1
EXHIBIT 1.0
5,907,665 SHARES
H.T.E., INC.
COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
October _____, 1998
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxx Xxxxx Xxxxxx & Company
As Representatives of the
several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
1. Introductory. H.T.E., Inc., a Florida corporation (the "Company"), and the
selling shareholders named in Schedule B-1 hereto (the "Selling
Shareholders") propose to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters" or
each, an "Underwriter") an aggregate of 5,137,100 shares of Common Stock,
$.01 par value (the "Common Stock") of the Company. The aggregate of
5,137,100 shares so proposed to be sold is hereinafter referred to as the
"Firm Stock." Certain of the Selling Shareholders also propose to sell to
the Underwriters, upon the terms and conditions set forth in Section 3
hereof, up to an additional 770,565 shares of Common Stock (the "Optional
Stock"). The Firm Stock and the Optional Stock are hereinafter collectively
referred to as the "Stock." XX Xxxxx Securities Corporation ("XX Xxxxx"),
Xxxxxx Xxxxxxxxxx Xxxxx Inc. ("Janney"), Xxxxxxx Xxxxx & Associates, Inc.
("Xxxxxxx Xxxxx") and Xxxxx Xxxxx Xxxxxx & Company ("Xxxxx") are acting as
representatives of the several Underwriters and in such capacity are
hereinafter referred to as the "Representatives."
2. (a) Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that (unless
the context in which the term appears indicate otherwise, the term
"Company" will be deemed to include reference to the Company and each of
its subsidiaries identified in Section 2(a)(vi) hereof (the
"Subsidiaries")):
2
(i) A registration statement on Form S-3 (File No. 333-61383),
with respect to the Stock has been carefully prepared by
the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities 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 Securities Act. Copies of such
registration statement and any amendments or supplements
thereto, and all forms of related prospectuses contained
therein, including all documents incorporated therein by
reference, have been delivered to you. Such registration
statement, including the prospectus, Part II, any documents
incorporated by reference therein and all financial
schedules and exhibits thereto, as amended at the time it
shall become effective, is herein referred to as the
"Registration Statement." If it is contemplated, at the
time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and
must be declared effective before the offering of the Stock
may commence, the term "Registration Statement" as used in
this Agreement means the registration statement as amended
by said post-effective amendment. The term "Registration
Statement" as used in this Agreement shall also include any
additional registration statement relating to the Stock
that is filed and declared effective pursuant to Rule
462(b) under the Securities Act. The term "Prospectus" as
used in this Agreement means the prospectus in the form
included in the Registration Statement, or, (A) if the
prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities
Act and such information is included in a prospectus filed
with the Commission pursuant to Rule 424(b) under the
Securities Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the
Registration Statement as supplemented by the addition of
the Rule 430A and other additional information contained in
the prospectus filed with the Commission pursuant to Rule
424(b) and (B) if prospectuses that meet the requirements
of Section 10(a) of the Securities Act are delivered
pursuant to Rule 434 under the Securities Act, then (i) the
term "Prospectus" as used in this Agreement means the
"prospectus subject to completion" (as such term is defined
in Rule 434(g) under the Securities Act) as supplemented by
(a) the addition of Rule 430A information and other
information contained in the form of prospectus delivered
pursuant to Rule 434(c)(2) under the Securities Act or (b)
the information contained in the abbreviated term sheets
described in Rule 434(c)(3) under the Securities Act, and
(ii) the date of such prospectuses shall be deemed to be
the date of the abbreviated term sheets. The term
"Pre-effective Prospectus" as used in this Agreement means
the prospectus subject to completion in the form included
in the Registration Statement at the time of the initial
filing of the Registration Statement with the Commission,
and as such prospectus shall have been amended from time to
time prior to the date of the Prospectus. Any reference
herein to any Pre-effective Prospectus or the Prospectus
shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Form S-3
under the Securities Act, as of the date of such
Pre-effective Prospectus or Prospectus, as the case may be,
and any reference to any amendment or supplement to any
Pre-effective Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and so incorporated by reference.
2
3
(ii) The Commission has not issued or threatened to issue any
order preventing or suspending the use of any Pre-effective
Prospectus, and, at its date of issue, each Pre-effective
Prospectus conformed in all material respects with the
requirements of the Securities Act and did not include any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading.
When the Registration Statement becomes effective and at
all times subsequent thereto up to and including each of
the Closing Dates (as hereinafter defined), the
Registration Statement and the Prospectus and any
amendments or supplements thereto will contain all material
statements and information required to be included therein
by the Securities Act and will conform in all material
respects to the requirements of the Securities Act and the
Rules and Regulations. At the time the Registration
Statement becomes effective, it will not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading. At the time the
Registration Statement becomes effective, the Prospectus
and any amendment or supplement thereto will not include
any untrue statement of a material fact or omit to state
any material fact required to be stated therein or
necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading. The foregoing representations, warranties and
agreements shall not apply to information contained in or
omitted from any Pre-effective Prospectus or the
Registration Statement or the Prospectus or any amendment
or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company by or on
behalf of any Underwriter, directly or through you, or by
any Selling Shareholder, specifically for use in the
preparation thereof. There is no franchise, lease,
contract, agreement or document required to be described in
the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement that is not
described or filed therein as required. All descriptions of
any such franchises, leases, contracts, agreements or
documents contained in the Registration Statement are
accurate and complete descriptions of such documents in all
material respects.
(iii) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and
except as set forth in the Prospectus, neither the Company
nor any of its Subsidiaries has incurred any liabilities or
obligations, direct or contingent, nor entered into any
transactions not in the ordinary course of business, and
there has not been any material adverse change in the
condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations
of the Company and its Subsidiaries considered as a whole
("Material Adverse Change"), or any change in the capital
stock, short-term or long-term debt of the Company and its
Subsidiaries considered as a whole.
3
4
(iv) The financial statements, together with the related notes
and schedules, set forth or incorporated by reference in
the Registration Statement, any Pre-Effective Prospectus or
the Prospectus fairly present, on the basis stated in the
Registration Statement, the financial condition, results of
operations and changes in financial condition of the
Company and its Subsidiaries at the respective dates and
for the respective periods therein specified. Such
statements and related notes and schedules have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the
periods indicated, except as may be set forth in the
Prospectus. All adjustments necessary for a fair
presentation of results for such periods have been made.
The selected financial, operating and statistical data set
forth in the Prospectus under the captions "Selected
Consolidated Financial Data" and "Management's Discussion
and Analysis of Financial Condition and Results of
Operations" and in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997, incorporated
by reference in the Prospectus, fairly present, on the
basis stated in the Registration Statement and such Annual
Report, the information set forth therein.
(v) Each of Xxxxxx Xxxxxxxx LLP, who have expressed their
opinions on the audited financial statements and related
schedules included in the Registration Statement and the
Prospectus and whose reports appear in the Prospectus, and
PricewaterhouseCoopers, whose reports appear in the
Prospectus, are independent public accountants as required
by the Securities Act and the Rules and Regulations.
(vi) Each of the Company and its Subsidiaries has been duly
organized and is validly existing and in good standing as a
corporation (or limited liability company, as the case may
be) under the laws of the jurisdiction of its organization,
with power and authority (corporate and other) to own or
lease its properties and to conduct its businesses as
described in the Prospectus; and each of the Company and
such Subsidiaries is duly qualified to do business and in
good standing as a foreign corporation in all other
jurisdictions where its ownership or leasing of properties
or the conduct of its businesses requires such
qualification (except where the failure to be so qualified
would not have a material adverse effect on the business,
condition or results of operations of the Company and its
Subsidiaries taken as a whole). Each of the Company and its
Subsidiaries has all requisite power and authority, and is
in possession of all necessary material consents,
approvals, franchises, grants, easements, certifications,
authorizations, orders, registrations, qualifications,
licenses and permits of and from all public regulatory or
governmental agencies and bodies and private parties
(collectively, the "Permits") to own, lease and operate its
properties and conduct its business as now being conducted
and as described in the Registration Statement and the
Prospectus, all of which permits are in full force and
effect, and no such Permit contains a materially burdensome
restriction not adequately disclosed in the Registration
Statement and the Prospectus. The Company owns directly or
indirectly 100% of the outstanding capital stock (or, in
4
5
the case of any limited liability company, 100% of the
outstanding membership interests) of the following
entities: HTE Xxxxxxx, Ltd., a Canadian corporation; HTE-Kb
Systems, Inc., a Florida corporation; HTE-Jalan, Inc., a
Florida corporation; HTE-Phoenix Systems, LLC, a
Connecticut limited liability company; HTE-USL Systems
Corporation, a Florida corporation; and HTE-UCS, Inc., a
Florida corporation. Any reference to the Company's
Subsidiaries herein shall be deemed to include all of these
entities. Neither the Company nor any of its Subsidiaries
has any direct or indirect equity interest (or derivative
thereof) in any other entity.
(vii) The Company's authorized and outstanding capital stock is,
on the date hereof, and will be on the Closing Dates, as
set forth under the heading "Capitalization" in the
Prospectus. The outstanding shares of Common Stock
(including the outstanding shares of Stock) of the Company
conform to the description thereof in the Prospectus and
have been duly authorized and validly issued and are fully
paid and nonassessable, are duly included for quotation on
the Nasdaq National Market and have been issued in
compliance with all federal and state securities laws and
were not issued in violation of or subject to any
preemptive rights or similar rights to subscribe for or
purchase securities. Except as disclosed in and or
contemplated by the Prospectus and the financial statements
of the Company and related notes thereto included in the
Prospectus, the Company does not have outstanding any
options or warrants to purchase, or any preemptive rights
or other rights to subscribe for or to purchase any
securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible
securities or obligations, except for options granted
subsequent to the date of information provided in the
Prospectus pursuant to, and in accordance with the
provisions of, the Company's employee and stock option
plans as disclosed in the Prospectus. The description of
the Company's stock option and other stock plans or
arrangements, and the options or other rights granted or
exercised thereunder, as set forth in the Prospectus,
accurately and fairly presents the information required to
be shown with respect to such plans, arrangements, options
and rights. All outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued,
and are fully paid and nonassessable and are owned directly
by the Company or by another wholly owned Subsidiary of the
Company free and clear of any liens, encumbrances, equities
or claims. All the outstanding membership interests of any
Subsidiary that is a limited liability company are validly
issued and are owned directly by the Company or by another
wholly owned Subsidiary of the Company free and clear of
any liens, encumbrances, equities or claims, and the
Company is not liable for the debts or obligations (whether
contract, tort or otherwise) of any Subsidiary that is a
limited liability company beyond the Company's capital
contribution to such limited liability company, as set
forth in its operating agreement.
