AFC CABLE SYSTEMS, INC.
2,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
Boston, Massachusetts
____________, 1997
XXXXXX XXXXXXX INCORPORATED
XXXXXX X. XXXXX & CO. INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
c/o Xxxxxx Xxxxxxx Incorporated
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
AFC Cable Systems, Inc., a Delaware corporation (the "Company"), and
certain shareholders of the Company named in Schedule B hereto (the "Selling
Shareholders") confirm their agreement with Xxxxxx Xxxxxxx Incorporated ("Xxxxxx
Xxxxxxx"), Xxxxxx X. Xxxxx & Co., Incorporated ("Baird") and The
Xxxxxxxx-Xxxxxxxx Company, Inc. (" Xxxxxxxx-Xxxxxxxx"), and each of the other
underwriters, if any, named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 9), for whom Xxxxxx Xxxxxxx, Xxxxx and
Xxxxxxxx-Xxxxxxxx are acting as representatives (in such capacity, Xxxxxx
Xxxxxxx, Xxxxx and Xxxxxxxx-Xxxxxxxx are herein referred to as "you" or the
"Representatives"), with respect to the sale by the Company and the Selling
Shareholders and the purchase by the Underwriters, acting severally and not
jointly, of an aggregate of 2,000,000 shares of the Common Stock, $.01 par value
per share (the "Common Stock"), of the Company, of which 1,200,000 shares are to
be sold by the Company and 800,000 shares are to be sold by the Selling
Shareholders (collectively, the "Firm Shares"), and with respect to the grant by
the Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase from the Company all or any part of
300,000 additional shares of Common Stock for the purpose of covering
over-allotments, if any. The Firm Shares and all or any part of the shares of
Common Stock subject to the option described in Section 2(b) hereof (the
"Optional Shares") are hereinafter collectively referred to as the "Stock."
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Underwriting
Agreement (this "Agreement") on behalf of the several Underwriters, and (b) that
the several Underwriters are willing, acting severally and not jointly, to
purchase the numbers of Firm Shares set forth opposite their respective names in
Schedule A, plus their pro rata portion of the Optional Shares if you elect to
exercise the over-allotment option, in whole or in part, for the accounts of the
several Underwriters.
The following terms, when used in this Agreement, shall have the meanings
indicated: "Commission" means the Securities and Exchange Commission;
"Securities Act" means the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder (the "Rules"); "Exchange Act" means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder; "Effective Date" means each date that the Registration
Statement (as defined herein) or any post-effective amendment or amendments to
the Registration Statement became or become effective; "Execution Time" means
the date and the time that this Agreement is executed and delivered by the
parties hereto; "Preliminary Prospectus" means any preliminary prospectus
referred to in Section 1(a) below with respect to the offering of the Stock, and
any preliminary prospectus included in the Registration Statement at the
Effective Date that omits Rule 430A Information (as defined below).
"Prospectus" means the final prospectus containing the Rule 430A Information;
"Registration Statement" means the registration statement referred to in
Section 1(a) below, including exhibits and financial statements and schedules,
in the form in which it has or shall become effective and, if any post-effective
amendment thereto becomes effective before any Closing Date (as defined in
Section 3), shall also mean such registration statement as so amended on such
date;. "Rule 430A Information" means information with respect to the Stock and
the offering thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A. Any reference herein to the
Registration Statement, the Prospectus, any amendment or supplement thereto or
any Preliminary Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing of any document
with the Commission deemed to be incorporated by reference therein. Such terms
shall also include Rule 430A Information deemed to be included therein at the
Effective Date, as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules under the Securities Act.
1. Representations, Warranties and Agreements of the Company and the Selling
Shareholders.
(a) The Company represents and warrants to, and agrees with, each of the
Underwriters as of the date hereof and as of each Closing Date, as defined
in Section 3(b) hereof, as follows:
(i) The Company meets the requirements for the use of Form S-3 under
the Securities Act, and has filed with the Commission a registration
statement, including related preliminary prospectuses, on Form S-3
(No. 333-____) for the registration of the Stock under the Securities
Act. The Company may have filed one or more amendments to the
Registration Statement, including the related Preliminary
Prospectuses. Copies of such Registration Statement and each such
amendment to such Registration Statement, each such Preliminary
Prospectus, each document incorporated by reference therein and each
exhibit to the Registration Statement and documents incorporated by
reference therein have been delivered to you. The Company will next
file with the Commission either, before effectiveness of the
Registration Statement, a further amendment thereto (including the
form of final prospectus) or, after effectiveness of the Registration
Statement, the Prospectus in accordance with Rules 430A and 424(b)(1)
or (4). As filed, such amendment and form of final prospectus, or
such Prospectus shall include all Rule 430A Information and, except to
the extent you agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus)
as the Company has advised you in writing, prior to the Execution
Time, will be included or made therein.
(ii) Each Preliminary Prospectus, when filed, complied and conformed
in all material respects with the applicable requirements of the
Securities Act and the Rules and did not include any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading. The Commission has not issued any order suspending or
preventing the use of any Preliminary Prospectus or instituted
proceedings for that purpose. On the Effective Date, the Registration
Statement did or will, and when the Prospectus is first filed (if
required) in accordance with Rule 424(b), and on each Closing Date,
the Prospectus (and any supplements thereto) will, comply and conform
in all material respects with the applicable requirements of the
Securities Act and the Rules; on the Effective Date and each Closing
Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, and the Prospectus, on the
Effective Date, if not filed pursuant to Rule 424(b), did not or will
not, and on the date of any filing pursuant to Rule 424(b) and on each
Closing Date, the Prospectus (and any supplements thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which there were made, not
misleading. The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any Preliminary Prospectus, when they became or become
effective under the Securities Act or were or are filed with the
Commission under the Exchange Act, as the case may be, conformed or
will conform in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules, and
as of the date any such document was or is filed with the Commission
under the Exchange Act such document did not omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, provided, however, that the Company makes no
representations or warranties as to information contained in the
section entitled "Underwriting" contained in the Registration
Statement and in the Prospectus, in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of
any Underwriter through the Representatives, specifically for use in
the preparation thereof..
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(iii) The accountants whose report appears in the Prospectus are
independent accountants as required by the Securities Act and the
Rules. The financial statements and schedules (including the related
notes) included in the Registration Statement, any Preliminary
Prospectus or the Prospectus, present fairly the financial condition,
results of operations and cash flows of the entities purported to be
shown thereby at the dates and for the periods indicated and have been
prepared in accordance with the Rules and generally accepted
accounting principles applied on a consistent basis throughout the
periods indicated, and all adjustments thereto necessary for a fair
presentation of the results for such periods have been made. The
financial and other information of the Company set forth in the
Prospectus under the captions "Summary Financial Data",
"Capitalization", "Selected Financial Data" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" fairly present, on the basis stated in the Prospectus, the
information included therein. Neither the Company nor any of the
Subsidiaries, as defined in Section 1(a)(v) hereof, has any material
contingent obligation which is not disclosed in the Registration
Statement.
(iv) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with full power and authority (corporate and other) to own or lease
its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business and is in good
standing in each jurisdiction in which such qualification is required
except for such jurisdictions where the failure to so qualify would
not have a material adverse effect on the business, results of
operations, prospects, condition (financial or otherwise) or material
assets or properties of the Company and the Subsidiaries, taken as a
whole.
(v) The subsidiaries of the Company listed in Exhibit 21.1 to the
Annual Report on Form 10-K of the Company for the year end
December 31, 1996 as filed with the Commission (the "1996 Form 10-K")
and incorporated by reference in the Registration Statement (the
"Subsidiaries") have been duly organized and are validly existing as
corporations in good standing under the laws of their respective
states of incorporation, with full power and authority (corporate and
other) to own or lease their respective properties and conduct their
respective businesses as described in the Prospectus, and are duly
qualified to do business and are in good standing in each jurisdiction
in which such qualification is required except for such jurisdictions
where the failure to so qualify would not have a material adverse
effect on the business, results of operations, prospects, condition
(financial or otherwise) or material assets or properties of the
Company and the Subsidiaries, taken as a whole.
(vi) The capitalization of the Company at December 31, 1996 is as set
forth under the caption "Capitalization" in the Prospectus, and the
Common Stock conforms to the description thereof contained under the
caption "Description of Capital Stock" in the Prospectus. The Stock
conforms in all respects to statements with respect thereto contained
in the Registration Statement and the Prospectus. All outstanding
shares of Common Stock have been, and the Stock (upon delivery and
payment therefor in the manner described in this Agreement) will be,
duly authorized, validly issued, fully paid and nonassessable with no
personal liability attaching to the ownership thereof and none of the
shares of Common Stock have been and the Stock will not be issued in
violation of any preemptive or similar right. Except as disclosed in
the Prospectus, there are no preemptive rights, rights of first
refusal or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company's Restated Certificate of Incorporation, as
amended, Bylaws or other governing documents or any agreement or other
instrument to which the Company or any Subsidiary is a party or by
which any of them or any of their properties may be bound. Except as
disclosed in the Registration Statement and the Prospectus, there are
no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, or agreements or understandings
with respect to the sale or issuance of, any shares of capital stock
of the Company.
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(vii) All of the outstanding shares of capital stock of the
Subsidiaries are owned by the Company, free and clear of any claim,
lien, encumbrance, equity, security interest or other restriction
whatsoever. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
those listed in Exhibit 21.1 to the 1996 Form 10-K.
(viii) Except as waived, no holder of any security of the Company
has the right to have any security owned thereby included in the
Registration Statement, or to demand registration of any security
owned thereby, during the period ending 180 days after the date of the
Prospectus. Each director and executive officer of the Company, each
Selling Shareholder who is not also a director or executive officer
and each of the prior stockholders of B&B Electronics Manufacturing
Company, Inc. ("B&B") has delivered to the Representatives such
person's enforceable written agreement that such person will not, for
a period of 180 days after the date of the Prospectus, transfer or
otherwise dispose of, or offer or contract to sell, offer to otherwise
dispose of, directly or indirectly, any Common Stock or any rights to
purchase or acquire Common Stock, or any securities convertible into
or exchangeable for Common Stock, without the prior written consent of
Xxxxxx Xxxxxxx and Sutro & Co. Incorporated has delivered to the
Representatives their enforceable written agreement that they will not
for a period of 180 days after the date of the Prospectus, transfer or
otherwise dispose of any Warrant Shares (as defined in those certain
Warrants delivered by the Company to such parties in connection with
the Company's Initial Public Offering) without the prior written
consent of Xxxxxx Xxxxxxx.
(ix) Except as disclosed in the Registration Statement and the
Prospectus, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (A) neither
the Company nor any Subsidiary has incurred any liabilities or
obligations other than in the ordinary course of business, direct or
contingent, or entered into any transactions, material, individually
or in the aggregate, to the Company and the Subsidiaries, taken as a
whole; (B) there has not been any change in the capital stock of the
Company, including but not limited to, any payment or declaration of
any dividends or any other distribution with respect to any shares of
the capital stock of the Company; (C) there has not been any material
adverse change or any development involving a prospective material
adverse change in the business, results of operations, prospects,
condition (financial or otherwise) or material assets or properties of
the Company and the Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business and
whether or not covered by insurance.
(x) None of the execution or delivery hereof or consummation of the
transactions contemplated pursuant to this Agreement, including,
without limitation, the issuance, sale and delivery of the Firm Shares
and the Optional Shares, if any, to be sold by the Company, will
result in a violation of, conflict with, or constitute a default
under, or require consent or waiver under or cause acceleration or
give any party the right to cause acceleration of, the Company's
obligations under its Restated Certificate of Incorporation, as
amended, Bylaws or other governing documents, or any material
agreement, indenture, mortgage, deed of trust, note or other
instrument to which the Company or any Subsidiary is a party or by
which any of them is bound, or to which any of their respective
properties is subject, violate any law, rule, administrative
regulation or decree of any court or any governmental agency or body
having jurisdiction over the Company, any Subsidiary, or any of their
respective properties, or result in the creation or imposition of any
material lien, charge, encumbrance, security interest, claim or other
restriction of any nature whatsoever upon any property or asset of the
Company or any Subsidiary. Except for permits and similar
authorizations required under the Securities Act and the securities or
Blue Sky laws of certain jurisdictions and the National Association of
Securities Dealers, Inc. (such permits and authorizations having been
obtained), no consent, approval, authorization or order of any court,
governmental agency or body, financial institution or other person or
entity is required in connection with the consummation of the
transactions contemplated pursuant to this Agreement.
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(xi) Neither the Company nor any Subsidiary is, nor with the giving of
notice or lapse of time or both would be (A) in violation of or in
default under, any material agreement, indenture, mortgage, deed of
trust, note or other instrument to which the Company or any Subsidiary
is a party or by which either is bound, or to which any of their
respective properties is subject, (B) in violation of any term or
provision of its Restated Certificate of Incorporation or Bylaws, or
(C) in violation of, or in default with respect to, any law, rule,
regulation, order, judgment or decree applicable to the Company, the
violation of which, individually or in the aggregate, would have a
material adverse effect upon the business, results of operations,
prospects, condition (financial or otherwise) or material assets or
properties of the Company and the Subsidiaries, taken as a whole.
(xii) Each of the Company and the Subsidiaries has filed all
federal, state, local and foreign tax returns that are required to be
filed or has received valid extensions with respect thereto and has
paid all taxes and all assessments to the extent that the same have
become due except for assessments being contested in good faith and
for which full reserves have been established. No tax assessment or
deficiency has been made or proposed against the Company or any
Subsidiary, nor has the Company or any Subsidiary received any notice
of any proposed assessment or deficiency. The charges, accruals and
reserves shown in the financial statements included in the
Registration Statement and the Prospectus in respect of taxes for all
fiscal periods to date are adequate based on current law. There is no
unpaid assessment or, to the Company's knowledge, proposal by any
taxing authority for additional taxes for which the Company or any
Subsidiary does not have adequate reserves for any fiscal year.
(xiii) With such exceptions as are not material or have been
disclosed in the Registration Statement and the Prospectus, (A) each
of the Company and the Subsidiaries is in compliance with all
applicable federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants,
and (B) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge or disposal of any
chemicals, pollutants, contaminants, wastes, toxic substances or
petroleum products, that might reasonably be expected to result in the
imposition of liability on the Company or any Subsidiary.
(xiv) Except as disclosed in the Registration Statement and the
Prospectus, there is no litigation, arbitration, action, suit,
proceeding or investigation before or by any court or by any public,
regulatory or governmental agency, body or board, domestic or foreign,
pending or threatened or contemplated against, or involving the
assets, properties or business of or otherwise affecting, the Company
or any Subsidiary which (A) if determined adversely to the Company,
could have, individually or in the aggregate, a material adverse
effect on the value or the operation of any such assets or properties,
or on the business, results of operations, prospects, condition
(financial or otherwise) or material assets or properties of the
Company and the Subsidiaries, taken as a whole, or (B) might prevent
the consummation of the transactions contemplated by this Agreement.
The aggregate of all pending legal, governmental and regulatory
proceedings to which the Company or any Subsidiary is a party or which
affect any of their respective properties and which are not described
in the Registration Statement and the Prospectus, including, without
limitation, ordinary routine litigation incidental to the business of
the Company or any Subsidiary, would not reasonably be expected to
have a material adverse effect on the business, results of operations,
prospects, condition (financial or otherwise) or material assets or
properties of the Company and the Subsidiaries, taken as a whole.
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(xv) Each of the Company and the Subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
(collectively, "Permits") of and from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file
would not individually or in the aggregate have a material adverse
effect on the Company and the Subsidiaries, taken as whole.
(xvi) All executed agreements or copies of executed agreements
filed or incorporated by reference as exhibits to the Registration
Statement to which the Company or any of the Subsidiaries is a party
or by which any of them may be bound or to which any of their
respective assets, properties or businesses may be subject have been
duly and validly authorized, executed and delivered by the Company and
such Subsidiaries, and, assuming due authorization, execution and
delivery by the other parties thereto, constitute the legal, valid and
binding agreements of the Company and such Subsidiaries enforceable
against the Company and such Subsidiaries in accordance with their
respective terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application relating to or affecting enforcement of
creditors' rights and the application of equitable principles in any
action, legal or equitable, and except as rights to indemnity or
contribution may be limited by applicable law). The descriptions in
the Registration Statement of contracts and other documents are
accurate in all material respects, and there are no contracts or other
documents that are required by the Securities Act to be described in
the Registration Statement or filed or incorporated by reference as
exhibits to the Registration Statement that are not described or filed
or incorporated by reference as required, and the exhibits that have
been filed or incorporated by reference are complete and correct
copies of the documents of which they purport to be copies.
