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EXHIBIT 1.1
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THE MAXIM GROUP, INC.
3,600,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
______ __, 1997
PRUDENTIAL SECURITIES INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
WHEAT, FIRST SECURITIES, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Maxim Group, Inc., a Delaware corporation (the "Company"), and the
selling stockholders named in Schedule 2 hereto (each a "Selling Stockholder"
and together the "Selling Stockholders"), hereby confirm their agreement with
the several underwriters named in Schedule 1 hereto (the "Underwriters"), for
whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained,
the Company and the Selling Stockholders propose to sell to the several
Underwriters an aggregate of 3,600,000 shares (the "Firm Securities") of the
Company's Common Stock, par value $0.001 per share ("Common Stock") of which
3,175,773 shares will be issued and sold by the Company (the "Company's Firm
Securities") and 424,227 shares will be sold by the Selling Stockholders (the
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(1) Plus an option to purchase from The Maxim Group, Inc. up to 540,000
additional shares to cover over-allotments.
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"Selling Stockholders' Firm Securities"). Of the Selling Stockholders' Firm
Securities, each Selling Stockholder will sell the number of shares listed
opposite its name on Schedule 2 hereto. The Company also proposes to issue and
sell to the several Underwriters not more than 540,000 additional shares of
Common Stock if requested by the Underwriters as provided in Section 3 of this
Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as the "Option
Securities," and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities."
2. Representations and Warranties of the Company and the Selling
Stockholders
(a) The Company represents and warrants to, and agrees with, each of
the several Underwriters that:
(i) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A
registration statement on such Form (File No. 333-_____) with respect
to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Act, and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (A) if
such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (I) if
the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify
the Preliminary Prospectus (as hereinafter defined) that it supplements
and, if required to be filed pursuant to Rules 434(c)(2) and 424(b), an
Integrated Prospectus (as hereinafter defined), in either case,
containing such information as is required or permitted by Rule 434,
430A and 424(b) under the Act or (II) if the Company does not rely on
Rule 434 under the Act, a prospectus in the form most recently included
in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with
such changes or insertions as are required by Rule 430A under the Act
or permitted by Rule 424(b) under the Act, and in the case of clause
(A)(I) or (A)(II) of this sentence as have been provided to and
approved by the Representatives prior to the execution of this
Agreement, or (B) if such registration statement, as it may have been
amended, has not been declared by the Commission to be effective under
the Act, an amendment to such registration statement, including a form
of prospectus, a copy of which amendment has been furnished to and
approved by the Representatives prior to the execution of this
Agreement. The Company may also file a related registration statement
with the Commission pursuant to Rule 462(b) under the Act for the
purpose of registering certain additional Securities, which
registration shall be effective upon filing with the Commission. As
used in this Agreement, the term "Original Registration Statement"
means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared
effective, including (A) all financial schedules and exhibits thereto,
(B) all documents incorporated by reference therein filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
(C) any information omitted therefrom pursuant to Rule 430A under the
Act and included in the Prospectus (as hereinafter defined) or, if
required to be filed
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pursuant to Rule 434(c)(2) and 424(b), in the Integrated Prospectus;
the term "Rule 462(b) Registration Statement" means any registration
statement filed with the Commission pursuant to Rule 462(b) under the
Act (including the Registration Statement and any Preliminary
Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any
Rule 462(b) Registration Statement; the term "Preliminary Prospectus"
means each prospectus subject to completion filed with such
registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was or is declared
effective), including all documents; the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act,
the Term Sheet relating to the Securities that is first filed
pursuant to Rule 424(b)(7) under the Act, together with the
Preliminary Prospectus identified therein that such Term Sheet
supplements:
(B) if the Company does not rely on Rule 434 under
the Act, the Prospectus first filed with the Commission
pursuant to Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under
the Act and if no prospectus is required to be filed pursuant
to Rule 424(b) under the Act, the prospectus included in the
Registration Statement, including, in the case of clauses (A),
(B) or (C) of this sentence, all documents incorporated by
reference therein filed under the Exchange Act; the term
"Integrated Prospectus" means a prospectus first filed with
the Commission pursuant to Rules 434(c)(2) and 424(b) under
the Act; and the term "Term Sheet" means any abbreviated term
sheet that satisfies the requirements of Rule 434 under the
Act. Any reference in this Agreement to an "amendment or
supplement" to any Preliminary Prospectus, the Prospectus or
any Integrated Prospectus or an "amendment" to any
registration statement (including the Registration Statement)
shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the
Exchange Act after the date of such Preliminary Prospectus,
Prospectus, Integrated Prospectus or registration statement,
as the case may be; any reference herein to the "date" of a
Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet. For purposes of the preceding sentence, any
reference to the "effective date" of an amendment to a
registration statement shall, if such amendment is effected by
means of the filing with the Commission under the Exchange Act
of a document incorporated by reference in such registration
statement, be deemed to refer to the date on which such
document was so filed with the Commission. Any reference in
this Agreement to an "amendment or supplement" to any
Preliminary Prospectus, Prospectus or any Integrated
Prospectus or an "amendment or supplement" to any registration
statement (including the Registration Statement) shall be
deemed to include any amendment or supplement to a report to
security holders or Form 10-Q. For purposes of the preceding
sentence, any reference to the "effective date" of an
amendment to a registration statement shall be deemed to
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refer to the date of any such amendment or supplement to a
report to security holders or Form 1O-Q.
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus and any amendment or supplement thereto was filed with the
Commission, it (A) contained all statements required to be stated
therein in accordance with, and complied in all material respects with
the requirements of, the Act, the Exchange Act and the respective rules
and regulations of the Commission thereunder, and (B) did not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared
effective, it (A) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in
all material respects with the requirements of, the Act, the Exchange
Act and the respective rules and regulations of the Commission
thereunder and (B) did not or will not include any untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein not misleading. When the Prospectus or any Term
Sheet that is a part thereof or any Integrated Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or part thereof or such
amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was or is declared
effective), on the date when the Prospectus is otherwise amended or
supplemented and on the Firm Closing Date and any Option Closing Date
(both as hereinafter defined), each of the Prospectus, and, if required
to be filed pursuant to Rules 434(c)(2) and 424(b) under the Act, the
Integrated Prospectus as amended or supplemented at any such time, (A)
contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material
respects with the requirements of, the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder and (B)
did not or will not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing provisions of this paragraph
(ii) do not apply to statements or omissions made in any Preliminary
Prospectus or any amendment or supplement thereto, the Registration
Statement or any amendment thereto, the Prospectus or, if required to
be filed pursuant to Rules 434(c)(2) and 424(b) and the Act, the
Integrated Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives specifically
for use therein.
(iii) If the Company has elected to rely on Rule 462(b) and
the Rule 462(b) Registration Statement has not been declared effective
(A) the Company has filed a Rule 462(b) Registration Statement in
compliance with and that is effective upon filing pursuant to Rule
462(b) and has received confirmation of its receipt and (B) the Company
has given irrevocable instructions for transmission of the applicable
filing fee in connection with the
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filing of the Rule 462(b) Registration Statement, in compliance with
Rule 111 promulgated under the Act or the Commission has received
payment of such filing fee.