(viii) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized
and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully
paid and nonassessable and free of any preemptive or
similar rights and will conform to the description thereof
in the Prospectus.
5
6
(ix) Except as set forth in the Prospectus, there are no legal
or governmental proceedings or investigations pending to
which the Company or any of its Subsidiaries or affiliates
is a party or of which any property of the Company or any
Subsidiary or affiliate is subject, which, if determined
adversely to the Company or any such Subsidiary or
affiliate, might individually or in the aggregate (i)
prevent or adversely affect the transactions contemplated
by this Agreement, (ii) suspend the effectiveness of the
Registration Statement, (iii) prevent or suspend the use of
any Pre-effective Prospectus in any jurisdiction or (iv)
result in a Material Adverse Change, and, to the best
knowledge of the Company, there is no valid basis for any
such legal or governmental proceeding. To the best of the
Company's knowledge, no such proceedings are threatened or
contemplated against the Company or any Subsidiary or
affiliate by governmental authorities or others. The
Company is not a party nor subject to the provisions of any
material injunction, judgment, decree or order of any
court, regulatory body or other governmental agency or
body. The description of the Company's litigation under the
heading "Legal Proceedings" in the Prospectus is true and
correct and complies with the Rules and Regulations.
(x) Neither the Company nor any of its Subsidiaries is, or with
the giving of notice or lapse of time or both would be, in
violation of or in material default under, nor will the
execution or delivery hereof or consummation of the
transactions contemplated hereby result in a violation of,
or constitute default under, the certificate or articles of
incorporation, bylaws or organizational or governing
documents of the Company or any of its Subsidiaries, or any
agreement, contract, mortgage, deed of trust, loan
agreement, note, lease, indenture or other instrument to
which the Company or any of its Subsidiaries is a party or
by which any of them is bound, or to which any of their
properties is subject, nor will the performance by the
Company of its obligations hereunder violate any law, rule,
administrative regulation or decree of any court or any
governmental agency or body having jurisdiction over the
Company, its Subsidiaries or any of their properties, or
result in the creation or imposition of any lien, charge,
claim or encumbrance upon any property or asset of the
Company or any of its Subsidiaries.
(xi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the
execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions
contemplated hereby, except such as may be required by the
National Association of Securities Dealers, Inc. (the
"NASD") or under the Securities Act or the Exchange Act or
the securities or "Blue Sky" laws of any jurisdiction in
connection with the purchase and distribution of the Stock
by the Underwriters.
6
7
(xii) The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations
hereunder (including to issue, sell and deliver the Stock),
and this Agreement has been duly and validly authorized,
executed and delivered by the Company and is a valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(xiii) Each of the Company and its Subsidiaries is in all
material respects in compliance with, and conducts its
businesses in conformity with, all applicable federal,
state, local and foreign laws, ordinances, rules and
regulations and any order or decree of any court or
governmental agency or body. To the knowledge of the
Company, otherwise than as set forth in the Registration
Statement and the Prospectus, no prospective change in any
of such federal or state laws, rules or regulations has
been adopted which, when made effective, would have a
material adverse effect on the condition (financial or
otherwise), properties, business, management, prospects,
net worth or results of operations of the Company and its
Subsidiaries taken as a whole ("Material Adverse Effect").
(xiv) Each of the Company and its Subsidiaries has filed all
necessary federal, state, local and foreign income,
payroll, franchise and other tax returns and all such tax
returns are complete and correct in all material respects
and the Company has not failed to pay any taxes that were
payables pursuant to such returns (or with respect to any
of its properties) or any assessments with respect thereto.
There is no tax deficiency that has been, or to the
knowledge of the Company is likely to be, asserted against
the Company or any of its Subsidiaries or any of their
respective properties or assets that would have a Material
Adverse Effect.
(xv) No person or entity has the right to require registration
of shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the
Registration Statement or otherwise, except for persons and
entities who have expressly waived such right or who have
been given proper notice and have failed to exercise such
right within the time or times required under the terms and
conditions of such right.
(xvi) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly,
any action designed or intended to stabilize or manipulate
the price of any security of the Company, or which caused
or resulted in, or which might in the future reasonably be
expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
7
8
(xvii) The Company has provided you with all financial
statements since December 31, 1997, to the date hereof that
are available to the officers of the Company, including
internal financial statements for the months of July and
August of 1998.
(xviii) The Company owns, or possesses rights to use, all
trademarks, trademark registrations, applications for
trademark registration, trade names, service marks, service
xxxx registrations, applications for service xxxx
registration, licenses, inventions, copyrights, know-how
(including, without limitation, trade secrets and other
unpatented and/or unpatentable proprietary or confidential
technology, information, systems, design methodologies and
devices or procedures developed or derived from or for the
Company's business), processes and formulations and other
proprietary information necessary for, used in, or proposed
to be used in, the conduct or its business as described in
the Prospectus (collectively, the "Intellectual Property").
The Company owns no rights in or to any patents or patent
applications. The Company has not infringed, is not
infringing and, except as expressly and specifically
disclosed in the Prospectus, has not received any notice of
conflict with, the rights of others with respect to the
Intellectual Property that, individually or in the
aggregate, if the subject of an unfavorable decision ruling
or finding, would have a Material Adverse Effect, and the
Company knows of no reasonable basis therefor. To the
knowledge of the Company, no other party has infringed upon
or is conflict with the Intellectual Property. The Company
is not a party to, or bound by, any agreement pursuant to
which royalties, honorariums or fees are payable by the
Company to any person by reason of the ownership or use of
any Intellectual Property that is material to the business
of the Company, except as described or referred to in the
Prospectus.
(xix) The Company has taken adequate steps to insure that all
software used in its operations or sold, licensed or
transferred to any person by the Company is "Year 2000
Compliant" (as defined below). For purposes of this
Agreement, the term "Year 2000 Compliant" means that the
software in question can, individually, and in combination
and in conjunction with all other systems, products or
processes with which it is required or designed to
interface, continue to be used normally and to operate
successfully (both in functionality and performance in all
material respects) over the transition into the
twenty-first century when used in accordance with the
documentation relating to the software, including being
able to, before, on and after January 1, 2000,
substantially conform to the following:
(i) use logic pertaining to dates that allows users to
identify and/or use the century portion of any date
field without special processing; and
8
9
(ii) respond to all date elements and date input so as to
resolve any ambiguity as to century in a disclosed,
defined and pre-determined manner and provide date
information in ways that are unambiguous as to
century, either by permitting or requiring the century
to be specified or where the date element is
represented without a century, the correct century is
unambiguous for all manipulations involving that
element. Except as described in the Prospectus, to the
knowledge of the Company, the Company has no material
liability, whether accrued, contingent or otherwise,
either matured or unmatured, arising from the failure
to be Year 2000 Compliant of any of the following:
(A) software that is or has been sold, licensed or
transferred by the Company to any person;
(B) the Company's computer systems; or
(C) software utilized by the Company and other
components of the Company's information
technology infrastructure.
(iii) To the Company's knowledge, it has complied, and is
in compliance, in all material respects, with the
requirements set forth in the Commission's Release
No. 33-7558 relating to disclosure of year 2000
issues.
(xx) Each of the Company and its Subsidiaries has performed all
material obligations required to be performed by it under
each contract required by Item 601(b)(10) of Regulation S-K
under the Securities Act to be filed as an exhibit to the
Registration Statement (whether or not the Company has
complied with its obligation to so file any such contract).
Neither the Company nor any of its Subsidiaries nor any
other party to any such contract is in default under or in
breach of any of its obligations thereunder and, neither
the Company nor any of its Subsidiaries has received any
notice of such default or breach.
(xxi) The Company is not involved in any labor dispute nor is
any such dispute threatened. The Company is not aware that
(A) any executive, key employee or significant group of
employees of the Company or any Subsidiary plans to
terminate employment with the Company or any such
Subsidiary or (B) any such executive or key employee is
subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be
violated by the present or proposed business activities of
the Company and its Subsidiaries. Neither the Company nor
any Subsidiary has or expects to have any liability for any
prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to
any pension, profit sharing or other plan which is subject
to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company or any Subsidiary
makes or ever has made a contribution and in which any
employee of the Company or any Subsidiary is or has ever
been a participant. With respect to such plans, each of the
Company and its Subsidiaries is in compliance in all
material respects with all applicable provisions of ERISA.
9
10
(xxii) The Company has obtained the written agreement described
in Section 8(k) of this Agreement from each of its
officers, directors and holders of Common Stock listed on
Schedule C hereto.
(xxiii) Each of the Company and its Subsidiaries has, and as of
each of the Closing Dates will have, good and valid title
in fee simple to all real property and good and marketable
title to all personal property owned or proposed to be
owned by it which is material to the business of the
Company, in each case free and clear of all liens,
encumbrances and defects, except such as are described in
the Prospectus or such as would not have a Material Adverse
Effect; and any real property and buildings held under
lease by any of the Company and its Subsidiaries or
proposed to be held after giving effect to the transactions
described in the Prospectus are, or will be as of each of
the Closing Dates, held by it under valid, subsisting and
enforceable leases with such exceptions as are described in
the Prospectus or as would not have a Material Adverse
Effect.
(xxiv) Each of the Company and its Subsidiaries is insured by
insurers of recognized financial responsibility against
such losses and risks and in such amounts as are customary
in the businesses in which it is engaged or proposes to
engage after giving effect to the transactions described in
the Prospectus. Neither the Company nor any Subsidiary of
the Company has any reason to believe that it will not be
able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its
business at a cost that would not cause a Material Adverse
Effect, except as described in or contemplated by the
Prospectus.
