EXHIBIT 1.1
Draft of October 20, 1996
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XXXXX XXXXX, INC.
(a Delaware corporation)
3,000,000 Shares of Common Stock
PURCHASE AGREEMENT
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Dated: __________ __, 1996
Table of Contents
PURCHASE AGREEMENT
SECTION 1. Representations and Warranties.............................. 3
(a) Representations and Warranties by the Company........................ 3
(i) Compliance with Registration Requirements..................... 3
(ii) Independent Accountants....................................... 4
(iii) Financial Statements.......................................... 4
(iv) No Material Adverse Change in Business........................ 4
(v) Good Standing of the Company.................................. 4
(vi) Good Standing of Subsidiaries................................. 5
(vii) Capitalization................................................ 5
(viii) Authorization of Agreement.................................... 5
(ix) Authorization and Description of Securities................... 5
(x) Absence of Defaults and Conflicts............................. 6
(xi) Absence of Labor Dispute...................................... 6
(xii) Absence of Proceedings........................................ 6
(xiii) Accuracy of Exhibits.......................................... 7
(xiv) Possession of Intellectual Property........................... 7
(xv) Absence of Further Requirements............................... 7
(xvi) Possession of Licenses and Permits............................ 7
(xvii) Leasehold Interests and Title to Property..................... 8
(xviii) Compliance with Cuba Act...................................... 8
(xix) Investment Company Act........................................ 8
(xx) Environmental Laws............................................ 8
(xxi) Registration Rights........................................... 9
(xxii) Related Transactions.......................................... 9
(xxiii) Foreign Corrupt Practices Act................................. 9
(xxiv) Insurance..................................................... 9
(xxv) Taxes.........................................................10
(xxvi) Internal Controls.............................................10
(xxvii) Filings.......................................................10
(xxviii) Brokers.......................................................10
(xxix) Rights to Acquire Securities..................................10
(xxx) Compliance with Laws..........................................10
(xxxi) Absence of Manipulation.......................................10
(xxxii) Lock-Ups......................................................11
(xxxiii) Distribution of Prospectus....................................11
(xxxiv) Services Agreement............................................11
(b) Representations and Warranties by BJK&E..............................12
(i) Good Standing of BJK&E........................................12
(ii) Absence of Defaults and Conflicts.............................12
(iii) Beneficial Ownership..........................................12
(iv) Accurate Disclosure...........................................12
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(v) Authorization of Agreement....................................12
(vi) [Reserved.]...................................................13
(vii) Absence of Manipulation.......................................13
(viii) Absence of Further Requirements...............................13
(ix) Restriction on Sale of Securities.............................13
(x) [Reserved.]...................................................13
(xi) No Association with NASD......................................14
(xii) Inter-corporate Agreements....................................14
(c) Officer's Certificates...............................................14
SECTION 2. Sale and Delivery to Underwriters; Closing....................14
(a) Initial Securities...................................................14
(b) Option Securities....................................................15
(c) Payment..............................................................15
(d) Denominations; Registration..........................................16
SECTION 3. Covenants of the Company......................................16
(a) Compliance with Securities Regulations and
Commission Requests.................................................16
(b) Filing of Amendments.................................................16
(c) Delivery of Registration Statements..................................17
(d) Delivery of Prospectuses.............................................17
(e) Continued Compliance with Securities Laws............................17
(f) Blue Sky Qualifications..............................................18
(g) Rule 158.............................................................18
(h) Use of Proceeds......................................................18
(i) Listing..............................................................18
(j) Restriction on Sale of Securities....................................18
(k) Reporting Requirements...............................................19
(1) Form SR..............................................................19
(m) Form S-8.............................................................19
(n) Information..........................................................19
(o) Transfer Agent.......................................................20
(p) Compliance with NASD Rules...........................................20
SECTION 4. Payment of Expenses...........................................20
(a) Expenses.............................................................20
(b) Expenses of BJK&E....................................................21
(c) Termination of Agreement.............................................21
SECTION 5. Conditions of Underwriters' Obligations.......................21
(a) Effectiveness of Registration Statement..............................21
(b) Opinion of Counsel for Company.......................................21
(c) Opinion of Counsel for BJK&E.........................................21
(d) Opinion of Counsel for Underwriters..................................22
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(e) Officer's Certificate................................................22
(f) Accountant's Comfort Letter..........................................22
(g) Bring-down Comfort Letter............................................22
(h) Approval of Listing..................................................23
(i) Certain Guaranties...................................................23
(j) Termination of Agreements............................................23
(k) No Objection.........................................................23
(l) Lock-up Agreements...................................................23
(m) Conditions to Purchase of Option Securities..........................23
(i) Officers' Certificate.........................................23
(ii) Opinion of Counsel for Company................................23
(iii) Opinion of Counsel for BJK&E..................................24
(iv) Opinion of Counsel for Underwriters...........................24
(v) Bring-down Comfort Letter.....................................24
(n) Additional Documents.................................................24
(o) Termination of Agreement.............................................24
SECTION 6. Indemnification...............................................24
(a) Indemnification of Underwriters......................................24
(b) Indemnification of the Company, Directors and
Officers, and BJK&E.................................................26
(c) Actions against Parties; Notification................................27
(d) Settlement without Consent if Failure to Reimburse...................27
(e) Indemnification for Reserved Securities..............................28
SECTION 7. Contribution..................................................28
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery..........................................29
SECTION 9. Termination of Agreement......................................30
(a) Termination; General.................................................30
(b) Liabilities..........................................................30
SECTION 10. Default by One or More of the Underwriters...................30
SECTION 11. Default by the Company.......................................31
SECTION 12. Notices......................................................31
SECTION 13. Parties......................................................31
SECTION 15. Effect of Headings...........................................32
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SCHEDULES AND EXHIBITS
Schedule A Underwriters
Schedule B Securities
Schedule C Initial Public Offering Price
Schedule D List of Persons with Registration Rights
Schedule E List of Persons Subject to Lock-up
Exhibit A Form of Company Counsel Opinion
Exhibit B Form of BJK&E Opinion
Exhibit C Form of Lock-up
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XXXXX XXXXX, INC.
(a Delaware corporation)
3,000,000 Shares of Common Stock
(Par Value $.001 Per Share)
PURCHASE AGREEMENT
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________ __, 1996
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxx Xxxxxx Xxxxxxxx Inc.
as Representative(s) of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxx Xxxxx, Inc., a Delaware corporation (the "Company"), and Bozell,
Jacobs, Xxxxxx & Xxxxxxxx, Inc., a Delaware corporation ("BJK&E"), confirm their
respective agreements with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx and Xxxx Xxxxxx Xxxxxxxx Inc. are acting as
representatives (in such capacity, the "Representatives"), with respect to (i)
the sale by the Company and the purchase by the Underwriters, acting severally
and not jointly, of the respective numbers of shares of Common Stock, par value
$.001 per share, of the Company ("Common Stock") set forth in Schedules A and B
hereto, and (ii) the grant by the Company to the Underwriters, acting severally
and not jointly, of the option described in Section 2(b) hereof to purchase all
or any part of 450,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 3,000,000 shares of Common Stock (the
"Initial Securities") to be purchased by the Underwriters and all or any part of
the 450,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "Option Securities") are hereinafter called, collectively, the
"Securities".
The Company and BJK&E understand that the Underwriters propose to make a
public offering of the Securities as soon as the Representatives deem advisable
after this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to 150,000 shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are
not orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-09791) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
The information included in such prospectus or in such Term Sheet, as the case
may be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and any schedules thereto, at the time
it became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated __________ __, 1996 together with the
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet or any amendment or supplement to
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any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. Each of the
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Registration Statement and any Rule 462(b) Registration Statement has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an 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. Neither the
Prospectus nor any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will 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. If Rule 434 is
used, the Company will comply with the requirements of Rule 434 and the
Prospectus shall not be "materially different," as such term is used in Rule
434, from the Prospectus included in the Registration Statement at the time it
became effective. The representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by any Underwriter through Xxxxxxx Xxxxx expressly for
use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and, if applicable, each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with this offering was identical to the electronically
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transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting notes and schedules of the Company and its
subsidiaries, and of the Xxxxx Organization, Inc., Animated Systems & Design,
Inc. and subsidiary, and Xxxxxx, Chepelsky and Partners, Inc. (collectively
referred to as the "Acquired Companies") included in the Registration Statement
are independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) Financial Statements. The financial statements included in the
--------------------
Registration Statement and the Prospectus, together with the related schedules
and notes, present fairly the financial position of the Company and its
consolidated subsidiaries, and of the Acquired Companies, respectively, at the
dates indicated and the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any, included in
the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with that
of the audited financial statements included in the Registration Statement. The
pro forma financial statements of the Company and its subsidiaries and the
related notes thereto included in the Registration Statement and the Prospectus
have been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled on the
bases described therein. No other financial statements or schedules are
required to be included in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock, other than the dividend of DoubleClick Inc.'s
common stock to BJK&E.
(v) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware 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;
and the Company is duly qualified as a foreign corporation to transact business
and
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is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the Company
-----------------------------
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and 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 where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of the subsidiaries was issued in violation
of the preemptive or similar rights arising by operation of law, or under the
charter or by-laws of any subsidiary or under any agreement to which the Company
or any subsidiary is a party. The only subsidiaries of the Company are the
subsidiaries listed on Exhibit 21.1 to the Registration Statement.
(vii) Capitalization. The authorized, issued and outstanding capital
--------------
stock of the Company is as set forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to employee benefit plans referred to
in the Prospectus or pursuant to the exercise of options referred to in the
Prospectus). The shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable; none of the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(viii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The Securities to
-------------------------------------------
be purchased by the Underwriters from the Company have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued and fully paid and
non-assessable; the Common Stock materially conforms to all statements relating
thereto contained in the Prospectus and such description conforms to the rights
set forth in the instruments defining the same; no holder of the Securities will
be subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to preemptive or other similar rights
of any securityholder of the Company.
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(x) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of its subsidiaries is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of them may be
bound, or to which any of the property or assets of the Company or subsidiary is
subject (collectively, "Agreements and Instruments"), except for such violations
or defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Securities by the
Company and the use by the Company of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of Proceeds")
and compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments, except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets or
properties, except for such violations that would not result in a Material
Adverse Effect. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company or any subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of BJK&E or the Company,
threatened, against or affecting BJK&E or the Company or any subsidiary, which
is required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of this
Agreement or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which BJK&E, the
Company or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the Registration
Statement,
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including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so described
and filed as required.
(xiv) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and neither
BJK&E, the Company nor any of their respective subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities hereunder or
the consummation of the transactions contemplated by this Agreement, except such
as have been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws.
(xvi) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them; the Company and its subsidiaries are
in compliance with the terms and conditions of all such Governmental Licenses,
except where the failure to possess such Governmental Licenses or so to comply
would not, singly or in the aggregate, have a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xvii) Leasehold Interests and Title to Property. The Company and
-----------------------------------------
its subsidiaries own no real property and have good title to all other
properties (other than real
-7-
property) owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any kind
except such as (a) are described in the Prospectus or (b) do not, singly or in
the aggregate, materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company or any
of its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise, and
under which the Company or any of its subsidiaries holds properties described in
the Prospectus, are in full force and effect, and neither the Company nor any
subsidiary has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any subsidiary under
any of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary of the continued possession of the
leased or subleased premises under any such lease or sublease.
(xviii) Compliance with Cuba Act. The Company has complied with, and
------------------------
is and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder (collectively,
the "Cuba Act") or is exempt therefrom.
(xix) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(xx) Environmental Laws. Except as described in the Registration
------------------
Statement and except such violations as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law and any
judicial or administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and
its subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D) there
are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental
-8-
body or agency, against or affecting the Company or any of its subsidiaries
relating to any Hazardous Materials or the violation of any Environmental Laws.
(xxi) Registration Rights. Except for the persons listed on Schedule
-------------------
D, there are no persons with registration or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xxii) Related Transactions. There are no outstanding loans,
--------------------
advances (except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the benefit of
any of BJK&E, the Company's or BJK&E's officers or directors or any of the
members of the families of any of them, that are required to be disclosed, that
are not disclosed, in the Registration Statement and the Prospectus.
(xxiii) Foreign Corrupt Practices Act. Neither the Company nor any
-----------------------------
of its subsidiaries has at any time during the last five years (i) made any
unlawful contribution to any candidate for foreign office or failed to disclose
fully any contribution in violation of law or (ii) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
(xxiv) Insurance. The Company together with its subsidiaries carries
---------
or is covered by insurance with insurers of recognized financial responsibility
of the types and in the amounts generally deemed adequate for their respective
businesses and consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company or the
subsidiaries against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect; neither the Company nor any of its subsidiaries had been refused any
insurance coverage sought or applied for; and neither the Company nor any of the
subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
(xxv) Taxes. BJK&E, the Company and their respective subsidiaries
-----
have filed all federal, state and foreign income tax returns which have been
required to be filed and have paid all taxes and all assessments received by
them to the extent such taxes have become due, except where the failure to so
file or pay would not have a Material Adverse Effect.
(xxvi) Internal Controls. The Company and each of its subsidiaries
-----------------
maintains (or BJK&E maintains on their behalf) a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's
-9-
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxvii) Filings. The Company has filed a registration statement
-------
pursuant to Section 12(g) of the Exchange Act, to register the Common Stock, has
filed an application to list the securities on the Nasdaq National Market, and
has received notification that the listing has been approved, subject to notice
of issuance of the Securities.
(xxviii) Brokers. The Company has not incurred any liability for a
-------
fee, commission, or other compensation on account of the employment of a broker
or finder in connection with the transactions contemplated by this Agreement
other than as contemplated hereby.
(xxix) Rights to Acquire Securities. There are no outstanding
----------------------------
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or liens related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock of, or other ownership
interest in, the Company or any subsidiary thereof except as described in the
Prospectus.
(xxx) Compliance with Laws. The Company and its subsidiaries are in
--------------------
compliance with all applicable laws, statutes, ordinances, rules or regulations,
except where the noncompliance with such laws, statutes, ordinances, rules or
regulations would not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect.
(xxxi) Absence of Manipulation. BJK&E, the Company and its
-----------------------
subsidiaries have not (i) taken, directly or indirectly, any action designed to
cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities or
(ii) since the initial filing of the Registration Statement (A) sold, bid for,
purchased or paid anyone any compensation for soliciting purchases of, the
Securities, or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(xxxii) Lock-Ups. The Company has obtained and delivered to the
--------
Representative(s) the agreements of the persons and entities named in Schedule E
in the form of Exhibit C hereto.
(xxxiii) Distribution of Prospectus. The Company has not distributed
--------------------------
and, prior to the later to occur of (i) the Closing Time and (ii) completion of
the distribution of the Securities, will not distribute any prospectus (as such
term is defined in the 1933 Act and the 1933 Act Regulations) in connection with
the offering and sale of the Securities other than the Registration Statement,
any preliminary prospectus filed with the Commission, the Prospectus or other
materials, if any, permitted by the 1933 Act or by the 1933 Act Regulations and
approved by the Representative(s).
-10-
(xxxiv) Services Agreement. Each of the Operating Services Agreement
------------------
between BJK&E and the Company (the "Services Agreement"), the Sublease Agreement
and the Occupancy Agreements described in the Prospectus under "Certain
Transactions" (collectively, the "Sublease Agreement"), and the Tax Sharing
Agreement between BJK&E and the Company (all of the foregoing agreements being
referred to herein as the "Inter-corporate Agreements") has been duly and
validly authorized, executed and delivered by the Company and BJK&E and is the
valid and binding agreement of the Company and BJK&E enforceable against each of
the Company and BJK&E in accordance with its terms, except as provided by
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law) (collectively, "applicable bankruptcy laws"). The execution, delivery and
performance of the Inter-corporate Agreements by the Company, the consummation
of the transactions therein contemplated and compliance with the terms thereof
do not and will not conflict with or constitute a breach of, or default or
Repayment Event under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any of
their assets or properties, except for such violations that would not result in
a Material Adverse Effect. Except for those that have been obtained, no
consent, approval, authorization or order of any court, governmental agency or
body or financial institution is required in connection with the consummation of
the transactions contemplated by such Inter-corporate Agreements.
(b) Representations and Warranties by BJK&E . BJK&E represents and
warrants to each Underwriter as of the date hereof, as of the Closing Time, and
as of each Date of Delivery, and agrees with each Underwriter, as follows:
(i) Good Standing of BJK&E . BJK&E has been duly organized and is
-----------------------
validly existing as a corporation in good standing under the laws of the State
of Delaware and has corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted and to enter into
and perform its obligations under this Agreement.
(ii) Absence of Defaults and Conflicts. BJK&E is not in violation of
---------------------------------
its charter or by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, license,
lease or other agreement or instrument to which BJK&E is a party or by which it
may be bound, or to which any of the property or assets of BJK&E is subject
(collectively, "BJK&E Agreements and Instruments") except for such violations or
defaults that would not result in a material adverse change in the condition,
financial or otherwise, or in the
-11-
earnings, business affairs or business prospects of BJK&E and its subsidiaries
considered as one enterprise (a "BJK&E Material Adverse Effect").
(iii) Beneficial Ownership. BJK&E owns, and will own as of record
--------------------
and beneficially, the number of shares of Common Stock of the Company set forth
in the Prospectus, free and clear of any liens, encumbrances, claims or
restrictions except for any lien arising from that certain Pledge Agreement
dated June 22, 1994 between BJK&E and Citibank, N.A. as Agent for certain other
lenders as described therein.
(iv) Accurate Disclosure. The representations and warranties of the
-------------------
Company contained in Section 1(a) hereof are true and correct; BJK&E has
reviewed and is familiar with the Registration Statement and the Prospectus and
the Prospectus does 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.
(v) Authorization of Agreement. BJK&E has the full right, power and
--------------------------
authority to enter into this Agreement. The execution, delivery and performance
of this Agreement by BJK&E and the consummation by BJK&E of the transactions
contemplated herein and in the Registration Statement and compliance by BJK&E
with its obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or
default or BJK&E Repayment Event (as defined below) under, BJK&E Agreements and
Instruments, nor will such action result in any violation of the provisions of
the charter or by-laws of BJK&E or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over BJK&E or
any of its assets or properties. As used herein, a "BJK&E Repayment Event"
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by BJK&E, the Company or any Company subsidiary.
(vi) [Reserved.]
(vii) Absence of Manipulation. BJK&E has not (i) taken, directly
-----------------------
or indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (ii) since the initial filing
of the Registration Statement (A) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of, the Securities, or (B) paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.
(viii) Absence of Further Requirements. No filing with, or
-------------------------------
consent, approval, authorization, order, registration, qualification or decree
of, any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by BJK&E of its
-12-
obligations hereunder, or in connection with the sale and delivery of the
Securities hereunder or the consummation of the transactions contemplated by
this Agreement, except such as may have previously been made or obtained or as
may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(ix) Restriction on Sale of Securities. During a period of 180 days
---------------------------------
from the date of the Prospectus, BJK&E will not, without the prior written
consent of Xxxxxxx Xxxxx, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
(x) [Reserved.]
(xi) No Association with NASD. Neither BJK&E nor any of its
------------------------
affiliates directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, or has any other
association with (within the meaning of Article I, Section 1(m) of the By-laws
of the National Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
(xii) Inter-corporate Agreements. Each of the Inter-corporate
--------------------------
Agreements to which BJK&E is a party has been duly and validly authorized,
executed and delivered by BJK&E and is the valid and binding agreement of BJK&E
enforceable in accordance with its terms, except as provided by applicable
bankruptcy laws. The consummation of the transactions therein contemplated and
compliance with the terms thereof do not and will not conflict with or
constitute a breach of, or default or Repayment Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of BJK&E pursuant to, BJK&E Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
result in a BJK&E Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter or by-laws of BJK&E or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over BJK&E or any of its assets or properties, except for such
violations that would not result in a BJK&E Material Adverse Effect. No
consent, approval, authorization or order of any court, governmental agency or
body or financial institution is required in connection with the consummation by
BJK&E of the transactions contemplated by the Inter-corporate Agreements to
which BJK&E is a party, except such as have been obtained.
-13-
(c) Officer's Certificates'. Any certificate signed by any officer of the
Company or any subsidiary thereof delivered to the Representatives or to counsel
for the Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of BJK&E thereof delivered to the
Representatives or to counsel for the Underwriters pursuant to the terms of this
Agreement shall be deemed a representation and warranty by BJK&E to the
Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter and each Underwriter, severally and
not jointly, agrees to purchase from the Company, at the price per share set
forth in Schedule C, that proportion of the number of Initial Securities set
forth in Schedule B opposite the name of the Company, which the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchase of
fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 450,000 shares of Common Stock
as set forth in Schedule B, at the price per share set forth in Schedule C. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the office of Loeb &
Loeb LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
shall be agreed upon by the Representatives and the Company, at 10:00 A.M.
(Eastern Time) on the third (fourth, if the pricing occurs after 4:30 P.M.
-14-
(Eastern Time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in the City of New York not later than 10:00 A.M. (Eastern Time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement, shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the
-15-
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus and will furnish
the Representatives with copies of any such documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not file
or use any such document to which the Representatives or counsel for the
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. If
applicable, the copies of the Registration Statement and each amendment thereto
(including all exhibits filed therewith), furnished to the Representatives will
be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934 (the "1934 Act"), such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably request. If
applicable, each preliminary prospectus and the Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend
-16-
or supplement the Prospectus in order that the Prospectus will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and maintain
the quotation of the Common Stock (including the Securities) on the Nasdaq
National Market and will file with the Nasdaq National Market all documents and
notices required by the Nasdaq National Market of companies that have securities
that are traded in the over-the-counter market and quotations for which are
reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer
-17-
or dispose of, directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing, except for the granting of options pursuant to the Company's Amended
and Restated 1996 Stock Option Plan and the Company's 1996 Employee Stock
Purchase Plan, each as described in the Prospectus, or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Common
Stock, whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the Securities
to be sold hereunder, (B) any shares of Common Stock issued by the Company upon
the exercise of an option or warrant or the conversion of a security outstanding
on the date hereof and referred to in the Prospectus, (C) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant to existing
employee benefit plans of the Company referred to in the Prospectus or (D) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to any non-employee director stock plan.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(1) Form SR. The Company will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 of the 1933 Act Regulations.
(m) Form S-8. The Company will not file a Form S-8 registration statement
(other than a Form S-8 relating to the Company's 1996 Employee Stock Purchase
Plan) until one hundred eighty (180) days after the date of the final prospectus
filed pursuant to Rule 424(b) under the Act.
(n) Information. During a period of five years after the date hereof, the
Company will furnish to its stockholders as soon as practicable after the end of
each respective period, annual reports (including financial statements audited
by independent certified public accountants) and unaudited quarterly statements
of operations for each of the first three quarters of the fiscal year. During a
period of three years after the date hereof, the Company will furnish to you,
(i) concurrently with furnishing such reports to its stockholders, statements of
operations of the Company for each of the first three quarters in the form
furnished to the Company's stockholders, (ii) concurrently with furnishing to
its stockholders a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations of shareholders' equity and of cash
flows of the Company for such fiscal year, accompanied by a copy of opinion or
report thereon of independent certified public accountants, (iii) as soon as
they are available, copies of all reports (financial or other) mailed to
stockholders, (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the commission, any securities
exchange or the NASD, (v) every material press release and every material news
item or article in respect of the Company or its affairs which was generally
released to stockholders or prepared by the Company or any of the subsidiaries,
and (vi) any additional information of a
-18-
public nature concerning the Company or the subsidiaries, or its business which
you may reasonably request. During such five-year period, if the Company shall
have active subsidiaries, the foregoing financial statements shall be on a
consolidated basis to the extent that the accounts of the Company and the
subsidiaries are consolidated, and shall be accompanied by similar financial
statements for any significant subsidiary which is not consolidated. To the
extent applicable, such reports or documents shall be identical to the
electronically transmitted copies thereof filed with the commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(o) Transfer Agent. The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Stock.
(p) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of this Agreement. The Underwriters
will notify the Company as to which persons will need to be so restricted. At
the request of the Underwriters, the Company will direct the transfer agent to
place a stop transfer restriction upon such securities for such period of time.
Should the Company release, or seek to release, from such restrictions any of
the Reserved Securities, the Company agrees to reimburse the Underwriters for
any reasonable expenses (including, without limitation, legal expenses) they
incur in connection with such release.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
or duties payable upon the sale of the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities,
(ix) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the NASD of the
terms of the sale of the Securities, (x) the fees and expenses incurred
-19-
in connection with the inclusion of the Securities on the Nasdaq National Market
and (xi) all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Securities which are designated by the Company for sale
to employees and others having a business relationship with the Company.
(b) Expenses of BJK&E . BJK&E will pay the fees and disbursements of its
counsel and accountants, to the extent not paid by the Company pursuant to
Section 4(a).
(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations'. The obligations of
----------------------------------------
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and BJK&E contained in Section 1
hereof or in certificates of any officer of BJK&E, the Company or any subsidiary
delivered pursuant to the provisions hereof, to the performance by BJK&E and the
Company of its covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective on the
date hereof and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Loeb & Loeb LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit A hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(c) Opinion of Counsel for BJK&E . At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Loeb & Loeb LLP, counsel for BJK&E, in form and substance satisfactory
to counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters to the effect set forth in
-20-
Exhibit B hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(d) Opinion of Counsel for Underwriters. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in clauses (i), (ii), (v),
(vi) (solely as to preemptive or other similar rights arising by operation of
law or under the charter or by-laws of the Company), (viii) through (x),
inclusive, (xiv) (solely as to the information in the Prospectus under
"Description of Capital Stock -- Common Stock) and the penultimate paragraph of
Exhibit A hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
Commonwealth of Massachusetts, the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(e) Officer's Certificate'. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate from each of the President or
a Vice President of BJK&E and the Company and of the chief financial or chief
accounting officer of BJK&E and the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) and Section 1(b) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) BJK&E and the Company have complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission.
(f) Accountant's Comfort Letter'. At the time of the execution of this
Agreement, the Representatives shall have received from KPMG Peat Marwick LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(g) Bring-down Comfort Letter. At the Closing Time, the Representatives
shall have received from KPMG Peat Marwick LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this
-21-
Section, except that the specified date referred to shall be a date not more
than three business days prior to Closing Time.
(h) Approval of Listing. At the Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(i) Certain Guaranties. At the Closing Time, the Company shall not be a
party to, or obligated under, any guarantee of indebtedness of money borrowed
by, or reimbursement in connection with a letter of credit issued to secure an
obligation of, BJK&E or any other person other than itself or the deferred
purchase price of any property acquired by BJK&E or any person other than
itself.
(j) Termination of Agreements. At the Closing Time, that certain Guarantee
dated June 22, 1994 together with any and all amendments thereto made by the
Company in favor of Citibank, N.A. shall have been terminated.
(k) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(l) Lock-up Agreements. At the date of this Agreement, the Representatives
shall have received an agreement substantially in the form of Exhibit C hereto
signed by the persons listed on Schedule E hereto.
(m) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of BJK&E and the Company contained herein and the statements in any certificates
furnished by BJK&E and the Company hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of each of the President or a Vice President of BJK&E and the
Company and of the chief financial or chief accounting officer of BJK&E and
the Company confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of Loeb &
------------------------------
Loeb LLP, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for BJK&E. The favorable opinion of Loeb &
----------------------------
Loeb LLP, counsel for BJK&E, in form and substance satisfactory to counsel
for the
-22-
Underwriters, dated such Date and Delivery, substantially to the same
effect as the opinion required by Section 5(c).
(iv) Opinion of Counsel for Underwriters. The favorable opinion of
-----------------------------------
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(d) hereof.
(v) Bring-down Comfort Letter. A letter from KPMG Peat Marwick LLP,
-------------------------
in form and substance satisfactory to the Representatives and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section 5(f) hereof,
except that the "specified date" on the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date of
Delivery.
(n) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by BJK&E and the Company in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(o) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company and, subject to the last
paragraph of this subsection (a), BJK&E each jointly and severally agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or
-23-
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading or arising out
of 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;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company and BJK&E; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx subject to
the terms of Section 6(c) hereof with respect to counsel fees), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), including the 430A Information and the
Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
In making a claim for indemnification under this Section 6 or contribution
under Section 7 hereof by the Company or BJK&E, the indemnified parties may
proceed against either (i) the Company and BJK&E jointly or (ii) the Company
only, but may not proceed solely against BJK&E. In the event that the
indemnified parties are entitled to seek indemnity or contribution hereunder
against any loss, liability, claim, damage and expense under this Section 6 or
Section 7 hereof (each such circumstance or event, a "Loss") the indemnified
parties shall seek to satisfy the Loss in full from the Company by making a
written demand upon the Company for such satisfaction. Only in the event such
Loss shall remain unsatisfied in whole or in part 20 days following the date of
receipt by the Company of a demand shall any indemnified party have the right to
take action to satisfy such Loss by making demand directly on BJK&E (but only if
and to the extent that the Company has not already satisfied such Loss, whether
by settlement, release or otherwise). The indemnified parties may exercise this
right to first seek to obtain payment from the Company and thereafter obtain
payment from BJK&E without regard to
-24-
the pursuit by any party of its rights to the appeal of any judgment. The
indemnified parties shall, however, be relieved of this obligation to seek to
obtain payment from the Company with respect to such Loss and having sought such
payment, to wait such 20 days after failure by the Company to immediately
satisfy any such Loss if (i) the Company files a petition for relief under the
United States Bankruptcy Code (the "Bankruptcy Code"), (ii) an order for relief
is ordered against the Company in an involuntary case under the Bankruptcy Code,
(iii) the Company makes an assignment for the benefit of its creditors, or (iv)
any court orders or approves the appointment of a receiver or custodian for the
Company or a substantial portion of its assets. In the case of reimbursement of
expenses pursuant to this Section 6, the indemnified parties shall first seek to
obtain such reimbursement in full from the Company by making a written demand
upon the Company for such reimbursement. Only in the event such expenses shall
remain unreimbursed in full or in part 20 days following the date of receipt by
the Company of such demand shall the indemnified party have the right to receive
reimbursement of such expenses from BJK&E by making written demand directly on
BJK&E (but only to the extent the Company has not already satisfied the demand
for reimbursement, whether by settlement, release or otherwise). The indemnified
parties, however, shall be relieved of their obligation to first seek to obtain
such reimbursement from the Company or, having made written demand therefor, to
wait 20 days after notice to the Company to immediately reimburse such expenses
if (i) the Company files a petition for relief under the Bankruptcy Code, (ii)
an order for relief is entered against the Company in an involuntary case under
the Bankruptcy Code, (iii) the Company makes an assignment for the benefit of
its creditors, or (iv) any court orders or approves the appointment of a
receiver or custodian for the Company or a substantial portion of its assets.
Notwithstanding anything to the contrary contained herein, the provisions of
this paragraph shall not apply to any claim for indemnity pursuant to this
Section 6 arising from a breach by BJK&E of its representations and warranties
contained in each of Section 1(b) (iii), (iv), or (vii).
In the event that BJK&E shall be required to satisfy a Loss under this
Section 6 or Section 7 hereof after demand on the Company (or in cases where no
such demand on the Company is required hereunder), BJK&E shall be entitled to
recover from the Company the entire amount of such Loss (other than in the case
of a Loss resulting from a breach by BJK&E of its representations and warranties
contained in each of Section 1(b) (iii), (iv), or (vii) hereof).
(b) Indemnification of the Company, Directors and Officers, and BJK&E.
Each Underwriter severally agrees to indemnify and hold harmless the Company,
its directors, each of the officers who signed the Registration Statement, BJK&E
and each person, if any, who controls the Company or BJK&E within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration
-25-
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them a
result of the failure of eligible employees and other persons to pay for and
accept delivery of Reserved Securities which, by the end of the first
-26-
business day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall, subject to the
terms and conditions contained in Section 6 hereof, contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by BJK&E and the Company on the one hand
and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 BJK&E and the Company on the one hand and of the Underwriters
on the other hand in connection with the statements or omissions, which resulted
in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by BJK&E and the Company on the one hand and
the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus, or, if Rule 434 is used,
the corresponding location on the Term Sheet, bear to the aggregate initial
public offering price of the Securities as set forth on such cover or the Term
Sheet.
The relative fault of BJK&E and the Company 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 relates to information
supplied by BJK&E or the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
BJK&E and the Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses (subject to the terms of Section 6(c) hereof
with respect to counsel fees) reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
-27-
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or
BJK&E within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as the Company or BJK&E. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of BJK&E or the Company submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of BJK&E or the Company, and shall survive delivery
of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and BJK&E, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or limited by the Commission or the
Nasdaq National Market, or if trading generally on the American Stock Exchange
or the New York Stock
-28-
Exchange or in the Nasdaq National Market has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
------------------------------------------
of the Underwriters shall fail at Closing Time or on a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Date of Delivery which occurs after the Closing Time, the obligation of
the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone the Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
-29-
SECTION 11. Default by the Company. If the Company shall fail at Closing
----------------------
Time or at the Date of Delivery to sell the number of Securities that it is
obligated to sell hereunder, then this Agreement shall terminate without any
liability on the part of any nondefaulting party; provided, however, that the
provisions of Sections 4, 6 and 7 shall remain in full force and effect. No
action taken pursuant to this Section shall relieve the Company from liability,
if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative(s) c/o of Xxxxxxx Xxxxx &
Co. at Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
attention of Syndicate Department, and notices to BJK&E and the Company shall be
directed to them c/o Xxxxx Xxxxx, Inc. and Bozell, Jacobs, Xxxxxx & Xxxxxxxx,
Inc. at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Valentine X.
Xxxxxx and Xxxxxx X. Blondy.
SECTION 13. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the Underwriters, BJK&E and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, BJK&E and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, BJK&E and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-30-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to BJK&E and the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, BJK&E and the Company in accordance with its
terms.
Very truly yours,
XXXXX XXXXX, INC.
By:______________________________________
Name:
Title:
BOZELL, JACOBS, XXXXXX
& XXXXXXXX, INC.
By:______________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXX XXXXXX XXXXXXXX INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:______________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
-31-
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated...........................
Xxxx Xxxxxx Xxxxxxxx Inc.......................
Total......................................... 3,000,000
=========
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to be Sold
--------------------- ---------------------
450,000
XXXXX XXXXX, INC. 3,000,000
SCHEDULE C
XXXXX XXXXX, INC.
3,000,000 Shares of Common Stock
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $_____.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $_____, being an amount equal to the initial
public offering price set forth above less $___ per share.
SCHEDULE D
List of Persons with
Registration Rights
Bozell, Jacobs, Xxxxxx & Xxxxxxxx, Inc.
G. Xxxxxxx Xxxxx
Xxxxxx X. Xxxxx, Xx.
Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
Xxx X. Xxxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxxx and Xxxxxxxxx X. Xxxxxxxx as Co-Trustees of a trust dated
4/25/95
Xxxxxx X. and Xxxxx Xxxxxxx, Trustees of a trust dated 0/0/00
Xxxxx X. XxXxxxx, Xx.
Xxxxxx X'Xxxx, Xx.
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Xx.
W. Xxxxx Xxxxxxx
Xxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx
SCHEDULE E
List of persons and entities
subject to lock-up
Xxxxxx X'Xxxx, Xx.
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Xx.
Xxxxxx X. Blondy
Xxxxx X. Xxxx
Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Xx.
Xxxx X. Xxxxxx III
Xxxxxx X. Xxxxxx
Valentine X. Xxxxxx
W. Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxxx
G. Xxxxxxx Xxxxx
Xxxxxx X. Xxxxx, Xx.
Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
Xxx X. Xxxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxxx and Xxxxxxxxx X. Xxxxxxxx as Co-Trustees of a trust dated
4/25/95
Xxxxxx X. and Xxxxx Xxxxxxx, Trustees of a trust dated 8/9/78
Xxxxx X. XxXxxxx, Xx.
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and to enter into and perform its obligations under the
Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction listed on Schedule 1
hereto.
(iv) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to the
Purchase Agreement or pursuant to reservations, agreements, employee benefit
plans or the exercise of convertible securities or options referred to in the
Prospectus); the shares of issued and outstanding capital stock have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the Company.
(v) The Securities to be issued for sale to the Underwriters have been duly
authorized for issuance and sale to the Underwriters pursuant to the Purchase
Agreement and, when issued and delivered by the Company pursuant to the Purchase
Agreement against payment of the consideration set forth in the Prospectus, will
be validly issued and fully paid and non-assessable and no holder of the
Securities is or will be subject to personal liability by reason of being such a
holder.
(vi) The issuance of the Securities is not subject to preemptive or other
similar rights of any securityholder of the Company.
(vii) Animated Systems & Design, Inc. has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction listed on Schedule 1 hereto; all of
the issued and outstanding capital stock of such subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, to the best
of our knowledge and information, is owned by the Company, directly, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock of such
subsidiary was issued in violation of the preemptive or similar rights of any
securityholder of such subsidiary.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared (or in the case of any Rule 462(b) Registration
Statement, become) effective under the 1933 Act; any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); and, to the best of our knowledge and
information, no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus and each amendment or supplement to the Registration
Statement and Prospectus as of their respective effective or issue dates (other
than the financial statements and supporting schedules included therein, as to
which no opinion need be rendered) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not "materially
different," as such term is used in Rule 434, from the prospectus included in
the Registration Statement at the time it became effective.
(xii) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company and the
requirements of the Nasdaq National Market.
(xiii) To the best of our knowledge, except as described in the
Prospectus, there is not pending or threatened any action, suit, proceeding,
inquiry or investigation, to which BJK&E, the Company or any Company subsidiary
is a party, or to which the property of BJK&E, the Company or any Company
subsidiary is subject, before or brought by any court or governmental agency or
body, which might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the Purchase Agreement or
the performance by BJK&E and the Company of its obligations thereunder;
(xiv) The information in the Prospectus under "Description of Capital
Stock--Common Stock", "Description of Capital Stock--Preferred Stock",
"Description of Capital Stock--Delaware Law and Certain Charter Provisions" and
"Business--Legal Proceedings" and in the Registration Statement under item 14
and item 15, to the extent that it constitutes matters of law, summaries of
legal matters, the Company's charter and by-laws or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material respects.
A-2
(xv) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(xvi) All descriptions in the Prospectus of contracts and other documents
to which the Company or its subsidiaries are a party are accurate in all
material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
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 or references thereto are correct in all material
respects.
(xvii) To the best of our knowledge, and except as would have no Material
Adverse Effect, no default by the Company or any Subsidiary exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed as an exhibit to the
Registration Statement.
(xviii) No filing with, or authorization, approval, consent or order of
any court or governmental authority or agency (other than under the 1933 Act and
the 1933 Act Regulations, which have been obtained, or as may be required under
the securities or blue sky laws of the various states, as to which we need
express no opinion) is required in connection with the authorization, execution
and delivery of the Agreement or for the offering, issuance or sale of the
Securities;
(xix) The execution, delivery and performance of the Purchase Agreement by
the Company and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the issuance and
sale by the Company of the Securities and the use of the proceeds from the sale
of the Securities by the Company as described in the Prospectus under the
caption "Use Of Proceeds") and compliance by the Company with its respective
obligations under the Purchase Agreement will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(a)(x)of the Purchase
Agreement) under or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any Subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any 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 any
Subsidiary is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-laws
of the Company or any Subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic
A-3
or foreign, having jurisdiction over the Company or any subsidiary or any of
their respective properties, assets or operations.
(xx) Except as set forth in the Prospectus and Schedule D to the Purchase
Agreement, to the best of our knowledge, there are no persons with registration
or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the 0000
Xxx.
(xxi) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.
(xxii) Except as disclosed in the Prospectus, to the best of such
counsel's knowledge, there are no outstanding options, warrants or other rights
calling for the issuance of, and no commitments, obligations, plans or
arrangements to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock of the Company. The
outstanding stock options relating to the Company's Common Stock have been duly
authorized and validly issued and the description thereof contained in the
Prospectus is accurate in all material respects.
(xxiii) Each of the Operating Services Agreement between BJK&E and the
Company (the "Services Agreement"), the Sublease Agreement and the Occupancy
Agreement described in the Prospectus under "Certain Transactions", and the Tax
Sharing Agreement between BJK&E and the Company (all of the foregoing agreements
being referred to herein as the "Inter-corporate Agreements") has been duly and
validly authorized, executed and delivered by each of BJK&E and the Company and
is the valid and binding agreement of each of BJK&E and the Company enforceable
in accordance with its terms, except as provided by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) (collectively, "applicable
bankruptcy laws"). The execution, delivery and performance of the Inter-
corporate Agreements by each of BJK&E and the Company, the consummation of the
transactions therein contemplated and compliance with the terms thereof do not
and will not result in a violation of, or constitute a default under, the
corporate charter, by-laws or other governing documents of each of BJK&E and the
Company, or any agreement, indenture or other instrument to which BJK&E or the
Company is a party or by which it is bound, or to which any of its properties is
subject, and do not and will not violate any existing law, rule, administrative
regulation or decree of any court or any governmental agency or body having
jurisdiction over BJK&E or the Company or any of its properties, or result in
the creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of BJK&E or the Company, which would be material to the
Company and its subsidiaries taken as a whole. No consent, approval,
authorization or order of any court, governmental agency or body or financial
institution is required in connection with the consummation of the transactions
contemplated by such Inter-corporate Agreements.
A-4
Nothing has come to our attention that would lead us to believe that the
Registration Statement, including the Rule 430A Information and Rule 434
Information (if applicable), (except for financial statements and schedules and
other financial data included therein, as to which we make no statement), at the
time such Registration Statement or any such amendment 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 or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
therein, as to which such counsel need make no statement), at the time the
Prospectus or any such amended or supplemented Prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-5
Exhibit B
FORM OF OPINION FOR BJK&E
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) BJK&E has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) No filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than the issuance of the order of the
Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which we need express no opinion) is necessary or required to be
obtained by BJK&E for the performance by BJK&E of its obligations hereunder or
the consummation of the transactions contemplated by the Purchase Agreement.
(iii) The Purchase Agreement has been duly executed and delivered by
or on behalf of BJK&E.
(iv) [Reserved.]
(v) The execution, delivery and performance of the Purchase
Agreement, the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement and compliance by BJK&E with its
obligations under the Purchase Agreement have been duly authorized by all
necessary action on the part of BJK&E and, to the knowledge of such counsel, do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or Repayment
Event under, or result in the creation or imposition of any tax lien, charge or
encumbrance upon the Securities or any property or assets of BJK&E pursuant to,
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, license, lease or other instrument or agreement to which BJK&E is a party
or by which it may be bound, or to which any of the property or assets of BJK&E
may be subject nor will such action result in any violation of the provisions of
the charter or by-laws of BJK&E, if applicable, or any law, administrative
regulation, judgment or order of any governmental agency or body or any
administrative or court decree having jurisdiction over BJK&E or any of its
properties (except that such counsel needs not express an opinion as to the
securities or blue sky laws of any jurisdiction other than the United States).
(vi) BJK&E has the requisite corporate power and authority to enter
into the Purchase Agreement.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of BJK&E and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
B-2
Exhibit C
Form of Lock-up
---------------
___________ __, 1996
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
XXXX XXXXXX XXXXXXXX INC.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by Xxxxx Xxxxx, Inc.
---------------------------------------------
Dear Sirs:
The undersigned, a stockholder, officer and/or director of Xxxxx Xxxxx,
Inc., a Delaware corporation (the "Company"), understands that Xxxxxxx Xxxxx &
Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), and
Xxxx Xxxxxx Xxxxxxxx Inc. propose to enter into a Purchase Agreement (the
"Purchase Agreement") with the Company and Bozell, Jacobs, Xxxxxx & Xxxxxxxx,
Inc., the Company's parent ("Bozell"), providing for the public offering of
shares (the "Securities") of the Company's common stock, par value $.001 per
share (the "Common Stock"). In recognition of the benefit that such an offering
will confer upon the undersigned as a stockholder, officer and/or director of
the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 180
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of Xxxxxxx Xxxxx, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option for the sale of, or
otherwise dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature:____________________________
Print Name:___________________________
C-2