(iv) The Company and each of its subsidiaries have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation and
are duly qualified to transact business as foreign corporations and are
in good standing under the laws of all other jurisdictions where the
ownership or leasing of their respective properties or the conduct of
their respective businesses requires such qualification, except where
the failure to be so qualified does not amount to a material liability
or disability to the Company and its subsidiaries, taken as a whole.
(v) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement each of the Prospectus and any Integrated Prospectus or, if
the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus; and the Company has
full power (corporate and other) to enter into this Agreement and to
carry out all the terms and provisions hereof to be carried out by it.
(vi) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and, except for directors' qualifying
shares and as otherwise set forth in each of the Prospectus and any
Integrated Prospectus or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus, are owned beneficially by the Company free and clear of any
security interests, liens, encumbrances, equities or claims.
(vii) The Company has an authorized, issued and outstanding
capitalization as set forth in the each of the Prospectus and any
Integrated Prospectus or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus. All of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. The Firm Securities and the Option Securities have been
duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. No
holders of outstanding shares of capital stock of the Company are
entitled as such to any preemptive or other rights to subscribe for any
of the securities, and no holder of securities of the Company has any
right which has not been fully exercised or waived to require the
Company to register the offer or sale of any securities owned by such
holder under the Act in the public offering contemplated by this
agreement.
(viii) The capital stock of the Company conforms to the
description thereof contained in each of the Prospectus and any
Integrated Prospectus or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus.
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(ix) Except as disclosed in each of the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), there are not outstanding (A) securities or obligations of
the Company or any of its subsidiaries convertible into or exchangeable
for any capital stock of the Company or any such subsidiary, (B)
warrants, rights or options to subscribe for or purchase from the
Company or any such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such subsidiary to issue any shares
of capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(x) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Registration
Statement and each of the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus) fairly present the
financial position of the Company and its consolidated subsidiaries and
the results of operations and changes in financial condition as of the
dates and periods therein specified. Such financial statements and
schedules have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Consolidated Financial and
Operating Data" in each of the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus) and in the
Company's Annual Report on Form 10-K for the fiscal year ended January
31, 1996, fairly present, on the basis stated in each of Prospectus and
any Integrated Prospectus (or such Preliminary Prospectus and such
Annual Report), the information included therein.
(xi) Xxxxxx Xxxxxxxx LLP and KPMG Peat Marwick LLP, who have
certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect to
the audited consolidated financial statements and the notes and
schedules thereto included in the Registration Statement, the
Prospectus and Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus), are independent public accountants as required
by the Act, the Exchange Act and the related published rules and
regulations thereunder.
(xii) The execution and delivery of this Agreement have been
duly authorized by the Company and this Agreement has been duly
executed and delivered by the Company, and is the valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms.
(xiii) No legal or governmental proceedings are pending to
which the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement, the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), and no such
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proceedings have been threatened against the Company or any of its
subsidiaries or with respect to any of their respective properties; and
no contract, other document is required to be described in the
Registration Statement or the Prospectus or any Integrated Prospectus
or to be filed as an exhibit to the Registration Statement that is not
described therein (or, if the Prospectus is and any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus) or filed as required.
(xiv) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained, such as may be required under state securities or
blue sky laws and, if the registration statement filed with respect to
the Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Act, or (B) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties are
bound, or the charter documents or by-laws of the Company or any of its
subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator applicable to the Company or any of its subsidiaries.
(xv) Subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus or
any Integrated Prospectus or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus, neither the Company nor any of its subsidiaries has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth, or results of operations of
the Company or any of its subsidiaries, except in each case as
described in or contemplated by the Prospectus or any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus.
(xvi) The Company has not, directly or indirectly, (A) taken
any action designed to cause or to result in, or that has constituted
or which might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (B) since the filing
of the Registration Statement (I) sold, bid for, purchased, or paid
anyone any compensation for soliciting purchases of, the Securities or
(II) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company
(except for the sale of Securities by the Selling Stockholders under
this Agreement).
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(xvii) The Company has not distributed and, prior to the later
of (A) the Closing Date and (B) the completion of the distribution of
the Securities, will not distribute any offering material in connection
with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus and and required Integrated Prospectus or
any amendment or supplement thereto, or other materials, if any
permitted by the Act.
(xviii) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to (A) the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants or to the storage, handling or transportation of hazardous
or toxic material ("Environmental Laws") or (B) occupational safety and
health and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal
and state occupational safety and health and Environmental Laws and
regulations to conduct their respective businesses, and the Company and
each such subsidiary is in compliance with all terms and conditions of
any such permit, license or approval, except any such violation of law
or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the
aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, except as described in
or contemplated by the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus). Neither the Company
nor any of its subsidiaries have any pending or threatened
Environmental Law or occupational safety and health claims against it
nor are there circumstances with respect to any property or operations
of the Company or its subsidiaries that could reasonably be anticipated
to form the basis of an Environmental Law or occupational safety and
health claim against the company or any of its subsidiaries which,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus).
(xix) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
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(xx) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters
pursuant to this Agreement shall be deemed to be a representation and
warranty by the Company to each Underwriter as to the matters covered
thereby.
(xxi) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the
Company nor any such subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, association or other entity, except as described in
or contemplated by the Prospectus or any required Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus).
(xxii) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only
in accordance with management's general or specific authorization; and
(D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxiii) No default exists, and no event has occurred which,
with notice or lapse of time or both, would constitute a default in the
due performance and observance of any term, covenant or condition of
any indenture, mortgage, deed of trust, lease or other material
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or any of
their respective properties is bound or may be affected in any material
adverse respect with regard to property, business or operations of the
Company and its subsidiaries taken as a whole.
(xxiv) Other than the __________ shares of Common Stock sold
in the initial public offering on ________ __, 19__ (the "IPO") and the
880,000 shares sold by certain stockholders in the public offering on
November 21, 1995 (the "Secondary Offering"), all offers and sales of
the Company's capital stock prior to the date hereof, including the
offer and sale of 5,266,285 shares of Common Stock in connection with
the acquisition of Image Industries, Inc., were at all relevant times
exempt from the registration requirements of the Act, and were the
subject of an available exemption from the registration requirements of
all applicable state securities or blue sky laws.
