications should be made to the
unaudited statements of income, balance sheets and statements of cash
flows included in the Prospectus for them to be in conformity with
generally accepted accounting principles, or the unaudited statements of
income, balance sheets and statements of cash flows included in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations thereunder;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited financial statements from which
such data and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited financial statements
included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited financial
statements included in the Prospectus;
(D) any unaudited pro forma condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the capital
stock or any increase in the long-term debt
33
of the Company, or any decreases in working capital, net assets,
shareholders' equity or other items specified by the Representative, or
any changes in any items specified by the Representative, in each case
as compared with amounts shown in the latest balance sheet included in
the Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred to
in Clause (E) there were any decreases in net revenues or operating
profit or the total or per share amounts of net income or any other
changes in any other items specified by the Representative, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representative, except in each case for changes, decreases or increases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representative,
which are derived from the general accounting records of the Company,
which appear in the Prospectus, or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the
Representative, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
have found them to be in agreement.
34
SCHEDULE IV
FORM OF LOCK-UP LETTER
ELECTRONIC PROCESSING INC.
1,250,000 SHARES
COMMON STOCK, PAR VALUE $0.01 PER SHARE (THE "COMMON STOCK")
X.X. Xxxxxxx & Sons, Inc.
As Representative of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
The undersigned shareholder (the "Shareholder") of
Electronic Processing Inc., a Missouri corporation (the "Company"), wishes
to facilitate the offering (the "Offering") of 1,250,000 shares of Common
Stock, par value $0.01 per share (the "Common Stock"), of the Company. The
Shareholder recognizes that the Offering will be of benefit to the Company
and the Shareholder.
In consideration of the foregoing and in order to induce you,
as the representative (the "Representative") of certain underwriters (the
"Underwriters") to enter into an underwriting agreement with the Company
and certain selling shareholders (the "Underwriting Agreement") relating to
the Offering and to complete the purchase of the shares of Common Stock
pursuant to such Underwriting Agreement, the Shareholder hereby agrees with
the Underwriters as follows:
1. During the term of this Agreement, as specified in
paragraph 3 hereof, such Shareholder shall not, directly or indirectly,
offer, sell, contract to sell or otherwise dispose of any shares of the
Company's Common Stock or any securities convertible into or exercisable or
exchangeable for, or any rights to purchase or acquire, Common Stock or the
beneficial ownership thereof (collectively the "Subject Securities"),
without your prior written consent as Representative of the Underwriters.
2. Any purported transfer of any Subject Securities in
violation of paragraph 1 hereof (an "Unauthorized Transfer") will be null
and void. The Company will not be required to register, recognize or give
effect to any Unauthorized Transfer and the purported transferee of any
Subject Securities or any interest therein pursuant to an Unauthorized
Transfer will not acquire any rights in such Subject Securities during the
term of this Agreement as specified in paragraph 3 hereof.
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3. This Agreement shall become effective upon the later of:
(i) the effective date of the Registration Statement filed by the Company
with the Securities and Exchange Commission on Form SB-2 (SEC Registration
No. 333-________) in connection with the Offering, as such Registration may
be amended from time to time (the "Registration Statement") or (ii) the
execution hereof by the Shareholder. This Agreement shall terminate without
any prior notice upon the earlier of (i) the date which is one hundred and
eighty (180) days after the effective date of the Registration Statement or
(ii) the termination or cancellation of the Underwriting Agreement for any
reason prior to the sale of the Common Stock to the Underwriters.
Notwithstanding the foregoing, this Agreement shall terminate immediately
upon any abandonment of the Registration Statement.
4. This Agreement shall be construed and enforced in
accordance with the laws of the State of Missouri. The Underwriters shall be
entitled to all legal and equitable remedies in enforcing this Agreement,
including without limitation an injunction against any sale of shares of the
Common Stock in contravention of this Agreement. If at any time subsequent
to the date of this Agreement any provision hereof shall be held by any court
of competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon, and shall not
impair the legality or enforceability of, any other provision of this
Agreement.
5. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same instrument.
6. All of the terms and provisions of this Agreement shall
inure to the benefit of and be binding upon the respective heirs, successors,
personal representatives and permitted assigns of the parties hereto.
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If the foregoing correctly sets forth the agreement between
the undersigned and the Underwriters, please indicate your acceptance in the
space provided below for that purpose.
Very truly yours,
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(SIGNATURE)
Print Name:
---------------------------
Date:
---------------------------------
Agreed to and accepted as of the date above
written:
X.X. Xxxxxxx & Sons, Inc.
For itself and as Representative of the several Underwriters
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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