EXHIBIT 1
Xxxxxxxx Financial, Inc.
Common Stock
(no par value)
UNDERWRITING AGREEMENT
-----------------------
May ___, 2004
Xxxxxx, Xxxxx Xxxxx, Incorporated
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Section 1. Introductory.
Subject to the terms and conditions stated herein, Xxxxxxxx Financial,
Inc., a corporation organized under the laws of British Columbia, Canada (the
"Company"), proposes to issue and sell to Xxxxxx Xxxxx Xxxxx, Incorporated (the
"Underwriter") an aggregate of 1,100,000 shares of its common stock, no par
value (the "Common Stock"), and the stockholders listed in Schedule A hereto
(the "Selling Stockholders") propose severally to sell an aggregate of 900,000
shares of Common Stock (such 2,000,000 shares of Common Stock being hereafter
referred to as the "Firm Common Shares".
In addition, the Company has granted to the Underwriter an option to
purchase up to an additional 300,000 shares of Common Stock, as provided in
Section 3 (such additional shares, the "Optional Common Shares"). The Firm
Common Shares and, if and to the extent such option is exercised, the Optional
Common Shares are collectively called the "Common Shares").
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-2 (File No.
333-113215), which contains a form of prospectus, subject to completion, to be
used in connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "Securities Act"),
including any information deemed to be a part thereof at the time of
effectiveness pursuant to the Securities Act or any rule promulgated thereunder,
is called the "Registration Statement." Any registration statement filed
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by the Company pursuant to Rule 462(b) under the Securities Act is called the
"Rule 462(b) Registration Statement," and from and after the date and time of
filing of the Rule 462(b) Registration Statement, the term "Registration
Statement" shall include any Rule 462(b) Registration Statement. The prospectus
in the form included in the Registration Statement at the time it becomes
effective or, if the prospectus included in the Registration Statement omits
certain information in reliance upon Rule 430A under the Securities Act and such
information is thereafter included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act or as part of a post-effective
amendment to the Registration Statement after the Registration Statement becomes
effective, the prospectus as so filed, is referred to in this Agreement as the
"Prospectus." Any reference herein to the Registration Statement, the 462(b)
Registration Statement, the Prospectus or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-2 under the Securities Act, as of the
effective date of the Registration Statement or the date of such Prospectus, as
the case may be, as such documents are modified or superseded by such Prospectus
(the "Incorporated Documents"). For purposes of this Agreement, all references
to the Registration Statement, the 462(b) Registration Statement, the
Prospectus, any preliminary prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System (XXXXX).
Each of the Company and the Selling Shareholders, severally but not
jointly, hereby confirms its agreements with the Underwriter as follows:
Section 2. Representations and Warranties.
(a) The Company hereby represents and warrants to the
Underwriter on the date hereof and shall be deemed to represent and warrant to
the Underwriter on each Closing Date as follows:
(i) Compliance with Registration Requirements.
The Registration Statement has been filed with the Commission and has been
declared effective by the Commission under the Securities Act and no
post-effective amendment to the Registration Statement has been filed as of the
date of this Agreement. The Company has complied with all written requests of
the Commission (and all oral requests of the Commission to an executive officer
of the Company) for additional or supplemental information relating to the
Registration Statement, except for post-ffective amendment No.1 to the
Registration Statement. The Company has not received any notice that a stop
order suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued by the Commission or that any
proceedings for such purpose have been instituted by the Commission and, to the
Company's knowledge, no such proceedings are contemplated or threatened by the
Commission.
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Each preliminary prospectus and the
Prospectus when filed and any supplement or amendment thereto when filed with
the Commission under Rule 424(b) of the Securities Act complied or will comply,
as the case may be, in all material respects as to form with the Securities Act
and at any such time did 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. The Registration Statement (including any
Rule 462(b) Registration Statement), in the form it became effective, and any
post-effective amendment thereto in the form it becomes effective, complied or
will comply, as the case may be, as to form in all material respects with the
Securities Act and at any such time did 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. The representations and
warranties set forth in the two immediately preceding sentences do not apply to
statements in or omissions from the Registration Statement (including any Rule
462(b) Registration Statement) or any post-effective amendment thereto, any
preliminary prospectus, or the Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with information relating to
the Underwriter furnished to the Company.
(ii) Offering Materials Furnished to the
Underwriter. The Company has delivered to the Underwriter a complete manually
signed copy of the Registration Statement and of each consent filed as a part
thereof, and conformed copies of the Registration Statement (without exhibits)
and preliminary prospectuses and the Prospectus, as amended or supplemented, in
such quantities and at such places as the Underwriter has reasonably requested.
(iii) Exhibits; Material Contracts. There
are no contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement which have not been
described or filed as required. The contracts so described in the Prospectus to
which the Company or any Subsidiary of the Company is a party have been duly
authorized, executed and delivered by the Company, constitute valid and binding
agreements of the Company, and are enforceable against and by the Company in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally or by general principles of equity or the
availability of specific performance, injunctive relief and other equitable
principles. Neither the Company, nor, to the best of the Company's knowledge,
any other party is in material breach of or material default under any of such
contracts.
(iv) No Brokerage Commissions, etc.
Except as disclosed in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or the Underwriter for a brokerage commission,
finder's fee or other like payment in connection with this offering.
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(v) The Underwriting Agreement. The
execution and delivery of this Agreement by the Company has been duly authorized
by all necessary corporate action.
(vi) Authorization of the Common Shares.
The Common Shares to be sold by the Company have been duly authorized for
issuance and sale pursuant to this Agreement; all other outstanding shares of
capital stock of the Company are, and, when the Common Shares have been issued
and delivered by the Company to the Underwriter against payment therefor in
accordance with the terms of this Agreement, such Common Shares will be validly
issued, fully paid and non-assessable.
(vii) No Applicable Registration or Other
Similar Rights. There are no persons other than the Selling Stockholders with
registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as have been duly
satisfied or waived.
(viii) No Material Adverse Change. Except
as otherwise disclosed or incorporated by reference in the Prospectus (or any
amendment or supplement thereto) subsequent to the respective dates as of which
information is given in such Prospectus: (i) there has been no material adverse
change, or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations, whether or not arising from transactions in
the ordinary course of business, of the Company and its subsidiaries, considered
as one enterprise (any such change or development is called a "Material Adverse
Change"); (ii) the Company and its subsidiaries, considered as one enterprise,
have not incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business, nor entered into any
material transaction or agreement not in the ordinary course of business; and
(iii) there has been no dividend or distribution of any kind declared, paid or
made by the Company, except for dividends or distributions paid to the Company
or its subsidiaries on any class of capital stock or other equity interests, or
repurchases or redemptions by the Company or any of its subsidiaries of any
class of capital stock or other equity interests.
(ix) Independent Accountants. Ernst &
Young LLP, who has expressed its opinions with respect to the financial
statements (which term as used in this Agreement includes the related notes
thereto) filed with the Commission as a part of or incorporated by reference in
the Registration Statement and included in the Prospectus, are, to the Company's
knowledge, independent public accountants as required by the Securities Act.