(xxv) Other than as expressly contemplated by this Agreement,
there is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder's fee
or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(xxvi) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida)
(related to doing business with the Government of Cuba or
with any person or any affiliate located in Cuba).
10
11
(xxvii) Each of the Company and its Subsidiaries maintains a
system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are
executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles
and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets
at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxviii) Neither the Company nor any of its Subsidiaries, nor
any officer, director, employee, agent or other person
acting on behalf of the Company or any of its Subsidiaries
has directly or indirectly, given or agreed to give any
money, property or similar benefit or consideration to any
customer or supplier (including any employee or agent of
any customer or supplier) or official or employee of any
agency or instrumentality of government (foreign or
domestic) or political party or candidate for office
(foreign or domestic) or any other person who was, or is in
the future may be, in a position to affect the general
affairs, properties, condition, financial or otherwise,
results of operations, stockholders' equity, business,
prospects or management of the Company or any of its
Subsidiaries, or any actual or proposed business
transaction of the Company or any of its Subsidiaries that
(A) could subject the Company to any liability (including,
but not limited to, the payment of monetary damages) or
penalty in any civil, criminal or governmental action or
proceeding that would have a Material Adverse Effect or (B)
violates any law, rule or regulation to which the Company
is subject, which violation, if proven, would have a
Material Adverse Effect.
(xxix) No statement, representation, warranty or covenant made
by the Company in this Agreement or in any certificate or
document required by this Agreement to be delivered to the
Representatives is, was when made, or as of any Closing
Date will be, inaccurate, untrue or incorrect in any
material respect.
(xxx) Neither the Company nor any of its Subsidiaries is or,
after application of the net proceeds of this offering as
described under the caption "Use of Proceeds" in the
Prospectus, will become, an "investment company" or an
entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act of 1940, as
amended (the "1940 Act"). The Company is familiar with the
1940 Act and the rules and regulations thereunder and it
has in the past conducted, and intends to conduct, its
affairs in such a manner as to ensure that it will not be
an "investment company" within the meaning of the 1940 Act
and the rules and regulations thereunder.
(xxxi) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the
Underwriters hereunder shall be deemed to be a
representation and warranty by the Company as to the
matters covered thereby.
11
12
(b) Representations and Warranties and Agreements of the Selling
Shareholders. Each of the Selling Shareholders represents and
warrants to, and agrees with, the several Underwriters that such
Selling Shareholder (provided that only such of the Selling
Shareholders as are identified in Schedule B-3 hereto (the "Major
Shareholders") is making the representations, warranties and
agreements set forth in Section 1(b)(x) hereof and only such of the
Selling Shareholders as are identified in Schedule B-4 hereto (the
"Acquisition Shareholders") are making the representations,
warranties and agreements set forth in Section 1(b)(xi) hereof):
(i) Now has, and on the Closing Dates will have, valid and
marketable title to the Stock to be sold by such Selling
Shareholder, free and clear of any lien, claim, security
interest or other encumbrance, including, without
limitation, any restriction on transfer, and has full
right, power and authority to enter into this Agreement,
the Custody Agreement and Power of Attorney (as hereinafter
defined) and, to the extent such Selling Shareholder is not
a natural person, has been duly organized and is validly
existing and in good standing under the laws of its
jurisdiction of organization.
(ii) Now has, and on each of the Closing Dates will have, upon
delivery of and payment for each share of Stock hereunder,
full right, power and authority, as well as any approval
required by law (except such as may be required by the NASD
or under the Securities Act, the Exchange Act or the Blue
Sky laws) to sell, transfer, assign and deliver the Stock
being sold by such Selling Shareholder hereunder, and each
of the several Underwriters will acquire good, valid and
marketable title to all of the Stock being sold to the
Underwriters by such Selling Shareholder, free and clear of
any liens, encumbrances, equities, claims, restrictions on
transfer or other defects whatsoever.
(iii) Will not, for a period of 90 days after the date of this
Agreement, without the consent of XX Xxxxx, offer to sell,
sell, contract to sell or otherwise dispose of any Stock or
securities convertible into or exchangeable for Stock,
including, without limitation Stock which may be deemed to
be beneficially owned by such Selling Shareholder in
accordance with the Rules and Regulations, except for the
Stock being sold hereunder.
(iv) Has duly executed and delivered a Custody Agreement and
Power of Attorney, in substantially the form heretofore
delivered by the Representatives (the "Custody Agreement
and Power of Attorney"), (A) appointing Xxxxxx X. Xxxxxxx
and O.F. Xxxxx (or, in the case of the distributees of
Meridian Venture Partners, Xxxxxx X. Xxxxxxx and Xxxxxxx X.
Xxxxxx) and each of them, as attorney-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver
this Agreement on behalf of such Selling Shareholder, to
authorize the delivery of the shares of Stock to be sold by
such Selling Shareholder hereunder and otherwise to act on
behalf of such Selling Shareholder in connection with the
transactions contemplated by this Agreement and (B)
appointing Continental Stock Transfer and Trust Company as
custodian (the "Custodian"), pursuant to which certificates
in negotiable form for the shares of Stock to be sold by
such Selling Shareholder hereunder have been placed in
custody for delivery under this Agreement.
12
13
(v) Has, by execution and delivery of each of this Agreement
and the Custody Agreement and Power of Attorney, created
valid and binding obligations of such Selling Shareholder,
enforceable against such Selling Shareholder in accordance
with their terms.
(vi) The performance of this Agreement, and the Custody
Agreement and Power of Attorney, and the consummation of
the transactions contemplated hereby and thereby will not
result in a breach or violation by such Selling Shareholder
of any of the terms or provisions of, or constitute a
default by such Selling Shareholder under, (A) the
articles, bylaws or other organizational documents of such
Selling Stockholder, if not a natural person, (B) any
indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other
agreement or instrument to which such Selling Shareholder
is a party or by which such Selling Shareholder or any of
its properties is bound, (C) any judgment of any court
applicable to such Selling Shareholder or any of its
properties, (D) or to such Selling Shareholder's knowledge,
any statute, decree, order, rule or regulation of any court
or governmental agency or body applicable to such Selling
Shareholder or any of its properties.
(vii) Has examined the Registration Statement and the Prospectus
and the information relating to such Selling Shareholder
set forth therein and, as to such information, the
Registration Statement does not contain an untrue statement
of a material fact and does not omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading and, as to such
information, the Prospectus does not contain any untrue
statement of the material fact and does not omit to state
any material fact required to be stated therein or
necessary to make the statement therein, in the light of
the circumstances under which they were made, not
misleading.
(viii) Has not incurred any liability for any finder's fee or
similar payment in connection with the sale of such Selling
Shareholder's Stock hereunder.
(ix) Has not distributed and will not distribute any offering
material in connection with the offering and sale of the
Stock other than the Registration Statement, a
Pre-effective Prospectus, the Prospectus and other
material, if any permitted by the Securities Act and the
Rules and Regulations. Neither such Selling Shareholder nor
any affiliate thereof has taken or shall take any action
designed, or that might be reasonably expected, to cause or
result in stabilization or manipulation or the price of the
Stock.
13
14
(x) If such Selling Shareholder is a Major Shareholder, the
representations and warranties of the Company contained in
Section 1(a) hereof are true and correct; provided, however,
with respect to the third sentence of Section 2(a)(xviii),
the Major Shareholders are making this representation and
warranty only to the best of their knowledge. Such Major
Shareholder has examined the Registration Statement and the
Prospectus and has no knowledge of any fact, condition or
information not disclosed therein that has had or could
reasonably be expect to have a Material Adverse Effect. Such
Major Shareholder is not prompted to sell the shares of
Stock to be sold by such Major Shareholder hereunder by any
information concerning the Company that is not set forth in
the Prospectus. The Registration Statement does 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. The Prospectus
does 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, in the
light of the circumstances under which they were made, not
misleading.
(xi) If such Selling Shareholder is an Acquisition Shareholder,
such Selling Shareholder has examined the Registration
Statement and the Prospectus and the information set forth
therein relating to the business of the Company acquired by
it when it acquired the entity (identified in Schedule B-4
hereto) of which Selling Shareholder was formerly an owner.
As to such information, the Registration Statement does not
contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading
and, as to such information, the Prospectus does 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, in the light of
the circumstances under which they were made, not
misleading.
Each Selling Shareholder agrees that the shares of Stock represented by
the certificates held in custody under the Custody Agreement are for the
benefit of and coupled with and subject to the interests of the
Underwriters, the other Selling Shareholders and the Company hereunder,
and that the arrangement for such custody and the appointment of the
Attorneys-in-Fact are irrevocable; that the obligations of such Selling
Shareholder hereunder shall not be terminated by operation of law, whether
by the death or incapacity, liquidation or distribution of such Selling
Shareholder, or any other event, that if such Selling Shareholder should
die or become incapacitated or is liquidated or dissolved or any other
event occurs, before the delivery of the Stock hereunder, certificates for
the Stock to be sold by such Selling Shareholder shall be delivered on
behalf of such Selling Shareholder in accordance with the terms and
conditions of this Agreement and the Custody Agreement and Power of
Attorney, and any action taken by the Attorneys-in-Fact or any of them
thereunder shall be as valid as if such death, incapacity, liquidation or
dissolution or other event had not occurred, whether or not the Custodian,
the Attorneys-in-Fact or any of them shall have notice of such death,
incapacity, liquidation or dissolution or other event.