(xxv) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items or real property and
marketable title to all personal property owned by each of them, in
each case free and clear of any security interests, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of
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such property by the Company or such subsidiary, and any real property
and buildings held under lease by the Company or any such subsidiary
are held under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company or
such subsidiary, in each case except as described in or contemplated by
the Prospectus or any Integrated Prospectus (or, if the Prospectus and
required Integrated Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxvi) No labor dispute with the employees of the Company or
any of its subsidiaries exists or is threatened or imminent that could
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its subsidiaries taken as a whole, except as described
in or contemplated by the Prospectus or any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxvii) The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, all material patents, patent
applications, trademarks, service marks, trade names, licenses,
copyrights and proprietary or other confidential information currently
employed by them in connection with their respective businesses, and
neither the Company nor any such subsidiary has received any notice of,
or has any reasonable belief that its use constitutes, a material
infringement of or conflict with asserted rights of any third party
with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its subsidiaries, except as described in or
contemplated by the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus is not in existence,
the most recent Preliminary Prospectus).
(xxiii) The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition (financial or otherwise), business prospects, net worth, or
results of operations of the Company and its subsidiaries taken as a
whole, except as described in or contemplated by the Prospectus or any
Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxix) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such
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subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary
of the Company, except as described in or contemplated by the
Prospectus or any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxx) The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus
or any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxxi) The Company will conduct its operations in a manner
that will not subject it to registration as an investment company under
the Investment Company Act of 1940, as amended, and this transaction
will not cause the Company to become an investment company subject to
registration under such Act.
(xxxii) The Company and its subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be
filed or have requested extensions thereof (except in any case in which
the failure so to file would not have a material adverse effect on the
Company and its subsidiaries taken as a whole) and have paid all taxes
required to be paid by them and any other assessment, fine or penalty
levied against them, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as described in or
contemplated by the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus is not in existence,
the most recent Preliminary Prospectus).
(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, each of the several Underwriters that:
(i) Such Selling Stockholder has full power (partnership,
trust and other) to enter into this Agreement and to sell, assign,
transfer and deliver to the Underwriters the Securities to be sold by
such Selling Stockholder hereunder in accordance with the terms of this
Agreement; the execution and delivery of this Agreement have been duly
authorized by all necessary actions of such Selling Stockholder
(partnership, trust or other, as applicable); and this Agreement has
been duly executed and delivered by such Selling Stockholder.
(ii) Such Selling Stockholder has duly executed and delivered
a power of attorney and custody agreement (with respect to such Selling
Stockholder, the "Power of Attorney" and the "Custody Agreement,"
respectively), each in the form heretofore
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delivered to the Representatives, appointing X.X. Xxxxxx as such
Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact") with
authority to execute, deliver and perform this Agreement on behalf of
such Selling Stockholder and appointing Wachovia Bank of North
Carolina, N.A., as custodian thereunder (the "Custodian"). Certificates
in negotiable form, endorsed in blank or accompanied by blank stock
powers duly executed, with signatures appropriately guaranteed,
representing the Securities to be sold by such Selling Stockholder
hereunder have been deposited with the Custodian pursuant to the
Custody Agreement for the purpose of delivery pursuant to this
Agreement. Such Selling Stockholder has full power (partnership, trust
or other, as applicable) to enter into the Custody Agreement and the
Power of Attorney and to perform his obligations under the Custody
Agreement. The Custody Agreement and the Power of Attorney have been
duly executed and delivered by such Selling Stockholder and, assuming
due authorization, execution and delivery by the Custodian, are the
legal, valid, binding and enforceable instruments of such Selling
Stockholder. Such Selling Stockholder agrees that each of the
Securities represented by the certificates on deposit with the
Custodian is subject to the interests of the Underwriters hereunder,
that the arrangements made for such custody, the appointment of the
Attorney- in-Fact and the right, power and authority of the
Attorney-in-Fact to execute and deliver this Agreement, to agree on the
price at which the Securities (including such Selling Stockholder's
Securities) are to be sold to the Underwriters, and to carry out the
terms of this Agreement, are to that extent irrevocable and that the
obligations of such Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or the Custody
Agreement, by any act of such Selling Stockholder, by operation of law
or otherwise, whether in the case of any individual Selling Stockholder
by the death or incapacity of such Selling Stockholder, in the case of
a trust or estate by the death of the trustee or trustees or the
executor or executors or the termination of such trust or estate, or in
the case of a partnership Selling Stockholder by its liquidation or
dissolution or by the occurrence of any other event. If any individual
Selling Stockholder, trustee or executor should die or become
incapacitated or any such trust should be terminated, or if any
corporate or partnership Selling Stockholder shall liquidate or
dissolve, or if any other event should occur, before the delivery of
such Securities hereunder, the certificates for such Securities
deposited with the Custodian shall be delivered by the Custodian in
accordance with the respective terms and conditions of this Agreement
as if such death, incapacity, termination, liquidation or dissolution
or other event had not occurred, regardless of whether or not the
Custodian or the Attorney-in-Fact shall have received notice thereof.
(iii) Such Selling Stockholder is the lawful owner of the
Securities to be sold by such Selling Stockholder hereunder and upon
sale and delivery of, and payment for, such Securities, as provided
herein, such Selling Stockholder will convey good and valid title to
such Securities, free and clear of any security interests, liens,
encumbrances, equities, claims or other defects.
(iv) Such Selling Stockholder has not, directly or indirectly,
(A) taken any action designed to cause or result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company
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to facilitate the sale or resale of the Securities or (B) since the
filing of the Registration Statement (I) sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the
Securities or (II) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company
(except for the sale of Securities by the Selling Stockholders under
this Agreement).
(v) In the case of the Selling Stockholders identified in
Schedule 1 hereto as Group 1 Selling Stockholders (collectively, the
"Group 1 Selling Stockholders"), such Selling Stockholder has reviewed
the Prospectus and any Integrated Prospectus (or, if the Prospectus and
any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) and the Registration Statement, and the
information included therein did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. In the case of the Selling
Stockholders identified in Schedule 1 hereto as Group 2 Selling
Stockholders (the "Group 2 Selling Stockholders"), such Selling
Stockholder has reviewed the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding such Selling
Stockholder set forth under the caption "Principal and Selling
Stockholders" is complete and accurate.
(vi) The Selling Stockholders have not distributed and, prior
to the later of (A) the Firm Closing Date and (B) the completion of the
distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities
other than the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or
any supplement or amendment thereto, or any materials, if any permitted
by the Act.
(vii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Internal Revenue Code
of 1986, as amended, with respect to the transactions herein
contemplated, such Selling Stockholder agrees to deliver to the
Representatives prior to or on the Firm Closing Date a properly
completed and executed United States Treasury Department Form W-8 or
W-9 (or other applicable form or statement specified by the Treasury
Department regulations in lieu thereof).
(viii) The sale by such Selling Stockholder of Securities
pursuant hereto is not prompted by any adverse information concerning
the Company that is not set forth in the Registration Statement, the
Prospectus or any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus).
(ix) The sale of the Securities to the Underwriters by such
Selling Stockholder pursuant to this Agreement, the compliance by such
Selling Stockholder with the other provisions of this Agreement and the
Custody Agreement and the consummation of the
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other transactions herein contemplated do not (A) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as has been obtained, such as the
registration under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act and the Exchange Act, or (B) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder or
any of such Selling Stockholder's properties are bound, or any statute
or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to such
Selling Stockholder.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to, and each of the Selling
Stockholders agrees to sell to, each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company and
the Selling Stockholders, at a purchase price of $_______ per share, the number
of Firm Securities set forth opposite the name of such Underwriter in Schedule 1
hereto. One or more certificates in definitive form for the Firm Securities that
the several Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Representatives request upon notice to the Company and the Selling Stockholders
at least 48 hours prior to the Firm Closing Date, shall be delivered by or on
behalf of the Company and the Selling Stockholders to the Representatives for
the respective accounts of the Underwriters, against payment by or on behalf of
the Underwriters of the purchase price therefor by wire transfer in same- day
funds (the "Wired Funds") to the account of the Company and the Selling
Stockholders, as their interests appear. Such delivery of and payment for the
Firm Securities shall be made at the offices of ________________________________
at 9:30 A.M., New York time, on ________, 1997, or at such other place, time or
date as the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, such time and date
of delivery against payment being herein referred to as the "Firm Closing Date".
The Company and the Selling Stockholders will make such certificate or
certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at least
24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3, plus if the purchase and sale of any Option Securities takes place
after the Firm Closing Date and after the Firm
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Securities are trading "ex-dividend", an amount equal to the dividend payable on
such Option Securities. The option granted hereby may be exercised as to all or
any part of the Option Securities from time to time within thirty days after the
date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading). The Underwriters shall not be under any obligation to
purchase any of the Option Securities prior to the exercise of such option. The
Representatives may from time to time exercise the option granted hereby by
giving notice in writing or by telephone (confirmed in writing) to the Company
setting forth the aggregate principal amount of Option Securities as to which
the several Underwriters are then exercising the option and the date and time
for delivery of and payment for such Option Securities. Any such date of
delivery shall be determined by the Representatives but shall not be earlier
than two business days or later than five business days after such exercise of
the option and, in any event, shall not be earlier than the Firm Closing Date.
The time and date set forth in such notice, or such other time on such other
date as the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, is herein called the
"Option Closing Date" with respect to such Option Securities. Upon exercise of
the option as provided herein, the Company shall become obligated to sell to
each of the several Underwriters, and, subject to the terms and conditions
herein set forth, each of the Underwriters (severally and not jointly) shall
become obligated to purchase from the Company, the same percentage of the total
number of the Option Securities as to which the several Underwriters are then
exercising the option as such Underwriter is obligated to purchase of the
aggregate number of Firm Securities, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional Shares. If the option is
exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered on the related Option Closing Date in the manner,
and upon the terms and conditions, set forth in paragraph (a) of this Section 3,
except that reference therein to the Firm Securities and the Firm Closing Date
shall be deemed, for purposes of this paragraph (b), to refer to such Option
Securities and Option Closing Date, respectively.
(c) The Company and the Selling Stockholders hereby acknowledge that
the wire transfer by or on behalf of the Underwriters of the purchase price for
any Shares does not constitute closing of a purchase and sale of the Shares.
Only execution and delivery of a receipt for Shares by the Underwriters
indicates completion of the closing of a purchase of the Shares from the Company
and the Selling Stockholders. Furthermore, in the event that the Underwriters
wire funds to the Company and the Selling Stockholders prior to the completion
of the closing of a purchase of Shares, the Company and the Selling Stockholders
hereby acknowledge that until the Underwriters execute and deliver a receipt for
the Shares, by facsimile or otherwise, the Company and the Selling Stockholders
will not be entitled to the wired funds and shall return the wired funds to the
Underwriters as soon as practicable (by wire transfer of same-day funds) upon
demand. In the event that the closing of a purchase of Shares is not completed
and the wire funds are not returned by the Company and the Selling Stockholders
to the Underwriters on the same day the wired funds were received by the Company
and the Selling Stockholders, the Company and the Selling Stockholders, as the
case may be, agree to pay to the Underwriters in respect of each day the wire
funds are not returned by it, in same-day funds, interest on the amount of such
wire funds in an
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amount representing the Underwriters' cost of financing as reasonably determined
by Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company and the Selling Stockholders.
(a) The Company covenants and agrees with each of the Underwriters
that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of
this Agreement, and any amendments thereto to become effective as
promptly as possible. If required, the Company will file the
Prospectus, any Integrated Prospectus or any Term Sheet that
constitutes a part thereof and any amendment or supplement thereto with
the Commission in the manner and within the time period required by
Rule 434 and 424(b) under the Act. During any time when a prospectus
relating to the Securities is required to be delivered under the Act,
the Company (A) will comply with all requirements imposed upon it by
the Act, the Exchange Act and the Trust Indenture Act and the
respective rules and regulations of the Commission thereunder to the
extent necessary to permit the continuance of sales of or dealings in
the Securities in accordance with the provisions hereof and of each of
the Prospectus and any Integrated Prospectus, as then amended or
supplemented, and (B) will not file with the Commission the prospectus
or the amendment referred to in the third sentence of Section 2(a)(i)
hereof, any amendment or supplement to such prospectus or any amendment
to the Registration Statement or any Rule 462(b) Registration Statement
of which the Representatives shall not previously have been advised and
furnished with a copy for a reasonable period of time prior to the
proposed filing and as to which filing the Representatives shall not
have given their consent. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the
Commission, promptly upon request by the Representatives or counsel for
the Underwriters, any amendments to the Registration Statement or
amendments or supplements to the Prospectus and any Integrated
Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will
use its best efforts to cause any such amendment to the Registration
Statement to be declared effective by the Commission as promptly as
possible. The Company will advise the Representatives, promptly after
receiving notice thereof, of the time when the Registration Statement
or any amendment thereto has been filed or declared effective or the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto has been filed and will provide evidence satisfactory to the
Representatives of each such filing or effectiveness.
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(ii) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (A) the
issuance by the Commission of any stop order suspending the
effectiveness of the Original Registration Statement or any Rule 462(b)
Registration Statement or any post-effective amendment thereto or any
order directed at any document incorporated by reference in the
Registration Statement or if the Prospectus and any required Integrated
Prospectus are or any amendment or supplement thereto or any order
preventing or suspending the use of any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto, (B) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (C) the institution, threatening
or contemplation of any proceeding for any such purpose or (D) any
request made by the Commission for amending the Original Registration
Statement or any Rule 462(b) Registration Statement, for amending or
supplementing any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or for additional information. The Company will
use its best efforts to prevent the issuance of any such stop order
and, if any such stop order is issued, to obtain the withdrawal thereof
as promptly as possible.
(iii) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws
of such jurisdictions as the Representatives may designate and will
continue such qualifications in effect for as long as may be necessary
to complete the distribution of the Securities, provided, however, that
in connection therewith the Company shall not be required to qualify as
a foreign corporation or to execute a general consent to service of
process in any jurisdiction.
(iv) If, at any time prior to the later of (A) the final date
when a prospectus relating to the Securities is required to be
delivered under the Act or (B) the Option Closing Date, any event
occurs as a result of which either the Prospectus or any Integrated
Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any
other reason it is necessary at any time to amend or supplement the
Prospectus or any Integrated Prospectus to comply with the Act, the
Exchange Act or the respective rules or regulations of the Commission
thereunder, the Company will promptly notify the Representatives
thereof and, subject to Section 5(a) hereof, will prepare and file with
the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus
or any Integrated Prospectus that corrects such statement or omission
or effects such compliance.
(v) The Company will, without charge, provide (A) to the
Representatives and to counsel for the Underwriters a signed copy of
the registration statement originally filed with respect to the
Securities and each amendment thereto (in each case including exhibits
thereto) or any Rule 462(b) Registration Statement, certified by the
Secretary or an Assistant Secretary of the Company to be true and
complete copies thereof as filed with the Commission by electronic
transmission, (B) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and
each amendment thereto (in each
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case without exhibits thereto) and (C) so long as a prospectus relating
to the Securities is required to be delivered under the Act, as many
copies of each Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request; without limiting the
application of clause (C) of this sentence, the Company, not later than
(I) 6:00 PM, New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to
10:00 AM, New York City time on such date or (II) 2:00 PM, New York
City time, on the business day following the date of determination of
the public offering price, if such determination occurred after 10:00
AM, New York City time, on such date, will deliver to the Underwriters,
without charge, as many copies of the Prospectus and any amendment or
supplement thereto as the Representatives may reasonably request for
purposes of confirming orders that are expected to settle on the Firm
Closing Date.
(vi) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a
consolidated earnings statement of the Company and its subsidiaries
that satisfies the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(vii) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Preliminary
Prospectus, the Prospectus or any Integrated Prospectus.
(viii) The Company will not, directly or indirectly, without
the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, offer, sell, offer to sell, contract to
sell, pledge, grant any option to purchase or otherwise sell or dispose
(or announce any offer, sale, offer of sale, contract of sale, pledge,
grant of any option to purchase or other sale or disposition) of any
shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of
180 days after the date hereof, except pursuant to this Agreement and
except for issuances pursuant to the exercise of employee stock options
outstanding on the date hereof, pursuant to the Company's dividend
reinvestment plan or pursuant to the terms of convertible securities of
the Company outstanding on the date hereof.
(ix) The Company will not, directly or indirectly, (A) take
any action designed to cause or to result in, or that has constituted
or which might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (B) (I) sell, bid
for, purchase, or pay anyone any compensation for soliciting purchases
of, the Securities or (II) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company (except for the sale of Securities by the Selling
Stockholders under this Agreement).
(x) The Company will obtain the agreements described in
Section 7(f) hereof prior to the Firm Closing Date.
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(xi) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the
Option Closing Date, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion
the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus and
any Integrated Prospectus), the Company will, after notice from you
advising the Company to the effect set forth above, forthwith prepare,
consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(xii) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees
in accordance with Rule 111 promulgated under the Act by the earlier of
(i) 10:00 P.M. Eastern time on the date of this Agreement and (ii) the
time confirmations are sent or given, as specified by Rule 462(b)(2).
(xiii) The Company will cause the Securities to be duly
included for quotation on the Nasdaq Stock Market's National Market
(the "Nasdaq National Market") prior to the Firm Closing Date. The
Company will ensure that the Securities remain included for quotation
on the Nasdaq National Market following the Firm Closing Date.
(b) Each Selling Stockholder covenants and agrees with each of the
Underwriters that:
(i) Such Selling Stockholder will not, directly or indirectly,
(A) take any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities or (B) (I)
sell, bid for, purchase, or pay anyone any compensation for soliciting
purchases of, the Securities or (II) pay or agree to pay to any person
any compensation for soliciting another to purchase any other
securities of the Company (except for the sale of Securities by the
Selling Stockholder under this Agreement).
(ii) Such Group 1 Selling Stockholders will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale,
contract of sale, pledge, grant of any option to purchase or other sale
or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, Common Stock or
other stock of the Company, or any right to purchase or acquire Common
Stock or other capital stock of the Company for a period of 180 days
after the date hereof, except pursuant to this Agreement.
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6. Expenses. The Company will pay all costs and expenses incident to
the performance of the obligations of the Company and the Selling Stockholders
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 12 hereof,
including all costs and expenses incident to (i) the printing or other
production of documents with respect to the transactions, including any costs of
printing the registration statement originally filed with respect to the
Securities and any amendment thereto, any Rule 462(b) Registration Statement,
any Preliminary Prospectus, the Prospectus and any Integrated Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (ii)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel,
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the filing fees of the Commission (and the National
Association of Securities Dealers, Inc.) relating to the Securities, (vii) the
quotation of the Securities on the Nasdaq National Market and, (viii) meetings
with prospective investors in the Securities (other than shall have been
specifically approved by the Representatives to be paid for by the Underwriters)
and (ix) advertising relating to the offering of the Securities (other than
shall have been specifically approved by the Representatives to be paid for by
the Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 12 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. The Company shall not in
any event be liable to any of the Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's officers made pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their covenants and
agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, Original Registration Statement or such amendment and,
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or to
the Registration Statement, as the case
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may be, containing information regarding the initial public offering price of
the Securities has been filed with the Commission and (ii) the time
confirmations are sent or given as specified by Rule 462(b)(2), or with respect
to the Original Registration Statement, or such later time and date as shall
have been consented to by the Representatives; if required, the Prospectus or
any Term Sheet that constitutes a part thereof and any Integrated Prospectus and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rule 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto and no order directed at any document
incorporated by reference in the Registration Statement, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission; and the Company shall have complied with any
request of the Commission for additional information (to be included in the
Registration Statement, the Prospectus or any Integrated Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxx, Xxxxxxxx & Xxxxxxx LLP, counsel for the Company, to the
effect that:
(i) the Company and each of its subsidiaries (the
"Subsidiaries") have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation and are duly qualified to transact
business as foreign corporations and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to the
Company and the Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have corporate
power to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and
the Prospectus or any Integrated Prospectus, and the Company has
corporate power to enter into this Agreement and to carry out all the
terms and provisions hereof and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares and
as otherwise set forth in each of the Prospectus and any Integrated
Prospectus, are owned beneficially by the Company free and clear of any
perfected security interests or, to the best knowledge of such counsel,
any other security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus or any Integrated
Prospectus; all of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable
federal and state
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securities laws and were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase
securities; the Firm Securities have been duly authorized by all
necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable; the
Securities have been duly included for trading on the Nasdaq National
Market; no holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to
subscribe for any of the Securities; and no holders of securities of
the Company are entitled to have such securities registered under the
Registration Statement;
(v) the statements set forth under the heading "Description of
Capital Stock" in each of the Prospectus and any Integrated Prospectus,
insofar as such statements purport to summarize certain provisions of
the capital stock of the Company, provide a fair summary of such
provisions and the statements set forth under the heading "Business -
Government Regulation" in each of the Prospectus and any Integrated
Prospectus, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, provide a
fair summary of such legal matters, documents and proceedings;
(vi) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the Company;
(vii) no legal or governmental proceedings are pending to
which the Company or any of the Subsidiaries is a party or to which the
property of the Company or any of the Subsidiaries is subject that are
required to be described in the Registration Statement, the Prospectus
and any Integrated Prospectus and are not described therein, and, to
the best knowledge of such counsel, no such proceedings have been
threatened against the Company or any of the Subsidiaries or with
respect to any of their respective properties; and no contract or other
document is required to be described in the Registration Statement, the
Prospectus and any Integrated Prospectus or to be filed as an exhibit
to the Registration Statement that is not described therein or filed as
required;
(viii) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement
and the consummation of the other transactions herein contemplated do
not (A) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company or
any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or any of their respective properties are bound, or
the charter documents or by-laws of the Company or any of the
Subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority
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or any arbitrator known to such counsel and applicable to the Company
or any of the Subsidiaries;
(ix) the Registration Statement is effective under the Act;
any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, and any Integrated Prospectus pursuant to
Rules 434 and 424(b) has been made in the manner and within the time
period required by Rules 434 and 424(b); and no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto has been
issued, and no proceedings for that purpose have been instituted or
threatened or, to the best knowledge of such counsel, are contemplated
by the Commission;
(x) the Registration Statement originally filed with respect
to the Securities and each amendment thereto and any Rule 462(b)
Registration Statement, the Prospectus and any Integrated Prospectus
(in each case, including the documents incorporated by reference
therein but not including the financial statements and other financial
information contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder;
(xi) If the Company elects to rely on Rule 434, the Prospectus
is not "materially different", as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the time of
its effectiveness or any effective post-effective amendment thereto
(including such information that is permitted to be omitted pursuant to
Rule 430A);
(xii) to the best knowledge of such counsel, the Company and
the Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and the Subsidiaries, except as described in or
contemplated by the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus is not in
existence, the most recent Preliminary Prospectus);
(xiii) the Company is not an "investment company" under the
Investment Company Act of 1940, as amended, and consummation of the
transactions herein contemplated will not cause the Company to become
an investment company subject to registration under such Act;
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(xiv) except for the shares of capital stock of each of the
Subsidiaries owned by the Company and such Subsidiaries, neither the
Company nor any such Subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, association or other entity, except as described in
or contemplated by the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus is not in
existence, the most recent Preliminary Prospectus); and
(xv) except as disclosed in the and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus is not in
existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of its
Subsidiaries convertible into or exchangeable for any capital stock of
the Company or any such Subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any
such capital stock or any such convertible or exchangeable securities
or obligations, or (C) obligations of the Company or any such
Subsidiary to issue any shares of capital stock, any such convertible
or exchangeable securities or obligations, or any such warrants, rights
or options.
Such counsel shall also state that they have no reason to believe that
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus and any Integrated Prospectus, as of its date or the date of
such opinion, included or includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials. The foregoing opinion shall also
state that the Underwriters are justified in relying upon such opinion of Xxxxx,
Xxxxxxxx & Xxxxxxx LLP, and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date of Xxxxx, Xxxxxxxx & Xxxxxxx, LLP for the Group 1 Selling
Stockholders and of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx LLP, for the Group 2 Selling
Stockholders, as appropriate, to the effect that:
(i) each Selling Stockholder has full power (partnership,
trust or other) to enter into this Agreement, the Custody Agreement and
the Power of Attorney and to sell, assign, transfer and deliver to the
Underwriters the Securities to be sold by such Selling Stockholder
hereunder in accordance with the terms of this Agreement, and to
perform his
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or its obligations under the Custody Agreement; the execution and
delivery of this Agreement, the Custody Agreement and the Power of
Attorney have been duly authorized by all necessary action
(partnership, trust or other) of each Selling Stockholder; this
Agreement, the Custody Agreement and the Power of Attorney have been
executed and delivered by such Selling Stockholder; this Agreement and,
assuming due authorization, execution and delivery by the Custodian,
the Custody Agreement and the Power of Attorney, are the legal, valid,
binding and enforceable instruments of such Selling Stockholder,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(ii) the delivery by such Selling Stockholder to the
Underwriters of certificates for the Securities being sold hereunder by
such Selling Stockholder against payment therefor as provided herein,
will convey good and marketable title to such Securities to the several
Underwriters, free and clear of any security interests, liens,
encumbrances, equities, claims or other defects; and
(iii) the sale of the Securities to the Underwriters by such
Selling Stockholder pursuant to this Agreement, the compliance by such
Selling Stockholder with the other provisions of this Agreement and the
Custody Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as has been obtained, and except such as may be required
for registration under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act and the Exchange Act, or (B) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder or
any of such Selling Stockholder's properties are bound, or any statute
or any judgment, decree, order, rule or regulation known to such
counsel of any court or other governmental authority or any arbitrator
applicable to such Selling Stockholder.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials. The foregoing opinions shall also
state that the Underwriters are justified in relying upon such opinions of
Xxxxx, Xxxxxxxx & Xxxxxxx LLP and Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx LLP, and
copies of such opinion shall be delivered to the Representatives and counsel for
the Underwriters.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (c) shall include any amendment or
supplement thereto at the date of such opinion.
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(d) The Representatives shall have received an opinion, dated the Firm
Closing Date, of King & Spalding, counsel for the Underwriters, with respect to
the issuance and sale of the Firm Securities, the Registration Statement, the
Prospectus and any Integrated Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Representatives shall have received from Xxxxxx Xxxxxxxx LLP
and KPMG Peat Marwick LLP, as appropriate, letters dated, respectively, the date
hereof and the Firm Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the
Act, the Exchange Act and the applicable rules and regulations
thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included in the
Registration Statement, the Prospectus and any Integrated Prospectus
comply in form in all material respects with the applicable accounting
requirements of the Act, the Exchange Act and the related published
rules and regulations thereunder;
(iii) on the basis of their limited review in accordance with
standards established by the American Institute of Certified Public
Accountants of any interim unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries as
indicated in their reports incorporated in the Registration Statement,
the Prospectus and any Integrated Prospectus, carrying out certain
specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the comments
set forth in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof of the
Company and each of its consolidated subsidiaries, and inquiries of
certain officials of the Company and its consolidated subsidiaries who
have responsibility for financial and accounting matters, nothing came
to their attention that caused them to believe that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement, the Prospectus and any
Integrated Prospectus do not comply in form in all material
respects with the applicable accounting requirements of the
Act, the Exchange Act and the related published rules and
regulations thereunder, or are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements included in the Registration Statement
and the Prospectus and any Integrated Prospectus; and
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(B) at a specific date not more than five business
days prior to the date of such letter, there were any changes
in the capital stock or long-term debt of the Company and its
consolidated subsidiaries or any decreases in net current
assets or stockholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts
shown on the unaudited consolidated balance sheet included in
the Registration Statement, the Prospectus and any Integrated
Prospectus, or for the period from ______________ to such
specified date there were any decreases, as compared with
____________, in sales, net revenues, net income before
income taxes or total or per share amounts of net income of
the Company and its consolidated subsidiaries, except in all
instances for changes, decreases or increases set forth in
such letter.
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are
included in the Registration Statement, the Prospectus and any
Integrated Prospectus, and have compared such amounts, percentages and
financial information with such records of the Company and its
consolidated subsidiaries and with information derived from such
records and have found them to be in agreement, excluding any questions
of legal interpretation.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (e) with respect to either letter
referred to above shall include any amendment or supplement thereto at the date
of such letter.
(f) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm Closing
Date; the Registration Statement, as amended as of the Firm Closing
Date, does not include any untrue statement of a material fact or omit
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to state any material fact necessary to make the statements therein not
misleading, and the Prospectus and any Integrated Prospectus, as
amended or supplemented as of the Firm Closing Date, does not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and the
Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement or the Prospectus or any amendment or supplement
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best of the Company's knowledge,
are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus [and
any Integrated Prospectus , neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and
there has not been any material adverse change, or any development
involving a prospective material adverse change, in the condition
(financial or otherwise), management, business prospects, net worth or
results of operations of the Company or any of its subsidiaries, except
in each case as described in or contemplated by the Prospectus and any
Integrated Prospectus.
(g) The Representatives shall have received a certificate from each
Selling Stockholder, signed by such Selling Stockholder, dated the Firm Closing
Date, to the effect that:
(i) the representations and warranties of such Selling
Stockholder in this Agreement are true and correct as if made on and as
of the Firm Closing Date;
(ii) in the case of the Group 1 Selling Stockholders, the
Registration Statement, as amended as of the Firm Closing Date, does
not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading and the Prospectus, as amended or supplemented as of the
Firm Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and in the case of the Group 2 Selling
Stockholders, to the extent that any statements or omissions are made
in the Registration Statement and the Prospectus in reliance upon and
in conformity with written information furnished to the Company by the
Selling Stockholder specifically for use therein, the Registration
Statement, as amended as of the Firm Closing Date, does not include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading and the
Prospectus, as amended or supplemented as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to
state
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any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and
(iii) such Selling Stockholder has performed all covenants and
agreements on its part to be performed or satisfied at or prior to the
Firm Closing Date;
(h) The Representatives shall have received from each person who is a
director or officer of the Company, a Group 1 Selling Stockholder or who owns
over 5% of the shares of Common Stock an agreement to the effect that such
person will not, directly or indirectly, without the prior written consent of
Prudential Securities Incorporated, on behalf of the Underwriters, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of an option to purchase or other sale or disposition) of
any shares of Common Stock or any securities convertible into, or exchangeable
or exercisable for, shares of Common Stock for a period of 180 days after the
date of this Agreement;
(i) On or before the Firm Closing Date, the Representatives and counsel
for the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company; and
(j) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
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(i) any untrue statement or alleged untrue statement made by
the Company in Section 2 of this Agreement;
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by
or on behalf of the Company filed in any jurisdiction in order to
qualify the Securities under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities
exchange (each an "Application");
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus and any Integrated Prospectus or any
amendment or supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading; or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films, tape recordings
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto, or any Application
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have. The Company will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than fifty percent (50%) of the Securities, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
(b) Each Selling Stockholder agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement, each Underwriter
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and each person who controls the Company or any Underwriter within the meaning
of Section 15 of the Act against any such losses, claims, damages or liabilities
to which the Company, any such director, officer, such Underwriter or any such
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the such Selling Stockholder in Section 2 of this Agreement;
(ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto; or
(iii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or any Application or necessary to
make the statements therein not misleading;
provided, however, that the Selling Stockholders will not be liable to
any Underwriter or any person controlling such Underwriter with respect
to any such untrue statement or omission made in any Preliminary
Prospectus that is corrected in the Prospectus (or any amendment or
supplement thereto) if the person asserting any such loss, claim,
damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented)
at or prior to the written confirmation of the sale of such Securities
to such person in any case where such delivery of the Prospectus (as
amended or supplemented) is required by the Act, unless such failure to
deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 5(a)(iv) or 5 (a)(v) of this
Agreement; and subject to the limitation set forth immediately
preceding this clause, will reimburse, as incurred, any legal or other
expenses reasonably incurred by the Company, any such director,
officer, such Underwriter or any such controlling person in connection
with investigating or defending any such loss, claim, damage, liability
or any action in respect thereof; provided, further, however, that in
the case of (i), (ii) and (iii) above for the Group 2 Selling
Stockholders, to the extent and only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company by such Group 2 Selling Stockholder. This
indemnity agreement will be in addition to any liability which the
Selling Stockholders may otherwise have. The Selling Stockholders will
not, without the prior written consent of the Underwriters purchasing
greater than fifty percent of the Securities, settle or compromise or
consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not such Underwriter or any person
who controls such Underwriter within the meaning of Section 15 of the
Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of
the Underwriters
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and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
(c) Each Underwriter, severally and not jointly, will
indemnity and hold harmless the Company, each of its directors, each of
its officers who signed the Registration Statement, each Selling
Stockholder and each person, it any, who controls the Company and each
Selling Stockholder within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company, any such director, officer or
controlling person or any such Selling Stockholder may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or any amendment thereto, any Preliminary Prospectus, the Prospectus or
any Integrated Prospectus or any amendment or supplement thereto, or
any Application or (ii) the omission or the alleged omission to state
therein a material fact required to be stated in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any Integrated Prospectus or any amendment or supplement
thereto, or any Application or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and, subject
to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred
by the Company or any such director, officer or controlling person or
such Selling Stockholder in connection with investigating or defending
any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability
which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
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 otherwise than under this Section 8. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to it
and/or other indemnified parties which are different from or additional
to those available to the indemnifying party, the indemnifying party
shall not have the right to direct the defense of such action on behalf
of
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such indemnified party or parties and such indemnified party or parties
shall have the right to select separate counsel to defend such action
on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of
counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable costs of investigation,
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 in connection with such
action the indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or
circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified parties
under such paragraph (a) who are parties to such action or actions) or
(ii) the indemnifying party does not promptly retain counsel
satisfactory to the indemnified party or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at
the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party.
(e) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in
respect thereof), each indemnifying party, in order to provide for just
and equitable contribution, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also
the relative fault of the indemnifying party or parties on the one hand
and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company and
the Selling Stockholders bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault of the
parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholders or the
Underwriters, the parties' relative intents, knowledge, access to
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35
information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Selling Stockholders and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rate or per capita allocation (even
if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation that does not take into account the
equitable considerations referred to above in this paragraph (e).
Notwithstanding any other provision of this paragraph (e), no
Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities
purchased by such Underwriter under this Agreement, less the aggregate
amount of any damages that such Underwriter has otherwise been required
to pay in respect of the same or any substantially similar claim, and
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in
proportion to their respective underwriting obligations and not joint,
and contributions among Underwriters shall be governed by the
provisions of the Prudential Securities Incorporated Master Agreement
Among Underwriters. For purposes of this paragraph (e), each person, if
any, who controls an Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company or any Selling
Stockholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the
Company.
(f) The liability of each Selling Stockholder under the
representations and warranties contained in Sections 2 and 3 hereof and
under the indemnity and contribution agreements contained in the
provisions of this Section 8 shall be limited to an amount equal to the
public offering price of the Securities to be sold by such Selling
Stockholder to the Underwriters minus the amount of the underwriting
discount paid thereon to the Underwriters by such Selling Stockholder.
The Company and such Selling Stockholder may agree, as among themselves
and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which
they each shall be responsible.
9. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Firm Securities or Option
Securities hereunder and the aggregate number of such Securities that
such defaulting Underwriter or Underwriters agreed but failed to
purchase is ten percent or less of the aggregate number of Firm
Securities or Option Securities to be purchased by all of the
Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of
such Securities by other persons (who may include one or more of the
non-defaulting Underwriters, including the Representatives), but if no
such arrangements are made by the Firm Closing Date or the related
Option Closing Date, as the case may be, the other
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Underwriters shall be obligated severally in proportion to their
respective commitments hereunder to purchase the Firm Securities or
Option Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase. If one or more Underwriters so default
with respect to an aggregate number of Securities that is more than ten
percent of the aggregate number of Firm Securities or Option
Securities, as the case may be, to be purchased by all of the
Underwriters at such time hereunder, and if arrangements satisfactory
to the Representatives are not made within 36 hours after such default
for the purchase by other persons (who may include one or more of the
non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which such default occurs, this Agreement
will terminate without liability on the part of any non-defaulting
Underwriter, Selling Stockholder or the Company other than as provided
in Section 11 hereof. In the event of any default by one or more
Underwriters as described in this Section 9, the Representatives shall
have the right to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in Section 3 hereof
for not more than seven business days in order that any necessary
changes may be made in the arrangements or documents for the purchase
and delivery of the Firm Securities or Option Securities, as the case
may be. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 9. Nothing
herein shall relieve any defaulting Underwriter from liability for its
default.
10. Default by Selling Stockholders. If on the Firm Closing
Date or Option Closing Date any Selling Stockholder fails to sell the
Selling Stockholders' Firm Securities, which such Selling Stockholder
has agreed to sell on such date as set forth herein, the Company agrees
that it will sell that number of shares of Common Stock to the
Underwriters which represents the Selling Stockholders' Firm Securities
which such Selling Stockholder has failed to so sell, or such lesser
number as may be requested by you.
11. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company
and its officers, the Selling Stockholders and the several Underwriters
set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the
Company, any of its officers or directors, any Underwriter or any
controlling person referred to in Section 8 hereof and (ii) delivery of
and payment for the Securities. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
12. Termination. (a) This Agreement may be terminated with
respect to the Firm Securities or any Option Securities in the sole
discretion of the Representatives by notice to the Company and the
Selling Stockholders given prior to the Firm Closing Date or the
related Option Closing Date, respectively, in the event that the
Company or the Selling Stockholders shall have failed, refused or been
unable to perform all obligations
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and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Firm Closing
Date or such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company),
in the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by
the Commission or the Nasdaq National Market or trading in securities
generally on the Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established on such market
system;
(iii) a banking moratorium shall have been declared by New
York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U. S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended as
of the date hereof.
(b) Termination of this Agreement pursuant to this Section 12 shall be
without liability of any party to any other party except as provided in Section
11 hereof.
13. Information Supplied by Underwriters. The statements set forth in
the last paragraph on the front cover page and under the heading "Underwriting"
in any Preliminary Prospectus, the Prospectus or any Integrated Prospectus (to
the extent such statements relate to the Underwriters) constitute the only
information furnished by any Underwriter through the Representatives to the
Company for the purposes of Sections 2(b) and 8 hereof. The Underwriters confirm
that such statements (to such extent) are correct.
14. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in
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writing to Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Equity Transactions Group; if sent to the Company, shall
be delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Company at 000 Xxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000,
Attention: X.X. Xxxxxx; and if sent to the Selling Stockholders shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to X.X. Xxxxxx, as Attorney-in-Fact, at 000 Xxxx Xxxx Xxxxx, Xxxxxxxx,
Xxxxxxx 00000 .
15. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company, the Selling Stockholders
and their respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (i) the indemnities of the Company and the Selling Stockholders contained
in Section 8 of this Agreement shall also be for the benefit of any person or
persons who control any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 8 of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company or the
Selling Stockholders within the meaning of Section 15 of the Act or Section 20
of the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
16. Applicable Law. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
17. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, each Selling Stockholder accepts
for itself and in connection with its properties, generally and unconditionally,
the nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Each Selling Stockholder designates
and appoints X.X. Xxxxxx, as Attorney-in-Fact, and such other persons as may
hereafter be selected by each Selling Stockholder irrevocable agreeing in
writing to so serve, as its agent to receive on its behalf service of all
process in any such proceedings in any such court, such service being hereby
acknowledged by each Selling Stockholder to be effective and binding service in
every respect. A copy of any such process so served shall be mailed by
registered mail to each Selling Stockholder at its address provided in Section
14 hereof; provided, however, that, unless otherwise provided by applicable law,
any failure to mail such copy shall not affect the validity of service of such
process. If any agent appointed by any Selling Stockholder refuses to accept
service, such Selling Stockholders hereby agrees that service of process
sufficient for personal jurisdiction in any action against such Selling
Stockholder in the State of New York may be made by registered or certified
mail, return receipt requested, to such Selling Stockholder at its
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address provided in Section 14 hereof, and such Selling Stockholder hereby
acknowledges that such service shall be effective and binding in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Underwriter to bring
proceedings against the Selling Stockholders in the courts of any other
jurisdiction.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
THE MAXIM GROUP, INC.
By
-------------------------
Name:
--------------------
Title:
-------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
WHEAT, FIRST SECURITIES, INC.
By PRUDENTIAL SECURITIES INCORPORATED
By
--------------------------------------
Xxxx-Xxxxxx Canfin
Director
For itself and on behalf of the Representatives.
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SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated
The Xxxxxxxx-Xxxxxxxx Company, Inc.
Wheat, First Securities, Inc.
Total
------------
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SCHEDULE 2
SELLING SECURITYHOLDERS
Number of Firm
Securities to
Selling Stockholders be Purchased
-------------------- ------------
Group 1 Selling Stockholders
Xxxxx X. XxXxxxx............................ 60,000
Xxxxxx XxXxxxx ............................. 184,225
Xxxx Xxxx .................................. 120,000
Group 2 Selling Stockholders
Xxxx X. Xxxxxxx ............................ 60,002
-------
Total ...................................... 424,227
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