(x) Preparation of the Financial
Statements. The consolidated financial statements of the Company filed with the
Commission as a part of the Registration
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Statement and included in the Prospectus (and any amendment or supplement
thereto) present fairly in all material respects, the consolidated financial
position of the Company and its subsidiaries as of and at the dates indicated
and the results of their operations and cash flows for the periods specified.
Any supporting schedules included in the Registration Statement present fairly
and accurately, in all material respects, the information required to be stated
therein. Such financial statements and supporting schedules have been prepared
in conformity with generally accepted accounting principles in the United States
applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No financial statements or
supporting schedules are required to be included or incorporated by reference in
the Registration Statement that have not been so included or incorporated. The
financial data set forth in the Prospectus under the captions "Selected
Financial Data" and "Capitalization" are accurately presented and prepared on a
basis consistent with the financial statements contained in the Registration
Statement and the books and records of the Company and fairly and accurately
present, in all material respects, the information set forth therein on a basis
consistent with that of such financial statements when read in conjunction with
the textual information included in those sections.
(xi) Organization and Good Standing of
the Company and its Subsidiaries. Each of the Company and its direct and
indirect subsidiaries has been duly incorporated or formed, as the case may be,
and is validly existing as a corporation, in good standing or of active status
(if incorporated in the State of Florida) under the laws of the jurisdiction of
its incorporation or formation, as the case may be, and has power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and, in the case of the Company, to enter into and
perform its obligations under this Agreement. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change. All of the issued and outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and, except as set forth in the
Amended and Restated Loan and Security Agreement dated August 1, 2000, by and
among Bank of America, as agent for the various financial institutions, the
Company and the various financial institutions from time to time a party to the
agreement, are owned by the Company, directly or through subsidiaries, free and
clear of any material security interest, mortgage, pledge, lien, claim,
restriction or encumbrance. The Company does not own or control, directly or
indirectly, any corporation, partnership, association or other entity other than
Xxxxxxxx Financial, Inc. and Xxxxxxxx Data Services, Inc., each a Florida
corporation.
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(xii) Capitalization and Other Capital
Stock Matters. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization" as
of the date set forth therein. The capital stock of the Company (including the
Common Shares) conforms in all material respects to the description thereof
contained in the Prospectus. All of the issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued, are fully
paid and non-assessable and have been issued in compliance with applicable
federal and state securities laws. None of the outstanding shares of capital
stock of the Company were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. Except as set forth in the Prospectus, and except for options to
purchase capital stock issued pursuant to the Xxxxxxxx Financial, Inc. Employee
Stock Option Plan and the Xxxxxxxx Financial, Inc. Non-Employee Director Stock
Option Plan, the Company does not have outstanding on the date hereof and each
Closing Date any contracts or commitments to issue or sell, any shares of Common
Stock or options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any Common Stock of the Company or any of its
subsidiaries.
(xiii) Exchange Act Registration; Stock
Exchange Listing. The Common Stock is registered pursuant to Section 12(g) of
the Exchange Act, and is quoted on the Nasdaq National Market System (the
"Nasdaq NMS"), and the Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the Nasdaq NMS, nor has the
Company received any notification that the Commission or the Nasdaq NMS is
contemplating terminating such registration or listing. Application has been
made to list the Common Shares being sold by the Company and the Selling
Stockholders on the Nasdaq NMS, and as of the Closing Date with respect thereto,
the Common Shares being sold by the Company and the Selling Stockholders shall
have been approved for quotation on the Nasdaq NMS, subject to official notice
of issuance.
(xiv) Non-Contravention of Existing
Instruments; No Further Authorizations or Approvals Required. Neither the
Company nor any subsidiary is in breach of, or in default under (nor has any
event occurred which with notice, lapse of time, or both would constitute a
breach of or default under) ("Default"), its respective articles or certificate
of incorporation, bylaws, certificate of limited partnership or partnership
agreement, as the case may be, or in the performance of any obligation,
agreement, covenant or condition contained in any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument to
which the Company or any subsidiary is a party or by which any of them or their
respective properties is bound (each, an "Existing Instrument"), except for such
Defaults which would not result in a Material Adverse Change. The Company's
execution, delivery and performance of this Agreement and consummation of the
transactions contemplated hereby (i)
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have been duly authorized by all necessary corporate action and will not result
in any violation of the provisions of the charter or by-laws or other
organizational documents of the Company, (ii) will not conflict with or
constitute a Default or Debt Repayment Triggering Event (as defined below), or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries that would result
in a Material Adverse Change, pursuant to, or require the consent of any other
party to, any Existing Instrument, where the failure to obtain such consent
would result in a Material Adverse Change and (iii) will not result in any
material violation of any material law, administrative regulation or
administrative or court decree applicable to the Company or any of its
subsidiaries that would result in a Material Adverse Change. No consent,
approval, authorization or other order of, or registration or filing with, any
court or other governmental or regulatory authority or agency, is required for
the Company's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby, except (i) such as have
been obtained or made by the Company and are in full force and effect under the
Securities Act, (ii) such as may be required under applicable state securities
or blue sky laws or by the National Association of Securities Dealers, Inc. (the
"NASD"), and (iii) such as may be required to list the Common Shares for trading
on Nasdaq NMS.
As used herein, a "Debt Repayment Triggering
Event" means any event or condition which gives, or with the giving of notice or
lapse of time or both would give, the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.
(xv) No Material Actions or Proceedings.
There are no legal or governmental actions, suits or proceedings pending or, to
the Company's knowledge, threatened (i) against the Company or any of its
subsidiaries or (ii) which have as the subject thereof any officer or director
of, or property owned or leased by, the Company or any of its subsidiaries,
where in any such case (A) there is a reasonable possibility that such action,
suit or proceeding might be determined adversely to the Company or such
subsidiary and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions contemplated by this
Agreement. No material labor dispute with the employees of the Company or any of
its subsidiaries taken as a whole, exists or, to the best of the Company's
knowledge, is threatened or imminent.
(xvi) Regulatory Compliance. The Company
and its subsidiaries are in compliance in all material respects with all
applicable federal, state and local laws and regulations applicable to them
including, without limitation, the Xxxxxxxx-Xxxxx Act of 2002, as amended, and
the rules and regulations of the Commission promulgated thereunder (the
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"Xxxxxxxx-Xxxxx Act"), the Fair Debt Collection Act, Truth in Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Reporting Act, the
Xxxxx-Xxxxx-Xxxxxx Act, and the Soldiers' and Sailors' Civil Relief Act and
comparable statutes in states where the Company and its subsidiaries' customers
reside, and the respective rules and regulations thereunder, the failure to
comply with which would have a Material Adverse Change. Neither the Company nor
any of its subsidiaries is a party to any agreement or memorandum of
understanding with, or party to any commitment letter or similar undertaking to,
or is subject to any order or directive by, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board resolutions at
the request of any regulatory authority which restricts materially the conduct
of its business as described in the Prospectus, nor has the Company or any of
its subsidiaries been advised in writing by any of the regulatory authorities
that it is contemplating issuing or requesting (or considering the
appropriateness of issuing or requesting) the foregoing (nor has any executive
officer of the Company been so advised, whether in writing or orally).