14
15
3. Purchase by, and Sale and Delivery to, Underwriters, Closing Dates. Each
of the Company and the Selling Shareholders agrees, severally and not
jointly, to sell to the Underwriters the Firm Stock, with the number of
shares to be sold by the Company and each Selling Shareholder being the
number of shares set forth opposite his, her or its name in Schedule B-1
hereto; and on the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Underwriters agree, severally and not jointly, to purchase
the Firm Stock from the Company and the Selling Shareholders, the number of
shares of Firm Stock to be purchased by each Underwriter being set forth
opposite its name in Schedule A hereto, subject to adjustment in accordance
with Section 12 hereof. The number of shares of Firm Stock to be purchased
by each Underwriter from each Selling Shareholder hereunder shall bear the
same proportion to the total number of shares of Firm Stock to be purchased
by such Underwriter hereunder as the number of shares of stock being sold
by each Selling Shareholder bears to the total number of shares of Stock
being sold by all Selling Shareholders, subject to adjustment by the
Representatives to eliminate fractions. Each Underwriter shall be obligated
to purchase from the Company the number of shares of Firm Stock that bears
the same proportion to the total number of shares of Firm Stock to be sold
by the Company as the number of shares of Firm Stock set forth opposite the
name of such Underwriter in the Schedule A hereto bears to the total number
of shares of Firm Stock to be purchased by all of the Underwriters pursuant
to this Agreement, subject to adjustment by the Representatives to
eliminate fractions.
The purchase price per share to be paid by the Underwriters to the Company
and the Selling Shareholders will be the price per share set forth in the
table on the cover page of the Prospectus under the heading "Proceeds to
the Company" (the "Purchase Price").
The Company and the Selling Shareholders will deliver the Firm Stock to
the Representatives for the respective accounts of the several
Underwriters (in the form of definitive certificates, issued in such names
and in such denominations as the Representatives may direct by notice in
writing to the Company and the Selling Shareholders given at or prior to
12:00 Noon, New York Time, on the second full business day preceding the
First Closing Date (as defined below) or, if no such direction is
received, in the names of the respective Underwriters or in such other
names as XX Xxxxx may designate (solely for the purpose of administrative
convenience) and in such denominations as XX Xxxxx may determine, against
payment of the aggregate Purchase Price therefor by certified or official
bank check or checks in immediately available funds (same day funds),
payable to the order of the Company and Continental Stock Transfer and
Trust Company as Custodian for the Selling Shareholders, all at the
offices of Saul, Ewing, Xxxxxx & Xxxx LLP, Centre Square West, 0000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000. The time and date of
the delivery and closing shall be at 10:00 A.M., New York Time, on
_____________, 1998, in accordance with Rule 15c6-1 of the Exchange Act.
The time and date of such payment and delivery are herein referred to as
the "First Closing Date". The First Closing Date and the location of
delivery of, and the form of payment for, the Firm Stock may be varied by
agreement among the Company, the Selling Shareholders, XX Xxxxx and
Xxxxxx. The First Closing Date may be postponed pursuant to the provisions
of Section 12 hereof.
The Company and the Selling Shareholders shall make the certificates for
the Stock available to the Representatives for examination on behalf of
the Underwriters not later than 10:00 A.M., New York Time, on the business
day preceding the First Closing Date at the offices of XX Xxxxx, Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
15
16
It is understood that XX Xxxxx, Xxxxxx, Xxxxxxx Xxxxx or Xxxxx,
individually and not as Representatives of the several Underwriters, may
(but shall not be obligated to) make payment to the Company or to the
Selling Shareholders on behalf of any Underwriter or Underwriters, for the
Stock to be purchased by such Underwriter or Underwriters. Any such
payment by XX Xxxxx, Xxxxxx, Xxxxxxx Xxxxx or Xxxxx, shall not relieve
such Underwriter or Underwriters from any of its or their other
obligations hereunder.
The several Underwriters agree to make a public offering of the Firm Stock
at the "Price to Public" set forth in the table on the cover page of the
Prospectus as soon after the effectiveness of the Registration Statement
as in their judgment is advisable. The Representatives shall promptly
advise the Company and the Selling Shareholders of the making of the
public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus,
each of the Selling Shareholders listed in Schedule B-2 hereto hereby
grants to the Underwriters an option to purchase, severally and not
jointly, up to the number of shares of Optional Stock set forth opposite
his name on Schedule B-2 hereto, for an aggregate of up to 757,500 shares.
The price per share to be paid for the Optional Stock shall be the
Purchase Price. The option granted hereby may be exercised as to all or
any part of the Optional Stock at any time, and from time to time, not
more than thirty (30) days subsequent to the effective date of this
Agreement. No Optional Stock shall be sold and delivered unless the Firm
Stock previously has been, or simultaneously is, sold and delivered. The
right to purchase the Optional Stock or any portion thereof may be
surrendered and terminated at any time upon notice by the Underwriters to
the Selling Shareholders.
The option granted hereby may be exercised by the Underwriters by giving
written notice from XX Xxxxx to the Selling Shareholders setting forth the
number of shares of the Optional Stock to be purchased by them and the
date and time for delivery of and payment for the Optional Stock. Each
date and time for delivery of and payment for the Optional Stock (which
may be the First Closing Date, but not earlier) is herein called an
"Option Closing Date" and shall in no event be earlier than two (2)
business days nor later than ten (10) business days after written notice
is given. (Each Option Closing Date and the First Closing Date are herein
called the "Closing Dates.") All purchases of Optional Stock from the
Selling Shareholders shall be made on a pro rata basis. Optional Stock
shall be purchased for the account of each Underwriter in the same
proportion as the number of shares of Firm Stock set forth opposite such
Underwriter's name in Schedule A hereto bears to the total number of
shares of Firm Stock (subject to adjustment by the Underwriters to
eliminate odd lots). Upon exercise of the option by the Underwriters, the
Selling Shareholders agree to sell to the Underwriters the number of
shares of Optional Stock set forth in the written notice of exercise and
the Underwriters agree, severally and not jointly and subject to the terms
and conditions herein set forth, to purchase the number of such shares
determined as aforesaid.
16
17
The Selling Shareholders will deliver the Optional Stock to the
Underwriters (in the form of definitive certificates, issued in such names
and in such denominations as the Representatives may direct by notice in
writing to the Selling Shareholders given at or prior to 12:00 Noon, New
York Time, on the second full business day preceding the Option Closing
Date or, if no such direction is received, in the names of the respective
Underwriters or in such other names as XX Xxxxx may designate (solely for
the purpose of administrative convenience) and in such denominations as XX
Xxxxx may determine, against payment of the aggregate Purchase Price
therefor by certified or official bank check or checks in Clearing House
funds (next day funds), payable to the order of and Continental Stock
Transfer and Trust Company as Custodian for the Selling Shareholders or
payable as directed by such Custodian all at the offices of Saul, Ewing,
Xxxxxx & Xxxx LLP, Centre Square West, 0000 Xxxxxx Xxxxxx, 00xx xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000. The Selling Shareholders shall make the
certificates for the Optional Stock available to the Underwriters for
examination not later than 10:00 A.M., New York Time, on the business day
preceding the Option Closing Date at the offices of XX Xxxxx, Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option Closing Date and the location
of delivery of, and the form of payment for, the Option Stock may be
varied by agreement among the Selling Shareholders, XX Xxxxx and Xxxxxx.
The Option Closing Date may be postponed pursuant to the provisions of
Section 12.
4. Covenants and Agreements of the Company. The Company covenants and agrees
with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective under the Securities Act and, if the
Company and the Representatives have determined to proceed pursuant
to Rule 430A of the Rules and Regulations, use its best efforts to
comply with the provisions of and make all requisite filings with the
Commission pursuant to Rule 430A and Rule 424 of the Rules and
Regulations and, if the Company and the Representatives have
determined to deliver Prospectuses pursuant to Rule 434 of the Rules
and Regulations, to use its best efforts to comply with all the
applicable provisions thereof. The Company will advise the
Representatives promptly as to the time at which the Registration
Statement becomes effective, will advise the Representatives promptly
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose, and will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible the lifting thereof, if issued. The Company will advise the
Representatives promptly of the receipt of any comments of the
Commission or any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to
the Registration Statement or supplement to the Prospectus which
shall not previously have been submitted to the Representatives a
reasonable time prior to the proposed filing thereof or to which the
Representatives shall reasonably object in writing or which is not in
compliance with the Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly upon
the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus which in the opinion of
the Representatives may be necessary to enable the several
Underwriters to continue the distribution of the Stock and will use
its best efforts to cause the same to become effective as promptly as
possible. The Company will promptly file all reports and other
documents and statements required to be filed with the Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Stock.
17
18
(c) If at any time after the effective date of the Registration Statement
when a prospectus relating to the Stock is required to be delivered
under the Securities Act any event relating to or affecting the
Company or any of its Subsidiaries occurs as a result of which the
Prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the
Securities Act and the Rules and Regulations, the Company will
promptly notify the Representatives thereof and will prepare an
amended or supplemented prospectus or make an appropriate filing
pursuant to Section 13 or 14 of the Exchange Act that will correct
such statement or omission; and in case any Underwriter is required
to deliver a prospectus relating to the Stock nine (9) months or more
after the effective date of the Registration Statement, the Company
upon the request of the Representatives and at the expense of such
Underwriter will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Securities Act.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as
originally filed with the Commission, and all amendments thereto
including all financial statements and exhibits thereto and all
documents theretofore incorporated by reference therein, and will
deliver to the Representatives such number of copies of the
Registration Statement, including such financial statements and all
documents theretofore incorporated by reference therein but without
exhibits, and all amendments thereto, as the Representatives may
reasonably request. The Company will deliver or mail to or upon the
order of the Representatives, from time to time until the effective
date of the Registration Statement, as many copies of the
Pre-effective Prospectus as the Representatives may reasonably
request. The Company will deliver or mail to or upon the order of the
Representatives on the date of the initial public offering, and
thereafter from time to time during the period when delivery of a
prospectus relating to the Stock is required under the Securities
Act, as many copies of the Prospectus, in final form or as thereafter
amended or supplemented as the Representatives may reasonably
request; provided, however, that the expense of the preparation and
delivery of any prospectus required for use nine (9) months or more
after the effective date of the Registration Statement shall be borne
by the Underwriters required to deliver such prospectus.
(e) The Company will make generally available to its shareholders as soon
as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earning statement
which will be in reasonable detail (but which need not be audited)
and which will comply with Section 11(a) of the Securities Act,
covering a period of at least twelve (12) months beginning after the
"effective date" (as defined in Rule 158 under the Securities Act) of
the Registration Statement.
