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EXHIBIT 1.1
H&D Draft 3/30/98
2,188,000 SHARES
XXXXXXX RIVER ASSOCIATES INCORPORATED
COMMON STOCK
UNDERWRITING AGREEMENT
DATED APRIL __, 1998
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Table of Contents
SECTION 1. REPRESENTATIONS AND WARRANTIES..................................................................2
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................2
(a) Compliance with Registration Requirements..............................................2
(b) Offering Materials Furnished to Underwriters...........................................3
(c) Distribution of Offering Material By the Company.......................................3
(d) The Underwriting Agreement.............................................................3
(e) Authorization of the Common Shares.....................................................4
(f) No Applicable Registration or Other Similar Rights.....................................4
(g) No Material Adverse Change.............................................................4
(h) Independent Accountants................................................................4
(i) Preparation of the Financial Statements................................................4
(j) Incorporation and Good Standing of the Company
and the Subsidiary.....................................................................5
(k) Capitalization and Other Capital Stock Matters.........................................5
(l) Nasdaq National Market Listing.........................................................6
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required...................................................6
(n) No Material Actions or Proceedings.....................................................7
(o) Intellectual Property Rights...........................................................7
(p) All Necessary Permits, etc.............................................................7
(q) Title to Properties....................................................................8
(r) Tax Law Compliance.....................................................................8
(s) Company Not an "Investment Company."...................................................8
(t) Insurance..............................................................................8
(u) No Price Stabilization or Manipulation.................................................9
(v) Related Party Transactions.............................................................9
(w) No Unlawful Contributions or Other Payments............................................9
(x) ERISA Compliance.......................................................................9
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.....................................10
(a) The Underwriting Agreement............................................................10
(b) The Custody Agreement and Power of Attorney...........................................10
(c) Title to Common Shares to be Sold; All Authorizations Obtained........................10
(d) Delivery of the Common Shares to be Sold..............................................11
(e) Non-Contravention; No Further Authorizations
or Approvals Required.................................................................11
(f) No Registration or Other Similar Rights...............................................11
(g) No Further Consents, etc..............................................................11
(h) Disclosure Made by Such Selling Stockholder in the Prospectus.........................12
(i) No Price Stabilization or Manipulation................................................12
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(j) Registration Statement and Prospectus.................................................12
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES...............................................13
The Firm Common Shares..................................................................................13
The First Closing Date..................................................................................13
The Optional Common Shares; the Second Closing Date.....................................................13
Public Offering of the Common Shares....................................................................14
Payment for the Common Shares...........................................................................14
Delivery of the Common Shares...........................................................................15
Delivery of Prospectus to the Underwriters..............................................................15
SECTION 3. ADDITIONAL COVENANTS...........................................................................16
A. Covenants of the Company.......................................................................16
(a) Representatives' Review of Proposed Amendments
and Supplements.......................................................................16
(b) Securities Act Compliance.............................................................16
(c) Amendments and Supplements to the Prospectus
and Other Securities Act Matters......................................................17
(d) Copies of any Amendments and Supplements to the Prospectus............................17
(e) Blue Sky Compliance...................................................................17
(f) Use of Proceeds.......................................................................17
(g) Transfer Agent........................................................................18
(h) Earnings Statement....................................................................18
(i) Periodic Reporting Obligations........................................................18
(j) Agreement Not To Offer or Sell Additional Securities..................................18
(k) Future Reports to the Representatives.................................................19
B. COVENANTS OF THE SELLING STOCKHOLDERS..........................................................19
(a) Agreement Not to Offer or Sell Additional Securities..................................19
(b) Delivery of Forms W-8 and W-9.........................................................20
SECTION 4. PAYMENT OF EXPENSES............................................................................20
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS..............................................21
(a) Accountants' Comfort Letter...........................................................21
(b) Compliance with Registration Requirements;
No Stop Order; No Objection from NASD.................................................21
(c) No Material Adverse Change............................................................22
(d) Opinion of Counsel for the Company....................................................22
(e) Opinion of Counsel for the Underwriters...............................................22
(f) Officers' Certificate.................................................................23
(g) Bring-down Comfort Letter.............................................................23
(h) Opinion of Counsel for the Selling Stockholders.......................................23
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(i) Selling Stockholders' Certificate.....................................................24
(j) Selling Stockholders' Documents.......................................................24
(k) Lock-Up Agreement from Certain Stockholders of the Company Other Than
Selling Stockholders................................................................24
(l) Additional Documents..................................................................24
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES........................................................25
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT................................................................25
SECTION 8. INDEMNIFICATION................................................................................25
(a) Indemnification of the Underwriters...................................................25
(b) Indemnification of the Company, its Directors and Officers............................27
(c) Notifications and Other Indemnification Procedures....................................28
(d) Settlements...........................................................................29
SECTION 9. CONTRIBUTION...................................................................................30
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.............................................32
SECTION 11. TERMINATION OF THIS AGREEMENT..................................................................32
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY............................................33
SECTION 13. NOTICES........................................................................................33
SECTION 14. SUCCESSORS.....................................................................................34
SECTION 15. PARTIAL UNENFORCEABILITY.......................................................................35
SECTION 16. GOVERNING LAW PROVISIONS.......................................................................35
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL AND DELIVER COMMON SHARES...........35
SECTION 18. GENERAL PROVISIONS.............................................................................35
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UNDERWRITING AGREEMENT
April __, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXX XXXXX & COMPANY, L.L.C.
As Representatives of the several Underwriters
c/o NATIONSBANC XXXXXXXXXX SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Xxxxxxx River Associates Incorporated, a Massachusetts
corporation (the "Company"), proposes to issue and sell to the several
underwriters named in Schedule A (the "Underwriters") an aggregate of 1,562,500
shares of its Common Stock, no par value (the "Common Stock"); and the
stockholders of the Company named in Schedule B (collectively, the "Selling
Stockholders") severally propose to sell to the Underwriters an aggregate of
625,500 shares of Common Stock. The 1,562,500 shares of Common Stock to be sold
by the Company and the 625,500 shares of Common Stock to be sold by the Selling
Stockholders are collectively called the "Firm Common Shares." In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 234,375 shares of Common Stock and the Selling Stockholders propose
severally to grant to the Underwriters an option to purchase up to an additional
93,825 shares of Common Stock, each Selling Stockholder selling up to the amount
set forth opposite such Selling Stockholder's name in Schedule B, all as
provided in Section 2. The additional 234,375 shares to be sold by the Company
and the additional 93,825 shares to be sold by the Selling Stockholders pursuant
to such option are collectively called the "Optional Common Shares." The Firm
Common Shares and, if and to the extent such option is exercised, the Optional
Common Shares are collectively called the "Common Shares." NationsBanc
Xxxxxxxxxx Securities LLC ("NMS") and Xxxxxxx Xxxxx & Company L.L.C. have agreed
to act as representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File
No. 333-46941), which contains a form of prospectus to be used in connection
with the public offering and sale of the Common Shares. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933
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and the rules and regulations promulgated thereunder (collectively,
the "Securities Act"), including any information deemed to be a part thereof at
the time of effectiveness pursuant to Rule 430A or Rule 434 under the Securities
Act, is called the "Registration Statement." Any registration statement filed by
the Company pursuant to Rule 462(b) under the Securities Act is called the "Rule
462(b) Registration Statement," and from and after the date and time of filing
of the Rule 462(b) Registration Statement the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Such prospectus, in the
form first used by the Underwriters to confirm sales of the Common Shares, is
called the "Prospectus"; provided, however, if the Company has, with the consent
of NMS, elected to rely upon Rule 434 under the Securities Act, the term
"Prospectus" shall mean the Company's prospectus subject to completion (each, a
"preliminary prospectus") dated __________, 1998 (such preliminary prospectus is
called the "Rule 434 preliminary prospectus"), together with the applicable term
sheet (the "Term Sheet") prepared and filed by the Company with the Commission
under Rules 434 and 424(b) under the Securities Act and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term Sheet.
All references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a preliminary prospectus, the Prospectus or the Term
Sheet, or any amendments or supplements to any of the foregoing, shall include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("XXXXX").
The Company and each of the Selling Stockholders hereby confirm their
respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The
Registration Statement and any Rule 462(b) Registration Statement have
been declared effective by the Commission under the Securities Act. The
Company has complied to the Commission's satisfaction with all requests
of the Commission for additional or supplemental information. No stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to XXXXX (except as may be
permitted by Regulation S-T
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under the Securities Act), was identical to the copy thereof delivered
to the Underwriters for use in connection with the offer and sale of
the Common Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the
time it became effective and at all subsequent times, complied and will
comply in all material respects with the Securities Act and did not and
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus, as amended
or supplemented, as of its date and at all subsequent times, did not
and will not contain 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. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus,
or any amendments or supplements thereto, made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by the Representatives expressly for use
therein. There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the
Registration Statement which have not been described or filed as
required.
(b) Offering Materials Furnished to Underwriters. The Company
has delivered to each Representative one complete manually signed copy
of the Registration Statement and of each consent and certificate of
experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and preliminary prospectuses
and the Prospectus, as amended or supplemented, in such quantities and
at such places as the Representatives have reasonably requested for
each of the Underwriters.
(c) Distribution of Offering Material By the Company. The
Company has not distributed and will not distribute, prior to the later
of the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering material
in connection with the offering and sale of the Common Shares other
than a preliminary prospectus, the Prospectus or the Registration
Statement.
(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification or contribution hereunder may be
limited by applicable law and except as the enforcement hereof may be
limited by bankruptcy, insolvency,
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reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(e) Authorization of the Common Shares. The Common Shares to
be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights. There
are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this Agreement,
except for such rights as have been duly waived.
(g) No Material Adverse Change. Except as otherwise disclosed
in the Prospectus, subsequent to the respective dates as of which
information is given in the Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of
business, of the Company and NeuCo LLC (the "Subsidiary"), considered
as one entity (any such change is called a "Material Adverse Change");
(ii) the Company and the Subsidiary, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution of any
kind declared, paid or made by the Company or, except for dividends
paid to the Company, by the Subsidiary on any class of capital stock or
repurchase or redemption by the Company or the Subsidiary of any class
of capital stock.
(h) Independent Accountants. Ernst & Young LLP, who have
expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus, are independent
public or certified public accountants as required by the Securities
Act.
(i) Preparation of the Financial Statements. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the
consolidated financial position of the Company and
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the Subsidiary as of and at the dates indicated and the results of
their operations and cash flows for the periods specified. The
supporting schedules, if any, included in the Registration Statement
present fairly the information required to be stated therein. Such
financial statements and supporting schedules have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary--Summary Consolidated Financial
Data," "Selected Consolidated Financial Data" and "Capitalization"
fairly present the information set forth therein on a basis consistent
with that of the audited financial statements contained in the
Registration Statement.
(j) Incorporation and Good Standing of the Company and the
Subsidiary. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Massachusetts and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement. The Subsidiary has been duly
organized and is validly existing as a limited liability company in
good standing under the laws of the Commonwealth of Massachusetts and
has power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus. Each of the
Company and the Subsidiary is duly qualified to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually
or in the aggregate, result in a Material Adverse Change. The Company
is the legal and beneficial owner of its membership interest in the
Subsidiary, as described in the Prospectus. The Company owns its
membership interest in the Subsidiary free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim. Except as
described in the Prospectus, the Company has no obligation to
contribute capital to the Subsidiary pursuant to the operating
agreement or certificate of formation of the Subsidiary or any
contractual arrangement with any third party. The Company does not own
or control, directly or indirectly, any corporation, association or
other entity other than the Subsidiary.
(k) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company as of
November 29, 1997 was as set forth in the Prospectus under the caption
"Capitalization." The
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Common Stock (including the Common Shares) conforms in all material
respects to the description thereof contained in the Prospectus. All of
the issued and outstanding shares of Common Stock (including the shares
of Common Stock owned by Selling Stockholders) have been duly
authorized and validly issued, are (except, in the case of shares
purchased by officers of the Company under agreements which provide for
the purchase price to be paid in installments, to the extent of the
installments which are not yet due and payable) fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common Stock were
issued in violation of any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase securities of the
Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase,
or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or the Subsidiary
other than those accurately described in the Prospectus. The
description of the Company's stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted
thereunder, set forth in the Prospectus is an accurate and fair
description in all material respects of such plans, arrangements,
options and rights.
(l) Nasdaq National Market Listing. The Common Shares have
been approved for inclusion on the Nasdaq National Market, subject only
to official notice of issuance.
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor the
Subsidiary is in violation of its charter or by-laws or is in default
(or, with the giving of notice or lapse of time, would be in default)
("Default") under any indenture, mortgage, loan or credit agreement,
note, contract, franchise, lease or other instrument to which the
Company or the Subsidiary is a party or by which it or any of them may
be bound or to which any of the property or assets of the Company or
the Subsidiary is subject (each, an "Existing Instrument"), except for
such Defaults as would not, individually or in the aggregate, result in
a Material Adverse Change. The Company's execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus (i) have been duly authorized
by all necessary corporate action and will not result in any violation
of the provisions of the charter or by-laws of the Company or the
Subsidiary, (ii) will not conflict with or constitute a breach of, or
Default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or the
Subsidiary pursuant to, or require the consent of any other part to,
any Existing Instrument, except for such conflicts, breaches, Defaults,
liens, charges or encumbrances (i) as to which the
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Company has obtained prior to the date hereof a valid waiver or
consent, a copy of which has been delivered to counsel for the
Underwriters, or (ii) as would not, individually or in the aggregate,
result in a Material Adverse Change and (iii) will not result in any
violation of any law, administrative regulation or administrative or
court decree applicable to the Company or the Subsidiary. No consent,
approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or
agency, is required for the Company's execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been
obtained or made by the Company and are in full force and effect under
the Securities Act, Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), applicable state securities or
blue sky laws and from the National Association of Securities Dealers,
Inc. (the "NASD").
(n) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened (i) against the Company or the
Subsidiary, (ii) which has as the subject thereof any officer or
director of, or property owned or leased by, the Company or the
Subsidiary or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility
that such action, suit or proceeding might be determined adversely to
the Company or the Subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No
material labor dispute with the employees of the Company or the
Subsidiary exists or, to the best of the Company's knowledge, is
threatened or imminent.
(o) Intellectual Property Rights. The Company and the
Subsidiary own or possess sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as now conducted; and
the expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Neither the Company nor
the Subsidiary has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would result in a
Material Adverse Change.
(p) All Necessary Permits, etc. The Company and the Subsidiary
possess such valid and current certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to
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conduct their respective businesses, except where any failure to
possess the same, individually or in the aggregate, would not result in
a Material Adverse Change, and neither the Company nor the Subsidiary
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could result in
a Material Adverse Change.
(q) Title to Properties. The Company and the Subsidiary have
good and marketable title to all the properties and assets reflected as
owned in the financial statements referred to in Section 1(A)(i) above
(or elsewhere in the Prospectus), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims
and other defects, except such as are disclosed in the Prospectus or as
do not materially and adversely affect the value of such property and
do not materially interfere with the use made or proposed to be made of
such property by the Company or the Subsidiary. The real property,
improvements, equipment and personal property held under lease by the
Company or the Subsidiary are held under valid and enforceable leases,
with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the Company
or the Subsidiary.
(r) Tax Law Compliance. The Company and the Subsidiary have
filed all necessary federal, state and foreign income and franchise tax
returns and have paid all taxes due and payable by any of them and, if
due and payable, any related or similar assessment, fine or penalty
levied against any of them, except as may be being contested in good
faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements
referred to in Section 1(A)(i) above in respect of all federal, state
and foreign income and franchise taxes for all periods as to which the
tax liability of the Company or the Subsidiary has not been finally
determined.
(s) Company Not an "Investment Company." The Company has been
advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The Company is not,
and after receipt of payment for the Common Shares will not be, an
"investment company" within the meaning of Investment Company Act and
will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(t) Insurance. Each of the Company and the Subsidiary are
insured by recognized, financially sound and reputable institutions
with policies in such
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amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their businesses including,
but not limited to, policies covering real and personal property owned
or leased by the Company and the Subsidiary against theft, damage,
destruction, acts of vandalism and earthquakes. The Company has no
reason to believe that it or the Subsidiary will not be able (i) to
renew its existing insurance coverage as and when such policies expire
or (ii) to obtain comparable coverage from similar institutions as may
be necessary or appropriate to conduct its business as now conducted
and at a cost that would not result in a Material Adverse Change. Since
November 29, 1992, neither of the Company nor the Subsidiary has been
denied any insurance coverage which it has sought or for which it has
applied.
(u) No Price Stabilization or Manipulation. The Company has
not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
(v) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company or
the Subsidiary or any other person required to be described in the
Prospectus which have not been described as required.
(w) No Unlawful Contributions or Other Payments. Neither the
Company nor the Subsidiary nor, to the best of the Company's knowledge,
any employee or agent of the Company or the Subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Prospectus.
(x) ERISA Compliance. The Company and the Subsidiary and any
"employee benefit plan" (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, the Subsidiary or their
"ERISA Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or the Subsidiary, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue
Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or the
Subsidiary is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or
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maintained by the Company, the Subsidiary or any of their ERISA
Affiliates. No "employee benefit plan" established or maintained by the
Company, the Subsidiary or any of their ERISA Affiliates, if such
"employee benefit plan" were terminated, would have any "amount of
unfunded benefit liabilities" (as defined under ERISA). Neither the
Company, the Subsidiary nor any of their ERISA Affiliates has incurred
or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code.
Each "employee benefit plan" established or maintained by the Company,
the Subsidiary or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing
has occurred, whether by action or failure to act, which would cause
the loss of such qualification.
Any certificate signed by an officer of the Company and
delivered to the Representatives or to counsel for the Underwriters on the First
Closing Date or the Second Closing Date shall be deemed to be a representation
and warranty by the Company to each Underwriter as to the matters set forth
therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, hereby represents, warrants and
covenants to each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly
executed and delivered by or on behalf of such Selling Stockholder and
is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to
indemnification or contribution hereunder may be limited by applicable
law and except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of the
(i) Custody Agreement signed by such Selling Stockholder and Boston
EquiServe, L.P., as custodian (the "Custodian"), relating to the
deposit of the Common Shares to be sold by such Selling Stockholder
(the "Custody Agreement") and (ii) Power of Attorney appointing certain
individuals named therein as such Selling Stockholder's
attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set forth
therein relating to the transactions contemplated hereby and by the
Prospectus (the "Power of Attorney"), of such Selling Stockholder has
been duly executed and delivered by such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification or
contribution
-10-
15
thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(c) Title to Common Shares to be Sold; All Authorizations
Obtained. Such Selling Stockholder has, and on the First Closing Date
and the Second Closing Date (as defined below) will have, good and
valid title to all of the Common Shares which may be sold by such
Selling Stockholder pursuant to this Agreement on such date and the
legal right and power, and all authorizations and approvals required by
law to enter into this Agreement and its Custody Agreement and Power of
Attorney, to sell, transfer and deliver all of the Common Shares which
may be sold by such Selling Stockholder pursuant to this Agreement and
to comply with its other obligations hereunder and thereunder.
(d) Delivery of the Common Shares to be Sold. Delivery of the
Common Shares which are sold by such Selling Stockholder pursuant to
this Agreement will pass good and valid title to such Common Shares,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance or other claim (other than any arising out of an action
taken by an Underwriter).
(e) Non-Contravention; No Further Authorizations or Approvals
Required. The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, this Agreement, the Custody Agreement and the Power of Attorney
will not contravene or conflict with, result in a breach of, or
constitute a Default under, or require the consent of any other party
to, any agreement or instrument to which such Selling Stockholder is a
party or by which it is bound or under which it is entitled to any
right or benefit, any provision of applicable law or any judgment,
order, decree or regulation applicable to such Selling Stockholder of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Stockholder, except
for any such contravention, conflict, breach or Default as to which the
Company has obtained prior to the date hereof a valid waiver (a copy of
which has been delivered to counsel for the Underwriters) and any such
consent as has been obtained by the Company prior to the date hereof (a
copy of which has been delivered to counsel for the Underwriters). No
consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental authority or agency, is
required for the consummation by such Selling Stockholder of the
transactions contemplated in this Agreement, except such as have been
obtained or made and are in full force and effect under the Securities
Act, Section 12(g) of the Exchange Act, applicable state securities or
blue sky laws and from the NASD.
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(f) No Registration or Other Similar Rights. Such Selling
Stockholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company
under the Registration Statement or included in the offering
contemplated by this Agreement.
(g) No Further Consents, etc. No consent, approval or waiver
is required under any instrument or agreement to which such Selling
Stockholder is a party or by which it is bound or under which it is
entitled to any right or benefit, in connection with the offering, sale
or purchase by the Underwriters of any of the Common Shares which may
be sold by such Selling Stockholder under this Agreement or the
consummation by such Selling Stockholder of any of the other
transactions contemplated hereby, except any such consent, approval or
waiver as has been obtained by such Selling Stockholder prior to the
date hereof, a copy of which has been delivered to counsel for the
Underwriters.
(h) Disclosure Made by Such Selling Stockholder in the
Prospectus. All information furnished by or on behalf of such Selling
Stockholder in writing expressly for use in the Registration Statement
and Prospectus is, and on the First Closing Date and the Second Closing
Date will be, true, correct, and complete in all material respects, and
does not, and on the First Closing Date and the Second Closing Date
will not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make such information not
misleading. Such Selling Stockholder confirms as accurate the number of
shares of Common Stock set forth opposite such Selling Stockholder's
name in the Prospectus under the caption "Principal and Selling
Stockholders" (both prior to and after giving effect to the sale of the
Common Shares).
(i) No Price Stabilization or Manipulation. Such Selling
Stockholder has not taken and will not take, directly or indirectly,
any action designed to or that might be reasonably expected to cause or
result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
(j) Registration Statement and Prospectus. Such Selling
Stockholder has reviewed the Registration Statement and the Prospectus
and, to the knowledge of such Selling Stockholder, neither the
Registration Statement nor the Prospectus contains any untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading. Such Selling Stockholder has no knowledge of any material
fact, condition or information not disclosed in the Registration
Statement or the Prospectus which has had or may have a Material
Adverse
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Effect and is not prompted to sell shares of Common Stock by any
information concerning the Company which is not set forth in the
Registration Statement and the Prospectus.
Any certificate signed by or on behalf of any Selling
Stockholder and delivered to the Representatives or to counsel for the
Underwriters on the First Closing Date or the Second Closing Date shall be
deemed to be a representation and warranty by such Selling Stockholder to each
Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
The Firm Common Shares. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
1,562,500 Firm Common Shares and (ii) the Selling Stockholders agree, severally
and not jointly, to sell to the several Underwriters an aggregate of 625,500
Firm Common Shares, each Selling Stockholder selling the number of Firm Common
Shares set forth opposite such Selling Stockholder's name on Schedule B. On the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Underwriters
agree, severally and not jointly, to purchase from the Company and the Selling
Stockholders the respective number of Firm Common Shares set forth opposite
their names on Schedule A. The purchase price per Firm Common Share to be paid
by the several Underwriters to the Company and the Selling Stockholders shall be
$___ per share.
The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of NMS, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such
other place as may be agreed to by the Company and the Representatives) at
6:00 a.m. San Francisco time, on _____________, 1998 [the fourth full business
day after the date of this Agreement, unless the pricing occurs at a time
earlier than 4:30 p.m., East Coast time, in which case insert the third full
business day after the date of this Agreement], or such other time and date not
later than 10:30 a.m. San Francisco time, on ____________, 1998 [ten business
days following the original contemplated First Closing Date] as the
Representatives shall designate by notice to the Company (the time and date of
such closing are called the "First Closing Date"). The Company and the Selling
Stockholders hereby acknowledge that circumstances under which the
Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company or the Representatives to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 10.
The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms
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but subject to the conditions herein set forth, the Company and the Selling
Stockholders hereby grant, severally and not jointly, an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
328,200 Optional Common Shares from the Company and the Selling Stockholders at
the purchase price per share to be paid by the Underwriters for the Firm Common
Shares. The option granted hereunder is for use by the Underwriters solely in
covering any over-allotments in connection with the sale and distribution of the
Firm Common Shares. The option granted hereunder may be exercised at any time
(but not more than once) upon notice by the Representatives to the Company and
the Selling Stockholders, which notice may be given at any time within 30 days
from the date of this Agreement. Such notice shall set forth (i) the aggregate
number of Optional Common Shares as to which the Underwriters are exercising the
option, (ii) the names and denominations in which the certificates for the
Optional Common Shares are to be registered and (iii) the time, date and place
at which such certificates are to be delivered (which time and date may be
simultaneous with, but not earlier than, the First Closing Date; and in such
case the term "First Closing Date" shall refer to the time and date of delivery
of certificates for the Firm Common Shares and the Optional Common Shares). Such
time and date of delivery, if subsequent to the First Closing Date, is called
the "Second Closing Date" and shall be determined by the Representatives and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Optional Common Shares are to be
purchased, (a) each Underwriter agrees, severally and not jointly, to purchase
the number of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Optional Common Shares to be purchased as the
number of Firm Common Shares set forth on Schedule A opposite the name of such
Underwriter bears to the total number of Firm Common Shares and (b) the Company
and each Selling Stockholder agree, severally and not jointly, to sell the
number of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Optional Common Shares to be sold as the
number of Optional Common Shares set forth in Schedule B opposite the name of
such Selling Stockholder (or, in the case of the Company, as the number of
Optional Common Shares to be sold by the Company as set forth in the paragraph
"Introductory" of this Agreement) bears to the total number of Optional Common
Shares. The Representatives may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to the Company and the
Selling Stockholders.
Public Offering of the Common Shares. The Representatives hereby advise
the Company and the Selling Stockholders that the Underwriters intend to offer
for sale to the public, as described in the Prospectus, their respective
portions of the Common Shares as soon after this Agreement has been executed and
the Registration Statement
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has been declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
Payment for the Common Shares. Payment for the Common Shares to be sold
by the Company shall be made at the First Closing Date (and, if applicable, at
the Second Closing Date) by wire transfer of immediately available funds to the
order of the Company. Payment for the Common Shares to be sold by the Selling
Stockholders shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date) by wire transfer of immediately available funds to the
order of the Custodian.
It is understood that the Representatives have been
authorized, for their own account and the accounts of the several Underwriters,
to accept delivery of and receipt for, and make payment of the purchase price
for, the Firm Common Shares and any Optional Common Shares the Underwriters have
agreed to purchase. NMS, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay
all stock transfer taxes, stamp duties and other similar taxes, if any, payable
upon the sale or delivery of the Common Shares to be sold by such Selling
Stockholder to the several Underwriters, or otherwise in connection with the
performance of such Selling Stockholder's obligations hereunder and (ii) the
Custodian is authorized to deduct for such payment any such amounts from the
proceeds to such Selling Stockholder hereunder and to hold such amounts for the
account of such Selling Stockholder with the Custodian under the Custody
Agreement.
Delivery of the Common Shares. The Company and the Selling Stockholders
shall, severally and not jointly deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters certificates for
the Firm Common Shares to be sold by them at the First Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The Company and the Selling Stockholders
shall, severally and not jointly, also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters, certificates for
the Optional Common Shares the Underwriters have agreed to purchase from them at
the First Closing Date or the Second Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The certificates for the Common
Shares shall be in definitive form and registered in such names and
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denominations as the Representatives shall have requested at least two full
business days prior to the First Closing Date (or the Second Closing Date, as
the case may be) and shall be made available for inspection on the business day
preceding the First Closing Date (or the Second Closing Date, as the case may
be) at a location in New York City as the Representatives may designate. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriters.
Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
San Francisco time on the second business day following the date the Common
Shares are released by the Underwriters for sale to the public, the Company
shall deliver or cause to be delivered copies of the Prospectus in such
quantities and at such places as the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS.
A. COVENANTS OF THE COMPANY. The Company further covenants and
agrees with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and ending
on the later of the First Closing Date or such date, as in the opinion
of counsel for the Underwriters, the Prospectus is no longer required
by law to be delivered in connection with sales by an Underwriter or
dealer (the "Prospectus Delivery Period"), prior to amending or
supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the
Prospectus, the Company shall furnish to the Representatives for review
a copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which a
Representative reasonably objects.
(b) Securities Act Compliance. After the date of this
Agreement, the Company shall promptly advise the Representatives in
writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission relating to
the Registration Statement, (ii) of the time and date of any filing of
any post-effective amendment to the Registration Statement or any
amendment or supplement to any preliminary prospectus or the
Prospectus, (iii) of the time and date that any post-effective
amendment to the Registration Statement becomes effective and (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or of any order preventing or suspending the use of
any preliminary prospectus or the Prospectus, or of any
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proceedings to remove, suspend or terminate from listing or quotation
the Common Stock from any securities exchange upon which it is listed
for trading or included or designated for quotation, or of the
threatening or initiation of any proceedings for any of such purposes.
If the Commission shall enter any such stop order at any time, the
Company will use its best efforts to obtain the lifting of such order
at the earliest possible moment. Additionally, the Company agrees that
it shall comply with the provisions of Rules 424(b), 430A and 434, as
applicable, under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under such Rule
424(b) were received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any
event shall occur or condition shall exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the
reasonable opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the
Prospectus to comply with law, the Company agrees to promptly prepare
(subject to Section 3(A)(a) hereof), file with the Commission and
furnish at its own expense to the Underwriters and to dealers,
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) Copies of any Amendments and Supplements to the
Prospectus. The Company agrees to furnish the Representatives, without
charge, during the Prospectus Delivery Period, as many copies of the
Prospectus and any amendments and supplements thereto as the
Representatives may reasonably request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register
the Common Shares for sale under (or obtain exemptions from the
application of) the Blue Sky or state securities laws or Canadian
provincial securities laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as
required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be
subject to taxation as a
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foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Common Shares for offering, sale or
trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at
the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Common Shares sold by it in the manner described
under the caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company
will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited)
covering the twelve-month period ending May __, 1999 [the end of the
Company's first quarter ending after one year following the effective
date of the Registration Statement] that satisfies the provisions of
Section 11(a) of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents
required to be filed under the Exchange Act.
(j) Agreement Not To Offer or Sell Additional Securities.
During the period of 180 days following the date of the Prospectus, the
Company will not, without the prior written consent of NMS (which
consent may be withheld at the sole discretion of NMS), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of or transfer, or announce the offering of, or file any registration
statement under the Securities Act in respect of, any shares of Common
Stock, options or warrants to acquire shares of the Common Stock or
securities exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this Agreement with
respect to the Common Shares); provided, however, that the Company may:
(i) issue shares of its Common Stock or options to purchase its Common
Stock, or Common Stock upon exercise of options, pursuant to any stock
option, stock bonus or other stock plan or arrangement described in the
Prospectus, but only if the holders of such shares,
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options, or shares issued upon exercise of such options, agree in
writing with NMS not to sell, offer, dispose of or otherwise transfer
any such shares or options during such 180 day period without the prior
written consent of NMS (which consent may be withheld at the sole
discretion of NMS) or, in the case of stock options, such options may
not be exercised during such 180 day period; (ii) file one or more
registration statements on Form S-8 covering shares of Common Stock
issuable pursuant to any stock option or stock purchase plan described
in the Prospectus; (iii) issues shares of Common Stock to officers of
the Company, provided such officers agree in writing with NMS not to
sell, offer, dispose of or otherwise transfer any such shares during
such 180 day period without the prior written consent of NMS (which
consent may be withheld at the sole discretion of NMS); or (iv) issue
shares of Common Stock, or securities exchangeable or exercisable for
or convertible into shares of Common Stock, as payment for all or part
of the purchase price of an acquisition by the Company of another
company or business, provided the total number of shares of Common
Stock issuable in connection with such acquisition (including shares
issuable upon exchange, exercise or conversion of any other securities
of the Company issued in connection with such acquisition) does not
exceed 5% of the number of shares of Common Stock outstanding
immediately prior to such acquisition, and provided further that each
person or entity receiving any such shares or securities in connection
with such acquisition agrees in writing with NMS not to sell, offer,
dispose of or otherwise transfer any such shares or securities during
such 180 day period without the prior written consent of NMS (which
consent may be withheld at the sole discretion of NMS).
(k) Future Reports to the Representatives. During the period
of five years hereafter the Company will furnish to each Representative
(with the copy to NMS to be sent to 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, XX 00000 Attention: Xxxx X. Xxxxxxx): (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholders'
equity and cash flows for the year then ended and the opinion thereon
of the Company's independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each
proxy statement, Annual Report on Form 10-K, Quarterly Report on Form
10- Q, Current Report on Form 8-K or other report filed by the Company
with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company
mailed generally to holders of its capital stock.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
further covenants and agrees, severally and not jointly, with each Underwriter:
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(a) Agreement Not to Offer or Sell Additional Securities. Such
Selling Stockholder will not, without the prior written consent of NMS
(which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer,
establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of any shares of
Common Stock, options or warrants to acquire shares of Common Stock, or
securities exchangeable or exercisable for or convertible into shares
of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Exchange, except that
a 180-day period shall be used rather than the 60-day period set forth
therein by the undersigned, or publicly announce the undersigned's
intention to do any of the foregoing, for a period commencing on the
date hereof and continuing through the close of trading on the date 180
days after the date of the Prospectus; provided, however, that such
Selling Stockholder may sell or otherwise transfer any such shares or
securities (i) to the Company and (ii) to an officer of the Company,
provided such officer agrees in writing with NMS not to sell, offer,
dispose of or otherwise transfer any such shares or securities during
such 180-day period without the prior written consent of NMS (which
consent may be withheld at the sole discretion of NMS).
(b) Delivery of Forms W-8 and W-9. Such Selling Stockholder
will deliver to the Representatives prior to the First Closing Date a
properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States person) or Form
W-9 (if the Selling Stockholder is a United States Person).
NMS, on behalf of the several Underwriters, may, in its sole
discretion, waive in writing the performance by the Company or any Selling
Stockholder of any one or more of the foregoing covenants or extend the time for
their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares sold by it (including all printing and engraving costs), (ii) all
fees and expenses of the registrar and transfer agent of the Common Stock, (iii)
all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel, independent public or certified public
accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and
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certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, and this Agreement, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the Blue Sky laws and the Canadian provincial securities laws,
and, if requested by the Representatives, preparing and printing a "Blue Sky
Survey" or memorandum, and any supplements thereto, advising the Underwriters of
such qualifications, registrations and exemptions, (vii) the filing fees
incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Common
Shares, (viii) the fees and expenses associated with listing the Common Shares
on the Nasdaq National Market, and (ix) all other fees, costs and expenses
referred to in Item 13 of Part II of the Registration Statement. Except as
provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Underwriters shall pay their own expenses, including the fees and disbursements
of their counsel.
The Selling Stockholders further agree, severally and not
jointly, with each Underwriter to pay (directly or by reimbursement) all fees
and expenses incident to the performance of their respective obligations under
this Agreement which are not otherwise specifically provided for herein,
including but not limited to (i) fees and expenses of counsel and other advisors
for such Selling Stockholders, (ii) fees and expenses of the Custodian and (iii)
expenses and taxes incident to the sale and delivery of the Common Shares to be
sold by such Selling Stockholders to the Underwriters hereunder (which taxes, if
any, may be deducted by the Custodian under the provisions of Section 2 of this
Agreement). This Section 4 shall not affect or modify any separate, valid
agreement relating to the allocation of payment of expenses between the Company,
on the one hand, and the Selling Stockholders, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares (if not purchased on the First Closing Date), the Second
Closing Date, shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders set forth in
Sections 1(A) and 1(B) hereof as of the date hereof and as of the First Closing
Date as though then made and, with respect to the Optional Common Shares (if not
purchased on the First Closing Date), as of the Second Closing Date as though
then made, to the timely performance by the Company and the Selling Stockholders
of their respective covenants and other obligations hereunder, and to each of
the following additional conditions:
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(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Ernst & Young LLP, independent
public or certified public accountants for the Company, a letter dated
the date hereof addressed to the Underwriters, in form and substance
satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus
(and each Representative shall have received an additional conformed
copy of such accountants' letter).
(b) Compliance with Registration Requirements; No Stop Order;
No Objection from NASD. For the period from and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares (if not purchased on the First Closing
Date), the Second Closing Date:
(i) the Company shall have filed the Prospectus with
the Commission (including the information required by Rule
430A under the Securities Act) in the manner and within the
time period required by Rule 424(b) under the Securities Act;
or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required
by such Rule 430A, and such post-effective amendment shall
have become effective; or, if the Company elected to rely upon
Rule 434 under the Securities Act and obtained the
Representatives' consent thereto, the Company shall have filed
a Term Sheet with the Commission in the manner and within the
time period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of
the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and no proceedings for such
purpose shall have been instituted or threatened by the
Commission; and
(iii) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and
arrangements.
(c) No Material Adverse Change. For the period from and after
the date of this Agreement and prior to the First Closing Date and,
with respect to the Optional Common Shares (if not purchased on the
First Closing Date), the
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Second Closing Date, in the judgment of the Representatives there shall
not have occurred any Material Adverse Change.
(d) Opinion of Counsel for the Company. On each of the First
Closing Date and, with respect to the Optional Common Shares (if not
purchased on the First Closing Date), the Second Closing Date the
Representatives shall have received the opinion of Xxxxx, Xxxx & Xxxxx
LLP, counsel for the Company, dated as of such Closing Date, the form
of which is attached as Exhibit A (and each Representative shall have
received an additional conformed copy of such counsel's legal opinion).
(e) Opinion of Counsel for the Underwriters. On each of the
First Closing Date and, with respect to the Optional Common Shares (if
not purchased on the First Closing Date), the Second Closing Date the
Representatives shall have received the opinion of Xxxx and Xxxx LLP,
counsel for the Underwriters, dated as of such Closing Date, with
respect to such matters as may be reasonably requested by the
Representatives (and each Representative shall have received an
additional conformed copy of such counsel's legal opinion).
(f) Officers' Certificate. On each of the First Closing Date
and, with respect to the Optional Common Shares (if not purchased on
the First Closing Date), the Second Closing Date the Representatives
shall have received a written certificate executed by the Chairman of
the Board, Chief Executive Officer or President of the Company and the
Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of such Closing Date, to the effect set forth in subsection
(b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not
occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of
the Company set forth in Section 1(A) of this Agreement are
true and correct with the same force and effect as though
expressly made on and as of such Closing Date; and
(iii) the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date.
(g) Bring-down Comfort Letter. On each of the First Closing
Date and, with respect to the Optional Common Shares (if not purchased
on the First
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Closing Date), the Second Closing Date the Representatives shall have
received from Ernst & Young LLP, independent public or certified public
accountants for the Company, a letter dated such date, in form and
substance satisfactory to the Representatives, to the effect that they
reaffirm the statements made in the letter furnished by them pursuant
to subsection (a) of this Section 5, except that the specified date
referred to therein for the carrying out of procedures shall be no more
than three business days prior to the First Closing Date or Second
Closing Date, as the case may be (and each Representative shall have
received an additional conformed copy of such accountants' letter).
(h) Opinion of Counsel for the Selling Stockholders. On each
of the First Closing Date and, with respect to the Optional Common
Shares (if not purchased on the First Closing Date), the Second Closing
Date the Representatives shall have received the opinion of Xxxxx, Xxxx
& Eliot LLP, special counsel for the Selling Stockholders, dated as of
such Closing Date, the form of which is attached as Exhibit B (and each
Representative shall have received an additional conformed copy of such
counsel's legal opinion).
(i) Selling Stockholders' Certificate. On each of the First
Closing Date and, with respect to the Optional Common Shares (if not
purchased on the First Closing Date), the Second Closing Date the
Representatives shall have received a written certificate executed by
an Attorney-in-Fact of each Selling Stockholder, dated as of such
Closing Date, to the effect that:
(i) the representations, warranties and covenants of
such Selling Stockholder set forth in Section 1(B) of this
Agreement are true and correct with the same force and effect
as though expressly made by such Selling Stockholder on and as
of such Closing Date; and
(ii) such Selling Stockholder has complied with all
the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such Closing Date.
(j) Selling Stockholders' Documents. On the date hereof, the
Company and the Selling Stockholders shall have furnished for review by
the Representatives copies of the Powers of Attorney and Custody
Agreements executed by each of the Selling Stockholders and such
further information, certificates and documents as the Representatives
may reasonably request.
(k) Lock-Up Agreement from Certain Stockholders of the Company
Other Than Selling Stockholders. On the date hereof, the Company shall
have furnished to the Representatives an agreement in the form of
Exhibit C hereto from each
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director, officer and each beneficial owner of Common Stock (as defined
and determined according to Rule 13d-3 under the Exchange Act, except
that a 180-day period shall be used rather than the 60-day period set
forth therein), other than the Selling Stockholders, and such agreement
shall be in full force and effect on each of the First Closing Date and
the Second Closing Date.
(l) Additional Documents. On or before each of the First
Closing Date and, with respect to the Optional Common Shares (if not
purchased on the First Closing Date), the Second Closing Date, the
Representatives and counsel for the Underwriters shall have received
such other information and documents as they may reasonably require for
the purposes of enabling them to pass upon the issuance and sale of the
Common Shares as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and an Attorney-in-Fact at any time on
or prior to the First Closing Date and, with respect to the Optional Common
Shares (if not purchased on the First Closing Date), at any time prior to the
Second Closing Date, which termination shall be without liability on the part of
any party to any other party, except that this paragraph, Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement
is terminated by the Representatives pursuant to Section 5, clauses (i), (v) or
(vi) of Section 11 or Section 17, or if the sale to the Underwriters of the
Common Shares on the First Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company or a Selling
Stockholder to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse the Representatives and the other
Underwriters severally, upon demand for all out-of-pocket expenses that shall
have been reasonably incurred by the Representatives and the other Underwriters
in connection with the proposed purchase and the offering and sale of the Common
Shares, including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of
(i) the execution of this Agreement by the parties hereto and (ii) notification
by the Commission to the Company of the effectiveness of the Registration
Statement under
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the Securities Act, and the notification by the Company to the Representatives
of the receipt of such notification by the Commission.
Prior to such effectiveness, this Agreement may be terminated
by any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the
Selling Stockholders to any Underwriter, except that the Company shall be
obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Section 4 hereof, (b) of any Underwriter to the Company or any
Selling Stockholder, or (c) of any party hereto to any other party, except that
the provisions of this paragraph, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company and each
of the Selling Stockholders, jointly and severally, agree to indemnify
and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of
the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or
such controlling person may become subject, under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of
the Company), insofar as such loss, claim, damage, liability or expense
(or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment
thereto, including any information deemed to be a part thereof pursuant
to Rule 430A or Rule 434 under the Securities Act, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or
(ii) upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; or (iii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company or the
Selling Stockholders contained herein; or (iv) in whole or in part upon
any failure of the Company or the Selling Stockholders to perform their
respective obligations hereunder or under law; or (v) any act or
failure to act or any alleged act or failure to act by any Underwriter
in connection with, or relating in any manner to, the offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage,
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liability or action arising out of or based upon any matter covered by
clause (i) or (ii) above; and to reimburse each Underwriter and each
such controlling person for any and all expenses (including the
reasonable fees and disbursements of counsel chosen by NMS) as such
expenses are reasonably incurred by such Underwriter or such
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action. Notwithstanding the foregoing: (A)
neither the Company nor any Selling Stockholder shall be liable under
clause (v) of the preceding sentence to the extent that a court of
competent jurisdiction shall have determined by a final judgment that
such loss, claim, damage, liability or action resulted directly from
any such acts or failures to act undertaken or omitted to be taken by
such Underwriter through its bad faith, negligence or willful
misconduct; (B) the indemnity and reimbursement agreements in the
preceding sentence shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out
of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); (C) with respect to any preliminary prospectus,
the indemnity and reimbursement agreements in the preceding sentence
shall not inure to the benefit of any Underwriter from whom the person
asserting any loss, claim, damage, liability or expense purchased
Common Shares, or any person controlling such Underwriter, if copies of
the Prospectus were timely delivered to the Underwriter pursuant to
Section 2 and a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to
such person, if required by law so to have been delivered, at or prior
to the written confirmation of the sale of the Common Shares to such
person, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage,
liability or expense; (D) the indemnity and reimbursement agreements of
a Selling Stockholder set forth in clauses (iii) and (iv) of the
preceding sentence shall not apply to any inaccuracy in the
representations and warranties of the Company or any other Selling
Stockholder or to any failure of the Company or any other Selling
Stockholder to perform their respective obligations hereunder or under
law; (E) the liability of each Selling Stockholder under the indemnity
and reimbursement agreements in the preceding sentence, or otherwise
for a breach of such Selling Stockholder's representations or
warranties set forth in this Agreement, shall be limited to an amount
equal to the initial public offering price of the Common Shares sold by
such Selling Stockholder, less the underwriting discount, as set forth
on the front cover page of the Prospectus; and (F) the
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Company and the Selling Stockholders 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. The indemnity and reimbursement agreements set
forth in this Section 8(a) shall be in addition to any liabilities that
the Company and the Selling Stockholders may otherwise have.
(b) Indemnification of the Company, its Directors and
Officers. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signed the Registration Statement, the Selling
Stockholders and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer, Selling
Stockholder or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of such Underwriter), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon (i) upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A or Rule
434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
in each case under clause (i) above and this clause (ii) to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus (or any amendment
or supplement thereto), in reliance upon and in conformity with written
information furnished to the Company by a Representative expressly for
use therein; or (iii) in whole or in part upon any failure of the
Company or the Selling Stockholders to perform their respective
obligations hereunder or under law; and to reimburse the Company, and
each such director, officer, Selling Stockholder and controlling person
for any legal and other expense reasonably incurred by the Company, or
any such director, officer, Selling Stockholder or controlling person
in connection with investigating, defending, settling, compromising or
paying any such loss,
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claim, damage, liability, expense or action. The Company and each of
the Selling Stockholders hereby acknowledge that the only information
that the Underwriters have furnished to the Company expressly for use
in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) are the statements
set forth (A) as the paragraph on the inside front cover page of each
preliminary prospectus the Prospectus concerning stabilization by the
Underwriters and (B) in the table in the first paragraph and as the
second, seventh, eighth and ninth paragraphs under the caption
"Underwriting" in the Prospectus; and the Underwriters confirm that
such statements are correct. The indemnity and reimbursement agreements
set forth in this Section 8(b) shall be in addition to any liabilities
that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures.
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 an indemnifying
party under this Section 8, notify the indemnifying party in writing of
the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it
is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between
the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by
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such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the fees and expenses of more than one separate counsel (together
with local counsel), approved by the indemnifying party (NMS in the
case of Section 8(b) and Section 9), representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after
notice of commencement of the action, in each of which cases the
reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) Settlements. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the specific
terms of such settlement at least 15 days prior to such settlement
being effected, and (iii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior
to the date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which
any indemnified party is or could have been a party and indemnity was
or could have been sought hereunder by such indemnified party, unless
such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION. If the indemnification provided for in
Section 8 is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion
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as is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders, on the one hand, and the Underwriters, on the other
hand, from the offering of the Common Shares pursuant to this Agreement or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholders, on the one hand, and the Underwriters, on
the other hand, in connection with the statements in or omissions from any
preliminary prospectus, the Prospectus or the Registration Statement (or any
amendment or supplement to any of the foregoing) or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Common Shares pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Common Shares pursuant to this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, and the total underwriting discount received by the Underwriters,
in each case as set forth on the front cover page of the Prospectus (or, if Rule
434 under the Securities Act is used, the corresponding location on the Term
Sheet) bear to the aggregate initial public offering price of the Common Shares
as set forth on such cover. The relative fault of the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other hand, shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company or the
Selling Stockholders, on the one hand, or the Underwriters, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating, defending, settling or compromising any action or claim. The
provisions set forth in Section 8(c) with respect to notice of commencement of
any action shall apply if a claim for contribution is to be made under this
Section 9; provided, however, that no additional notice shall be required with
respect to any action for which notice has been given under Section 8(c) for
purposes of indemnification.
The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity
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for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting commissions received by such Underwriter in connection with the
Common Shares underwritten by it and distributed to the public nor shall any
Selling Stockholder be required to contribute any amount in excess of the
initial public offering price of the Common Shares sold by such Selling
Stockholder, less the underwriting discount, as set forth on the front cover
page of the Prospectus. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several, and not joint, in proportion to their respective
underwriting commitments as set forth opposite their names in Schedule A. For
purposes of this Section 9, each officer and employee of an Underwriter and each
person, if any, who controls an Underwriter within the meaning of the Securities
Act and 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 within the meaning of the Securities Act and the Exchange Act shall have
the same rights to contribution as the Company, and each person, if any, who
controls a Selling Stockholder within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as such Selling
Stockholder.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the
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purchase of such Common Shares are not made within 48 hours after such default,
this Agreement shall terminate without liability of any non-defaulting party to
any other party except that the provisions of this sentence, Section 4,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination. In any such case either the Representatives or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date this Agreement may be terminated by the Representatives by notice given to
the Company and the Custodian if at any time (i) trading or quotation in any of
the Company's securities shall have been suspended or limited by the Commission
or by the Nasdaq Stock Market; (ii) trading in securities generally on either
the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended
or limited, or minimum or maximum prices shall have been generally established
on any of such stock exchanges by the Commission or the NASD; (iii) a general
banking moratorium shall have been declared by any of federal, New York or
California authorities; (iv) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions, as
in the judgment of the Representatives is material and adverse and makes it
impracticable to market the Common Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(v) in the judgment of the Representatives there shall have occurred any
Material Adverse Change; or (vi) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representatives may interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company or the Selling Stockholders
to any Underwriter, except that the Company and the Selling Stockholders shall
be obligated to reimburse the expenses of the Representatives and the other
Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to the
Company or any Selling Stockholder, or (c) of any party hereto to any other
party except that the provisions of this sentence, Section 8 and Section 9 shall
at all times be effective and shall survive such termination.
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SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company:
Xxxxxxx River Associates Incorporated
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: President
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With a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
If to the Selling Stockholders:
Boston EquiServe, L.P.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx XxXxxx
With a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and personal representatives, and no
other person will have any right or obligation hereunder. No assignment shall
relieve any party of its obligations hereunder. The term "successors" shall not
include any purchaser of the Common Shares as such from any of the Underwriters
merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
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SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL
AND DELIVER COMMON SHARES. If one or more of the Selling Stockholders shall fail
to sell and deliver to the Underwriters the Common Shares to be sold and
delivered by such Selling Stockholders at the First Closing Date pursuant to
this Agreement, then the Underwriters may at their option, by written notice
from the Representatives to the Company and the Custodian, either (i) terminate
this Agreement without any liability on the part of any Underwriter or, except
as provided in Sections 4, 6, 8 and 9 hereof, the Company or the Selling
Stockholders (other than such defaulting Selling Stockholders), or (ii) purchase
the shares which the Company and the other Selling Stockholders have agreed to
sell and deliver in accordance with the terms hereof. If one or more of the
Selling Stockholders shall fail to sell and deliver to the Underwriters the
Common Shares to be sold and delivered by such Selling Stockholders pursuant to
this Agreement at the First Closing Date or the Second Closing Date, then the
Underwriters shall have the right, by written notice from the Representatives to
the Company and the Custodian, to postpone the First Closing Date or the Second
Closing Date, as the case may be, but in no event for longer than seven days in
order that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section and paragraph headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of
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41
Sections 8 and 9 hereto fairly allocate the risks in light of the ability of the
parties to investigate the Company, its affairs and its business in order to
assure that adequate disclosure has been made in the Registration Statement, any
preliminary prospectus and the Prospectus (and any amendments and supplements
thereto), as required by the Securities Act and the Exchange Act.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to the Company and the Custodian the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.
Very truly yours,
XXXXXXX RIVER ASSOCIATES
INCORPORATED
By: ____________________________________
President
EACH OF THE SELLING STOCKHOLDERS
By: ____________________________________
(Attorney-in-fact)
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives in San Francisco, California as of the date
first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXX XXXXX & COMPANY, L.L.C.
Acting as Representatives of the several Underwriters named in the attached
Schedule A.
By NATIONSBANC XXXXXXXXXX SECURITIES LLC
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By:_________________________________
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SCHEDULE A
NUMBER OF
FIRM COMMON SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
NationsBanc Xxxxxxxxxx Securities LLC......................
Xxxxxxx Xxxxx & Company, L.L.C.............................
...........................................................
...........................................................
...........................................................
----------------
Total......................................................
================
44
SCHEDULE B
NUMBER OF FIRM MAXIMUM NUMBER OF
COMMON SHARES OPTIONAL COMMON
SELLING STOCKHOLDER TO BE SOLD SHARES TO BE SOLD
---------- -----------------
Xxxxxxxx X. Xxxxxx......................... 72,248 10,838
Xxxxxx X. Xxxxx............................ 52,000 7,800
Xxxxxx X. Xxxxxx........................... 34,057 5,110
Xxxxxxx X. Xxxxxxxx........................ 41,080 6,162
Xxxxxxx X. Xxxxxxx......................... 34,488 5,174
Xxxx Xxxxxx................................ 7,473 1,121
Xxxxxxx X. Xxxxxx.......................... 31,200 4,680
Xxxxxxx X. Xxxxxxx......................... 22,993 3,449
Xxxxxx X. Xxxxxxxxxx....................... 22,993 3,449
Xxxx X. Xxxxxxx............................ 20,803 3,120
Xxxxxxx X. Xxxxx........................... 20,119 3,018
Xxxxxxx X. Xxxx............................ 20,119 3,018
Bridger X. Xxxxxxxx........................ 20,119 3,018
Xxxxxxx X. Xxxxxx.......................... 20,119 3,018
Xxxx Xxxxx................................. 14,370 2,156
Xxxxxx Xxxxx............................... 13,221 1,983
Xxxxxx X. Xxxxxxx.......................... 13,221 1,983
Xxxxxx X. Xxxx............................. 13,221 1,983
W. Xxxxx Xxxxxxxxxx........................ 13,221 1,983
Xxxx X. Xxxxxxx............................ 13,221 1,983
Xxxxx X. Xxxxx............................. 13,221 1,983
Xxxxxxx X. Xxxxx........................... 11,496 1,724
Xxxxxx X. Xxxxxxxxxx....................... 11,496 1,724
C. Xxxxxxxxxxx Xxxxxxx..................... 11,496 1,724
Xxxxxx X. Xxxxx............................ 11,496 1,724
45
Xxxx X. Xxxxxxxx........................................ 11,496 1,724
Xxxxxx X. Xxxxxxx....................................... 10,921 1,638
Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxx.......................................... 9,916 1,487
Xxxx X. Xxxxxxxxx....................................... 9,795 1,469
Xxxxxxx X. Xxxxxx....................................... 8,622 1,293
Xxxxxxx X. Xxxx......................................... 7,185 1,078
Xxxx X. Xxxxxxx......................................... 5,200 780
Xxxxxxx X. Xxxx......................................... 2,874 431
------- ------
Total:......................................... 625,500 93,825
======= ======
46
EXHIBIT A
[The final opinion in draft form should be attached as Exhibit A at the time
this Agreement is executed.]
Opinion of Counsel for the Company
References to the Prospectus in this Exhibit A include any
supplements thereto at the Closing Date. References to the Registration
Statement include any Rule 462(b) Registration Statement.
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of The Commonwealth of
Massachusetts.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change.
(iv) The Subsidiary has been duly organized and is validly
existing as a limited liability company in good standing under the laws of the
Commonwealth of Massachusetts, has the power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and, to the best knowledge of such counsel, is duly qualified to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change.
(v) The Company is the legal and beneficial owner of its
membership interest in the Subsidiary, as described in the Prospectus.
(vi) Immediately prior to the issue and sale of Common Shares
pursuant to the Agreement on the date hereof, the authorized capital stock of
the Company was comprised of 25,000,000 shares of Common Stock, without par
value, _____ of which were outstanding of record, and 1,000,000 shares of
Preferred Stock,
47
without par value, none of which were outstanding of record. The capital stock
of the Company (including the Common Stock) conforms to the descriptions thereof
set forth in the Prospectus under the heading "Description of Capital Stock".
All of the outstanding shares of Common Stock (including the shares of Common
Stock owned by Selling Stockholders) have been duly authorized and validly
issued, are (except, in the case of shares purchased by officers of the Company
under agreements which provide for the purchase price to be paid in
installments, to the extent of the installments which are not yet due and
payable) fully paid and nonassessable and, to the best of such counsel's
knowledge, have been issued in compliance with the registration and
qualification requirements of federal and state securities laws. The form of
certificate used to evidence the Common Stock is in due and proper form and
complies with all applicable requirements of the charter and by-laws of the
Company and the Business Corporation Law of The Commonwealth of Massachusetts.
The description of the Company's stock option and stock purchase plans, and the
options or other rights granted and exercised thereunder, set forth in the
Prospectus is an accurate and fair description in all material respects of such
plans, arrangements, options and rights.
(vii) No stockholder of the Company or any other person has
any preemptive right, right of first refusal or other similar right to subscribe
for or purchase securities of the Company arising (i) by operation of the
charter or by-laws of the Company or the Business Corporation Law of The
Commonwealth of Massachusetts or (ii) to the best knowledge of such counsel,
otherwise.
(viii) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The Common Shares to be purchased by the Underwriters
from the Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable.
(x) Based solely on the oral advice of the staff of the
Commission, the Registration Statement has been declared effective by the
Commission under the Securities Act. To the best knowledge of such counsel, no
stop order suspending the effectiveness of either of the Registration Statement
or the Rule 462(b) Registration Statement, if any, has been issued under the
Securities Act and, to the best knowledge of such counsel, no proceedings for
such purpose have been instituted or are pending or are contemplated or
threatened by the Commission. Any required filing of the Prospectus under Rule
424(b) under the Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
(xi) The Registration Statement, the Prospectus and each
amendment or supplement to the Registration Statement and the Prospectus, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules
48
included therein, as to which no opinion need be rendered), comply as to form in
all material respects with the applicable requirements of the Securities Act.
Such counsel may state that it is rendering no opinion as to the accuracy of any
financial or accounting data contained therein.
(xii) Based solely on a letter dated _________, 1998 from, and
subsequent conversations with members of the staff of, the Nasdaq Stock Market,
the Common Shares have been approved for listing on the Nasdaq National Market.
(xiii) The statements (i) in the Prospectus under the captions
"Description of Capital Stock," "Management's Discussion and Analysis and
Results of Operations--Liquidity and Capital Resources," "Business--Legal
Proceedings," "Certain Transactions,"and "Shares Eligible for Future Sale," and
(ii) in Item 14 and Item 15 of the Registration Statement, insofar as such
statements constitute matters of law, summaries of legal matters, the Company's
charter or by-law provisions, documents or legal proceedings, or legal
conclusions, has been reviewed by such counsel and fairly present and summarize,
in all material respects, the matters referred to therein.
(xiv) To the best knowledge of such counsel, there are no
legal or governmental actions, suits or proceedings pending or threatened which
are required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xv) To the best knowledge of such counsel, there are no
Existing Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto;
and the descriptions thereof and references thereto are correct in all material
respects.
(xvi) No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental authority or
agency, is required for the execution, delivery and performance of the
Underwriting Agreement by the Company and consummation by the Company of the
transactions contemplated thereby and by the Prospectus, except as required
under the Securities Act, Section 12(g) of the Exchange Act, applicable state
securities or blue sky laws and from the NASD.
(xvii) The execution and delivery of the Underwriting
Agreement by the Company and the performance by the Company of its obligations
thereunder (other than performance by the Company of its obligations under the
indemnification and contribution sections of the Underwriting Agreement, as to
which no opinion need be rendered) (i) have been duly authorized by all
necessary corporate action on the part of the Company; (ii) will not result in
any violation of the provisions of the charter, by-laws or other organizational
documents of the Company or the Subsidiary; (iii) will not
49
constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or the Subsidiary pursuant to, (A) the Company's revolving line of
credit with BankBoston Corporation, or (B) to the best knowledge of such
counsel, any other material Existing Instrument; or (iv) to the best knowledge
of such counsel, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company or the
Subsidiary.
(xviii) The Company is not, and after receipt of payment for
the Common Shares sold by it will not be, an "investment company" within the
meaning of the Investment Company Act.
(xix) To the best knowledge of such counsel, there are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by the Underwriting Agreement, except for such rights
as have been duly waived.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of
the Company, representatives of the independent public or certified
public accountants for the Company and with representatives of the
Underwriters at which the contents of the Registration Statement and
the Prospectus, and any supplements or amendments thereto, and related
matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement
or the Prospectus (other than as specified above), and any supplements
or amendments thereto, and (except as specifically set forth in this
opinion) have not made any independent confirmation or verification
thereof, on the basis of the foregoing (and relying, as to materiality,
upon the statements of officers and other representatives of the
Company), nothing has come to their attention which would lead them to
believe either that the Registration Statement or any amendments
thereto, at the time the Registration Statement or such amendments
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the Second
Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that such
counsel need express no belief as to the financial statements or
schedules or other financial or statistical data derived therefrom,
included in the Registration Statement or the Prospectus or any
amendments or supplements thereto).
50
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than those
of The Commonwealth of Massachusetts, the General Corporation Law of the State
of Delaware and the federal law of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion (which shall be dated the
First Closing Date or the Second Closing Date, as the case may be, shall be
satisfactory in form and substance to the Underwriters, shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to them
and shall be furnished to the Representatives) of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall further state that they
believe that they and the Underwriters are justified in relying upon such
opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.
51
EXHIBIT B
[The final opinion in draft form should be attached as Exhibit B at the time
this Agreement is executed.]
Opinion of Counsel for the Selling Stockholders
[FH&E to add introductory language]
The opinion shall be rendered to the Representatives at the request of
the Company and shall so state therein. References to the Prospectus in this
Exhibit B include any supplements thereto at the Closing Date.
(i) The Underwriting Agreement has been duly executed and
delivered by or on behalf of, and is a valid and binding agreement of, each
Selling Stockholder, enforceable in accordance with its terms, except as rights
to indemnification thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(ii) The execution and delivery by each Selling Stockholder
of, and the performance by such Selling Stockholder of his or her obligations
under, the Underwriting Agreement and his or her Custody Agreement and his or
her Power of Attorney will not, to the best of such counsel's knowledge, violate
or contravene any provision of applicable law or regulation, or violate, result
in a breach of or constitute a default under the terms of any agreement or
instrument to which such Selling Stockholder is a party or by which he or she is
bound, or any judgment, order or decree applicable to such Selling Stockholder
of any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Stockholder.
(iii) Each Selling Stockholder is the sole record owner of all
of the Common Shares which may be sold by such Selling Stockholder under the
Underwriting Agreement and has the legal right and power to enter into the
Underwriting Agreement and his or her Custody Agreement and his or her Power of
Attorney, to sell, transfer and deliver all of the Common Shares which may sold
by such Selling Stockholder under the Underwriting Agreement and to comply with
his or her other obligations under the Underwriting Agreement, his or her
Custody Agreement and his or her Power of Attorney.
(iv) Each of the Custody Agreement and Power of Attorney of
each Selling Stockholder has been duly executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
enforceable in
52
accordance with its terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles.
(v) Assuming that the Underwriters purchase the Common Shares
which are sold by such Selling Stockholder pursuant to the Underwriting
Agreement for value and without notice of any adverse claim (within the meaning
of Section 8-303 of Chapter 106 of the Massachusetts General Laws) to the
Common Shares, the delivery of such Common Shares pursuant to the Underwriting
Agreement will pass good and valid title to such Common Shares, free and clear
of any such adverse claim.
(vi) To the best of such counsel's knowledge, no consent,
approval, authorization or other order of, or registration or filing with, any
court or governmental authority or agency, is required for the consummation by
such Selling Stockholder of the transactions contemplated in the Underwriting
Agreement, except as required under the Securities Act, Section 12(g) of the
Exchange Act, applicable state securities or blue sky laws, and from the NASD.
53
EXHIBIT C