(xvii) Intellectual Property Rights. The
Company and its subsidiaries own or possess sufficient trademarks, trade names,
patent rights, copyrights, licenses, approvals, trade secrets and other similar
rights (collectively, the "Intellectual Property Rights") reasonably necessary
to conduct their businesses as now conducted or as proposed to be conducted as
described in the Prospectus; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change.
Neither the Company nor any of its subsidiaries has received any written notice
(nor has any executive officer of the Company been so advised, whether in
writing or orally) of infringement or conflict with asserted Intellectual
Property Rights of others, which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change, and to the Company's knowledge, no such infringements
or conflicts exist.
(xviii) All Necessary Permits, etc. The
Company and each of its subsidiaries possesses such valid and current
certificates, authorizations, licenses, registrations and permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses as described in the Registration Statement
and Prospectus (or any amendment or supplement thereto) (collectively, the
"Governmental Licenses") except where the failure to possess Governmental
License would not result in a Material Adverse Change; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where such noncompliance would not, singly or in
the aggregate, have a Material Adverse Change; all of the Governmental Licenses
are valid and in full force and effect, except where such invalidity would not
have a Material Adverse Change; and neither the Company nor any of its
subsidiaries have received any notice of proceedings relating to the revocation
or modification of any Governmental Licenses which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change.
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(xix) Tax Law Compliance. The Company and
its subsidiaries have filed all federal, state, local and foreign income and
franchise tax returns required to be filed by or on behalf of the Company and
any subsidiary with respect to all periods ended prior to the date hereof,
except where the failure to file would not have a Material Adverse Change, or
have properly requested extensions thereof and have paid all taxes required to
be paid by them and, if due and payable, any related or similar assessment, fine
or penalty levied against any of them, except such, if any, that are being
contested in good faith. The Company has made adequate charges, accruals and
reserves in the applicable financial statements referred to in Section 2(a)(x)
above in respect of all federal, state, local and foreign income and franchise
taxes for all periods as to which the tax liability of the Company or any of its
subsidiaries has not been finally determined.
(xx) Company Not an "Investment
Company." The Company is not, and after receipt of payment for the Common Shares
will not be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(xxi) Insurance. The Company has no
reason to believe that it or any of its subsidiaries will not be able to (i)
renew its existing insurance coverage as and when such policies expire or (ii)
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted or as proposed to be
conducted as described in the Prospectus. During the past five years, neither
the Company nor any of its subsidiaries has been denied any insurance coverage
which it has sought or for which it has applied.
(xxii) No Price Stabilization or
Manipulation. Other than excepted activity pursuant to Regulation M under the
Exchange Act, neither the Company nor any of its officers, directors or
controlling persons has taken any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Common Shares or
which is otherwise prescribed by Regulation M promulgated by the Commission.
(xxiii) Related Party Transactions. There
are no business relationships or transactions, direct or indirect, involving the
Company or any of its subsidiaries on the one hand, and the directors, officers,
or five percent stockholders of the Company, on the other hand, required to be
described in the Registration Statement or the Prospectus which have not been
described as required or incorporated by reference therein.
(xxiv) No Unlawful Contributions or Other
Payments. Neither the Company nor any of its subsidiaries nor, to the best of
the Company's knowledge, any employee
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or agent of the Company or any subsidiary has made any contribution or other
payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law or of the character required to be disclosed in
the Prospectus.
(xxv) Compliance with Environmental Laws.
Except as otherwise disclosed in the Prospectus, or except as would not,
individually or in the aggregate, result in a Material Adverse Change, the
Company and its subsidiaries (i) have been and are in compliance with applicable
Environmental Laws (as defined below), (ii) have received all material permits,
licenses or other approvals required of it under applicable Environmental Laws,
to conduct their business as described in the Prospectus and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, have a Material Adverse Change. There are no
costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up and any
potential liabilities to third parties) which would, individually or in the
aggregate, have a Material Adverse Change. To the Company's knowledge, there are
no pending or threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and, to the Company's knowledge, there are no
events or circumstances that would reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against the Company, its
subsidiaries, or any of its predecessors in interest relating to hazardous
materials or any Environmental Laws. To the Company's knowledge, no property
that is or has been owned, leased or occupied by the Company or its subsidiaries
has been designated as a Superfund Site pursuant to the Comprehensive
Environmental Response, Compensation of Liability Act of 1980, as amended (42
U.S.C. Section 9601, et. seq. "CERCLA") or otherwise designated as a
contaminated site under applicable state or local law and the Company has not
been named as a "potentially responsible party" under CERCLA.
As used herein, "Environmental Law" means
any federal, state or local environmental law, statute, bylaw, ordinance, rule
or regulation, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. (S)(S)
9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as amended, 49
U.S.C. (S)(S) 1801-1819, the Resource Conservation and Recovery Act, as amended,
42 U.S.C. (S)(S) 6901-K, the Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. (S)(S) 1101-11050, the Toxic Substances Control Act, 15
U.S.C. (S)(S) 2601-2671, the Federal Insecticide, Fungicide and Rodenticide Act,
7 U.S.C. (S)(S) 136-136y, the Clean Air Act, 42 U.S.C. (S)(S) 7401-7642, the
Clean Water Act (Federal Water Pollution
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Control Act), 33 U.S.C. (S)(S) 1251-1387, the Safe Drinking Water Act, 42 U.S.C.
(S)(S) 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C.
(S)(S) 651-678, and any analogous state laws, as any of the above have been
amended as of the date hereof and as of each Closing Date and in the regulations
promulgated pursuant to each of the foregoing (including environmental statutes
and laws not specifically defined herein) (individually, an "Environmental Law"
and collectively, the "Environmental Laws").
(xxvi) ERISA Compliance. Any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company or its ERISA
Affiliates (as defined below) that is subject to ERISA (individually, an "ERISA
Plan") is in compliance in all material respects with ERISA. "ERISA Affiliate"
means, with respect to the Company, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Code of which the Company
is a member. No "reportable event" (as defined under ERISA) has occurred with
respect to any ERISA Plan. Except as disclosed in the Prospectus, no ERISA Plan,
if such ERISA Plan were terminated, would have any "amount of unfunded benefit
liabilities" (as defined under ERISA). Neither the Company nor any of its ERISA
Affiliates has incurred any liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any ERISA Plan or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each ERISA Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS as to its qualified status and nothing has
occurred since the date of such letter, whether by action or failure to act,
which would cause the loss of such qualification.
(xxvii) Offering. In connection with this
offering, the Company has not offered and will not offer shares of its Common
Stock or any other securities convertible into or exchangeable or exercisable
for shares of Common Stock in a manner in violation of the Securities Act; the
Company has not distributed and will not distribute any offering material in
connection with the offer and sale of the Shares, other than a preliminary
prospectus, the Prospectus, the Registration Statement including any amendments
or supplements to any of the foregoing, and other materials permitted by the
Securities Act.
(xxviii) Broker/Dealer. The Company (i) is
not required to register as a "broker" or "dealer" in accordance with the
provisions of the Exchange Act or the regulations promulgated thereunder, and
(ii)except as previously disclosed to the Underwriter in writing, neither the
Company nor any of its subsidiaries nor any director or officer of the Company
or its subsidiaries directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, or has any other
association with (within the meaning of Article I, Section 1(m) of the By-laws
of the NASD), any member firm of the NASD.