18
19
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such
jurisdictions as the Representatives may designate and at the request
of the Representatives will make such applications and furnish such
consents to service of process or other documents as may be required
of it as the issuer of the Stock for that purpose; provided, however,
that the Company shall not be required to qualify to do business or
to file a general consent (other than that arising out of the
offering or sale of the Stock) to service of process in any such
jurisdiction where it is not now so subject. The Company will, from
time to time, prepare and file such statements and reports as are or
may be required of it as the issuer of the Stock to continue such
qualifications in effect for so long a period as the Representatives
may reasonably request for the distribution of the Stock. The Company
will advise the Representatives promptly after the Company becomes
aware of the suspension of the qualifications or registration of (or
any such exception relating to) the Common Stock of the Company for
offering, sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and in the event of
the issuance of any orders suspending such qualifications,
registration or exception, the Company will, with the cooperation of
the Representatives use its best efforts to obtain the withdrawal
thereof.
(g) The Company will furnish to its shareholders annual reports
containing financial statements certified by independent public
accountants and with quarterly summary financial information in
reasonable detail which may be unaudited. During the period of five
(5) years from the date hereof, the Company will deliver to the
Representatives and, upon request, to each of the other Underwriters,
as soon as they are available, copies of each annual report of the
Company and each other report furnished by the Company to its
shareholders and will deliver to the Representatives, (i) as soon as
they are available, copies of any other reports (financial or other)
which the Company shall publish or otherwise make available to any of
its shareholders as such, (ii) as soon as they are available, copies
of any reports and financial statements furnished to or filed with
the Commission or any national securities exchange and (iii) from
time to time such other information concerning the Company as you may
reasonably request. So long as the Company has active subsidiaries,
such financial statements will be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally.
Separate financial statements shall be furnished for all subsidiaries
whose accounts are not consolidated but which at the time are
significant subsidiaries as defined in the Rules and Regulations.
(h) The Company will use its best efforts to cause the Stock to be
included for quotation, subject to official notice of issuance, on
the Nasdaq National Market concurrently with the effectiveness of the
Registration Statement.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
19
20
(j) Without the prior written consent of XX Xxxxx, the Company will not
offer, sell, assign, transfer, encumber, contract to sell, grant an
option to purchase or otherwise dispose of any shares of Common Stock
or securities convertible into or exercisable or exchangeable for
Common Stock (including, without limitation, Common Stock of the
Company which may be deemed to be beneficially owned by the Company
in accordance with the Rules and Regulations) during the 90 days
following the date on which the price of the Common Stock to be
purchased by the Underwriters is set, other than the Company's sale
of Common Stock hereunder, the Company's issuance of Common Stock
upon the exercise of warrants and stock options which are presently
outstanding and described in the Prospectus and the Company's
issuance of Common Stock (which is restricted stock under the Rules
and Regulations) in connection with corporate acquisitions described
or referred to in the Prospectus.
(k) The Company will apply the net proceeds from the sale of the Stock 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-K.
(l) 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 Stock under the Securities
Act.
(m) Prior to each of the Closing Dates the Company will furnish to you,
as soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company and its Subsidiaries
for any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the
Prospectus.
(n) Prior to each of the Closing Dates the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company, the financial
condition, results of operations, business, prospects, assets or
liabilities of the Company, or the offering of the Stock, without
your prior written consent. For a period of twelve (12) months
following the first Closing Date, the Company will use commercially
reasonable efforts to provide to you copies of each press release or
other public communications with respect to the financial condition,
results of operations, business, prospects, assets or liabilities of
the Company at least twenty-four (24) hours prior to the public
issuance thereof or such longer advance period as may reasonably be
practicable.
(o) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the
Representatives, to each of the Underwriters: (i) as soon as
practicable after the end of each fiscal year, copies of the annual
report to shareholders of the Company containing the balance sheet of
the Company as of the close of such fiscal year and statements of
income, stockholders' equity and cash flows for the year then ended
and the opinion thereon of the Company's independent public
accountants; (ii) as soon as practicable after the filing thereof,
copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Report on Form 8-K or other report filed by the
Company with the Commission, or the NASD or the Nasdaq National
Market or any securities exchange; and (iii) as soon as available,
copies of any report or communication of the Company mailed generally
to holders of its Common Stock.
20
21
(p) The Company will comply with the Securities Act, the Rules and
Regulations, the Exchange Act and the rules and regulations
thereunder so as to permit the continuance of sales of, and dealings
in, the Stock for as long as may be necessary to complete the
distribution of the Stock as contemplated hereby.
(q) During the course of the distribution of the Stock, the Company will
not take, directly or indirectly, any action designed to, or that
could reasonably be expected to, cause or result in stabilization or
manipulation of the price of its Common Stock.
(r) For a period of no less than three years after the date of the
Prospectus, the Company will use all reasonable efforts to maintain
the inclusion of its Common Stock (including, without limitation, the
Stock) for quotation on the Nasdaq National Market or the New York
Stock Exchange.
(s) The Company shall, at its sole cost and expense, supply and deliver
to the Representatives and the counsel for the Underwriters and the
Major Shareholders and their counsel, within a reasonable period from
the last Closing Date, an aggregate of 15 transaction binders, each
of which shall include the Registration Statement, as amended or
supplemented, all exhibits to the Registration Statement, the
Prospectus, as amended or supplemented, all underwriting and closing
documents and all other correspondence, filings and applications with
the Securities and Exchange Commission, the NASD and the Nasdaq
National Market.
(t) The Company, during the three-year period after the date of the
Prospectus, will take such steps as shall be necessary to insure that
neither it nor any Subsidiary shall become an "investment company"
within the meaning of the 1940 Act and the Rules and Regulations
thereunder.
5. Payment of Expenses.
(a) The Company will pay (directly or by reimbursement) all costs, fees
and expenses incurred in connection with expenses incident to the
performance of the obligations of the Company and of the Selling
Shareholders under this Agreement and in connection with the
transactions contemplated hereby, including but not limited to (i)
all expenses and taxes incident to the issuance and delivery of the
Stock to the Representatives; (ii) all expenses incident to the
registration of the Stock under the Securities Act; (iii) the costs
of preparing stock certificates (including printing and engraving
costs); (iv) all fees and expenses of the registrar and transfer
agent of the Stock; (v) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Stock to the
Underwriters; (vi) fees and expenses of the Company's counsel and the
Company's independent accountants; (vii) all costs and expenses
incurred in connection with the preparation, printing, filing,
shipping and distribution of the Registration Statement, each
Pre-effective Prospectus and the Prospectus (including all exhibits
and financial statements) and all amendments and supplements provided
for herein, the Selling Shareholders' Custody Agreements or Powers of
Attorney, the Master Agreement Among Underwriters between the
Representatives and the Underwriters, the Master Selected Dealers'
Agreement, the Underwriters' Questionnaire and related documents, and
the Blue Sky memoranda (including related fees and expenses of
counsel to the Underwriters) and this Agreement; (viii) all filing
fees, attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with exemptions from the qualifying or
21
22
registering (or obtaining qualification or registration of) all or
any part of the Stock for offer and sale and determination of its
eligibility for investment under the Blue Sky or other securities
laws of such jurisdictions as the Representatives may designate; (ix)
all fees and expenses paid or incurred in connection with filings
made with the NASD; (x) the Company's travel expenses in connection
with meetings with the brokerage community and institutional
investors; (xi) the costs and expenses associated with settlement in
same day funds (including, but not limited to, interest or cost of
funds expenses, if desired by the Company with respect to any
purchase of Optional Stock hereunder; and (xii) all other costs and
expenses incident to the performance of their obligations hereunder
which are not otherwise specifically provided for in this Section.
6. Indemnification and Contribution.
(a) The Company and each Major Shareholder, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if
any, who controls such Underwriter within the meaning of the
Securities Act and the respective officers, directors, partners,
employees, representatives and agents of each of such Underwriter
(collectively, the "Underwriter Indemnified Parties" and, each, an
"Underwriter Indemnified Party"), against any losses, claims,
damages, liabilities or expenses (including the reasonable cost of
investigating and defending against any claims therefor and counsel
fees incurred in connection therewith), joint or several, which may
be based upon the Securities Act, or any other statute or at common
law, (i) arising out of any breach of the Company's representations
and warranties herein, or (ii) on the ground or alleged ground that
any Pre-effective Prospectus, the Registration Statement or the
Prospectus (or any Pre-effective Prospectus, the Registration
Statement or the Prospectus as from time to time amended or
supplemented) includes or allegedly includes an 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 statements therein, in
light of the circumstances under which they were made, not
misleading, unless such statement or omission was made in reliance
upon, and in conformity with, written information furnished to the
Company by any Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof or (iii) for any act
or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or
expense arising out of or based upon matters covered by clause (ii)
above (provided that the Company shall not be liable under this
clause (iii) to the extent that it is determined in a final judgment
by a court of competent jurisdiction that such loss, claim, damage,
or liability or expense resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct). The Company will
be entitled to participate at its own expense in the defense or, if
it so elects, to assume the defense of any suit brought to enforce
any such liability, but if the Company elects to assume the defense,
such defense shall be conducted by counsel chosen by it and
reasonably acceptable to the Underwriters. In the event the Company
elects to assume the defense of any such suit and retain such
counsel, any Underwriter Indemnified Parties, defendant or defendants
in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) the Company shall have
specifically authorized the retaining of such counsel or (ii) the
parties to such suit include any such Underwriter Indemnified
Parties, and the Company and such Underwriter Indemnified Parties at
law or in equity have been advised by counsel to the Underwriters
that one or more legal defenses may be available to it or them which
may not be available to the Company, in which case the Company shall
not be entitled to assume the defense of such suit notwithstanding
its obligation to bear the fees and expenses of such counsel. This
indemnity agreement is not exclusive and will be in addition to any
liability which the Company might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in
equity to each Underwriter Indemnified Party. Notwithstanding the
foregoing, the liability under this Section 6(a) of each Major
Shareholder identified in Section B of Schedule B-3 hereto shall not
exceed the aggregate proceeds received by such person upon the sale
of his shares of Stock under this Agreement.
22
23
(b) Each Selling Shareholder agrees to indemnify and hold harmless each
Underwriter Indemnified Party against any losses, claims, damages,
liabilities or expenses (including, unless such Selling Shareholder
elects to assume the defense, the reasonable cost of investigating
and defending against any claims therefor and counsel fees incurred
in connection therewith), joint or several, which may be based upon
the Securities Act, or any other statute or at common law, (i)
arising out of breach of any representation and warranty of such
Selling Shareholder herein or (ii) on the ground or alleged ground
that the "Relevant Information" (as defined below) contained in any
Pre-effective Prospectus, the Registration Statement or the
Prospectus (or any Pre-effective Prospectus, the Registration
Statement or the Prospectus, as from time to time amended and
supplemented) includes an 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 statements therein, in light of the
circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity
with, written information furnished to the Company by any
Underwriter, directly or through the Representatives, specifically
for use in the preparation thereof; provided, however, that in no
case is such Selling Shareholder to be liable with respect to any
claims made against any Underwriter Indemnified Party against whom
the action is brought unless such Underwriter Indemnified Party shall
have notified such Selling Shareholder (at the address therefor
reflected in the records of the Corporation on the date hereof) in
writing within a reasonable time after the summons or other first
legal process giving information on the nature of the claim shall
have been served upon the Underwriter Indemnified Party, but failure
to notify such Selling Shareholder of such claims shall not relieve
it from any liability which it may have to any Underwriter
Indemnified Party otherwise than on account of its indemnity
agreement contained in this paragraph. Such Selling Shareholder shall
be entitled to participate at his own expense in the defense, or, if
he, she, or it so elects, to assume the defense of any suit brought
to enforce any such liability, but, if such Selling Shareholder
elects to assume the defense, such defense shall be conducted by
counsel chosen by him, her or it. In the event that any Selling
Shareholder elects to assume the defense of any such suit and retain
such counsel, the Underwriter Indemnified Parties, defendant or
defendants in the suit, may retain additional counsel but shall bear
the fees and expenses of such counsel unless (i) such Selling
Shareholder shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include such Underwriter
Indemnified Parties and such Selling Shareholder and such Underwriter
Indemnified Parties have been advised by counsel that one or more
legal defenses may be available to it or them which may not be
available to such Selling Shareholder, in which case such Selling
Shareholder shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such
counsel. Any Selling Shareholder against whom indemnity may be sought
shall not be liable to indemnify any person for any settlement of any
claim effected without such Selling Shareholder's consent, unless
Selling Shareholders having sold in the aggregate a majority of the
Stock hereunder shall have consented to such settlement. This
indemnity agreement is not exclusive and will be in addition to any
liability which such Selling Shareholder might otherwise have and
shall not limit any rights or remedies which may otherwise be
available at law or in equity to each Underwriter Indemnified Party.
The Company and the Selling Shareholders may agree, as among
themselves and without limiting the rights of the Underwriters under
this Agreement, as to their respective amounts of such liability for
which they each shall be responsible. For purposes of this Section
6(b), the term "Relevant Information" means (A) in the case of each
Major Shareholder, the entirety of the contents, (B) in the case of
each Acquisition Shareholder, the information relating to the
business of the Company acquired by the Company when it acquired the
entity (identified in Schedule B-4 hereto) of which such Acquisition
Shareholder was formerly an owner, and (C) in the case of any other
Selling Shareholder, the information relating to such Selling
Shareholder. Notwithstanding the foregoing, the liability under this
Section 6(b) of each Selling Shareholder (other than the Major
Shareholders identified in Section A of Schedule B-3 hereto) shall
not exceed the aggregate proceeds received by such person upon the
sale of his or her shares of Stock under this Agreement.
23
24
(c) Each Underwriter severally and not jointly agrees to 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 Securities
Act (collectively, the "Company Indemnified Parties") and, each
Selling Shareholder and each person, if any, who controls a Selling
Shareholder within the meaning of the Securities Act (collectively,
the "Shareholder Indemnified Parties"), against any losses, claims,
damages, liabilities or expenses (including, unless the Underwriter
or Underwriters elect to assume the defense, the reasonable cost of
investigating and defending against any claims therefor and counsel
fees incurred in connection therewith), joint or several, which arise
out of or are based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that
any Pre-effective Prospectus, the Registration Statement or the
Prospectus (or any Pre-effective Prospectus, the Registration
Statement or the Prospectus, as from time to time amended and
supplemented) includes an 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 statements therein, in light of the
circumstances in which they were made, not misleading, but only
insofar as any such statement or omission was made in reliance upon,
and in conformity with, written information furnished to the Company
by such Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof; provided, however,
that in no case is such Underwriter to be liable with respect to any
claims made against any Company Indemnified Party or Shareholder
Indemnified Party against whom the action is brought unless such
Company Indemnified Party or Shareholder Indemnified Party shall have
notified such Underwriter in writing within a reasonable time after
the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Company
Indemnified Party or Shareholder Indemnified Party, but failure to
notify such Underwriter of such claim shall not relieve it from any
liability which it may have to any Company Indemnified Party or
Shareholder Indemnified Party otherwise than on account of its
indemnity agreement contained in this paragraph. Such Underwriter
shall be entitled to participate at its own expense in the defense,
or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if such Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it.
In the event that any Underwriter elects to assume the defense of any
such suit and retain such counsel, the Company Indemnified Parties or
Shareholder Indemnified Parties and any other Underwriter or
Underwriters or controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, respectively. The Underwriter
against whom indemnity may be sought shall not be liable to indemnify
any person for any settlement of any such claim effected without such
Underwriter's consent. This indemnity agreement is not exclusive and
will be in addition to any liability which such Underwriter might
otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to any Company Indemnified
Party or Shareholder Indemnified Party.
(d) If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under
subsection (a) or (b) or (c) above in respect of any losses, claims,
damages, liabilities or expenses (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and each of the Selling
Shareholders on the one hand and the Underwriters on the other from
the offering of the Stock. 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 of the Company and each of the Selling Shareholders on
24
25
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholders on the
one hand and the Underwriters on the other 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 or
alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company, the particular Selling Shareholder or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company, each of the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if
contribution 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. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating, defending, settling or compromising any such
claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the shares of the Stock
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. Notwithstanding the
provisions of this subsection (d), no Selling Shareholder (other than
the Major Shareholders listed in Section A of Schedule B-3 hereto)
shall be required to contribute any amount in excess of the amount by
which the aggregate proceeds received by such Selling Shareholder
from the sale of Stock hereunder exceeds the amount of any damages
that such Selling Shareholder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. The Underwriters' obligations to contribute are
several in proportion to their respective underwriting obligations
and not joint. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. Survival of Indemnities, Representations, Warranties, etc. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company, the Selling Shareholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter,
the Selling Shareholders, the Company or any of its officers or directors
or any controlling person, and shall survive delivery of and payment for
the Stock.
8. Conditions of Underwriters' Obligations. The respective obligations of the
several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated herein) as of the date hereof and at and as of
each of the Closing Dates, of the representations and warranties made
herein by the Company and the Selling Shareholders, to compliance at and
as of each of the Closing Dates by the Company and the Selling
Shareholders with their respective covenants and agreements herein
contained and other provisions hereof to be satisfied at or prior to each
of the Closing Dates, and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness thereof shall have been issued and
no proceedings for that purpose shall have been initiated or, to the
knowledge of the Company or the Representatives, shall be threatened
by the Commission, and any request for additional information on the
part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Representatives. Any filings of the
Prospectus, or any supplement thereto, required pursuant to Rule
424(b) or Rule 434 of the Rules and Regulations, shall have been made
in the manner and within the time period required by Rule 424(b) and
Rule 434 of the Rules and Regulations, as the case may be.
25
26
(b) The Representatives shall have been satisfied that there shall not
have occurred prior to any of the Closing Dates any Material Adverse
Change or any change in the capital stock, short-term or long-term
debt of the Company and its Subsidiaries considered as a whole, such
that it is unpracticable in the reasonable judgment of the
Representatives to proceed with the public offering or purchase the
Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or governmental
action, suit or proceeding affecting the Company which is material
and adverse to the Company or which affects or may affect the
Company's or the Selling Stockholders' ability to perform their
respective obligations under this Agreement shall have been
instituted or threatened and there shall have occurred no material
adverse development in any existing such action, suit or proceeding.
(d) At the time of execution of this Agreement, the Representatives shall
have received from Xxxxxx Xxxxxxxx LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance
satisfactory to the Underwriters.
(e) The Representatives shall have received from Xxxxxx Xxxxxxxx LLP,
independent certified public accountants, letters, dated each of the
Closing Dates, to the effect that such accountants reaffirm, as of
each of the Closing Dates, and as though made on each of the Closing
Dates, the statements made in the letter furnished by such
accountants pursuant to paragraph (d) of this Section 8.
(f) The Representatives shall have received from Xxxxxxxxx Traurig, P.A.,
counsel for the Company, opinions, dated each of the Closing Dates,
to the effect set forth in Exhibit I hereto.
(g) The Representatives shall have received from Xxxxxxxxx Xxxxxxx, P.A.
and Xxxxxx Xxxxxx & Xxxxx, LLP, counsel for the Selling Shareholders,
opinions dated each of the Closing Dates to the effect set forth in
Exhibit II hereto.
(h) The Representatives shall have received from Saul, Ewing, Xxxxxx &
Xxxx LLP, counsel for the Underwriters, their opinions dated each of
the Closing Dates with respect to the incorporation of the Company,
the validity of the Stock, the Registration Statement and the
Prospectus and such other related matters as may reasonably request,
and the Company and the Selling Shareholders shall have furnished to
such counsel such documents as they may request for the purpose of
enabling them to pass upon such matters.
(i) The Representatives shall have received certificates, dated each of
the Closing Dates, of the chief executive officer or the president
and the chief financial officer of the Company to the effect that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued, and, to the best of the knowledge of
the signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities
Act;
(ii) They have examined the Registration Statement, each
Pre-effective Prospectus and Prospectus and any amendments or
supplements thereto and neither any Pre-effective Prospectus, as
of its date, nor the Registration Statement nor the Prospectus,
nor any amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate,
included any untrue statement of a material fact, nor did the
Registration Statement (or any amendment thereto), at and during
such times, omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, nor did the Prospectus (or any supplement thereto),
at and during such times, omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading;
26
27
(iii) They have read this Agreement and the representations and
warranties of the Company in this Agreement are true and correct
at and as of each of the Closing Dates, and the Company has
complied with all the agreements and performed or satisfied all
the conditions on its part to be performed or satisfied at or
prior to each of the Closing Dates; and
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as
disclosed in or contemplated by the Prospectus, (i) there has
not been any Material Adverse Change; (ii) there has been no
material adverse change, loss, reduction, termination or
non-renewal of any material contract to which the Company or any
Subsidiary is a party, (iii) there has been no event or
transaction, contract or agreement entered into by the Company
or any Subsidiary that has not been, but would be required to
be, set forth in the Registration Statement or Prospectus; (iv)
the business and operations conducted by the Company and its
Subsidiaries have not sustained a loss by strike, fire, flood,
accident or other calamity (whether or not insured) of such a
character as to interfere materially with the conduct of the
business and operations of the Company and its Subsidiaries
considered as a whole; (v) no legal or governmental action,
suit, investigation or proceeding is pending or threatened
against the Company that is material to the Company, whether or
not arising from transactions in the ordinary course of
business, or which may materially and adversely affect the
transactions contemplated by this Agreement; (vi) the Company
has not incurred any material liability or obligation, direct,
contingent or indirect, made any change in its capital stock
(except pursuant to its stock plans, as described in the
Prospectus, and pursuant to corporate acquisition agreements
described or referred to in the Prospectus), made any material
change in its short-term or funded debt or repurchased or
otherwise acquired any of the Company's capital stock; and (vii)
the Company has not declared or paid any dividend, or made any
other distribution, upon its outstanding capital stock payable
to stockholders of record on a date prior to the Closing Date.
(j) The Representatives shall have received a certificate or certificates
(which may be executed and delivered by the respective
Attorneys-in-Fact), dated each of the Closing Dates, of each of the
Selling Shareholders to the effect that as of each of the Closing
Dates its representations and warranties in this Agreement are true
and correct as if made on and as of each of the Closing Dates, and
that it has performed all its obligations and satisfied all the
conditions on its part to be performed or satisfied at or prior to
the Closing Dates.
(k) The Representatives shall have received the written agreements,
substantially in the form of Exhibit III hereto, of the officers,
directors and holders of Common Stock listed in Schedule C thereto.
(l) The Nasdaq National Market shall have approved the stock for
inclusion for quotation, subject only to official notice of issuance.
(m) All corporate proceedings and other matters incident to the
authorization, form and validity of the Agreement, the Stock and the
form of the Registration Statement and the Prospectus, as amended and
supplemented, and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be satisfactory in all
material respects to counsel for the Underwriters. The Company and
the Selling Shareholders shall have furnished to such counsel all
documents and information that they may have reasonably requested to
enable them to pass upon such matters.
(n) The National Association of Securities Dealers, Inc. shall have
indicated that it has no objection to the underwriting arrangements
pertaining to the sale of any shares of Stock.
27
28
(o) The Representatives shall have received at or prior to each Closing
Date from counsel for the Underwriters a memorandum or summary in
form and substance satisfactory to the Representatives with respect
to the qualification for offering and sale by the Underwriters of the
Stock under the securities or Blue Sky laws of such as are
jurisdictions designated by the Representatives.
(p) At each of the Closing Dates: (i) the Registration Statement and any
post-effective amendment thereto and the Prospectus and any
amendments or supplements thereto shall contain all statements that
are required to be stated therein in accordance with the Securities
Act and the Rules and Regulations and in all material respects shall
conform to the requirements of the Securities Act and the Rules and
Regulations, and the Registration Statement and any post-effective
amendment thereto shall not contain any untrue statement or a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented, shall not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; (ii) since the respective dates as of which information
is given in the Registration Statement and any post-effective
amendment thereto and in the Prospectus and any amendments or
supplements thereto, except as otherwise expressly stated therein,
there shall have been no Material Adverse Change; and (iii) since the
respective dates as of which information is given in the Registration
Statement and any post-effective amendment thereto and the Prospectus
and any amendment or supplement thereto, there shall have been no
event or transaction, contract or agreement entered into by the
Company or any Subsidiary that has not been, but is required to be,
set forth in the Registration Statement or Prospectus.
(q) The Representatives shall have received from Xxxxxx Xxxxxxxx LLP a
letter addressed to the Company and made available to the
Representatives for the use of the Underwriters stating that their
review of the Company's system of internal accounting controls, to
the extent they deem necessary in establishing the scope of audit of
the Company's consolidated financial statements as of December 31,
1997, after restatement for the 1998 pooling of interests with UCS,
Inc., did not disclose any weaknesses in internal controls that they
considered to be material weaknesses.
(r) There shall have been duly tendered to the Representatives for the
respective accounts of the Underwriters certificates representing all
of the shares of Stock to be purchased by the Underwriters on a
particular Closing Date.
(t) The Representatives shall have received copies of the executed
Custody Agreement and Power of Attorney for each Selling Shareholder,
and such document shall have been approved in form and substance by
counsel for the Underwriters, such approval not to be withheld
unreasonably.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in
form and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters
and other documents as the Representatives shall reasonably request. If
any of the conditions hereinabove provided for in this Section shall not
have been satisfied when and as required by this Agreement, this Agreement
may be terminated by the Representatives by notifying the Company of such
termination in writing or by telegram at or prior to each of the Closing
Dates, but XX Xxxxx, on behalf of the Representatives, shall be entitled
to waive any of such conditions.
28
29
9. Effective Date. This Agreement shall become effective immediately as to
Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. New York City time on the first full business
day following the effectiveness of the Registration Statement or at such
earlier time after the Registration Statement becomes effective as the
Representatives may determine on and by notice to the Company or by
release of any of the Stock for sale to the public. For the purposes of
this Section 9, the Stock shall be deemed to have been so released upon
the release for publication of any newspaper advertisement relating to the
Stock or upon the release by you of telegrams (i) advising the several
Underwriters that the shares of Stock are released for public offering or
(ii) offering the Stock for sale to securities dealers, whichever may
occur first.
10. Termination. This Agreement (except for the provisions of Section 5) may
be terminated by the Company or the Selling Shareholders at any time
before it becomes effective in accordance with Section 9 by notice to the
Representatives and may be terminated by the Representatives at any time
before it becomes effective in accordance with Section 9 by notice to the
Company. In the event of any termination of this Agreement under this or
any other provision of this Agreement, there shall be no liability of any
party to this Agreement to any other party, other than as provided in
Sections 5, 6 and 11 and other than as provided in Section 12 as to the
liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First
Closing Date trading in securities on any of the New York Stock Exchange,
American Stock Exchange, Nasdaq National Market System, Chicago Board of
Options Exchange, Chicago Mercantile Exchange, Chicago Board of Trade,
shall have been suspended or minimum or maximum prices shall have been
established on any such exchange or market, or a banking moratorium shall
have been declared by New York or United States authorities; (ii) trading
of any securities of the Company shall have been suspended on any exchange
or in any over-the-counter market; (iii) if at or prior to the First
Closing Date there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power or of any
other insurrection or armed conflict involving the United States or (B)
any change in financial markets or any calamity or crisis which, in the
judgment of the Representatives, makes it impractical or inadvisable to
offer or sell the Stock on the terms contemplated by the Prospectus; (iv)
if there shall have been any development or prospective development
involving particularly the business or properties or securities of the
Company or the transactions contemplated by this Agreement, which, in the
judgment of the Representatives, makes it impracticable or inadvisable to
offer or deliver the Stock on the terms contemplated by the Prospectus;
(v) if there shall be any litigation or proceeding, pending or threatened,
which, in the judgment of the Representatives, makes it impracticable or
inadvisable to offer or deliver the on the terms contemplated by the
Prospectus; or (vi) if there shall have occurred any of the events
specified in the immediately preceding clauses (i) - (v) together with any
other such event that makes it, in the judgment of the Representatives,
impractical or inadvisable to offer or deliver the Stock on the terms
contemplated by the Prospectus.
29
30
11. Reimbursement of Underwriters. Notwithstanding any other provisions
hereof, if this Agreement shall not become effective by reason of any
election of the Company or the Selling Shareholders pursuant to the first
paragraph of Section 10 or shall be terminated by the Representatives
under Section 8 or Section 10, the Company will bear and pay the expenses
specified in Section 5 hereof and, in addition to its obligations pursuant
to Section 6 hereof, the Company will reimburse the reasonable
out-of-pocket expenses of the several Underwriters (including reasonable
fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives.
12. Substitution of Underwriters. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent
(10%) of the total number of shares of Firm Stock or Optional Stock (as
the case may be) underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase. If any Underwriter or Underwriters shall so
default and the aggregate number of shares with respect to which such
default or defaults occur is more than ten percent (10%) of the total
number of shares underwritten and arrangements satisfactory to the
Representatives and the Company for the purchase of such shares by other
persons are not made within forty-eight (48) hours after such default,
this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a
defaulting Underwriter or Underwriters as provided in this Section 12, (i)
the Company and the Selling Shareholders shall have the right to postpone
the Closing Dates for a period of not more than five (5) full business
days in order that the Company and the Selling Shareholders may 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 promptly to file any amendments to the Registration
Statement or supplements to the Prospectus which may thereby be made
necessary, and (ii) the respective numbers of shares to be purchased by
the remaining Underwriters or substituted Underwriters shall be taken as
the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting
Underwriter of its liability to the Company, the Selling Shareholders or
the other Underwriters for damages occasioned by its default hereunder.
Any termination of this Agreement pursuant to this Section 12 shall be
without liability on the part of any non-defaulting Underwriter, the
Selling Shareholders or the Company, except for expenses to be paid or
reimbursed pursuant to Section 5 and except for the provisions of Section
6.
30
31
13. Notices. All communications hereunder shall be in writing and, if sent to
the Underwriters shall be mailed, delivered or telegraphed and confirmed
to you, as their Representatives c/o XX Xxxxx Securities Corporation at
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 except that notices given to an
Underwriter pursuant to Section 6 hereof shall be sent to such Underwriter
at the address furnished by the Representatives or, if sent to the Company
or the Selling Shareholders, shall be mailed, delivered or telegraphed and
confirmed c/o the Company at 0000 Xxxxxxxx Xxxxx, Xxxx Xxxx, Xxxxxxx
00000.
14. Successors. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters, the Company and the Selling Shareholders
and their respective successors and legal representatives. Nothing
expressed or mentioned in this Agreement is intended or shall be construed
to give any person other than the persons mentioned in the preceding
sentence any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained, this Agreement and
all conditions and provisions hereof being intended to be and being for
the sole and exclusive benefit of such persons and for the benefit of no
other person; except that the representations, warranties, covenants,
agreements and indemnities of the Company and the Selling Shareholders
contained in this Agreement shall also be for the benefit of the person or
persons, if any, who control any Underwriter or Underwriters within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the indemnities of the several Underwriters shall also be for the
benefit of each director of the Company, each of its officers who has
signed the Registration Statement and the person or persons, if any, who
control the Company or any Selling Shareholders within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action
taken under this Agreement by Cowen, as Representative, will be binding on
all the Underwriters; and any action taken under this Agreement by any of
the Attorneys-in-Fact will be binding on all the Selling Shareholders.
17. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is for
any reason determined to be invalid or unenforceable, there shall be
deemed to be made such minor changes (and only such minor changes) as are
necessary to make it valid and enforceable.
18. General. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company, the Selling
Shareholders and the Representatives.
31
32
19. Counterparts. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Shareholders represents by so doing that he has been duly
appointed as Attorney-in-Fact by such Selling Shareholder pursuant to a
validly existing and binding power of attorney which authorizes such
Attorney-in-Fact to take such action.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding
agreement between us.
Very truly yours,
H.T.E., INC.
By:
----------------------------
President
----------------------- ------------------------ ----------------------
XXXXXX X. XXXXXXX O.F. XXXXX XXXXXXX X. XXXXXX
Acting on his own behalf and Acting on his own behalf and Acting as Attorney-in-Fact
as Attorney-in-Fact for the as Attorney-in-Fact for the for the Selling Shareholders
Selling Shareholders listed in Selling Shareholders listed in listed in Schedule E hereto
Schedule D hereto Schedule F hereto
Accepted and delivered in
New York, New York, as of
the date first above written.
XX XXXXX SECURITIES CORPORATION
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXX XXXXX XXXXXX & COMPANY
Acting on their own behalf and
as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: XX XXXXX SECURITIES CORPORATION
By:
----------------------------------
Xxxx X. Xxxxxx
Managing Director - Syndicate
32
33
SCHEDULE A
Number of Firm Number of
Shares to be Optional Shares to
Name Purchased be Purchased
---- --------- ------------
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxx Xxxxx Xxxxxx & Company
Total
-----
34
SCHEDULE B-1
FIRM STOCK
NUMBER OF FIRM SHARES
COMPANY TO BE SOLD
------- ----------
H.T.E., Inc..................................................................... 1,500,002
SELLING SHAREHOLDERS
--------------------
Xxxxxx X. Xxxxxxx............................................................... 371,749
Xxxx X. Xxxxxxx................................................................. 250,885
O.F. Xxxxx...................................................................... 273,098
X.X. Xxxxxx, Jr................................................................. 70,000
Xxxxxx X. Xxxxx................................................................. 20,000
Xxxxxx X. Xxxxxxx............................................................... 169,600
Xxxxxx X. Xxxxxx................................................................ 183,468
Xxxxxxx X. North................................................................ 112,846
Xxxxxx X. Xxxxxx................................................................ 110,000
Xxxxx X. Way.................................................................... 110,000
BancBoston Ventures, Inc........................................................ 1,112,432
CoreStates Holdings, Inc........................................................ 416,391
First Maryland Bancorp.......................................................... 36,208
Summit Bancorp.................................................................. 54,312
The Philadelphia Municipal...................................................... 90,520
PNC Bank, Delaware.............................................................. 36,208
NatWest Group Holdings Corporation.............................................. 90,520
Xxxxxx X. Xxxxxx................................................................ 30,394
Xxxxxxx X. Xxxxxxxx, Xx......................................................... 43,827
49 Employees of HTE-UCS, Inc.................................................... 54,640
---------
Total........................................................................... 3,637,098
35
SCHEDULE B-2
OPTIONAL STOCK TO BE SOLD BY SELLING SHAREHOLDERS
NUMBER OF SHARES OF
OPTIONAL STOCK
SELLING SHAREHOLDERS TO BE SOLD
-------------------- -----------
Xxxxxx X. Xxxxxxx............................................................... 339,300
Xxxx X. Xxxxxxx................................................................. 339,301
O.F. Xxxxx...................................................................... 81,964
X.X. Xxxxxx, Jr................................................................. 10,000
-------
Total........................................................................... 770,565
36
SCHEDULE B-3
MAJOR SHAREHOLDERS
The following Selling Shareholders are "Major Shareholders" within the
meaning of Section 2(b) of this Agreement for the purposes of joining with the
Company in making the representations and warranties to, and agreements with,
the several Underwriters as provided in such Section 2:
A. Selling Shareholders whose obligations are coextensive with the
Company's:
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
B. Selling Shareholders whose maximum obligations will not exceed the
proceeds received thereby, respectively, upon the sale of their Stock under
this Agreement.
O. F. Xxxxx
X. X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
37
SCHEDULE B-4
ACQUISITION SHAREHOLDERS
The following Selling Shareholders are "Acquisition Shareholders" within
the meaning of Section 2(b) of this Agreement.
A. Persons who formerly were shareholders of UCS, Inc., who acquired
their shares of Stock in connection with the Company's acquisition of UCS, Inc.
and whose maximum obligations will not exceed the proceeds received upon the
sale of their Stock under this Agreement.
Xxxxxx X. Xxxxxx
Xxxxxxx X. North
B. Persons who formerly were members of Phoenix Systems, LLC, who
acquired their shares of Stock in connection with the Company's acquisition of
Phoenix Systems, LLC, and whose maximum obligations will not exceed the proceeds
received upon the sale of their Stock under this Agreement.
Xxxxxx X. Xxxxxx
Xxxxx X. Way
38
SCHEDULE C
LOCK-UP AGREEMENT SIGNATORIES
H.T.E., Inc.
Lock-up obligations included in Underwriting Agreement.
Selling Shareholders
Lock-up obligations included in Underwriting Agreement and Custody
Agreement and Power of Attorney. Further, the following Selling
Shareholders have delivered stand-alone Lock-Up Agreements:
[To be provided]
Non-Selling Shareholders
Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxxxx X. Xxxx
Xxxxx X. Xxxxx
39
SCHEDULE D
SELLING SHAREHOLDERS FOR WHOM
XXXXXX X. XXXXXXX IS ATTORNEY-IN-FACT
Xxxx X. Xxxxxxx
X.X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Way
40
SCHEDULE E
SELLING SHAREHOLDERS FOR WHOM
XXXXXXX X. XXXXXX IS ATTORNEY-IN-FACT
BancBoston Ventures, Inc.
CoreStates Holdings, Inc.
First Maryland Bancorp.
Summit Bancorp
The Philadelphia Municipal Employees Retirement System
PNC Bank, Delaware
NatWest Group Holdings Corporation
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx, Xx.
41
SCHEDULE F
SELLING SHAREHOLDERS FOR WHOM
O. F. XXXXX IS ATTORNEY-IN-FACT
Xxxxx X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxx and Xxxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxxx Xxxxxx X. May
Xxxxxx X. August Xxxxxx XxXxxx
Xxxxxx Bollinjin Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxx Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx Xxxxx Xxxxxxx
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxx Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx Xxxxx X. North
Xxxxx Deer Xxxxxxx X. North
Xxxxxx xxXxxxxxxxx Xxxx Plush
Xxxxxx X. Xxxxx Xxxxx Xxxxx
Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxxx Xxxxxxxx Xxxx
Xxxxx Xxxxxx Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxx Xxxxx Xxxxx
Xxxxxxxxxxx Xxxxx Xxxx Xxx Xxxxx
Xxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxx
Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx X. Xxxx Xxxxx Xxxxxx
Xxxxx Xxxxxx, Jr. Xxxxxxx X. Xxxxx
Xxxxxxxx Xxxxxx Xxxxx Xx
Mandvil Loriston Xxxx Xxxxxxx
42
Exhibit III
[Form of Lock-Up Agreement]
[Date]
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxx Xxxxx Xxxxxx & Company
As Representative of the
several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: H.T.E., Inc.
5,137,100 Shares of Common Stock
Dear Sirs:
In order to induce XX Xxxxx Securities Corporation ("SC Cowen"), Xxxxxx
Xxxxxxxxxx Xxxxx Inc. ("Janney"), Xxxxxxx Xxxxx & Associates, Inc. ("Xxxxxxx
Xxxxx") and Xxxxx Xxxxx Xxxxxx & Company ("Xxxxx") (XX Xxxxx, Xxxxxx, Xxxxxxx
Xxxxx and Xxxxx are together, the "Representatives"), to enter in to a certain
underwriting agreement with H.T.E., Inc., a Florida corporation (the
"Company"), with respect to the public offering of shares of the Company's
Common Stock, par value $.01 per share ("Common Stock"), the undersigned hereby
agrees that for a period of 90 days following the date of the final prospectus
filed by the Company with the Securities and Exchange Commission in connection
with such public offering, the undersigned will not, without the prior written
consent of SC Cowen, directly or indirectly, offer, sell, assign, transfer,
encumber, pledge, contract to sell, grant an option to purchase or otherwise
dispose of, other than by operation of law, any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the "Beneficially Owned
Shares")).
Anything contained herein to the contrary notwithstanding, any person to whom
shares of Common Stock or Beneficially Owned Shares are transferred from the
undersigned shall be bound by the terms of this Agreement.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of legends and/or stop-transfer orders with the
transfer agent of the Common Stock with respect to any shares of Common Stock
or Beneficially Owned Shares.
[Signatory]
By:
---------------------------------
Name:
Title:
