Exhibit 1
2,450,000 SHARES
COMMON STOCK
($.01 PAR VALUE)
UNDERWRITING AGREEMENT
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July 8, 1997
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Xxxxx & Associates, Inc.
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, World of Science, Inc., a New York corporation (the
"Company") and the persons listed on Schedule I hereto (the "Selling
Shareholders"), hereby address you as the representatives (the
"Representatives") of each of the persons, firms and corporations listed on
Schedule II hereto (collectively, the "Underwriters") and hereby confirm their
agreement with the several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell to the
Underwriters 1,600,000 shares of its Common Stock, par value $.01 per share, and
the Selling Shareholders propose to sell to the Underwriters a total of 850,000
shares of the Company's Common Stock, par value $.01 per share, as set forth on
Schedule I hereto (such shares of Common Stock are herein referred to as the
"Firm Shares"). Solely for the purpose of covering over-allotments in the sale
of the Firm Shares, the Company and M&T Capital Corporation (the "Principal
Selling Shareholder") further propose to grant to the Underwriters the right to
purchase up to an aggregate of 367,500 additional shares of the Company's Common
Stock (the "Option Shares"), as provided in Section 3 of this Agreement. The
Firm Shares and the Option Shares are herein sometimes referred to as the
"Shares" and are more fully described in the Prospectus hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees and each Selling
Shareholder agrees, severally and not jointly, to sell to the Underwriters, and
each such Underwriter agrees, severally and not jointly, (a) to purchase from
the Company and from each of the Selling Shareholders, pro rata, at a purchase
price of $5.58 per share, the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule II hereto and (b) to purchase from the Company
and
the Principal Selling Shareholder any additional number of Option Shares which
such Underwriter may become obligated to purchase pursuant to Section 3 hereof.
The Company and the Selling Shareholders will deliver definitive
certificates for the Firm Shares at the office of X.X. Xxxxxxx & Sons, Inc., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx ("Xxxxxxx' Office"), or such other place as you
and the Company may mutually agree upon, for the accounts of the Underwriters
against payment to the Company and the Selling Shareholders of the purchase
price for the Firm Shares sold by them to the several Underwriters by wire
transfer or certified or bank cashiers' check in clearing house (same day
available) funds payable to the order of the Company and the Selling
Shareholders, respectively, and delivered to Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx.
Xxxxx, Xxxxxxxx 00000, or at such other place as may be agreed upon between you
and the Company (the "Place of Closing"), at 10:00 a.m., St. Louis time, on July
11, 1997, or at such other time and date not later than five full business days
thereafter as you and the Company may agree, such time and date of payment and
delivery being herein called the "Closing Date."
The certificates for the Firm Shares so to be delivered will be made
available to you for inspection at Xxxxxxx' Office (or such other place as you
and the Company may mutually agree upon) at least one full business day prior to
the Closing Date and will be in such names and denominations as you may request
at least three full business days prior to the Closing Date.
It is understood that an Underwriter, individually, may (but shall not be
obligated to) make payment on behalf of the other Underwriters whose checks
shall not have been received prior to the Closing Date for Shares to be
purchased by such Underwriter. Any such payment by an Underwriter shall not
relieve the other Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Shares to the
public upon the terms and conditions set forth in the Registration Statement
hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. The Company and the
Principal Selling Shareholder hereby grant options to the Underwriters to
purchase from them on up to 327,500 and 40,000 Option Shares, respectively, on
the same terms and conditions as the Firm Shares; provided, however, that such
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options may be exercised only for the purpose of covering any over-allotments
which may be made by them in the sale of the Firm Shares and provided, further,
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that such options shall be exercised first with respect to the Option Shares
held by the Principal Selling Shareholder. No Option Shares shall be sold or
delivered unless the Firm Shares previously have been, or simultaneously are,
sold and delivered.
The options are exercisable on behalf of the several Underwriters by you,
as Representatives, at any time, and from time to time, before the expiration of
45 days from
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the date of this Agreement, for the purchase of all or part of the Option Shares
covered thereby, by notice given by you to the Company and the Principal Selling
Shareholder in the manner provided in Section 13 hereof, setting forth the
number of Option Shares as to which the Underwriters are exercising the options,
and the date of delivery of said Option Shares, which date shall not be more
than five business days after such notice unless otherwise agreed to by the
parties. You may terminate the options at any time, as to any unexercised
portion thereof, by giving written notice to the Company and the Principal
Selling Shareholder to such effect.
You, as Representatives, shall make such allocation of the Option Shares
among the Underwriters as may be required to eliminate purchases of fractional
Shares.
Delivery of the Option Shares with respect to which the options shall have
been exercised shall be made to or upon your order at Xxxxxxx' Office (or at
such other place as you and the Company may mutually agree upon), against
payment by you of the per share purchase price to the Company and the Principal
Selling Shareholder by wire transfer or certified or bank cashier's check or
checks, payable in clearing house (same day available) funds. Such payment and
delivery shall be made at 10:00 a.m., St. Louis time, on the date designated in
the notice given by you as above provided for, unless some other date and time
are agreed upon, which date and time of payment and delivery are called the
"Option Closing Date." The certificates for the Option Shares so to be
delivered will be made available to you for inspection at Xxxxxxx' Office at
least one full business day prior to the Option Closing Date and will be in such
names and denominations as you may request at least three full business days
prior to the Option Closing Date. On the Option Closing Date, the Company and
the Principal Selling Shareholder shall provide the Underwriters such
representations, warranties, opinions and covenants with respect to the Option
Shares as are required to be delivered on the Closing Date with respect to the
Firm Shares.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
SELLING SHAREHOLDERS.
(a) The Company represents and warrants to and agrees with each Underwriter
that:
(i) A registration statement (Registration No. 333-25031) on Form S-1
with respect to the Shares, including a preliminary prospectus, and such
amendments to such registration statement as may have been required to the
date of this Agreement, has been carefully prepared by the Company pursuant
to and in conformity with the requirements of the Securities Act of 1933,
as amended (the "Act"), and the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder and has been filed with the Commission under the Act. Copies of
such registration statement, including any amendments thereto, each related
preliminary prospectus (meeting the requirements of Rule 430 or 430A of the
Rules
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and Regulations) contained therein, the exhibits, financial statements and
schedules have heretofore been delivered by the Company to you. If such
registration statement has not become effective under the Act, a further
amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become
effective will be filed promptly by the Company with the Commission. If
such registration statement has become effective under the Act, a final
prospectus containing information permitted to be omitted at the time of
effectiveness by Rule 430A of the Rules and Regulations will be filed
promptly by the Company with the Commission in accordance with Rule 424(b)
of the Rules and Regulations or a post-effective amendment containing such
information will be filed promptly by the Company with the Commission in
accordance with the Rules and Regulations of the Commission. The term
"Registration Statement" as used herein means the registration statement as
amended at the time it becomes or became effective under the Act (including
the effective time of any post-effective amendment) (each such effective
time, an "Effective Date"), including financial statements and all exhibits
and, if applicable, the information deemed to be included by Rule 430A of
the Rules and Regulations and including any registration statement that may
be filed pursuant to Rule 462(b) of the Rules and Regulations. The term
"Prospectus" as used herein means (i) the prospectus as first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations or,
(ii) if no such filing is required, the form of final prospectus included
in the Registration Statement at the Effective Date or (iii) if a Term
Sheet or Abbreviated Term Sheet (as such terms are defined in Rule 434(b)
and 434(c), respectively, of the Rules and Regulations) is filed with the
Commission pursuant to Rule 424(b)(7) of the Rules and Regulations, the
Term Sheet or Abbreviated Term Sheet and the last Preliminary Prospectus
filed with the Commission prior to the time the Registration Statement
became effective, taken together. The term "Preliminary Prospectus" as used
herein shall mean a preliminary prospectus as contemplated by Rule 430 or
430A of the Rules and Regulations included at any time in the Registration
Statement.
(ii) The Commission has not issued, and is not to the knowledge of the
Company threatening to issue, an order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus nor instituted proceedings for
that purpose. Each Preliminary Prospectus at its date of issue, the
Registration Statement and the Prospectus and any amendments or supplements
thereto contains or will contain, as the case may be, all statements which
are required to be stated therein by, and in all material respects conform
or will conform, as the case may be, to the requirements of, the Act and
the Rules and Regulations. Neither the Registration Statement nor any
amendment thereto, as of the applicable Effective Date, and neither the
Prospectus nor any supplement thereto, contains or will contain, as the
case may be, any untrue statement of a material fact or omits or will omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that
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the Company makes no representation or warranty as to information contained
in or omitted from the Registration Statement or the Prospectus, or any
such amendment or supplement, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of the
Underwriters specifically for use in the preparation thereof.
(iii) The filing of the Registration Statement and the execution and
delivery of this Agreement have been duly authorized by the Board of
Directors of the Company; this Agreement constitutes a valid and legally
binding obligation of the Company enforceable in accordance with its terms
(except to the extent the enforceability of the indemnification and
contribution provisions of Section 7 hereof may be limited by public policy
considerations as expressed in the Act as construed by courts of competent
jurisdiction, and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors'
rights generally and by general principles of equity); the issue and sale
of the Shares by the Company and the performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
violation of the Company's certificate of incorporation or bylaws or result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any properties or assets of the Company
under, any statute, or under any indenture, mortgage, deed of trust, note,
loan agreement, sale and leaseback arrangement or other agreement or
instrument to which the Company is a party or by which it is bound or to
which any of the properties or assets of the Company is subject, or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or their properties; no consent,
approval, authorization, order, registration or qualification of or with
any court or governmental agency or body is required for the consummation
of the transactions herein contemplated, except such as may be required by
the National Association of Securities Dealers, Inc. (the "NASD") or under
the Act or Rules and Regulations or any state securities laws.
(iv) Except as described in the Prospectus, the Company has not
sustained since the date of the latest audited financial statements
included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree. Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company has not incurred any
material liabilities or material obligations, direct or contingent, other
than in the ordinary course of business, or entered into any material
transactions not in the ordinary course of business, and there has not been
any material change in the capital stock or long-term debt of the Company
or any material adverse change in the condition (financial or other), net
worth, business, affairs, management, prospects or results of operations of
the
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Company. The Company has filed all necessary federal, state and foreign
income and franchise tax returns and paid all taxes shown as due thereon;
all tax liabilities are adequately provided for on the books of the Company
except to such extent as would not materially adversely affect the business
of the Company; the Company has made all necessary payroll tax payments and
is current and up-to-date as of the date of this Agreement; and the Company
has no knowledge of any tax proceeding or action pending or threatened
against the Company which might materially adversely affect its business or
property.
(v) Except as described in the Prospectus, there is not now pending
or, to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding to which the Company is a party before or by any
court or public, regulatory or governmental agency or body which might be
expected to result (individually or in the aggregate) in any material
adverse change in the condition (financial or other), business or prospects
of the Company, or might be expected to materially and adversely affect
(individually or in the aggregate) the properties or assets thereof; and
there are no contracts or documents of the Company which would be required
to be filed as exhibits to the Registration Statement by the Act or by the
Rules and Regulations which have not been filed as exhibits to the
Registration Statement.
(vi) The Company has duly and validly authorized capital stock as
described in the Prospectus; all outstanding shares of Common Stock of the
Company and the Shares conform, or when issued will conform, to the
description thereof in the Registration Statement and the Prospectus and
have been or, when issued and paid for, will be duly authorized, validly
issued, fully paid and nonassessable; and the issuance of the Shares to be
purchased from the Company hereunder is not subject to preemptive rights.
(vii) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state or other
jurisdiction in which it is incorporated, with full power and authority
(corporate and other) to own, lease and operate its properties and conduct
its businesses as described in the Registration Statement; the Company is
duly qualified to do business as foreign corporation in good standing in
each state or other jurisdiction in which its ownership or leasing of
property or conduct of business legally requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the ability of the Company to conduct its business as described
in the Registration Statement; and the Company does not have and has never
had any subsidiary.
(viii) KPMG Peat Marwick LLP, the accounting firm which has certified
the financial statements filed with the Commission as a part of the
Registration Statement,
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is an independent public accounting firm within the meaning of the Act and
the Rules and Regulations.
(ix) The financial statements and schedules of the Company, including
the notes thereto, filed with and as a part of the Registration Statement,
are accurate in all material respects and present fairly the financial
position of the Company as of the respective dates thereof and the results
of operations and statements of cash flow for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
except as otherwise disclosed in the Prospectus. The selected financial
data included in the Registration Statement and Prospectus present fairly
the information shown therein and have been compiled on a basis consistent
with that of the audited financial statements in the Registration Statement
and Prospectus.
(x) The Company is not in default with respect to any contract or
agreement to which it is a party; provided that this representation shall
not apply to defaults which in the aggregate are not materially adverse to
the condition, financial or other, or the business or prospects of the
Company.
(xi) The Company is not in violation of any other laws, ordinances or
governmental rules or regulations to which it is subject, and the Company
has not failed to obtain any other license, permit, franchise, easement,
consent, or other governmental authorization necessary to the ownership,
leasing and operation of its properties or to the conduct of its business,
which violation or failure would materially adversely affect the business,
operations, affairs, properties, prospects, profits or condition (financial
or other) of the Company. The Company has not, at any time during the past
five years, (A) made any unlawful contributions to any candidate for any
political office, or failed fully to disclose any contribution in violation
of law, or (B) made any payment to any state, federal or foreign government
official, or other person charged with similar public or quasi-public duty
(other than payment required or permitted by applicable law).
(xii) Except as described in the Prospectus, the Company owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
licenses, trademarks, service marks and trade names necessary to conduct
the business now operated by them, and the Company has not received any
notice of infringement of or conflict with asserted rights of others with
respect to any patents, patent licenses, trademarks, service marks or trade
names which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
conduct of the business, operations, financial condition or income of the
Company.
(xiii) The Company has good and marketable title to all property owned
by it, free and clear of all liens, encumbrances, restrictions and defects
except such as are
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described in the Registration Statement or do not interfere with the use
made and proposed to be made of such property; and any property held under
lease or sublease by the Company is held under valid, subsisting and
enforceable leases or subleases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such
property by the Company, and the Company has no notice or knowledge of any
material claim of any sort which has been, or may be, asserted by anyone
adverse to the Company's rights as lessee or sublessee under any lease or
sublease described above, or affecting or questioning the Company's rights
to the continued possession of the leased or subleased premises under any
such lease or sublease in conflict with the terms thereof.
(xiv) Except as described in the Prospectus, there is no factual basis
for any action, suit or other proceeding involving the Company or any of
its material assets for any failure of the Company, or any predecessor
thereof, to comply with any requirements of federal, state or local
regulation relating to air, water, solid waste management, hazardous or
toxic substances, or the protection of health or the environment. Except as
described in the Prospectus, none of the property owned or leased by the
Company is, to the best knowledge of the Company, contaminated with any
waste or hazardous substances, and the Company may not be deemed an "owner
or operator" of a "facility" or "vessel" which owns, possesses, transports,
generates or disposes of a "hazardous substance" as those terms are defined
in (S)9601 of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S)9601 et seq.