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(xxix) No Unlawful Payments. Neither the Company,
nor to the Company's knowledge any other person associated with or acting on
behalf of the Company, including, without limitation, any director, officer,
agent or employee of the Company, has, directly or indirectly, while acting on
behalf of the Company (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any other unlawful payment or established
or maintained any unlawful or unrecorded funds in violation of Section 30A of
the Exchange Act required to be disclosed in the Prospectus.
(xxx) Internal Controls. The Company is in
compliance with the provisions of Section 13(b) of the Exchange Act.
(xxxi) Books and Records. The minute books of the
Company contain accurate and complete records of all meetings held of, and
corporate action taken by, the stockholders, the Company's board of directors
and committees of the Company's board of directors, and no meeting of any of
such stockholders, the Company's board of directors or such committees has been
held for which minutes have not been prepared and are not contained in such
minute books.
(xxxii) Board of Directors. The Board of Directors
of the Company and the audit committee, which the Board of Directors of the
Company maintains, meet the qualitative listing requirements currently imposed
by the Marketplace Rules of The Nasdaq Stock Market on small business issuers
(as such issuers are defined in Rule 405 of the Securities Act) whose stock is
approved for quotation on the Nasdaq NMS.
(xxxiii) Any certificate signed by an officer of the
Company and delivered to the Underwriter or to counsel for the Underwriter shall
be deemed to be a representation and warranty by the Company to each Underwriter
as to the matters set forth therein.
(b) Each of the Selling Stockholders represents and
warrants as of the date hereof as follows:
(i) Due Authorization. The execution and
delivery of this Agreement and the Power of Attorney (as defined herein) by such
Selling Stockholder has been duly authorized, including by all necessary
corporate action if the Selling Stockholder is a corporation. This Agreement has
been duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
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enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(ii) Selling Stockholder Documents. The Selling
Stockholders or their authorized representative are authorized to deliver the
Firm Shares to be sold by each Selling Stockholder hereunder and to accept
payment therefor.
(iii) No Conflict. The execution and delivery by
each Selling Stockholder of, and the performance by each Selling Stockholder of
its obligations under, this Agreement, and the Power of Attorney appointing
certain individuals as the attorney-in-fact for certain Selling Stockholders to
the extent set forth therein, relating to the transactions contemplated hereby
and by the Registration Statement (the "Power of Attorney") will not result in
(A) any material violation of any material law, administrative regulation or
administrative or court decree applicable to such Selling Stockholder, (B) the
violation of the provisions of the charter , bylaws or other organizational
documents of any Selling Stockholder (if such Selling Stockholder is a
corporation) or (C) a conflict with any judgment, order or decree of any
governmental body, agency or court having jurisdiction over any Selling
Stockholder. No consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance by any
Selling Stockholder of its obligations under this Agreement or the Power of
Attorney of any Selling Stockholder, except such as have been obtained or such
as may be required by the securities or blue sky laws of the various states in
connection with the offer and sale of the Common Shares.
(iv) Good Title to Shares. Each Selling
Stockholder has, and on the first Closing Date (as hereinafter defined) will
have, valid title to the Common Shares to be sold by such Selling Stockholder on
such Closing Date and the legal right and power, and all authorization and
approval required by law, to sell, transfer and deliver the Common Shares to be
sold by such Selling Stockholder.
(v) Delivery of Common Shares. Delivery of the
Common Shares to be sold by such Selling Stockholder pursuant to this Agreement
will pass title to such Common Shares free and clear of any security interests,
claims, liens, equities and other encumbrances.
(vi) Share Certificates. Certificates for all of
the Firm Shares to be sold by such Selling Stockholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in escrow with the Underwriter as escrow agent,
with
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irrevocable conditional instructions to deliver such Firm Shares to the
Underwriter pursuant to this Agreement.
(vii) NASD. No Selling Stockholder nor any
affiliate of a Selling Stockholder directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
or has any other association with (within the meaning of Article I, Section 1(m)
of the By-laws of the NASD), any member firm of the NASD.
(viii) Warrants and Options. No Selling Stockholder
has granted with respect to the Firm Shares to be sold by such Selling
Stockholder under this Agreement, and the Firm Shares to be sold by such Selling
Stockholder under this Agreement are not subject to, any option, warrant, put,
call, right of first refusal or other right to acquire or purchase any such Firm
Shares other than pursuant to this Agreement, except as may be required under
Section 409(h) of the Internal Revenue Code of 1986, as amended (the "Code").
(ix) No Price Stabilization or Manipulation.
Other than excepted activity pursuant to Regulation M under the Exchange Act, no
Selling Stockholder has taken any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Common Shares or
which is otherwise prescribed by Regulation M promulgated by the Commission.
(x) Disclosure by Selling Stockholder in
Registration Statement. The portion of the Registration Statement comprised of
the table and the notes thereto under the caption "Selling Stockholders" in the
form supplied to the Selling Stockholder, insofar as such portion specifically
relates to each Selling Stockholder, does 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, in light of the circumstances under
which they were made, not misleading.
Section 3. Purchase, Sale and Delivery of the Common Shares.
(a) The Firm Common Shares. On the basis of the
agreements herein, but subject to the conditions herein set forth, the Company
and each Selling Stockholder (each, a "Seller" and collectively, the "Sellers"),
severally and not jointly, agrees to sell to the Underwriter the Firm Common
Shares upon the terms herein set forth. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Underwriter agrees to purchase from such
Seller the Firm Common Shares. The purchase price per Firm Common Share to be
paid by the Underwriter to the Sellers shall be $___ per share.
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(b) The First Closing Date. Delivery of the Firm Common
Shares to be purchased by the Underwriter and payment therefor shall be made at
such place as may be agreed to by the Company and the Underwriter at 11:00 a.m.
Eastern time, on May ___, 2004, or such other time and date as the Underwriter
and the Company shall agree (the time and date of such closing are called the
"First Closing Date"), but in no event more than four business days after the
date of this Agreement.
(c) The Optional Common Shares; the Second Closing Date.
In addition, on the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein set
forth, the Company hereby grants an option to the Underwriter to purchase up to
an aggregate of 300,000 Optional Common Shares from the Company at the purchase
price per share to be paid by the Underwriter for the Firm Common Shares. The
options granted hereunder are for use by the Underwriter solely in covering any
over-allotments in connection with the sale and distribution of the Firm Common
Shares. The options granted hereunder may be exercised at any time upon notice
by the Underwriter to the Company, which notice may be given at any time within
30 days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriter is
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may not be earlier than the First Closing Date; and in the case that
such date is simultaneous with the First Closing Date, the term "First Closing
Date" shall refer to the time and date of delivery of certificates for the Firm
Common Shares and the Optional Common Shares). Such time and date of delivery,
if subsequent to the First Closing Date, is called the "Second Closing Date" and
shall be determined by the Underwriter and shall not be earlier than three nor
later than ten full business days after delivery of such notice of exercise.
(The First Closing Date and the Second Closing Date are sometimes referred to
herein as a "Closing Date".) The Underwriter agrees to purchase the number of
Optional Common Shares with respect to which the Underwriter exercised the
option on the Second Closing Date. The Underwriter may cancel the option at any
time prior to its expiration by giving written notice of such cancellation to
the Company and each Selling Stockholder.
(d) Public Offering of the Common Shares. The Underwriter
hereby advises the Company that the Underwriter intends to offer for sale to the
public, as described in the Prospectus, their respective portions of the Common
Shares as soon after this Agreement has been executed and the Registration
Statement has been declared effective as the Underwriter, in its sole judgment,
has determined is advisable and practicable.
(e) Payment for the Common Shares. Payment for the Common
Shares shall be made by the Underwriter at the applicable Closing Date by wire
transfer of immediately
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available Federal funds to the order of each Seller.
(f) Delivery of the Common Shares. The Company shall
deliver, or cause to be delivered, to the Underwriter certificates for the Firm
Common Shares, against the irrevocable release of a wire transfer of immediately
available Federal funds for the amount of the purchase price therefor. The
Company also shall deliver, or cause to be delivered, to the Underwriter
certificates requested for the Optional Common Shares the Underwriter has agreed
to purchase at the applicable Closing Date against the irrevocable release of a
wire transfer of immediately available Federal funds for the amount of the
purchase price therefor. The certificates for the Common Shares shall be in
definitive form and registered in such names and denominations as the
Underwriter shall have requested at least two full business days prior to the
applicable Closing Date and shall be made available for inspection on the
business day preceding the applicable Closing Date at a location the Underwriter
may reasonably designate. Delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriter.
(g) Delivery of Prospectus to the Underwriter. Not later
than 12:00 p.m. on the second business day following the date the Common Shares
are first released by the Underwriter for sale to the public, the Company shall
deliver or cause to be delivered, copies of the Prospectus in such quantities
and at such places as the Underwriter shall request, which request shall be
received no later than the effective date of the Registration Statement.
Section 4. Additional Covenants. The Company covenants and agrees with
the Underwriter as follows:
(a) Underwriter's Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and ending on the
latest Closing Date or such date, as in the opinion of counsel for the
Underwriter, the Prospectus is no longer required by law to be delivered in
connection with sales by the Underwriter or dealer (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the Underwriter
for review a copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which the
Underwriter reasonably objects.
(b) Securities Act Compliance. After the date of this
Agreement, the Company shall promptly advise the Underwriter in writing of (i)
the receipt of any comments of, or requests for additional or supplemental
information from, the Commission relating to the
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Registration Statement, (ii) the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or
supplement to any preliminary prospectus or the Prospectus, (iii) the time and
date that any post-effective amendment to the Registration Statement becomes
effective and (iv) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any time,
the Company will use its reasonable best efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b), 430A and 434, as applicable,
under the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under such Rule 424(b) were received in a timely
manner by the Commission.
(c) Amendments and Supplements to the Prospectus and
Other Securities Act Matters. If, during the Prospectus Delivery Period, any
event shall occur or condition exist as a result of which the Prospectus, as
then amended or supplemented, would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if in the reasonable opinion of the Underwriter or
counsel for the Underwriter it is otherwise necessary to amend or supplement the
Prospectus to comply with law, the Company agrees to promptly notify the
Underwriter and to promptly prepare (subject to Section 4(a) hereof), file with
the Commission and furnish at its own expense to the Underwriter and to dealers,
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading or so that the Prospectus, as amended
or supplemented, will comply with law. Neither the Underwriter's consent to, nor
the its delivery of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6.
(d) Copies of any Amendments and Supplements to the
Prospectus. The Company agrees to furnish the Underwriter, without charge and in
as many copies as the Underwriter reasonably requests, (i) during the Prospectus
Delivery Period, the Prospectus and any amendments and supplements thereto, (ii)
signed copies of each Registration Statement, which will include all exhibits,
(iii) each related preliminary prospectus, and (iv) copies of the Incorporated
Documents, including exhibits.
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(e) Blue Sky Compliance. The Company will arrange for the
qualification of the Common Shares for sale under the laws of such jurisdictions
as the Underwriter designates and will continue such qualifications in effect so
long as required for the distribution, except that in no event shall the Company
be obligated in connection therewith to qualify a foreign corporation or to
execute a general consent to service of process. The filing fees incurred in
connection with such filings will be paid by the Company. The Company will
advise the Underwriter promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall use
its reasonable efforts to obtain the withdrawal thereof at the earliest possible
moment.
(f) Use of Proceeds. The Company shall apply the net
proceeds from the sale of the Common Shares sold by it in the manner described
under the caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(h) Earning Statement. As soon as practicable, but not
later than the Availability Date (as defined below), the Company will make
generally available to its security holders and to the Underwriter an earning
statement (which need not be audited) covering the twelve-month period that
satisfies the provisions of Section 11(a) of the Securities Act. For the purpose
of the preceding sentence, "Availability Date" means the 45th day after the end
of the fourth fiscal quarter following the fiscal quarter that includes the date
on which the Registration Statement became effective, except that, if such
fourth fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(i) Periodic Reporting Obligations. During the Prospectus
Delivery Period, the Company shall file, on a timely basis, with the Commission
reports and documents required to be filed under the Exchange Act.
(j) Agreement Not to Offer or Sell Additional Securities.
During the period of 120 days following the date of the Prospectus, the Company
will not, without the prior written consent of the Underwriter, (which consent
may be withheld at the sole discretion of the Underwriter), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge, transfer
or establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock,
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options or warrants to acquire shares of Common Stock or securities exchangeable
or exercisable for or convertible into shares of Common Stock (other than as
contemplated by this Agreement with respect to the Common Shares); provided,
however, that the Company may (i) issue shares of Common Stock upon the exercise
of warrants outstanding on the date hereof, as set forth in the Prospectus, (ii)
grant options to purchase Common Stock and issue shares of Common Stock upon the
exercise of options, in both cases, pursuant to any stock option plan or
arrangements, or issue shares of Common Stock in the ordinary course of business
pursuant to the Company's employee benefit plans existing on the date hereof,
and (iii) issue shares of Common Stock in payment of all or a portion of the
purchase price for properties acquired from sellers who are not affiliates of
the Company. In addition, each Selling Stockholder, agrees that, without the
prior written consent of the Underwriter, it will not, during the period ending
120 days after the date of the Prospectus, make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
(k) Future Reports to the Underwriter. During the period
of three years hereafter, the Company will furnish to the Underwriter at c/x
Xxxxxx, Xxxxx Xxxxx, Incorporated, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx (i) at the same time as distributed to
the Company's stockholders after the end of each fiscal year, copies of the
Annual Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report on Form
10-KSB or 10-K, Quarterly Report on Form 10-QSB or 10-Q, Current Report on Form
8-K or other report filed by the Company with the Commission or the Nasdaq NMS;
(iii) at the same time as mailed to the Company's stockholders, copies of any
report or communication of the Company mailed generally to holders of its
capital stock; and (iv) from time to time, such other information concerning the
Company as the Underwriter may reasonably request.
(l) Statement Regarding Certain Events. If at any time
prior to 30 days after the Registration Statement becomes effective, any
publication or event relating to or affecting the Company shall occur as a
result of which in the reasonable opinion of the Underwriter the market price of
the Common Shares has been or is likely to be materially affected (regardless of
whether such publication or event necessitates a supplement or amendment to the
Prospectus) and after written notice from the Underwriter advising the Company
to the effect set forth above, the Company agrees to forthwith prepare, consult
with the Underwriter concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to the Underwriter,
responding to or commenting on such publication or event.
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(m) No Price Stabilization or Manipulation. The Company
and the Selling Stockholders will not, and the Company will use its best efforts
to cause its officers, directors and affiliates not to, take, directly or
indirectly prior to the termination of the underwriting syndicate contemplated
by this Agreement, any action designed to stabilize or manipulate the price of
any security of the Company, or which may cause or result in, or which might
reasonably be expected to result in, the stabilization or manipulation of the
price of any security of the Company, to facilitate the sale or resale of any of
the Common Shares.
(n) Listing. The Company will use its best efforts to
maintain the quotation of the Common Stock on the Nasdaq NMS, the American Stock
Exchange or the New York Stock Exchange for three years following the effective
date of the Registration Statement, and, while its Common Stock is quoted on the
Nasdaq NMS or one of the foregoing exchanges, the Company will file with the
Nasdaq NMS or such exchange all documents and notices required to companies that
have securities that are so quoted.
Section 5. Payment of Expenses. The Company agrees to pay all
costs, fees and expenses incurred by it in connection with the performance of
its obligations hereunder and in connection with the transactions contemplated
hereby, including, without limitation, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the preliminary prospectuses and
the Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Underwriter; (ii) the issuance and delivery of
the Common Shares to the Underwriter, including any transfer taxes payable upon
the sale of the Common Shares to the Underwriter (other than transfer taxes on
resales by the Underwriter); (iii) the fees and disbursements of the Company's
counsel and accountants; (iv) the filing fees in connection with the
qualification of the Common Shares under the applicable securities laws in
accordance with Section 4(b) and (e) hereof and any filing fee in connection
with the review of the offering with the NASD, (v) the transfer agent's and
registrar's fees and all miscellaneous expenses referred to in Part II of the
Registration Statement and (vi) costs related to travel and lodging incurred by
the Company and its representatives relating to meetings with and presentations
to prospective purchasers of the Common Shares. The Company, upon the request of
the Underwriter, will provide funds in advance for filing fees in connection
with "blue sky" qualifications and the NASD.
Section 6. Conditions of the Obligations of the Underwriter.
The obligations of the Underwriter to purchase and pay for the Common Shares as
provided herein on any Closing Date shall be subject to the accuracy of the
representations and warranties in all material respects on the part of the
Company and the Selling Stockholders set forth in Section 2 hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Common Shares, the accuracy of the representations and
warranties in all material respects on the part of the Company as set forth in
Section 2 hereof as of the Second Closing Date, as though
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then made; to the timely performance by the Company of its covenants and other
obligations hereunder; and to each of the following additional conditions:
(a) Accountants' Comfort Letters. On the date hereof, the
Underwriter shall have received from Xxxxx Xxxxxx PLLC, independent public
accountants for the Company, letters dated the date hereof addressed to the
Underwriter, in form and substance reasonably satisfactory to the Underwriter,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration Statement and the Prospectus, including the
Incorporated Documents.
(b) Compliance with Registration Requirements; No Stop
Order; No Objection from NASD. For the period from and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date:
(i) The Registration Statement shall have been
declared effective, and the Prospectus shall have been filed with the Commission
not later than the Commission's close of business on the second business day
following the date hereof or such later time and date to which the Underwriter
shall have consented. The Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise);
(ii) The Common Stock shall have begun trading on
the Nasdaq NMS, and the Common Shares shall have been approved for quotation on
the Nasdaq NMS;
(iii) No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or any
order preventing or suspending the use of any Prospectus or any amendment or
supplement thereto shall have been issued, and no proceedings for that purpose
shall have been instituted or pending or, to the best knowledge of the Company
or the Underwriter, shall be contemplated or threatened by the Commission;
(iv) the NASD shall have raised no objection to
the fairness and reasonableness of the underwriting terms and arrangements;
(v) the Common Shares shall have been qualified
under the securities or blue sky laws of such jurisdictions as the Underwriter
shall have designated or an exemption therefrom shall be available;
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(vi) no stop orders suspending the sale of the
Common Shares in any jurisdiction referred to in Section 4(e) shall have been
issued, and no proceedings for that purpose shall have been instituted or shall
be pending or, to the best knowledge of the Company or the Underwriter, shall be
contemplated or threatened by the officials of any such jurisdiction; and
(c) No Material Adverse Change. For the period from and
after the date of this Agreement and prior to the First Closing Date and, with
respect to the Optional Common Shares, the Second Closing Date, there shall not
have occurred any change, or any development or event involving a prospective
change, in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as one enterprise which,
in the reasonable judgment of the Underwriter, is material and adverse and makes
it impractical or inadvisable to proceed with completion of the public offering
or the sale of and payment for the Common Shares.
(d) Opinion of Counsel for the Company. On each Closing
Date, the Underwriter shall have received the opinion of Xxxxx & Lardner, LLP,
United States counsel for the Company, and of Xxxxxx Xxxxx Xxxxxxxx, Canadian
counsel for the Company, dated as of such Closing Date, in form and substance
reasonably satisfactory to the Underwriter.
(e) Opinion of Counsel for the Underwriter. On each
Closing Date, the Underwriter shall have received the favorable opinion of
Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., counsel for the Underwriter,
dated as of such Closing Date, in form and substance reasonably satisfactory to
the Underwriter.
(g) Officers' Certificate. On each Closing Date, the
Underwriter shall have received a written certificate executed by (i) the
Chairman of the Board, Chief Executive Officer and President of the Company and
(ii) the Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of such Closing Date, to the effect set forth in subsection (b)(ii) of
this Section 6, and further to the effect that:
(i) no stop order suspending the effectiveness
of the Registration Statement or post-effective amendment thereto or suspending
the use of any Prospectus or amendment or supplement thereto or the
qualification of the Securities for offering or sale has been issued, and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of each such person, are contemplated or threatened under the
Securities Act or any applicable state securities or blue sky statute or
regulation, and any and all filings required by Rule 424, Rule 430A and Rule
462(b) have been timely made;
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(ii) the Registration Statement and Prospectus
and, if any, each amendment and each supplement thereto, contain all statements
and information required by the Securities Act or any rules or regulations
promulgated thereunder to be included therein, and neither the Registration
Statement or the Prospectus nor any amendment or supplement thereto includes any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
(iii) for the period from and after the date of
this Agreement and prior to such Closing Date, there has not occurred any
Material Adverse Change;
(iv) the representations and warranties of the
Company set forth in this Agreement are true and correct in all material
respects with the same force and effect as though expressly made on and as of
such Closing Date, except that, to the extent any representations and warranties
are qualified by terms such as "material," "materially," "material adverse
effect" or "Material Adverse Change," such representations and warranties will
be true and correct in all respects; and
(v) the Company has performed or complied in all
material respects with all of the covenants and agreements hereunder and
satisfied all the conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date.
(h) Bring-down Comfort Letters. On each Closing Date, the
Underwriter shall have received from Xxxxx Xxxxxx PLLC, independent public
accountants for the Company, letters dated such date, in form and substance
reasonably satisfactory to the Underwriter, to the effect that they reaffirm the
statements made in the letters furnished by them pursuant to subsection (a) of
this Section 6, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to
the First Closing Date or Second Closing Date, as the case may be.
(i) Lock-Up Agreements. On or before the date hereof, the
Company shall have furnished to the Underwriter an agreement in the form of
Exhibit A hereto from certain Selling Stockholders and directors and executive
officers of the Company whose names are set forth on Schedule 1 to Exhibit A,
and each such agreement shall be in full force and effect on each Closing Date.
(j) Selling Stockholders' Certificates. The Underwriter
shall have received on each Closing Date, a certificate, dated as of such
Closing Date and signed by the Attorney-in-Fact of each Selling Stockholder, to
the effect that the representations and warranties of the Selling Stockholders
contained in this Agreement are true and correct in all material respects as of
such Closing Date and that the Selling Stockholders have complied in all
material respects
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 24 of 35
with all of the agreements and satisfied all of the conditions on their part to
be performed or satisfied hereunder on or before such Closing Date.
(k) Selling Stockholder Documents. On the date hereof,
the Company and the Selling Stockholders shall have furnished for review by the
Underwriter copies of the Powers of Attorney and transfer agent instructions
executed by each of the Selling Stockholders and such further information,
certificates and documents as the Underwriter may reasonably request.
(l) Material Misstatements or Omissions. On or after the
effective date of the Registration Statement and before each Closing Date, the
Underwriter shall not have advised the Company that the Registration Statement
contains an untrue statement of fact which, in the Underwriter's opinion, is
material, or omits to state a fact which, in the Underwriter's opinion, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading, or that the Prospectus, or any supplement
thereto, contains an untrue statement of fact which, in the Underwriter's
opinion, is material, or omits to state a fact which, in the Underwriter's
opinion, is material and is required to be stated therein or is necessary to
make the statements therein not misleading, provided that the Underwriter shall
not have had any knowledge, before the effective date of the Registration
Statement, that (i) such statement was untrue or such omitted fact existed and
(ii) that such statement or omission was material, and provided further, that
the Company has not cured any such untrue statement or omission after having had
a reasonable opportunity to cure such untrue statement or omission.
(m) Additional Documents. On or before each Closing Date,
the Underwriter and counsel for the Underwriter shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Common
Shares as contemplated herein, or in order to evidence the material accuracy of
any of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.
If any condition specified in this Section 6 is not
satisfied when and as required to be satisfied, this Agreement may be terminated
by the Underwriter by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 5, Section 9 and
Section 10 shall at all times be effective and shall survive such termination.
Section 7. Reimbursement of Underwriter's Expenses. If this Agreement
is terminated by the Underwriter pursuant to Section 6 or 12 or if the sale to
the Underwriter of the Common Shares on any Closing Date is not consummated
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 25 of 35
hereof, the Company agrees to reimburse the Underwriter, upon demand for up to
$50,000 of out-of-pocket expenses that shall have been reasonably incurred by
the Underwriter in connection with the proposed purchase and offering and sale
of the Common Shares, which may include, but are not limited to, fees and
disbursements of counsel, printing expenses, travel expenses, postage, and
facsimile and telephone charges.
Section 8. [Intentionally left blank]
Section 9. Indemnification.
(a) Indemnification of the Underwriter. The Company
agrees to indemnify and hold harmless the Underwriter and its officers,
directors, employees and agents, and each person, if any, who controls the
Underwriter within the meaning of the Securities Act and the Exchange Act,
against any loss, claim, damage, liability or reasonable expense, to which the
Underwriter or such controlling person may become subject, under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, including any information deemed to be a
part thereof pursuant to the Securities Act or any rule promulgated thereunder,
or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(ii) upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to reimburse the
Underwriter and each such person for any and all expenses (including the
reasonable fees and disbursements of counsel chosen by the Underwriter by the
Underwriter or such person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by the
Underwriter or any Selling Stockholder expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), as the same is described in Section 9(d) below; and
provided, further, that with respect to any preliminary prospectus, the
foregoing indemnity agreement shall not inure to the benefit of the Underwriter,
if the person asserting any loss,
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 26 of 35
claim, damage, liability or expense purchased Common Shares from the
Underwriter, or any person controlling the Underwriter, if copies of the
Prospectus were timely delivered to the Underwriter pursuant to Section 3 and a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of the Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Common Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. The indemnity agreement set forth in this Section
9(a) shall be in addition to any liabilities that the Company may otherwise
have.
(b) Indemnification of the Underwriter by the Selling
Stockholders. Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of the Securities Act and the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any amendment thereof, any preliminary prospectus or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading, but only with reference to information
relating to such Selling Stockholder furnished in writing by or on behalf of
such Selling Stockholder expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(c) Indemnification of the Company by the Selling
Stockholders. Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of the Securities Act and the Exchange Act, from and against
any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in the light of the circumstances under which they were made, not
misleading, but only with reference to information relating to such Selling
Stockholder furnished in writing
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 27 of 35
by or on behalf of such Selling Stockholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) Indemnification of the Company, its Directors and
Officers. The Underwriter agrees to indemnify and hold harmless the Company, the
Selling Stockholders, each of the Company's directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, against
any loss, claim, damage, liability or expense, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in the case of any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto), in light of the
circumstances in which they were made, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), based on
written information furnished to the Company by the Underwriter expressly for
use therein; and to reimburse the Company or any such director, officer or
controlling person for any legal and other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. The Company acknowledges that the
statements with respect to the public offering of the Securities set forth under
the caption "Underwriting" have been furnished by the Underwriter to the Company
expressly for use therein and constitute the only information furnished in
writing by or on behalf of the Underwriter for inclusion in the Prospectus. The
indemnity agreement set forth in this Section 9(d) shall be in addition to any
liabilities that the Underwriter may otherwise have.
(e) Notifications and Other Indemnification Procedures.
Promptly after receipt by an indemnified party under this Section 9 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this Section
9, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise under the indemnity agreement contained in this Section 9 to the
extent it is not prejudiced as a
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 28 of 35
proximate result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party,
and counsel to the indemnifying party shall have concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel) representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the reasonable fees and expenses of counsel shall
be at the expense of the indemnifying party.
(f) Settlements. The indemnifying party under this
Section 9 shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent (i) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act by or on behalf of an indemnified party.
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 29 of 35
(g) Limitations on Selling Stockholder Liability. The
liability of each Selling Stockholder under this Section 9 shall not exceed an
amount equal to the net proceeds received by such Selling Stockholders from the
sale of Firm Shares by such Selling Stockholder to the Underwriter hereunder.
The Company and the Selling Stockholders may agree, as among themselves and
without limiting the rights of the Underwriter under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
Section 10. Contribution. If the indemnification provided for in
Section 9 is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand, from the offering of the Common Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company or a Selling Stockholder, on the one hand, and
the Underwriter, on the other hand, in connection with the offering of the
Common Shares pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Common
Shares pursuant to this Agreement (before deducting expenses) received by the
Company or a Selling Stockholder, and the total underwriting discount and
commissions received by the Underwriter, in each case as set forth on the front
cover page of the Prospectus bear to the aggregate initial public offering price
of the Common Shares as set forth on such cover. The relative fault of the
Company or a Selling Stockholder, on the one hand, and the Underwriter, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Underwriter, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 9(e), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 9(e) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 10; provided, however,
that no additional notice
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 30 of 35
shall be required with respect to any action for which notice has been given
under Section 9(e) for purposes of indemnification.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 10.
Notwithstanding the provisions of this Section 10, the Underwriter
shall not be required to contribute any amount in excess of the underwriting
discount and commissions received by the Underwriter in connection with the
Common Shares underwritten by it and distributed to the public. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 10,
each officer and employee of the Underwriter and each person, if any, who
controls the Underwriter within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Underwriter, each
officer and employee of a Selling Shareholder, (if the Selling Shareholder is an
entity) shall have the same rights as to contribution as such Selling
Shareholder, and each director of the Company, each officer of the Company, and
each person, if any, who controls the Company within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as the Company.
Section 11. [Intentionally left blank]
Section 12. Termination of this Agreement. Prior to the Closing Date,
this Agreement may be terminated by the Underwriter by notice given to the
Company if at any time (i) trading or quotation in any of the Company's
securities shall have been refused, suspended, or limited by the Commission or
by the Nasdaq NMS, or trading in securities generally on the Nasdaq NMS or the
New York Stock Exchange has been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any federal, or New York authorities; (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or in the United States' or international political,
financial or economic conditions, as in the reasonable judgment of the
Underwriter is material and adverse and makes it impracticable or inadvisable to
market the Common Shares in the manner and on the terms described in the
Prospectus or to enforce contracts for the sale of securities; (iv) in the
reasonable judgment of the Underwriter there shall have occurred any Material
Adverse Change; (v) the Company shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as in the
judgment of the Underwriter may interfere materially with the conduct of the
business and
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 31 of 35
operations of the Company regardless of whether or not such loss shall have been
insured; or Any termination pursuant to this Section 12 shall be without
liability on the part of (a) the Company to the Underwriter, except that the
Company shall be obligated to reimburse the expenses of the Underwriter pursuant
to Sections 5 and 7 hereof, (b) the Underwriter to the Company or any Selling
Stockholder, or (c) of any party hereto to any other party.
Section 13. Representations and Indemnities to Survive Delivery. Except
as otherwise set forth herein, the respective indemnities, agreements,
representations, warranties and other statements of the Company, of the
Company's officers, of any of the Selling Stockholders and of the Underwriter
set forth in or made pursuant to this Agreement will remain in full force and
effect according to the applicable statute of limitations, regardless of any
investigation made by or on behalf of the Underwriter, Selling Stockholder or
the Company or any of its or their officers or directors or any controlling
person, as the case may be.
Section 14. Notices. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Underwriter:
Xxxxxx, Xxxxx Xxxxx, Incorporated
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx
with a copy to:
Neuberger, Quinn, Gielen, Rubin & Gibber, P.A.
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esquire
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 32 of 35
If to the Company:
Xxxxxxxx Financial, Inc.
2454 XxXxxxxx Xxxxx Xxxx
Xxxxxxxx X, Xxxxx 000X
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxx. 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
If to the Selling Stockholders:
Xxxxx X. Xxxxxxx
2454 XxXxxxxx Xxxxx Xxxx
Xxxxxxxx X, Xxxxx 000X
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
and
Xxxxxx Xxxxxxxxx
x/x Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
Section 15. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto, and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 9 and
Section 10, and in each case their respective successors, and no other person
will have any right or obligation hereunder. The term "successors" shall not
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 33 of 35
include any purchaser of the Common Shares as such from the Underwriter merely
by reason of such purchase.
Section 16. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
Section 17. Governing Law Provisions.
(a) Governing Law Provisions. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Delaware and applicable to agreements made and to be performed in such state.
Section 18. General Provisions. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in writing by
all of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit. The Section headings herein are for the convenience of the parties only
and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 9 and the contribution provisions of
Section 10, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 9 and 10 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
Xxxxxxxx Financial, Inc.
By:_________________________________________
Name:
Title:
Xxxxx X. Xxxxxxx Family Trust
By:_________________________________________
Xxxxx X. Xxxxxxx, Trustee
PTC CUST. XXX FBO XXXXXX X. XXXXX
By:_________________________________________
Name:____________________________________
Title:___________________________________
Xxxxxx Xxxxx
Xxxxx Children, LLC
Xxxxx Family, LLC
Grenma, Inc.
Xxxxx Xxxxx
Xxxxx Xxxxx Grantor Xxxx
Xxxxxxx & Xxxxx Xxxxx
By:_________________________________________
Xxxxxx Xxxxxxxxx, Attorney-in-Fact
Xxxxxxxx Financial, Inc.
Xxxxxx Xxxxx Xxxxx, Inc.
May___, 2004
Page 35 of 35
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Underwriter as of the date first above written.
Xxxxxx, Xxxxx Xxxxx, Incorporated
By: ________________________
Name:
Title:
SCHEDULE A
NUMBER OF FIRM
SELLING STOCKHOLDER COMMON SHARES TO BE SOLD
------------------- ------------------------
Xxxxx X. Xxxxxxx Family Trust 500,000
PTC Cust. XXX FBO Xxxxxx X. Xxxxx 33,998
Xxxxxx Xxxxx 11,666
Xxxxx Children, LLC 125,000
Xxxxx Family, LLC 111,450
Grenma, Inc. 50,000
Xxxxx X. Xxxxx Grantor Trust 8,888
Xxxxx Xxxxx 23,332
Xxxxxxx & Xxxxx Xxxxx 35,666
Total 900,000
EXHIBIT A
LOCK UP AGREEMENT
Xxxxxx, Xxxxx Xxxxx, Incorporated
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Re: Xxxxxxxx Financial, Inc. (the "Company")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares
of Common Stock, no par value, of the Company ("Common Stock") or securities
convertible into or exchangeable or exercisable for Common Stock. The Company
proposes to carry out a public offering of Common Stock (the "Offering") for
which you will act as the Underwriter. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into underwriting arrangements with the Company with
respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not, without the prior written consent of Xxxxxx, Xxxxx
Xxxxx, Incorporated (which consent may be withheld in its sole discretion),
directly or indirectly, sell, offer, contract or grant any option to sell
(including, without limitation, any short sale), pledge, transfer, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended, or otherwise dispose of any shares
of Common Stock, options or warrants to acquire shares of Common Stock, or
securities exchangeable or exercisable for or convertible into shares of Common
Stock currently or hereafter owned either of record or beneficially (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
undersigned (other than as a bona fide gift, provided that the donee thereof
agrees in writing to be bound by this Agreement), or publicly announce the
undersigned's intention to do any of the foregoing, for a period commencing on
the date hereof and continuing to and including the date that is 120 days after
the effective date of the registration statement of the Company related to the
Offering. The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representative, and assigns of
the undersigned.
Dated: _______________, 2004
Printed Name of Holder:
_________________________________
Signature
_________________________________
Printed Name of Person Signing
_________________________________
Capacity of Person Signing if Signing as
Custodian, Trustee, or on Behalf of an
Entity
SCHEDULE 1
Xxxxx X. Xxxxxxx
Xxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxx Children, LLC
Xxxxx Family, LLC
Grenma, Inc.
Xxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxx
Xxxxx Finkenbrink
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxx