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(xv) No labor disturbance exists with the employees of the Company or
is imminent which would have a material adverse effect on the Company.
(xvi) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of the
Company's Common Stock, and the Company is not aware of any such action
taken or to be taken by affiliates of the Company.
(xvii) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xviii) The Company carries, or is covered by, insurance in such
amounts and covering such risks as the Company believes is adequate for the
conduct of its business and the value of its respective properties and as
is customary for companies engaged in similar industries.
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(xix) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(xx) The Common Stock has been duly authorized for listing on the
National Association of Securities Dealers, Inc. Automated
Quotation/National Market System ("Nasdaq National Market System").
(b) Each Selling Shareholder severally, and not jointly, represents and
warrants to and agrees with each Underwriter and the Company that:
(i) All authorizations and consents necessary for the execution and
delivery by it of this Agreement and the sale and delivery of the Shares to
be sold by such Selling Shareholder hereunder have been given and are in
full force and effect on the date hereof and will be in full force and
effect on the Closing Date (and, if applicable, the Option Closing Date).
(ii) Such Selling Shareholder has, and on the Closing Date (and, if
applicable, the Option Closing Date) will have, good and valid title to the
Shares to be sold by such Selling Shareholder, free and clear of all liens,
mortgages, pledges, encumbrances, claims, equities and security interests
whatsoever, and will have, full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder hereunder.
(iii) Upon delivery of and payment for such Shares hereunder, the
several Underwriters will acquire valid and unencumbered title to such
Shares to be sold by such Selling Shareholder hereunder, free and clear of
all liens, mortgages, pledges, encumbrances, claims, equities and security
interests whatsoever.
(iv) The consummation by such Selling Shareholder of the transactions
contemplated herein and the fulfillment by such Selling Shareholder of the
terms hereof will not result in a violation or breach of any terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, note, loan agreement, sale and
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leaseback arrangement or other agreement or instrument to which such
Selling Shareholder is a party, or of any order, rule or regulation
applicable to such Selling Shareholder of any court or of any regulatory
body of an administrative agency or other governmental body having
jurisdiction.
(v) Such Selling Shareholder has not taken and will not take, directly
or indirectly, any action designed to or which might be reasonably expected
to cause or result in stabilization or manipulation of the price of the
Company's Common Stock, and such Selling Shareholder is not aware of any
such action taken or to be taken by affiliates of such Selling Shareholder.
(vi) When the Registration Statement becomes effective and at all
times subsequent thereto, such information in the Registration Statement
and Prospectus and any amendments or supplements thereto as specifically
refers to such Selling Shareholder will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(vii) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Shareholder hereunder have been placed in the
custody of American Stock Transfer & Trust Company (the "Custodian") under
a Custody Agreement (the "Custody Agreement"), duly executed and delivered
by such Selling Shareholder, with the Custodian having the authority to
deliver the Shares to be sold by such Selling Shareholder hereunder, and
that such Selling Shareholder has duly executed and delivered a Power of
Attorney (the "Power of Attorney") appointing Xxxx X. Xxxxxxx and Xxxxxxx
X. Xxxxxxxx as such Selling Shareholder's attorneys-in-fact (the
"Attorneys-in-Fact") with the Attorneys-in-Fact having authority to execute
and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Shareholders as provided in Section 2, to authorize the delivery of the
Shares to be sold by it hereunder and otherwise to act on behalf of such
Selling Shareholder in connection with the transactions contemplated by
this Agreement and such Custody Agreement.
(viii) The Shares represented by the certificates held in custody for
such Selling Shareholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder, and the arrangements made by such
Selling Shareholder for such custody, and the appointment by such Selling
Shareholder of the Custodian under the Custody Agreement and of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
(ix) The obligations of such Selling Shareholders hereunder shall not
be terminated by operation of law, whether by the death or incapacity of
any individual Selling Shareholder or by the occurrence of any other event,
and if any Selling
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Shareholder should die or become incapacitated, or if any other such event
should occur before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of each Selling
Shareholder in accordance with the terms and conditions of this Agreement
and of the Custody Agreement, and actions taken by the Custodian pursuant
to the Custody Agreement or by the Attorneys-in-Fact pursuant to the Power
of Attorney shall be as valid as if such death, incapacity or other event
had not occurred, regardless of whether or not the Custodian or Attorneys-
in-Fact, or any of them, shall have received notice of such death,
incapacity or other event.
(x) Such Selling Shareholder is not prompted to sell shares of Common
Stock by any information concerning the Company which is not included in
the Registration Statement.
(c) Any certificate signed by any officer of the Company and delivered to
you 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 the Selling Shareholders as such
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Selling Shareholders to each Underwriter as
to the matters covered thereby.
5. ADDITIONAL COVENANTS. The Company and, where expressly indicated, the
Selling Shareholders, covenant and agree with the several Underwriters that:
(a) If the Registration Statement is not effective under the Act, the
Company will use its best efforts to cause the Registration Statement to become
effective as promptly as possible, and it will notify you, promptly after it
shall receive notice thereof, of the time when the Registration Statement has
become effective. The Company (i) will prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations, if required, a
Prospectus containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations or otherwise or a Term Sheet or Abbreviated Term Sheet, as
applicable; (ii) will not file any amendment to the Registration Statement or
supplement to the Prospectus of which the Underwriters shall not previously have
been advised and furnished with a copy or to which the Underwriters shall have
reasonably objected in writing or which is not in compliance with the Rules and
Regulations; and (iii) will promptly notify you after it shall have received
notice thereof of the time when any amendment to the Registration Statement
becomes effective or when any supplement to the Prospectus has been filed.
(b) The Company will advise the Underwriters promptly, after it shall
receive notice or obtain knowledge thereof, of any request of the Commission for
amendment of the Registration Statement or for supplement to the Prospectus or
for any additional information, or of the issuance by the Commission of any stop
order suspending the effectiveness of the
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Registration Statement or the use of the Prospectus or of the institution or
threatening of any proceedings for that purpose, and the Company will use its
best efforts to prevent the issuance of any such stop order preventing or
suspending the use of the Prospectus and to obtain as soon as possible the
lifting thereof, if issued.
(c) The Company will cooperate with the Underwriters and their counsel in
endeavoring to qualify the Shares for sale under the securities laws of such
jurisdictions as they may have reasonably designated and will make such
applications, file such documents, and furnish such information as may be
necessary for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent or to subject itself to taxation as doing business in any
jurisdiction where it is not now so taxed. The Company will, from time to time,
file such statements, reports, and other documents, as are or may be required to
continue such qualifications in effect for so long a period as is reasonably
required for the offering, sale and distribution of the Shares.
(d) The Company will deliver to, or upon the order of, the Underwriters,
without charge from time to time, as many copies of any Preliminary Prospectus
as they may reasonably request. The Company will deliver to, or upon the order
of, the Underwriters without charge as many copies of the Prospectus, or as it
thereafter may be amended or supplemented, as they may from time to time
reasonably request. The Company consents to the use of such Prospectus by the
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for such other purposes
and for such period of time thereafter as the Prospectus is required by law to
be delivered in connection with the offering or sale of the Shares. The Company
will deliver to the Underwriters at or before the Closing Date two signed copies
of the Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Underwriters such number of copies of
the Registration Statement, without exhibits, and of all amendments thereto, as
they may reasonably request.
(e) If, during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, any event shall occur as a result of
which, in the judgment of the Company or in your judgment or in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law.
(f) The Company will make generally available to its shareholders and will
file as an exhibit in a report pursuant to the Securities Exchange Act of 1934,
as amended (the "1934
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Act"), as soon as it is practicable to do so, but in any event not later than
the date prescribed by Section 11(a) of the Act, an earnings statement in
reasonable detail, covering a period of at least 12 consecutive months beginning
after the date prescribed by Section 11(a) of the Act, which earnings statement
shall satisfy the requirements of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and will advise the Underwriters in writing when such
statement has been so made available.
(g) The Company will, for a period of five years from the Closing Date,
deliver to the Underwriters at their principal executive offices a reasonable
number of copies of annual reports, quarterly reports, current reports and
copies of all other documents, reports and information furnished by the Company
to its shareholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or the
1934 Act. The Company will deliver to the Underwriters similar reports with
respect to any significant subsidiaries, as that term is defined in the Rules
and Regulations, which are not consolidated in the Company's financial
statements. Any report, document or other information required to be furnished
under this paragraph (g) shall be furnished as soon as practicable after such
report, document or information becomes available.
(h) The Company will apply the proceeds from the sale of the Shares as set
forth in the description under "Use of Proceeds" in the Prospectus, which
description complies in all material respects with the requirements of Item 504
of Regulation S-K.
(i) The Company will supply you with copies of all correspondence to and
from, and all documents issued to and by, the Commission in connection with the
registration of the Shares under the Act.
(j) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will furnish to you, as soon as they have been prepared,
copies of any unaudited interim financial statements of the Company for any
periods subsequent to the periods covered by the financial statements appearing
in the Registration Statement and the Prospectus.
(k) Prior to the Closing Date (and, if applicable, the Option Closing
Date), neither the Company nor any Selling Shareholder will issue any press
releases or other communications directly or indirectly and will hold no press
conferences with respect to the Company or any of its subsidiaries, the
financial condition, results of operations, business, properties, assets or
liabilities of the Company, or the offering of the Shares, without your prior
written consent.
(l) For a period of 180 days from the date of the final Prospectus, the
Company will not, and will use its best efforts to cause its directors and
officers to not, directly or indirectly offer for sale, sell, contract to sell
or otherwise dispose of any shares of the Company's Common Stock, any securities
exchangeable for Common Stock or any other rights to acquire such shares without
your prior written consent, except for the Shares sold
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hereunder and except for sales of shares of Common Stock to the Company's
employees or directors pursuant to the exercise of options under the Company's
stock option plans.
(m) The Selling Shareholders will not directly or indirectly, for a period
of 365 days from the date of the final Prospectus in the case of the Principal
Selling Shareholder and 180 days from the date of the final Prospectus in the
case of all other Selling Shareholders, offer for sale, sell, contract to sell
or otherwise dispose of any shares of the Company's Common Stock, any securities
exchangeable for Common Stock or rights to acquire such shares without your
prior written consent, except for the Shares sold hereunder or request the
registration for the offer or sale of any of the foregoing (or as to which such
person has the right to direct the disposition of).
(n) The Company has caused each officer and director and specific
shareholders of the Company as requested by you, to furnish to you, on or prior
to the date of this agreement, a letter or letters, in form and substance
satisfactory to the Underwriters, pursuant to which each such person shall agree
not to, directly or indirectly, offer for sale, sell, contract to sell or
otherwise dispose of any shares of the Company's Common Stock, any securities
exchangeable for Common Stock or rights to acquire such shares or request the
registration for the offer or sale of any of the foregoing (or as to which such
person has the right to direct the disposition of) for a period of 180 days
after the date of the final Prospectus (or 365 days after the date of the final
Prospectus in the case of the Principal Selling Shareholder) without your prior
written consent (the "Lockup Agreements").
(o) The Company, and any subsidiaries of the Company in the future, will
maintain and keep accurate books and records reflecting their assets and
maintain internal accounting controls which provide reasonable assurance that
(1) transactions are executed in accordance with management's authorization, (2)
transactions are recorded as necessary to permit the preparation of the
Company's financial statements, and, if applicable, such subsidiaries on a
consolidated basis, and to maintain accountability for the assets of the Company
and such subsidiaries, (3) access to the assets of the Company and such
subsidiaries is permitted only in accordance with management's authorization,
and (4) the recorded accounts of the assets of the Company and such subsidiaries
are compared with existing assets at reasonable intervals.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase and pay for the Shares, as provided herein, shall
be subject to the accuracy, as of the date hereof and as of the Closing Date
(and, if applicable, the Option Closing Date), of the representations and
warranties of the Company and the Selling Shareholders contained herein, to the
performance in all material respects by the Company and the Selling Shareholders
of their covenants and obligations hereunder, and to the following additional
conditions:
(a) All filings required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made. No stop order suspending the effectiveness of
the Registration
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Statement, as amended from time to time, shall have been issued and no
proceeding for that purpose shall have been initiated or, to the knowledge of
the Company or any Underwriter, threatened or contemplated by the Commission,
and any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Underwriters.
(b) No Underwriter shall have disclosed in writing to the Company on or
prior to the Closing Date (and, if applicable, the Option Closing Date), that
the Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to the
Underwriters, is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing Date), you
shall have received the opinion of Xxxxxx, Beach & Xxxxxx LLP, counsel for the
Company, addressed to you and dated the Closing Date (and, if applicable, the
Option Closing Date), to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the states or other
jurisdictions in which it is incorporated, with full corporate power and
authority to own, lease and operate its properties and conduct its business
as described in the Registration Statement; the Company is duly qualified
to do business as a foreign corporation in good standing in each state or
other jurisdiction in which its ownership or leasing of property or conduct
of business legally requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the ability
of the Company to conduct its business as described in the Registration
Statement; and, to the knowledge of such counsel after due inquiry, the
Company has no, and never has had any subsidiary.
(ii) The Company has duly and validly authorized capital stock as set
forth under the heading "Capitalization" in the Prospectus; all outstanding
shares of Common Stock of the Company and the Shares conform to the
description thereof in the Prospectus under the heading "Description of
Capital Stock", and the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and non-assessable; the
Shares to be sold by the Company have been duly authorized and, when
delivered and paid for in accordance with this Agreement, will be validly
issued, fully paid and non-assessable, and the shareholders of the Company
have no preemptive rights with respect to the Shares.
(iii) Except as described in or contemplated by the Prospectus, to the
knowledge of such counsel after due inquiry, there are no outstanding
securities of the
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Company convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of capital stock of the Company and
there are no outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its capital stock
or any securities convertible or exchangeable into or evidencing the right
to purchase or subscribe for any shares of such stock.
(iv) Except as described in the Prospectus, to the knowledge of such
counsel after due inquiry, no holder of any securities of the Company or
any other person has the right, contractual or otherwise, which has not
been satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, any
of the Shares or the right to have any Shares or other securities of the
Company included in the Registration Statement or the right, as a result of
the filing of the Registration Statement, to require registration under the
Act of any shares of Common Stock or other securities of the Company.
(v) Such counsel has been advised by the staff of the Commission that
the Registration Statement has become effective under the Act and, to the
knowledge of such counsel after due inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act.
(vi) The Registration Statement and the Prospectus, and each amendment
or supplement thereto, as of their respective effective or issue date,
comply as to form and appear on their face to be appropriately responsive
in all material respects to the requirements of the Act and the applicable
rules and regulations (except that such counsel need express no opinion as
to the financial statements and financial statement schedules contained
therein).
(vii) The descriptions in the Registration Statement and Prospectus of
contracts and other documents filed as exhibits to the Registration
Statement are accurate in all material respects; all other material
agreements between the Company and third parties expressly referenced in
the Prospectus are legal, valid and binding obligations of the Company.
(viii) No authorization, approval, consent, order, registration or
qualification of or with of any court or governmental body, authority or
agency is required with respect to the Company in connection with the
transactions contemplated by this Agreement, except such as may be required
under the Act or the Rules and Regulations or as may be required by the
NASD or under state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(ix) The filing of the Registration Statement has been duly authorized
by the Board of Directors of the Company. This Agreement has been duly
authorized,
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executed and delivered by the Company. The performance of this Agreement
and the consummation of the transactions herein contemplated will not
result in a violation of the Company's certificate of incorporation or
bylaws or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any properties or assets
of the Company under, any statute, or under any indenture, mortgage, deed
of trust, note, loan agreement, sale and leaseback arrangement, or any
other agreement or instrument known to such counsel after due inquiry to
which the Company is a party or by which it is bound or to which any of the
properties or assets of the Company are subject, or any order, rule or
regulation known to such counsel after due inquiry of any court or
governmental agency or body having jurisdiction over the Company or its
properties, except, in the case of any such violation, breach, default,
creation or imposition, to such extent as does not materially adversely
affect the business of the Company.
(x) To the knowledge of such counsel after due inquiry,(A) there are
no material (individually or in the aggregate) legal, governmental or
regulatory proceedings pending or threatened to which the Company is a
party or of which the business or properties of the Company is the subject
which are not disclosed in the Registration Statement and Prospectus; (B)
there are no contracts or documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which are not described or filed as
required; and (C) there are no statutes or regulations required to be
described in the Registration Statement or Prospectus which are not
described as required.
(xi) To the knowledge of such counsel after due inquiry, the Company
holds all licenses, certificates, permits and approvals from all state,
federal and other regulatory authorities, and have satisfied in all
material respects the requirements imposed by regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, that are required for the Company lawfully to own, lease and
operate its properties and conduct its business as described in the
Prospectus, and, to the knowledge of such counsel after due inquiry, the
Company is conducting its business in compliance in all material respects
with all of the laws, rules and regulations of each jurisdiction in which
it conducts its business.
(xii) The statements made in the Registration Statement under the
captions "Dividend Policy", "Capitalization", "Description of Capital
Stock", and "Certain Provisions of the Certificate and Bylaws", to the
extent that they constitute summaries of documents referred to therein or
matters of law or legal conclusions, have been reviewed by such counsel and
are accurate summaries and fairly present the information disclosed
therein.
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(xiii) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Such counsel shall confirm that in the course of its duties in connection with
the preparation of the Registration Statement and Prospectus, nothing came to
such counsel's attention that would lead them to believe that either the
Registration Statement or Prospectus or any amendment or supplement thereto
(other than the financial statements and financial statement schedules contained
therein as to which such counsel need express no opinion) contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering the foregoing opinion, such counsel may rely, provided that the
opinion shall state that you and they are entitled to so rely, (1) as to matters
involving laws of any jurisdiction other than New York or the United States,
upon opinions addressed to the Underwriters of other counsel satisfactory to
them and Ropes & Xxxx, and (2) as to all matters of fact, upon certificates and
written statements of the executive officers of, and accountants for, the
Company.
(d) On the Closing Date (and, if applicable, the Option Closing Date), you
shall have received the opinion of Xxxxxx, Beach & Xxxxxx LLP, counsel to the
Selling Stockholders, addressed to you and dated the Closing Date (and, if
applicable, the Option Closing Date), to the effect that:
(i) Each Selling Shareholder has duly authorized, executed and
delivered the Custody Agreement and Power of Attorney, appointing American
Stock Transfer & Trust Company as such Selling Shareholder's Custodian with
authority to take custody of and deliver the Shares as represented by
certificates on behalf of such Selling Shareholder in connection with the
transactions contemplated by this Agreement and the Custody Agreement and
appointing Xxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxxx as such Selling
Shareholder's attorneys-in-fact with authority to execute and deliver this
Agreement on behalf of such Selling Shareholder and otherwise to act on
behalf of such Selling Shareholder in connection with the transactions
contemplated by this Agreement and the Power of Attorney.
(ii) This Agreement has been duly authorized, executed and delivered
on behalf of the Selling Shareholders.
(iii) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as required by the
Act, the NASD and state securities and Blue Sky Laws) to sell, assign,
transfer and deliver the Shares to be sold by such Selling Shareholder.
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(iv) No consent, approval, authorization or order of any court, or
governmental agency or body is required for consummation of the
transactions contemplated by this Agreement in connection with the Shares
to be sold by each Selling Shareholder hereunder except such as may be
required under the Act or the Rules and Regulations or as may be required
by the NASD or under state securities laws.
(v) Immediately prior to the time of delivery of the Shares being
purchased from the Selling Shareholders, each Selling Shareholder was the
sole registered owner of the Shares to be sold by such Selling Shareholder.
Following such time of delivery, each of the Underwriters will be the
registered owner of the Shares purchased by it from such Selling
Shareholder and, assuming the Underwriters purchase such Shares in good
faith and without notice of any adverse claim, the Underwriters, in
addition to acquiring all rights of such Selling Shareholder in such
Shares, will acquire such Shares, free of any adverse claim, and free of
any lien in favor of the Company, and any restrictions on transfer imposed
by the Company.
In rendering the foregoing opinion, such counsel may rely, provided that the
opinion shall state that you and they are entitled to so rely, (1) as to matters
involving laws of any jurisdiction other than the State of New York or the
United States, upon opinions addressed to the Underwriters of other counsel
satisfactory to them and Ropes & Xxxx, and (2) as to all matters of fact, upon
certificates and written statements of the Selling Shareholders.
(e) You shall have received on the Closing Date (and, if applicable, the
Option Closing Date), from Ropes & Xxxx, counsel to the Underwriters, such
opinion or opinions, dated the Closing Date (and, if applicable, the Option
Closing Date) with respect to the incorporation of the Company, the validity of
the Shares, the Registration Statement, the Prospectus and other related matters
as you may reasonably require; the Company and Selling Shareholders shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass on such matters.
(f) You shall have received at or prior to the Closing Date from Ropes &
Xxxx a memorandum or memoranda, in form and substance satisfactory to you, with
respect to the qualification or exemption for offering and sale by the
Underwriters of the Shares under state securities or Blue Sky laws of such
jurisdictions as the Underwriters may have designated to the Company.
(g) On each Effective Date as requested by you and on the Closing Date
(and, if applicable, the Option Closing Date), you shall have received from KPMG
Peat Marwick, LLP, a letter or letters, dated such Effective Date and the
Closing Date (and, if applicable, the Option Closing Date), respectively, in
form and substance satisfactory to you, confirming that they are independent
public accountants with respect to the Company within the meaning of the Act and
the published Rules and Regulations, and the answer to Item 509 of Regulation
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S-K set forth in the Registration Statement is correct insofar as it relates to
them, and stating to the effect set forth in Schedule III hereto.
(h) Except as contemplated in the Prospectus, (i) the Company shall not
have sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree; and (ii)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company shall not have incurred
any liability or obligation, direct or contingent, or entered into transactions,
and there shall not have been any change in the capital stock or long-term debt
of the Company or any change in the condition (financial or other), net worth,
business, affairs, management, prospects or results of operations of the
Company, the effect of which, in any such case described in clause (i) or (ii),
is in your judgment so material or adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered on such Closing Date (and, if applicable, the Option Closing
Date) on the terms and in the manner contemplated in the Prospectus.
(i) There shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or the establishing on such exchanges by
the Commission or by such exchanges of minimum or maximum prices which are not
in force and effect on the date hereof; (ii) a general moratorium on commercial
banking activities declared by either federal or state authorities; (iii) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iii) in your judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares in the manner contemplated in the Prospectus; (iv) any calamity or
crisis, change in national, international or world affairs, act of God, change
in the international or domestic markets, or change in the existing financial,
political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in this clause (iv) makes it impracticable or
inadvisable in your reasonable judgment to proceed with the public offering or
the delivery of the Shares in the manner contemplated in the Prospectus; or (v)
the enactment, publication, decree, or other promulgation of any federal or
state statute, regulation, rule, or order of any court or other governmental
authority, or the taking of any action by any federal, state or local government
or agency in respect of fiscal or monetary affairs, if the effect of any such
event specified in this clause (v) in your reasonable judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares in the manner contemplated in the Prospectus.
(j) You shall have received certificates, dated the Closing Date (and, if
applicable, the Option Closing Date) and signed by the President and the Chief
Financial Officer of the Company stating that (i) they have carefully examined
the Registration Statement and the
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Prospectus as amended or supplemented and nothing has come to their attention
that would lead them to believe that either the Registration Statement or the
Prospectus, or any amendment or supplement thereto as of their respective
effective or issue dates, contained, and the Prospectus as amended or
supplemented at such Closing Date, contains any untrue statement of a material
fact, or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and, that (ii) all representations
and warranties made herein by the Company are true and correct at such Closing
Date, with the same effect as if made on and as of such Closing Date, and all
agreements herein to be performed by the Company on or prior to such Closing
Date have been duly performed in all material respects.
(k) The Company and each of the Selling Shareholders shall not have failed,
refused, or been unable, at or prior to the Closing Date (and, if applicable,
the Option Closing Date) to have performed in all material respects any
agreement on their part to be performed or any of the conditions herein
contained and required to be performed or satisfied by them at or prior to such
Closing Date.
(l) The Company and the Selling Shareholders shall have furnished to you at
the Closing Date (and, if applicable, the Option Closing Date) such other
certificates as you may have reasonably requested as to the accuracy, on and as
of such Closing Date, of the representations and warranties of the Company and
the Selling Shareholders herein and as to the performance by the Company and the
Selling Shareholders of their obligations hereunder.
(m) The Shares shall have been approved for trading upon official notice of
issuance on the Nasdaq National Market System.
(n) Each of the Lockup Agreements described in Section 5(n) shall be in
full force and effect as of the Closing Date (and, if applicable, the Option
Closing Date).
All such opinions, certificates, letters and documents will be in compliance
with the provisions hereof only if they are reasonably satisfactory to you and
to Ropes & Xxxx, counsel for the several Underwriters. The Company and Selling
Shareholders will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you may request.
If any of the conditions specified above in this Section 6 shall not have been
satisfied at or prior to the Closing Date (and, if applicable, the Option
Closing Date) or waived by you in writing, this Agreement may be terminated by
you on notice to the Company and the Selling Shareholders.
7. INDEMNIFICATION.
(a) The Company and the Principal Selling Shareholder agree, jointly and
severally, to indemnify and hold harmless each Underwriter and each person, if
any, who
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controls any Underwriter within the meaning of the Act, against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or in any blue sky application or other document executed by the Company or
based on any information furnished in writing by the Company, filed in any
jurisdiction in order to qualify any or all of the Shares under the securities
laws thereof ("Blue Sky Application"), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and will reimburse
each Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that neither the Company nor the
Principal Selling Shareholder shall be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by you or by any Underwriter through you, specifically for use in the
preparation thereof; and provided, further, that in no event shall the liability
of the Principal Selling Shareholder for indemnification under this subsection
(a) exceed the proceeds received by the Principal Selling Shareholder in the
offering. This indemnity agreement shall be in addition to any liabilities
which the Company and the Principal Selling Shareholder, respectively, may
otherwise have.
(b) Each Selling Shareholder (other than the Principal Selling Shareholder)
agrees, jointly and not severally, to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or controlling person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or any Blue Sky Application or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or such amendment or supplement, or any Blue Sky Application, in
reliance upon and in conformity with written information furnished to the
Company or any Underwriter by such Selling Shareholder specifically for use in
the preparation thereof; and will reimburse any legal or
-22-
other expenses reasonably incurred by each Underwriter and each person, if any,
who controls any Underwriter within the meaning of the Act, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that in no event shall the liability of any such Selling
-------- -------
Shareholder for indemnification under this subsection (b) exceed the proceeds
received by such Selling Shareholder in the offering. This indemnity agreement
shall be in addition to any liabilities which the Selling Shareholders may
otherwise have.
(c) Each Underwriter agrees, jointly and not severally, to indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and, each person, if any, who controls the
Company within the meaning of the Act, and each Selling Shareholder, against any
losses, claims, damages or liabilities, joint or several, to which the Company
or any such director, officer or controlling person or any such Selling
Shareholder may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, any amendment or supplement thereto, or any Blue Sky
Application or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, such Preliminary Prospectus or the Prospectus, such amendment or
supplement, or any Blue Sky Application in reliance upon and in conformity with
written information furnished to the Company by such Underwriter specifically
for use in the preparation thereof; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person or any such Selling Shareholder in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement shall be in addition to any liabilities which the
Underwriters may otherwise have.
(d) Any party which proposes to assert the right to be indemnified under
this Section 7 shall, within ten days after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a claim is
to be made against an indemnifying party under this Section 7, notify each such
indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party of any such action, suit or proceeding shall not relieve such
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 7. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party, similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified
-23-
party for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ
its own counsel in any such action, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party at the expense of the indemnifying party has
been authorized by the indemnifying party, (ii) the indemnified party shall have
been advised by such counsel in a written opinion that there may be a conflict
of interest between the indemnifying party and the indemnified party in the
conduct of the defense, or certain aspects of the defense, of such action (in
which case the indemnifying party shall not have the right to direct the defense
of such action with respect to those matters or aspects of the defense on which
a conflict exists or may exist on behalf of the indemnified party), or (iii) the
indemnifying party shall not in fact have employed counsel to assume the defense
of such action, in any of which events such fees and expenses to the extent
applicable shall be borne by the indemnifying party. It is understood, however,
that the indemnifying parties shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all indemnified parties not having actual or potential differing
interests among themselves, which firm shall be designated in writing by X.X.
Xxxxxxx & Sons, Inc. An indemnifying party shall not be liable for any
settlement of any action or claim effected without its consent. Each indemnified
party, as a condition of such indemnity, shall cooperate in good faith with the
indemnifying party in the defense of any such action or claim.
(e) If the indemnification provided for in this Section 7 is for any
reason, other than pursuant to the terms thereof, judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right to appeal) to be
unavailable to an indemnified party under subsections (a), (b) or (c) above in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company, the Selling
Shareholders and the Underwriters from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault, as
applicable, of the Company, the Selling Shareholders and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as other
relevant equitable considerations. The relative benefits received by, as
applicable, the Company, the Selling Shareholders, and the Underwriters shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the
-24-
Selling Shareholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Shareholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Shareholders and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (e) 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 subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter and (ii) no Selling Shareholder shall be required
to contribute more than the net proceeds received by such Selling Shareholder in
the offering. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company and the Selling
Shareholders contained in Sections 7 and 11 herein or in certificates delivered
pursuant hereto, and the agreements of the Underwriters contained in Section 7
hereof, shall remain operative and in full force and effect regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any Underwriter or any controlling person, the Company or any of its
officers, directors or any controlling persons, or the Selling Shareholders, and
shall survive delivery of the Shares to the Underwriters hereunder.
9. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Shares on the
terms contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, then the Company
and the Selling Shareholders shall be entitled to a further period of thirty-six
hours within which to procure another party or parties reasonably satisfactory
to you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company and the Selling
Shareholders that you have so arranged for
-25-
the purchase of such Shares, or the Company and the Selling Shareholders notify
you that they have so arranged for the purchase of such Shares, you or the
Company and the Selling Shareholders shall have the right to postpone the
Closing Date for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any persons substituted
under this Section 9 with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters made by you or the Company
and the Selling Shareholders as provided in subsection (a) above, the aggregate
number of Shares which remains unpurchased does not exceed one tenth of the
total Shares to be sold on the Closing Date, then the Company and the Selling
Shareholders shall have the right to require each non-defaulting Underwriter to
purchase the Shares which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters made by you or the Company
and the Selling Shareholders as provided in subsection (a) above, the number of
Shares which remains unpurchased exceeds one tenth of the total Shares to be
sold on the Closing Date, or if the Company and the Selling Shareholders shall
not exercise the right described in subsection (b) above to require the non-
defaulting Underwriters to purchase Shares of the defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter or the Company and the Selling
Shareholders except for the expenses to be borne by the Company and the
Underwriters as provided in Section 11 hereof and the indemnity and contribution
agreements in Section 7 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. EFFECTIVE DATE AND TERMINATION.
(a) This Agreement shall become effective at 1:00 p.m., St. Louis time, on
the first business day following the date of which the post-effective amendment
to the Registration Statement filed on or after the date hereof is declared
effective by the Commission or at such earlier time on or after the Effective
Date as you in your discretion shall first release the Shares for offering to
the public; provided, however, that the provisions of Section 7 and 11 shall at
-------- -------
all times be effective. For the purposes of this Section 10(a), the Shares
shall be
-26-
deemed to have been released to the public upon release by you of the
publication of a newspaper advertisement relating to the Shares or upon release
of telegrams, facsimile transmissions or letters offering the Shares for sale to
securities dealers, whichever shall first occur.
(b) This Agreement may be terminated by you at any time before it becomes
effective in accordance with Section 10(a) by notice to the Company and the
Selling Shareholders; provided, however, that the provisions of this Section 10
-------- -------
and of Section 7 and Section 11 hereof shall at all times be effective. In the
event of any termination of this Agreement pursuant to Section 9 or this Section
10(b) hereof, the Company and the Selling Shareholders shall not then be under
any liability to any Underwriter except as provided in Section 7 or Section 11
hereof.
(c) This Agreement may be terminated by you at any time at or prior to the
Closing Date by notice to the Company and the Selling Shareholders if any
condition specified in Section 6 hereof shall not have been satisfied on or
prior to the Closing Date. Any such termination shall be without liability of
any party to any other party except as provided in Sections 7 and 11 hereof.
(d) This Agreement also may be terminated by you, by notice to the Company
and the Selling Shareholders, as to any obligation of the Underwriters to
purchase the Option Shares, if any condition specified in Section 6 hereof shall
not have been satisfied at or prior to the Option Closing Date or as provided in
Section 9 of this Agreement. If you terminate this Agreement as provided in
Sections 10(b), 10(c) or 10(d), you shall notify the Company and the Selling
Shareholders by telephone or telegram, confirmed by letter.
11. COSTS AND EXPENSES. The Company will bear and pay the costs and
expenses incident to the registration of the Shares and public offering thereof,
including, without limitation, (a) the fees and expenses of the Company's
accountants and the fees and expenses of counsel for the Company, (b) the
preparation, printing, filing, delivery and shipping of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto (except as otherwise expressly provided in Section 5(d)
hereof) and the printing, delivery and shipping of this Agreement, the Agreement
Among Underwriters, the Selected Dealer Agreement, Underwriters' Questionnaires
and Powers of Attorney and Blue Sky Memoranda, (c) the furnishing of copies of
such documents (except as otherwise expressly provided in Section 5(d) hereof)
to the Underwriters, (d) the registration or qualification of the Shares for
offering and sale under the securities laws of the various states, including the
reasonable fees and disbursements of Underwriters' counsel relating to such
registration or qualification, (e) the fees payable to the NASD and the
Commission in connection with their review of the proposed offering of the
Shares, (f) all printing and engraving costs related to preparation of the
certificates for the Shares, including transfer agent and registrar fees, (g)
all initial transfer taxes, if any, (h) all fees and expenses relating to the
authorization of the Shares for trading on the Nasdaq National Market System,
(i) all travel expenses, including air fare
-27-
and accommodation expenses, of representatives of the Company in connection with
the offering of the Shares and (j) all of the other costs and expenses incident
to the performance by the Company of the registration and offering of the
Shares; provided, however, that the Underwriters will bear and pay the fees and
-------- -------
expenses of the Underwriters' counsel (other than fees and disbursements
relating to the registration or qualification of the Shares for offering and
sale under the securities laws of the various states), the Underwriters' out-of-
pocket expenses, and any advertising costs and expenses incurred by the
Underwriters incident to the public offering of the Shares; and provided,
further, that the Company will bear and pay the fees and expenses of the Selling
Shareholders' counsel.
If this Agreement is terminated by you in accordance with the provisions of
Section 10(c), the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel to the Underwriters.
12. DEFAULT OF SELLING SHAREHOLDERS. Failure or refusal by any of the
Selling Shareholders to sell and deliver on the Closing Date the Shares agreed
to be sold and delivered by such Selling Shareholder shall in no manner relieve
the other Selling Shareholders or the Company of their respective obligations
under this Agreement. If any Selling Shareholder should fail or refuse to sell
and deliver his Shares, the remaining Selling Shareholders shall have the right
hereby granted to increase, pro rata or otherwise, the number of Shares to be
sold by them hereunder to the total number of Shares to be sold by all Selling
Shareholders as set forth in Schedule I. If the remaining Selling Shareholders
do not fully exercise the right to increase the number of Shares to be sold by
them, the Underwriters, at your option, will have the right to elect to purchase
or not to purchase the Shares to be sold by the Company and the remaining
Selling Shareholders. In the event the Underwriters purchase the Shares of the
Company and such other Selling Shareholders pursuant to this Section 12, the
Closing Date shall be postponed for a period of not more than seven days in
order that the Registration Statement and Prospectus or other documents may be
amended or supplemented to the extent necessary under the provisions of the Act
and the Rules and Regulations or under the securities laws of any jurisdiction.
If the Underwriters determine not to purchase the Shares of the Company and the
other Selling Shareholders, if any, this Agreement shall terminate and neither
the Company nor the Underwriters nor any other Selling Shareholder shall be
under any obligation under this Agreement except as provided in Section 7 hereof
and except for the obligation of the Company to pay for such expenses as are set
forth in Section 11 hereof. Nothing herein shall relieve a defaulting Selling
Shareholder from liability for his default or from liability under Section 7
hereof or for expenses imposed by this Agreement upon such Selling Shareholder.
13. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Syndicate, facsimile number (314)
955-7387, or if sent to the Company shall be mailed, delivered, sent
-28-
by facsimile transmission, or telegraphed and confirmed to the Company at World
of Science, Inc., Building Four, 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000,
Attention: Xxxx X. Xxxxxxx, facsimile number (000) 000-0000, or if sent to any
Selling Shareholder shall be mailed, delivered, sent by facsimile transmission
or telegraphed and confirmed to such Selling Shareholder, c/o the Attorney-in-
Fact at the address set forth above for the Company. Notice to any Underwriter
pursuant to Section 7 shall be mailed, delivered, sent by facsimile
transmission, or telegraphed and confirmed to such Underwriter's address as it
appears in the Underwriters' Questionnaire furnished in connection with the
offering of the Shares or as otherwise furnished to the Company and the Selling
Shareholder.
14. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Selling Shareholders, and the Company and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, corporation or
other entity, other than the parties hereto and their respective successors and
assigns and the controlling persons, officers and directors referred to in
Section 7, 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 being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns and said controlling persons and said officers and directors, and for
the benefit of no other person, corporation or other entity. No purchaser of
any of the Shares from any Underwriter shall be construed a successor or assign
by reason merely of such purchase.
In all dealings with the Company and the Selling Shareholders under this
Agreement you shall act on behalf of each of the several Underwriters, the
Company, and the Selling Shareholders shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of the Underwriters, made or
given by you on behalf of the Underwriters, as if the same shall have been made
or given in writing by the Underwriters.
15. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
16. PRONOUNS. Whenever a pronoun of any gender or number is used herein,
it shall, where appropriate, be deemed to include any other gender and number.
17. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri.
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If the foregoing is in accordance with your understanding, please so indicate in
the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement among the Company, each of the Selling
Shareholders and the Underwriters.
WORLD OF SCIENCE, INC.
By:
---------------------------------
Title:
------------------------------
Selling Shareholders Named in Schedule I Hereto
By:
---------------------------------
Attorney-in-Fact
Accepted in St. Louis,
Missouri as of the date
first above written, on
behalf of ourselves and each
of the several Underwriters
named in Schedule II hereto.
X.X. XXXXXXX & SONS, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
By: X.X. XXXXXXX & SONS, INC.
By:
-------------------------------------
Title:
-----------------------------------
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SCHEDULE I
Number of
Selling Shareholders Firm Shares
-------------------- -----------
B&J Management Corporation 12,500
Xxxxxx Xxxxx 2,555
Xxxx Xxxxxx 1,665
Xxxxxxxx Xxxxxxx & Xxxxx Xxxxxxx 10,000
Xxxxxx X. XxXxxxx 1,275
Xxxxxx XxXxxxxxxx 25,000
Xxxxxx X. Xxxxxx 12,745
Xxxxx Xxxxxxxxx 960
Xxxx & Iva Xxx Xxxxxxx 4,465
Xxxxx Xxxxxxxx 11,900
Xxxxxx Xxxxx 5,000
Xxxxxx Xxxxx 5,000
Xxxxxxxx X. Xxxxxxx Trust 5,000
Xxxxxx X. Xxxxx 2,780
Harbus Investors, Inc. 13,890
Xxxxxxxxx Xxxxxxx 10,000
Xxxxx & Xxxxx Xxxxxx 5,000
Xxxxx Xxxxx 1,275
Xxxxxx X. Xxxxx 1,275
Xxxx Xxxxx 1,275
Xxxxxxx Xxxxxxx 10,000
X.X. Xxxxxxx 4,250
Xxxxx Xxxx 10,000
Lincoln Xxxxxxxxx 9,435
Xxxxxx Xxxxxx 255
L. Xxxxx XxXxxx 10,000
Xxxxxxx Xxxxxxx 3,060
Xxxxxx X. Xxxxx 2,000
Xxxxx X. Xxxxxxx 6,600
Xxxxxxxxx X. Xxxxxxx 20,000
Xxxxx X. Xxxxxxx 16,200
Xxxxxxx X. Xxxxxx 10,000
Xxxx X. Xxxxxx 10,000
Xxxxxx X. Xxxxxx, as Settlor
under Declaration of Trust 18,165
Xxxxxx X. Xxxxxx 10,000
Xxxxxxx & Xxxxx Xxxxxxx 7,000
M&T Capital Corporation 515,555
Xxxxx X. Xxxx 4,330
Xxxxxx X. Xxxxxx 5,000
Xxxxxxx X. Xxxxxxxx 3,315
0000-0000 Xxxx Xxxxx Xxxx, Inc. 6,445
Xxxxx Sherdlower 10,000
Xxxxxx Xxxxxxxx 1,275
Xxxx X. Xxxxxx, Trustee 2,555
Xxxxx Xxxxxx 15,000
Xxxx X. Xxxxxx 2,000
Xxxxxx X. Xxxxxx 4,000
-------
Total 850,000
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SCHEDULE II
Name Number of Shares
---- ----------------
X.X. Xxxxxxx & Sons, Inc. 815,000
Xxxxxxx Xxxxx & Associates, Inc. 815,000
Alex. Xxxxx & Sons Incorporated 49,000
Credit Lyonnais Securities (USA) Inc. 49,000
Xxxxxx, Read & Co. Inc. 49,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities 49,000
Xxxxxx Brothers 49,000
Xxxxxxxxxxx & Co. Inc. 49,000
PaineWebber Incorporated 49,000
Prudential Secuities Incorporated 49,000
Advest Inc. 24,500
Xxxxxxxxxx & Co. Inc. 24,500
First Albany Corporation 24,500
First of Michigan Corp. 24,500
Xxxxxxx, Xxxxxx Inc. 24,500
Xxxxxx Xxxxxxxxxx Xxxxx Inc. 24,500
Ladenburg Xxxxxxxx & Co. Inc. 24,500
Xxxx Xxxxx Xxxx Xxxxxx Inc. 24,500
XxXxxxxx & Co. Securities Inc. 24,500
Mesirow Financial Inc. 24,500
Xxxxxx Xxxxxx & Co. Inc. 24,500
Xxxxxxx & Co. 24,500
Xxxxxxxxx Xxxxxx, LLC 24,500
Pennsylvania Merchant Group Ltd. 24,500
Xxxxxx Xxxxxxx Inc. 24,500
Wheat First Securities 24,500
X.X. Xxxx & Associates, Inc. 12,000
Starr Securities Inc. 12,000
Xxx Xxxxxx & Co. 12,000
---------
Total 2,450,000
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SCHEDULE III
Pursuant to Section 6(g) of the Underwriting Agreement, KPMG Peat
Marwick, LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company within the meaning of the Act and the applicable Rules and
Regulations thereunder.
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included in the Prospectus or the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Act and the applicable Rules and Regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants ("AICPA") of the unaudited interim financial statements,
selected financial data, pro forma financial information, prospective
financial statements and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been furnished to the Representatives of the Underwriters (the
"Representatives").
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, performing the procedures specified by the AICPA for a
review of interim financial information as discussed in SAS No. 71, Interim
Financial Information, on the latest available interim financial statements
of the Company, inspection of the minute books of the Company since the
date of the latest audited financial statements included in the Prospectus,
inquiries of officials of the Company responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) any material modifications should be made to the unaudited
statements of consolidated income, statements of financial position
and statements of consolidated cash flows included in the Prospectus
for them to be in conformity with generally accepted accounting
principles, or the unaudited statements of income, statements of
consolidated financial position and statements of cash flows included
in the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations thereunder.
-33-
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items
in the unaudited financial statements from which such data and items
were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited financial statements included in
the Prospectus.
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included in the Prospectus.
(D) any unaudited pro forma condensed financial statements included in
the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of
those statements.
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the capital stock or
any increase in the long-term debt of the Company, or any decreases in
working capital, net current assets or net assets or other items
specified by the Representatives, or any changes in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter.
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in
Clause (E) there were any decreases in net revenues or operating
profit or the total or per share amounts of net income or any other
changes in any other items specified by the Representatives, in each
case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for changes, decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter.
(iv) In addition to the audit referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iii) above, they
have carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
-34-
of the Company for the periods covered by their reports and any interim or
other periods since the latest period covered by their reports, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representative, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and have found them to be in
agreement.
-35-