(xvii) Each of the Company and the Subsidiaries owns or possesses
adequate licenses or other rights to use all patents, patent
applications, copyrights, copyright applications, trademarks,
trademark applications, service marks, trade names and other know-how,
proprietary knowledge, and similar intellectual property
(collectively, "Intangibles") necessary for the conduct of its
business as described in the Registration Statement and the Prospectus
and neither the Company nor any Subsidiary has received any notice of
infringement or conflict with (or knows of any infringement or
conflict with) asserted rights of others with respect to any
Intangibles.
(xviii) Each of the Company and the Subsidiaries has good and
marketable title to all items of real property and good and marketable
title to all personal property owned by it, in each case clear of all
liens, encumbrances and defects except as are disclosed in the
Registration Statement and the Prospectus or as do not materially
affect the value of such property and do not interfere with the use
made or proposed to be made or proposed to be made of such property by
the Company or any Subsidiary. Any real or personal property or
buildings held under lease by the Company or a Subsidiary are held by
it under valid, existing and enforceable leases with such exceptions
as are not material and do not interfere with the use made or proposed
to be made of such property or buildings.
6
(xix) Each of the Company and the Subsidiaries has insurance or
indemnity agreements with financially responsible insurers of the
types and in the amounts adequate for its business and consistent with
insurance or indemnity coverage maintained by companies of similar
size and engaged in similar businesses.
(xx) Neither the Company nor any Subsidiary, nor any of their
respective officers, directors or affiliates has taken or will take,
directly or indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the
Company.
(xxi) The Stock is authorized for quotation on the National
Association of Securities Dealers Automated Quotation System National
Market System ("NASDAQ NMS"). Quotations and last sale data with
respect to the Company's Common Stock are reported on the NASDAQ-NMS
under the symbol "AFCX" and the Company knows of no currently existing
reason or set of facts which is likely to result in the inability or
refusal to quote the Common Stock or the Stock.
(xxii) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes the
valid and binding agreement of the Company and is enforceable against
the Company in accordance with its terms except to the extent that
rights to indemnity under this Agreement may be limited by federal or
state securities laws and except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally. The Registration
Statement and the filing of the Registration Statement with the
Commission have been duly authorized by and on behalf of the Company,
and the Registration Statement has been duly executed pursuant to such
authorization by and on behalf of the Company.
(xxiii) Except as contemplated by this Agreement or as disclosed in
the Registration Statement or the Prospectus, no person has the right
to any payment in connection with the sale of the Stock resulting from
any acts of the Company or any Subsidiary.
(xxiv) Except as disclosed in the Registration Statement and the
Prospectus, no transaction has occurred between or among the Company
or any Subsidiary, on the one hand, and any of the Company's or any
Subsidiary's officers or directors or any affiliate or affiliates of
any such officer or director, on the other hand, that is required to
be so disclosed, including, but not limited to, any outstanding loans,
advances or guaranties of indebtedness by the Company or any
Subsidiary to or for the benefit of any affiliates of the Company or
any Subsidiary or any of the officers or directors of the Company or
any Subsidiary, or any family member of any of them.
(xxv) Neither the Company, any Subsidiary nor any officers or
directors, acting on behalf of the Company or any Subsidiary has at
any time (A) made any payment outside the ordinary course of business
to any purchasing or selling agent or person charged with similar
duties of any entity to which the Company or any Subsidiary sells or
from which the Company or any Subsidiary buys products for the purpose
of influencing such agent or person to buy products from or sell
products to the Company or any Subsidiary, or (B) except as set forth
in the Registration Statement and Prospectus, engaged in any
transaction, maintained any bank account or used any corporate funds
except for transactions, bank accounts and funds which have been and
are reflected in the normally maintained books and records of the
Company or any Subsidiary.
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(xxvi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general
or specific authorization, (B) transactions are recorded as necessary
in order to permit preparation of financial statements in accordance
with generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization, or
(D) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxvii) Except as disclosed in the Registration Statement and
Prospectus, no labor problem exists with the Company's employees or
with employees of any Subsidiary or is imminent that could adversely
affect the Company and the Subsidiaries, taken as a whole, except for
grievances that have been made, none of which individually or in the
aggregate, if adversely determined, would reasonably be expected to
materially adversely affect the Company and the Subsidiaries, taken as
a whole, and there is no existing or imminent labor disturbance by the
employees of any of the Company's or any Subsidiary's principal
suppliers, contractors or customers that would have a material adverse
effect on the Company and the Subsidiaries, taken as a whole.
(xxviii) 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 failure to act, which would cause the loss of
such qualification.
(xxix) The Company has not distributed and will not distribute any
offering material in connection with the offering and sale of the
Shares, other than the Prospectus, any Preliminary Prospectus, the
Registration Statement and other materials permitted by the Securities
Act.
(xxx) Neither the Company nor any Subsidiary is an investment
company or controlled by an investment company within the meaning of
the Investment Company Act of 1940, as amended or an investment
adviser within the meaning of the Investment Advisers Act of 1940, as
amended.
Any certificates signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall also be deemed a
representation and warranty of the Company to the Underwriters as to the
matters covered thereby. Any certificate delivered by the Company to its
counsel for purposes of enabling such counsel to render the opinions
referred to in Section 6(f) will also be furnished to the Underwriters and
counsel for the Underwriters and shall be deemed to be additional
representations and warranties by the Company to the Underwriters as to the
matters covered thereby.
(b) Each of the Selling Shareholders severally represents and warrants to
and agrees with, each of the Underwriters and the Company as of the
date hereof and as of each Closing Date, as defined in Section 3(b)
hereof as follows:
(i) Such Selling Shareholder owns the Stock to be sold by such
Selling Shareholder, free of any liens, encumbrances, equities and
claims, and has full right, power and authority to effect the sale and
delivery of such Stock; and upon the delivery of and payment for such
Stock pursuant to this Agreement, ownership thereof, free of any
liens, encumbrances, equities and claims, will be transferred to the
several Underwriters.
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(ii) No consents, approvals, authorizations and orders of any court or
regulatory body is necessary for the execution and delivery by such
Selling Shareholder of this Agreement, the Power of Attorney and
Custody Agreement (as hereafter defined) and for the sale and delivery
of the Stock to be sold by such Selling Shareholder hereunder (except
such consents and authorizations as may be required under the
Securities Act, state securities laws or Blue Sky Laws in connection
with the public offering of the Shares, have been obtained. Such
Selling Shareholder has full right, power and authority to enter into
this Agreement and the Power of Attorney and Custody Agreement and to
sell, assign, transfer, and deliver the Stock to be sold by such
Selling Shareholder hereunder. This Agreement and the Power of
Attorney and Custody Agreement have been duly executed and delivered
by such Selling Shareholder, and each such document is a valid,
binding and legally enforceable obligation of such Selling Shareholder
in accordance with its terms, except insofar as rights to indemnity or
contribution hereunder may be limited by federal or state securities
laws and except as limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or
limiting creditors' rights generally.
(iii) Neither the sale of Stock to be sold by such Selling
Shareholder hereunder, nor the execution, delivery and performance of
this Agreement and the Power of Attorney will result in a breach or
violation of any material term or provision of, or constitute a
default under any statute (to the best of such Selling Shareholder's
knowledge), any material (individually or in the aggregate) indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder is bound, or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over such
Selling Shareholder or over any of such Selling Shareholder's
properties.
(iv) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the
Company. Such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection
with the offering and sale of the Stock.
(v) Each Selling Shareholder listed in Schedule C hereto (a
"Principal Selling Shareholder") has no reason to believe that the
representations and warranties of the Company contained in this
Section 1 are not true and correct, is familiar with the Registration
Statement and has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement which has
adversely affected or may adversely affect the business of the Company
or any of the Subsidiaries; and the sale of the Firm Shares by such
Selling Shareholder pursuant hereto is not prompted by any information
concerning the Company or any of the Subsidiaries which is not set
forth in the Registration Statement.
(vi) Certificates in negotiable form representing all of the Stock to
be sold by such Selling Shareholder hereunder have been placed in
custody under a Custody Agreement ("Custody Agreement"), which Custody
Agreement has been duly executed and delivered by such Selling
Shareholder to The First National Bank of Boston, as custodian
("Custodian"), and such selling stockholder has executed a Power of
Attorney ("Power of Attorney") which appoints Xxxxxxx X. Xxxxxx and
Xxxxx X. Xxxxxxx, as such Selling Shareholder's attorney-in-fact
("Attorney-In-Fact") with 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 3 hereof, to authorize the
delivery of the Stock to be sold by such Selling Shareholder
hereunder, and otherwise to act on behalf of such Selling Shareholder
in connection with the transactions contemplated by this Agreement and
the Custody Agreement.
9
(vii) The Stock represented by the certificates held in custody
for such Selling Shareholder under the Custody Agreement are subject
to the interests of the Underwriters hereunder. The arrangements made
by such Selling Shareholder under such Custody Agreement, and the
appointment by such Selling Shareholder of the Attorney-In-Fact by the
Power of Attorney, are irrevocable. The obligations of a Selling
Shareholder shall not be terminated by any act or deed of the Selling
Shareholder or operation of law or the occurrence of any event
whatsoever, including but not limited to the death, incompetency or
other disability of the Selling Shareholder; or, in the case of a
trust, the death, incapacitation, resignation or removal of any
trustee or trustees or the termination of such trust; or, in the case
of any estate, the death, incapacitation, resignation or removal of
any executor or administrator. If any such event should occur, before
the delivery of the Stock hereunder, certificates representing the
Stock shall be delivered on behalf of such Selling Shareholder in
accordance with the terms and conditions of this Agreement and of such
Power of Attorney, and all actions taken by such Attorney-In-Fact
pursuant to the Power of Attorney shall be as valid as if such event
had not occurred, regardless of whether or not the Custodian, the
Attorney-In-Fact, or any of them, shall have received notice of such
event.
2. Purchase and Sale of Securities.
(a) On the basis of the representations, warranties, covenants and
agreements contained in this Agreement, but subject to the terms and
conditions herein set forth, the Company and the Selling Shareholders agree
to sell the Firm Shares to the several Underwriters. Each of the
Underwriters agrees, severally and not jointly, to purchase from the
Company and the Selling Shareholders, at a purchase price of $_____ per
share (the "Initial Price"), the number of Firm Shares set forth opposite
the name of such Underwriter on Schedule A hereto plus any additional
number of Firm Shares that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 9 hereof. The number of
Firm Shares to be purchased by each Underwriter from the Company and each
Selling Stockholder shall be as nearly as practicable in the same
proportion to the total number of Firm Shares being sold by the Company and
each Selling Stockholder as the number of Firm Shares being purchased by
each Underwriter bears to the total number of Firm Shares to be sold
hereunder. The obligations of the Company and of each of the Selling
Shareholders shall be several and not joint.
(b) In addition, upon written notice from you to the Company not more than
once within thirty (30) days after the date of the Prospectus, and on the
basis of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase from the Company the number of
Optional Shares (which may be some or all of the Optional Shares) specified
in such notice at the purchase price per share set forth in Section 2(a) in
the same proportion as the number of Firm Shares set forth opposite such
Underwriter's name in Schedule A hereto bears to the total number of Firm
Shares (subject to adjustment by you to eliminate fractions). The Optional
Shares may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Shares. No Optional Shares shall be sold or delivered unless the Firm
Shares previously have been, or simultaneously are, sold and delivered, and
if the Optional Shares are to be purchased on the First Closing Date the
written notice from you must be delivered at least two business days prior
to the First Closing Date. The right to purchase the Optional Shares or
any portion thereof may be surrendered and terminated at any time upon
notice by you to the Company.
3. Delivery of and Payment for Stock.
(a) Delivery by the Company and the Custodian of the Firm Shares to you
for the respective accounts of the Underwriters shall be made at the
offices of Xxxxxx Xxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx at
10:00 a.m., Boston time, on the fourth business day following the date of
this Agreement (unless postponed pursuant to Section 8 or 9 hereof), or at
such other place, time and on such other date, not later than 10 business
days after the date of this Agreement, as shall be agreed upon by you and
the Company (such time and date of delivery being referred to herein as the
"First Closing Date"). Payment of the purchase price for the Firm Shares
shall be by wire transfer in immediately available funds to the Company for
the Firm Shares sold by the Company and to the Custodian (in such names as
the Custodian may request) for the Firm Shares sold by the Selling
Shareholders in each case against delivery of certificates therefore.
10
(b) In the event the option with respect to the Optional Shares is
exercised, delivery by the Company of the Optional Shares to you for the
respective accounts of the Underwriters shall be made at the offices of
Xxxxxx Xxxxxxx specified in paragraph (a) of this Section 3 at the time and
on the date (which may be the same date as, but in no event shall be
earlier than, the First Closing Date) set forth in the notice referred to
in Section 2(b) hereof (such time and date of delivery being referred to
herein as an "Option Closing Date"). Payment of the purchase price for the
Optional Shares shall be by wire transfer in immediately available funds to
the Company for the Optional Shares sold by the Company against delivery of
certificates therefor. The First Closing Date and the Option Closing Date
are collectively referred to herein as the "Closing Date").
(c) Certificates evidencing the Stock shall be in definitive, fully
registered form, shall bear no restrictive legends and shall be registered
in such names and shall be in such denominations as the Representatives
shall request at least two full business days prior to the First Closing
Date or, in the case of Optional Shares, on the day of each notice of
exercise of the option to purchase Optional Shares set forth in
Section 2(b) hereof and shall be made available to you for checking and
packaging, at such place as is designated by you, on the second full
business day before the First Closing Date or, in the case of Optional
Shares, each Subsequent Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Stock for sale to the public as set forth in the
Prospectus.
5. Certain Agreements of the Company and the Selling Shareholders.
(a) The Company covenants and agrees with each Underwriter that:
(i) The Company will use its best efforts to cause the Registration
Statement, and any amendment thereof, if not effective at the
Execution Time, to become effective as promptly as possible. If the
Registration Statement has become or becomes effective pursuant to
Rule 430A, or filing of the Prospectus is otherwise required under
Rule 424(b), the Company will file the Prospectus, properly completed,
pursuant to Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such timely filing. The
Company will promptly advise you (A) when the Registration Statement
shall have become effective, (B) when any amendment thereof shall have
become effective, (C) of any request by the Commission for any
amendment or supplement of the Registration Statement or the
Prospectus or for any additional information, (D) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose and (E) of the receipt by the Company of
any notification with respect to the suspension of the qualification
of the Stock for sale in any jurisdiction or the initiation or
threatening of such stop order or suspension and, if issued, to obtain
as soon as possible its withdrawal. The Company will not file any
amendment to the Registration Statement or supplement to the
Prospectus without your prior consent. The Company shall prepare and
file with the Commission, promptly upon your request, any amendment to
the Registration Statement or supplement to the Prospectus that may be
necessary or advisable in connection with the distribution of the
Stock by you, and use its best efforts to cause the same to become
effective as promptly as possible.
11
(ii) The Company shall, during the period of time when a Prospectus
relating to the Stock is required to be delivered under the Securities
Act and the Rules, comply with all requirements imposed by the
Securities Act and the Rules as is necessary to permit the continuance
of sales of or dealings in the Stock in accordance with the provisions
hereof and of the Prospectus. The Company consents to the use of the
Prospectus included in the Registration Statement or any amendment or
supplement thereto by the several Underwriters and by all dealers to
whom the Stock may be sold, in connection with the offering or sale of
the Stock and for such period of time thereafter as the Prospectus is
required by law to be delivered in connection therewith.
(iii) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to
its security holders in the manner contemplated by Rule 158(b) of the
Securities Act an earning statement covering a period of at least
12 months beginning after the Effective Date that will satisfy the
provisions of Section 11(a) of the Securities Act. For purposes of
the preceding sentence, "Availability Date" means the 45th day after
the end of the fourth fiscal quarter following the fiscal quarter that
includes the Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(iv) The Company will furnish to you copies of the Registration
Statement (three of which will be signed and will include all
exhibits), each Preliminary Prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available in such quantities as you reasonably request.
(v) The Company will cooperate with the Underwriters and counsel to
the Underwriters to arrange for the qualification of the Stock for
sale under the laws of such jurisdictions as you designate and will
continue such qualifications in effect so long as required for the
distribution of the Stock, except that in connection therewith the
Company shall not be required to qualify as a foreign corporation or
to execute a general consent to service of process in any
jurisdiction.
(vi) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the NASDAQ NMS that may
from time to time apply to the Company.
(vii) The Company will apply net proceeds from the offering
received by it in the manner set forth under "Use of Proceeds" in the
Prospectus.
(viii) For a period of five years following the date of this
Agreement, the Company will furnish to you and, upon request, to each
of the other Underwriters, without charge, as soon as available,
(A) copies of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to
the holders of its Common Stock and to furnish to you a copy of each
annual or other report it shall be required to file with the
Commission under the Exchange Act, and (B) from time to time, such
other information of a public nature concerning the Company as you, or
such other Underwriters, may reasonably request.
(ix) Whether or not this Agreement becomes effective or is terminated
or the sale of the Stock to the Underwriters is consummated, the
Company shall pay or cause to be paid (A) all costs and expenses
(including stock transfer or similar taxes) incurred in connection
with the delivery to the several Underwriters of the Stock, (B) all
fees, costs and expenses (including, without limitation, fees and
expenses of the Company's accountants and counsel) in connection with
the preparation, printing, filing, delivery and shipping of the
Registration Statement (including the financial statements therein and
all amendments and exhibits thereto), each Preliminary Prospectus as
amended or supplemented and the delivery and shipping of this
Agreement and other underwriting documents including Blue Sky
Memoranda, and Selected Dealer Agreements, (C) all costs, filing fees,
and expenses, the registration or qualification of the Stock for offer
and sale under the securities or Blue Sky laws of the various
jurisdictions referred to in Section 5(a)(v) herein, including the
fees and disbursements of counsel to the Underwriters in connection
with such registration and qualification and the preparation,
printing, distribution and shipment of preliminary, supplementary and
final Blue Sky Memoranda, (D) the filing fee of the National
Association of Securities Dealers, Inc. ("NASD"), (E) all costs and
expenses incurred in connection with the preparation of materials used
in connection with a "road show" or other presentation to potential
investors, (F) the cost of printing certificates representing the
Stock, (G) the cost and charges of any transfer agent or registrar,
(H) the furnishing (including costs of shipping and mailing) to you
and to the Underwriters of copies of all reports and information
required by Section 5(a)(viii) hereof, and (I) all other costs and
expenses of the Company incident to the performance of its obligations
hereunder that are not otherwise provided for in this Section. To the
extent, if at all, that any Selling Shareholder engages special legal
counsel to represent it in connection with this offering, the fees and
expenses of such counsel shall be borne by such Selling Shareholder,
except as otherwise provided in the registration rights agreements
between the Company and certain Selling Shareholders.
12
(x) So long as the Company's Stock is registered under the Exchange
Act, the Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common
Stock.
(xi) For at least five years after the date of this Agreement, the
Company will use its best efforts to maintain insurance with
financially responsible insurers of the types and in the amounts that
it deems adequate for its business and consistent with insurance
coverage maintained by companies of similar size and engaged in
similar businesses.
(xii) The Company will not register with the Commission, offer,
sell, contract to sell or otherwise dispose of any additional shares
of its Common Stock or any security convertible into or exchangeable
for its Common Stock without the prior written consent of Xxxxxx
Xxxxxxx for 180 days after the date of the Prospectus, except
issuances by the Company pursuant to the grant of options and the
issuance of shares pursuant to the Company's equity-based plans
described in the Registration Statement or copies of which have been
delivered to the Underwriters or their counsel or pursuant to the
exercise of warrants outstanding on the date hereof.
(xiii) The Company will take such steps as shall be necessary to
ensure that neither the Company nor any Subsidiary is an investment
company or controlled by an investment company within the meaning of
the Investment Company Act of 1940, as amended or an investment
adviser within the meaning of the Investment Adviser Act of 1940, as
amended.
(b) Each of the Selling Shareholders covenants and agrees with each
Underwriter that:
(i) They will promptly notify the Representatives of any information
which comes to such Selling Shareholder's attention which would cause
such Selling Shareholder to have reason to believe that his or her
representations, warranties and statements in this Agreement are not
accurate in all material respects.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax
Compliance Act of 1983 with respect to the transactions herein
contemplated, each of the Selling Shareholders agrees to deliver to
you prior to or at the Closing Date a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in lieu
thereof).
13
6. Conditions .. The obligations of the Underwriters to purchase the Firm
Shares and the Optional Shares, as the case may be, at any Closing Date, and the
other obligations of the Underwriters hereunder will be subject, in your
reasonable discretion, to the accuracy of the representations and warranties on
the part of the Company and the Selling Shareholders herein, both at the
Execution Time and at and as of each Closing Date, the accuracy, in your
reasonable discretion, of the statements of Company officers made pursuant to
the provisions hereof, and the timely performance by the Company and the Selling
Shareholders of their obligations hereunder and to the following additional
conditions precedent:
(a) If the Registration Statement is not effective at the time of
execution of this Agreement, the Registration Statement shall have become
effective not later than 5:00 p.m. Boston time on the date of this
Agreement or at such later date and time as you may approve in writing. If
the Company has elected to rely upon Rule 43OA of the Rules, the price of
the Stock and any other information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the
Rules within the prescribed time period, and, prior to the Closing Date,
the Company shall have provided evidence satisfactory to the
Representatives of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the Rules.)
No order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus shall have been made or shall be in effect and no order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no proceeding
for the issuance of such an order shall have been initiated or threatened
by the Commission or any Blue Sky or other securities authority or any
jurisdiction, and any request on the part of the Commission or any Blue Sky
or other securities authority of any jurisdiction for additional
information (to be included in the Registration Statement or Prospectus or
otherwise) shall have been disclosed to you and complied with to the
reasonable satisfaction of you and counsel to the Underwriters.
(b) You shall not have advised the Company that the Registration Statement
or the Prospectus contains an untrue statement of fact which, in your
opinion, is material or omits to state a fact which, in your opinion, is
material or is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) At the Execution Time and at each Closing Date, you shall have
received a letter, dated the date of delivery thereof, of Ernst & Young in
form and substance satisfactory to you, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable Rules and stating in effect that:
(i) The financial statements and schedules audited by them and
included in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and the related Rules;
(ii) The amounts under the headings "Summary Financial Information"
and "Selected Financial Data" included in the Registration Statement
and the Prospectus agree with the corresponding amounts in the audited
and unaudited financial statements of the Company from which such
amounts were derived;
(iii) On the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for review of
interim financial information as described in SAS 71, and a reading of
the latest available unaudited financial statements of the Company and
certain other information, inspection of the minutes of the meetings
of the stockholders and the Board of Directors of the Company,
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company as to transactions
and events subsequent to the date of the latest audited financial
statements included in the Registration Statement and the Prospectus
and such other inquiries and procedures as may be specified in such
letter, nothing came to their attention which caused them to believe
that:
14
(A) As of a specified date not more than five days prior to the
date of delivery of such letter, there were any changes in the
capital stock of the Company or any increase in long-term debt of
the Company, or any decreases in net current assets or
stockholders' equity of the Company, as compared with amounts
shown on the Company's 1996 unaudited financial statements;
(B) For the period from December 31, 1996 to a specified date
not more than five days prior to the date of delivery of such
letter, there were any decreases in combined net sales or
decreases in income from operations or the total or per share
amounts of net income, or any decreases or increases, as the case
may be, in other items specified by you, in each case as compared
with comparable periods in the preceding year, except in each
case for increases or decreases which the Registration Statement
and the Prospectus disclose, have occurred or may occur; and
(C) They have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statement and the Prospectus (in
each case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of the Company or are derived directly from
such records by analysis or computation) with the results
obtained from a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to be
in agreement with such results, except as otherwise specified in
such letter.
(d) You shall have received from Ernst & Young a letter, in accordance
with A.U. Section 9325-Auditing Interpretations of Section 325 (February
1989) of the American Institute of Certified Public Accountants (the
"Interpretation"), stating that in planning and performing their audit of
the audited financial statements included or incorporated by reference in
the Registration Statement, they noted no matters involving the Company's
internal control structure and its operation that they consider to be
material weaknesses as defined in the interpretation.
(e) On each Closing Date, you shall have received a written opinion, dated
such Closing Date, of Ropes & Xxxx, counsel for the Company, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) The Company is a corporation duly organized, validly existing and
in good standing under the laws of Delaware, with corporate power to
own its properties and conduct its business as described in the
Prospectus, and is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the Company maintains an
office or owns or leases property;
(ii) The Subsidiaries are corporations duly organized, validly
existing and in good standing under the laws their respective states
of incorporation, with corporate power to own their respective
properties and conduct their respective businesses, and are duly
qualified and in good standing as foreign corporations in each
jurisdiction in which the Company maintains an office or owns or
leases property; and all of the outstanding shares of capital stock of
the Subsidiaries are owned directly by the Company free and clear of
any claim, lien, encumbrance, equity, security interest or other
restriction;
15
(iii) The Company has all requisite corporate power and authority
to execute and deliver this Agreement, to perform its obligations
under this Agreement, and to issue and sell the Stock;
(iv) This Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Company;
(v) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Capitalization table contained in the
Prospectus for the date set forth thereunder (with the exception of
shares of restricted stock disclosed in the footnote thereto). The
Stock and the other shares of Common Stock issued and outstanding on
the date of such opinion have been, duly authorized and validly issued
and are fully-paid and nonassessable, with no personal liability
attaching to the ownership thereof. The authorized, issued and
outstanding stock of the Company conforms in all material respects to
the statements in relation thereto contained in the Registration
Statement and the Prospectus. The form of Certificate used to
evidence the Stock is in due and proper form. The issuance of the
Stock to the Underwriters is not subject to (A) statutory preemptive
rights or voting or transfer restrictions, (B) preemptive rights or
voting or transfer restrictions under the Company's Restated
Certificate of Incorporation, as amended, or Bylaws or, (C) to such
counsel's knowledge, any contractual preemptive rights or voting or
transfer restrictions (other than pursuant to federal and state
securities laws);
(vi) None of (A) the execution, delivery, and performance of this
Agreement, (B) the consummation of the transactions contemplated by
this Agreement, including, without limitation, the issuance, sale and
delivery of the Firm Shares and the Optional Shares, if any, or
(C) compliance with the terms and provisions of this Agreement will
(1) conflict with or result in a breach or default or require consent
under any agreement listed as an exhibit to the 1996 Form 10-K or the
Registration Statement, (2) violate or conflict with any provisions of
the Restated Certificate of Incorporation, as amended, or Bylaws of
the Company, (3) violate any judgment, decree or order known to such
counsel, or law or regulation, of any court or governmental agency,
entity or instrumentality binding upon the Company or any Subsidiary
or any of their properties, except that such counsel need express no
opinion as to state securities or Blue Sky laws or (4) require
obtaining the consent or authorization for, or filing with, any
governmental agency or entity or any court except such as have been
obtained and made under the Securities Act and such as may be required
under state securities or Blue Sky laws as to which such counsel need
express no opinion; such counsel need express no opinion in this
paragraph (vi) as to compliance with the anti-fraud provisions of the
federal or state securities laws;
(vii) To such counsel's actual knowledge, no default exists, and
no event has occurred which, with notice or lapse of time or both,
would constitute a default, in the due performance and observance of
any term, covenant or condition of any indenture, mortgage, agreement
or instrument to which the Company or any Subsidiary a party or by
which the Company or any Subsidiary or any of their respective
properties or assets may be bound or affected except for such default
or event which, individually or taken together with all such other
defaults or events, would not have a material adverse effect on the
business, results of operations, prospects, condition (financial or
otherwise) or the material assets or properties of the Company and the
Subsidiaries taken as a whole;
(viii) To the such counsel's actual knowledge, neither the Company
nor any Subsidiary is in violation of any term or provision of its
Certificate of Incorporation or Bylaws or of any judgment, decree, or
order known to such counsel;
(ix) The Registration Statement, the Preliminary Prospectus and the
Prospectus and each amendment or supplement thereto (except for the
financial statements and notes and schedules thereto and other
financial or accounting information included therein, as to which such
counsel expresses no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the Rules;
and the documents incorporated by reference in the Registration
Statement, the Preliminary Prospectus and the Prospectus and each
amendment or supplement thereto, when they became effective under the
Act or were filed with the Commission under the Exchange Act, as the
case may be, complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as applicable,
and the Rules;
16
(x) To the knowledge of such counsel, all contracts, agreements and
other documents of a character required to be described in the
Prospectus or documents incorporated therein by reference or filed as
exhibits to the Registration Statement or documents incorporated
therein by reference have been so described or filed as exhibits;
(xi) The Registration Statement is effective under the Securities Act,
and any required filing of the Prospectus or any supplement thereto
pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b). To such counsel's knowledge, no
order suspending the effectiveness of the Registration Statement, or
any post-effective amendment thereof, has been issued and no
proceedings therefor have been instituted or are threatened, pending
or contemplated;
(xii) To the knowledge of such counsel, there are no legal or
governmental proceedings or investigations pending or threatened to
which the Company or any Subsidiary is or would be a party or to which
any of their respective property is subject (A) which are required to
be described in the Registration Statement or the Prospectus or
documents incorporated therein by reference and which are not so
described or (B) which might prevent the consummation of the
transactions contemplated by this Agreement;
(xiii) To the knowledge of such counsel, except as described in the
Prospectus, no holder of any security of the Company has any right to
require or participate in the registration under the Securities Act of
the Common Stock or any other security to be effected by the
Registration Statement except for such rights as have been waived;
(xiv) To the extent that the statements contained in the
Prospectus under the headings "Risk Factors-Antitakeover Provisions",
"Risk Factor - Shares Eligible for Future Sale",
"Business-Environmental/Legal Proceedings", "Description of Capital
Stock" and "Shares Eligible For Future Sale" refer to matters of law
or summarize the status of litigation or summarize the provisions of
statutes, regulations, contracts, agreements or other documents, such
statements have been reviewed by such counsel, are accurate and
correct in all material respects and fairly present the status of any
such litigation and such provisions purported to be summarized;
(xv) The Company is not, and will not become as a result of the
transactions contemplated by this Agreement, an "Investment Company"
as defined in the Investment Company Act of 1940, as amended; and
In addition, such counsel shall state that, although such counsel
is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified
elsewhere in such counsel's opinion), and based upon such counsel's
examination and participation in discussions with your representatives
and those of the Company and its independent accountants, in which the
business and affairs of the Company and the contents of the
Registration Statement and Prospectus were discussed, no facts have
come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became
effective (except with respect to the financial statements and notes
and schedules thereto and other financial or accounting information,
as to which such counsel shall not be required to express any belief)
contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended
or supplemented (except with respect to the financial statements and
notes and schedules thereto and other financial or accounting
information, as to which such counsel shall not be required to make
any statement) on the date thereof and on the Closing Date contained
any untrue statements of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; further, no facts have come to the attention of such
counsel to cause it to believe that any document incorporated by
reference in the Registration Statement, the Prospectus, any amendment
or supplement thereto or any Preliminary Prospectus, as of the date of
the filing thereof with the Commission, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and no facts have come to the attention of such counsel
that cause it to believe that on the Closing Date, such incorporated
documents taken as a whole contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (it being
understood that such counsel need express no view with respect to the
financial statements and schedules, related notes, and other financial
and statistical data included or incorporated by reference in any
Preliminary Prospectus, the Registration Statement (including any
exhibit thereto) or the Prospectus or any amendment or supplement
thereto).
17
In rendering such opinion, such counsel may rely as to matters
governed by the laws of states other than Massachusetts or Delaware or
Federal laws of the United States of America on local counsel in such
jurisdiction. As to factual matters, such counsel may rely on certificates
obtained from officers of the Company and the Subsidiaries and from public
officials.
(f) On each Closing Date, you shall have received a written opinion or
opinions dated such Closing Date, of Ropes & Xxxx, counsel for the the
Principal Selling Shareholder, and separate counsel the other Selling
Shareholders, to the effect that:
(i) This Agreement has been duly authorized, executed and delivered
by each of the Selling Shareholders (through their duly authorized
attorney-in-fact);
(ii) The Power of Attorney has been duly authorized and executed, and
delivered by each of the Selling Shareholders and, pursuant to such
Power of Attorney, each Selling Shareholder has authorized its
attorney-in-fact to carry out the transactions contemplated in this
Agreement on its behalf, and to deliver the shares of Stock being sold
by it pursuant to this Agreement; and
(iii) Immediately prior to the Closing Date, each Selling
Shareholder was the sole registered owner of the shares of Stock to be
sold by such Selling Shareholder; each Selling Shareholder has full
legal right, power and authority, and any approval required by law
(other than any approval required by the applicable state securities
and Blue Sky laws) to sell, assign, transfer and deliver the shares of
Stock to be sold by such Selling Shareholder in the manner provided in
this Agreement and the respective Selling Shareholders Power of
Attorney; upon registration of the shares of Stock to be sold by the
Selling Shareholders in the names of the Underwriters in the stock
records of the Company, assuming the Underwriters purchased such Stock
in good faith and without notice of any adverse claim within the
meaning of Section 8-302 of the Massachusetts Uniform Commercial Code,
the Underwriters will have acquired all rights of such Selling
Shareholders in the shares of Stock being sold by them free of any
adverse claim, any lien in favor of the Company, and any restrictions
on transfer imposed by the Company; and the owner of such Stock, if
other than the Selling Shareholders, is precluded from asserting
against the Underwriters the ineffectiveness of any unauthorized
endorsement.
(g) On each Closing Date, you shall have received from Peabody & Xxxxx,
counsel for the Underwriters, such opinion or opinions, dated such Closing
Date, with respect to the incorporation of the Company, the validity of the
Stock, the Registration Statement, the Prospectus and other related matters
as you may require, and the Company shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling them
to pass upon such matters.
18
(h) On each Closing Date, you shall have received a certificate, dated
such Closing Date, of the chief executive officer and the principal
financial officer of the Company, in which such officers shall state that
the representations and warranties of the Company in this Agreement are
true and correct on and as of the date of this Agreement and such Closing
Date, that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or before
such Closing Date, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission and that, after
the date of the most recent financial statements in the Prospectus, there
has been no material adverse change in the financial position or results of
operations of the Company except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(i) On each Closing Date, you shall have received a certificate, dated
such Closing Date, of the Selling Shareholders through the Attorney-In-Fact
designated in the Power of Attorney, in which the Attorney-In-Fact shall
state on behalf of the Selling Shareholders that the representations and
warranties of the Selling Shareholders in this Agreement are true and
correct on and as of the date of this Agreement and such Closing Date, and
that each of the Selling Shareholders have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied
hereunder at or before such Closing Date.
(j) On each Closing Date, you shall have received a letter, dated such
Closing Date, of Ernst & Young that meets the requirements of
subsection (d) of this Section (or that brings down to date and confirms
matters set forth in such letter delivered pursuant to subsection (d)),
except that the specified date referred to in such subsection will be not
more than five days before such Closing Date for purposes of this
subsection.
(k) You shall have received an agreement (i) from each director and
executive officer, each Selling Stockholder who is not also a director or
executive officer and each of the prior stockholders of B&B Electronics
Manufacturing Company in form and substance satisfactory to you, that such
person will not offer, sell or otherwise dispose of any shares of the
Company's Common Stock or any security convertible into or exchangeable for
such Common Stock and (ii) from Sutro & Co. Incorporated in form and
substance satisfactory to you, that such parties will not offer, sell or
otherwise dispose of any Warrant Shares (as defined in those certain
warrants delivered by the Company to such party in connection with the
Company's initial public offering), in each instance without the prior
written consent of Xxxxxx Xxxxxxx for 180 days after the date of the
Prospectus.
(l) The Stock delivered on the Closing Date shall have been duly listed,
subject to notice of official issuance, on the Nasdaq National Market.
The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all respects when made as provided in this Agreement, or if any of
the opinions and certificates mentioned above or elsewhere in this Agreement
shall not be in all respects reasonably satisfactory in form and substance to
you and your counsel, you may cancel this Agreement and all obligations of the
Underwriters hereunder at, or at any time prior to, any Closing Date. Notice of
such cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
19
The obligations of the Company and the Selling Shareholders to sell and
deliver the portion of the Shares required to be delivered as and when specified
in this Agreement are subject to the condition that at the Closing Date or the
Option Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened.
7. Indemnification and Contribution.
(a) The Company and each Selling Shareholder, jointly and severally, will
indemnify and hold harmless each Underwriter, each of its officers and
directors against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter, officer or director may become subject,
under the Securities Act, the Exchange Act or otherwise (including, without
limitation, all costs of disputing or defending any such claim or action or
any amount paid in settlement thereof and all reasonable costs of
investigation in connection therewith), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related Preliminary Prospectus,
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 not misleading, or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any application or
other document or communication executed by or on behalf of the Company or
the Selling Shareholders or based upon written information furnished by or
on behalf of the Company or the Selling Shareholders filed in any
jurisdiction in order to qualify the Stock under the securities or Blue Sky
laws thereof or filed with the Commission or any securities exchange, or
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter, officer or director for
any legal or other expenses reasonably incurred by such Underwriter,
officer or director in connection with investigating or defending any such
losses, claims, damages, liabilities or actions as such expenses are
incurred; provided, however, that (x) with respect to the indemnity of each
Selling Shareholder, other than the Principal Selling Shareholder listed on
Schedule C hereto, the indemnity shall, in each case, apply only 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, any Preliminary
Prospectus or the Prospectus in reliance upon and in conformity with
written information furnished by such Selling Shareholder specifically for
use in the preparation thereof; (y) the Company and the Selling
Shareholders will not be liable in any such case to the extent that any
such losses, claims, damages or liabilities arise out of or are based upon
an untrue statement or alleged untrue statement in or omission or alleged
omission from the information included under the heading "Underwriting" in
the Prospectus in reliance upon and in conformity with written information
furnished to the Company and the Selling Shareholders by you or by or on
behalf of any Underwriter through you specifically for inclusion therein
and (z) the Company and the Selling Shareholders will not be liable to any
Underwriter, officer or director under this section with respect to any
Preliminary Prospectus to the extent that any loss, claim, damage or
liability of such person results from the fact that such Underwriter sold
shares of Stock to a person to whom there was not given or sent, at or
prior to the written confirmation of such sale, a copy of the Prospectus or
of the Prospectus as then amended or supplemented in any case where such
delivery is required by the Securities Act if the Company has previously
furnished copies thereof to such Underwriter and the loss, claim, damage or
liability of such Underwriter, officer or director results from an untrue
statement or omission of a material fact contained in the Preliminary
Prospectus which was corrected in the Prospectus (or the Prospectus as
amended or supplemented). In no event, however, shall the liability of any
Selling Shareholder for indemnification under this Section 7(a) exceed the
net proceeds received by such Selling Shareholder from the Underwriters in
the offering.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company and the Selling Shareholders against any losses,
claims, damages or liabilities to which the Company or the Selling
Shareholders may become subject, under the Securities Act, the Exchange Act
or otherwise (including, without limitation, all costs of disputing or
defending such claim or action or any amount paid in settlement thereof and
all reasonable costs of investigation in connection therewith), 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, the
Prospectus, or any amendment or supplement thereto, or any related
Preliminary Prospectus, 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 any such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement
or alleged untrue statement or omission or alleged omission from the
information included under the heading "Underwriting" in the Prospectus in
reliance upon and in conformity with written information furnished to the
Company by you or by or on behalf of any Underwriter through you
specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company or the Selling Shareholders in
connection with investigating or defending any such losses, claims,
damages, liabilities or actions as such expenses are incurred, and
provided, further, that the obligation of each Underwriter to indemnify the
Company (including any controlling person, director or officer thereof)
shall be limited to the net proceeds received by the Company from such
Underwriter.
20
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof, enclosing a copy of all papers served. No
indemnification provided for in this Section 7 shall be available to any
party which shall fail to give notice as provided in this Section 7(c) if
the party to which notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to
give such notice 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 that such indemnifying party may have to any
indemnified party for contribution or otherwise than under this Section 7.
In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, assume the defenses thereof, with counsel 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 and
the approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section for
any legal or other expenses, except as provided below. The indemnified
party shall have the right to employ its 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 has been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified
party in the conduct of the defense of such action (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying
parties shall not have employed counsel to assume the defense of such
action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying parties. Anything in this Section 7 to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its
written consent, which consent shall not be unreasonably withheld. If a
claim, action, suit or proceeding is settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss, liability,
claim, damage or expense by reason of such settlement or judgment.
21
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subsection (a)
or (b) above is due in accordance with its terms but for any reason is held
to be unavailable, the Company, the Selling Shareholders and the
Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities, and expenses (including, without limitation, legal and other
expenses incurred in connection with, and any amount paid in settlement of,
any action, suit, proceeding or litigation, or any claim, but after
deducting any contribution received by the Company from persons other than
the Underwriters, such as persons who control the Company within the
meaning of the Securities Act, officers of the Company who signed the
Registration Statement and directors of the Company, who may also be liable
for the contribution) to which the Company, the Selling Shareholders and
one or more of the Underwriters may be subject 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 Stock
or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 7 hereof, then each such
indemnifying party shall contribute to such amount paid or payable to such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company, the
Selling Shareholders and the Underwriters in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities,
or expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Selling Shareholders and the
Underwriters shall be deemed to be in the same proportion as (a) the total
proceeds from the offering (net of underwriting discounts but before
deducting expenses) received by the Company and the Selling Shareholders,
as set forth in the table on the cover page of the Prospectus, bear to
(b) the underwriting discounts received by the Underwriters, as set forth
in the table on the cover page of the Prospectus. The relative fault of
the Company, the Selling Shareholders or the Underwriters, shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact related 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 contribution pursuant to this Section 7(d) 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. Notwithstanding
the provisions of this Section 7(d), in no case shall (i) any Underwriter
(except as otherwise agreed among the Underwriters) be liable or
responsible for any amount in excess of the underwriting discount
applicable to the Stock purchased by such Underwriter hereunder and
(ii) any Selling Shareholder be liable or responsible for any amount in
excess of the net proceeds received by such Selling Stockholder from the
Underwriters in the offering, provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
Section 7(d), notify such party or parties from whom contribution shall be
sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation such party or parties
may have hereunder or otherwise than under this Section 7(d). No party
shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its written consent. The Underwriters'
obligations to make contributions pursuant to this Section 7(d) are several
in proportion to their respective underwriting commitments and not joint.
(e) The obligations of the Company and the Selling Shareholders under this
Section shall be in addition to any liability that the Company or the
Selling Shareholders may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Securities Act or the Exchange Act. The
obligations of the Underwriters under this Section shall be in addition to
any liability the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act.
22
(f) It is understood that the indemnifying party shall, in connection with
any one 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 by a majority of such indemnified parties.
8. Default by the Company or the Selling Shareholders.
(a) If the Company or the Selling Shareholders shall fail on the First
Closing Date or, if any Optional Shares are to be purchased, any Subsequent
Closing Date, as the case may be, to sell and deliver the number of Firm
Shares or Optional Shares, as the case may be, which the Company or the
Selling Shareholders is obligated to sell hereunder, then, at the option of
the Underwriters, this Agreement shall terminate without any liability on
the part of any Underwriter for such termination.
(b) In the event of a default by the Company or the Selling Shareholders
under this Section 8, the Underwriters shall have the right to postpone the
First Closing Date or, if any Optional Shares are to be purchased, any
Subsequent Closing Date, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements.
(c) No action taken pursuant to this Section 8 shall relieve the Company
or the Selling Shareholders from any liability, if any, in respect of such
default.
9. Substitution of Underwriters. If one or more of the Underwriters shall
fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Sections 6, 8 or 10 hereof) to purchase on
any Closing Date the shares of Stock agreed to be purchased on such Closing Date
by such Underwriter or Underwriters, you may find one or more substitute
underwriters to purchase such Stock or make such other arrangements as you may
deem advisable or one or more of the remaining Underwriters may agree to
purchase such Stock in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If
no such arrangements have been made by the close of business on the business day
following such Closing Date:
(a) If the number of shares of Stock to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Stock that
all the Underwriters are obligated to purchase on such Closing Date, then
each of the nondefaulting Underwriters shall be obligated to purchase such
shares on the terms herein set forth in proportion to their respective
obligations hereunder; provided, however, that in no event shall the
maximum number of shares of Stock that any Underwriter has agreed to
purchase pursuant to Section 1 hereof be increased pursuant to this
Section 9 by more than one-ninth of such number of shares without the
written consent of such Underwriter, or
(b) If the number of shares of Stock to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Stock that all
the Underwriters are obligated to purchase on such Closing Date, then the
Company shall be entitled to an additional business day with which it may,
but is not obligated to, find one or more substitute Underwriters
reasonably satisfactory to you to purchase such shares of Stock upon the
terms set forth in this Agreement.
In any such case, either you or the Company shall have the right to
postpone the applicable Closing Date for a period of not more than five business
days in order that necessary changes and arrangements (including any necessary
amendments or supplements to the Registration Statement or Prospectus) may be
effected by you and the Company and the Company agrees to prepare and file
promptly any amendment or supplement to the Registration Statement or the
Prospectus which in the opinion of counsel to the Underwriters may thereby be
made necessary. If the number of shares of stock to be purchased on such
Closing Date by such defaulting Underwriter or Underwriters shall exceed 10% of
the shares of Stock that all the Underwriters are obligated to purchase on such
Closing Date, and none of the nondefaulting Underwriters or the Company shall
make arrangements pursuant to this Section 9 within the period specified for the
purchase of the shares of Stock that the defaulting Underwriters agreed to
purchase, this Agreement shall terminate with respect to the shares of Stock to
be purchased on such Closing Date without liability on the part of any
nondefaulting Underwriter to the Company and without liability on the part of
the Company, except in both cases as otherwise provided for herein in Sections 7
and 11 hereof. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. The term "Underwriter" as used in
this Agreement shall include any party substituted under this Section 9 as if
such party had originally been a party to this Agreement and had been allocated
the aggregate number of (i) such Stock actually purchased by such party as a
result of its original commitment to purchase Stock, plus (ii) Stock purchased
pursuant to this Section 9.
23
10. Termination. This Agreement may be terminated by you by notice to the
Company and the Selling Shareholders (a) at any time prior to the earlier of
(i) the time the Stock is released by you for sale by notice to the
Underwriters, or (ii) 11:30 a.m. on the first business day following the date of
this Agreement. The obligations of the several Underwriters to purchase the
Stock also may be terminated at any time on or prior to any Closing Date by
notice to the Company, from a Representative at any time if in the discretion of
the Representatives at or before any Closing Date, upon or prior to such dates:
(i) there shall have occurred any material loss to or interference with the
businesses or properties of the Company or any Subsidiary from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, or any material
adverse change, or any development involving a prospective material adverse
change (including, without limitation, a change in management or control of the
Company) or in the condition (financial or otherwise), business, prospects,
capitalization, net worth or results of operations of the Company or any
Subsidiary; (ii) trading in the Stock has been suspended by the Commission or
trading generally on the New York Stock Exchange or on the American Stock
Exchange has been suspended or limited, or minimum or maximum ranges for prices
of securities shall have been fixed, or maximum ranges for prices of securities
have been required, by such exchanges or by order of the Commission, the NASD or
any other governmental or regulatory authority; (iii) any banking moratorium
has been declared by federal or Massachusetts or New York bank authorities;
(iv) any domestic or international event or act or occurrence shall have
occurred that shall have materially disrupted, or in your opinion will in the
future materially disrupt, the securities market; (v) there shall have occurred
any new outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United States is such
as to make it, in your judgment, inadvisable or impracticable to proceed with
the offering; or (vi) there shall be such a material adverse change in general
financial, political or economic conditions or the effect of international
conditions on the financial markets in the United States as to make it, in your
judgment, inadvisable or impracticable to market the Stock.
11. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
(i) the Company or its officers, (ii) the Selling Shareholders or (iii) the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the Company, the
Selling Shareholders or any of their respective representatives, officers, or
directors or any controlling person, and will survive delivery of and payment
for the Stock. Upon termination of this Agreement, the Company shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5(a)(ix) and the respective obligations of the Company, the Selling
Shareholders and the Underwriters pursuant to Section 7 shall remain in effect,
and if the Agreement is terminated after the First Closing Date, the
representations and warranties in Section 1 and all obligations under Section 5
shall also remain in effect. If the purchase of the Stock by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Sections 9 and 10, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) incurred by them in connection with the offering of the Stock.
24
12. Applicable Law; Consent to Jurisdiction. This Agreement shall be governed
by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts without giving effect to choice or conflict of law principles. If
any action or proceeding shall have been brought by the Company, the Selling
Shareholders or by any of the Underwriters in order to enforce any right or
remedy under this Agreement or relating to or arising out of the transactions
contemplated hereby, the Company, the Selling Shareholders and each of the
Underwriters hereby consent to, and agree to submit to, the jurisdiction of the
state courts of the Commonwealth of Massachusetts and of any United States
federal court sitting in Massachusetts, and waive any claim of improper venue or
forum non conveniens as to any such action or proceeding. The Company, the
Selling Shareholders and each Underwriter hereby irrevocably agree that process
in any such action or proceeding may be served in the manner provided by
Massachusetts law for service on foreign corporations or other entities.
13. Notices. All notices and communications hereunder may be mailed or
transmitted by any standard form of telecommunication and, except as herein
otherwise specifically provided, shall be in writing and shall be deemed to have
been duly given when delivered to a notice party hereto at the address specified
herein or at the address subsequently communicated in writing to the notice
parties. Notices to the Underwriters shall be directed to the Representatives
c/o Xxxxxx Xxxxxxx Incorporated, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention Xxxx X. Xxxx, Managing Director, with a copy to Peabody & Xxxxx,
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention Xxxxxx X. Xxxxxxx,
P.C. Notices to the Company shall be directed to AFC Cable Systems, Inc.,
00 Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000, Attention Xxxxxxx X. Xxxxxx, Chief
Executive Officer, with a copy to Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention Xxxxxxx X. Xxxxx, Esq. Notices to the Selling
Shareholders shall be directed to Xxxxxxx X. Xxxxxx, Attorney-in fact, c/o AFC
Cable Systems, Inc., 00 Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000. In each case a
notice party may change its address for notice hereunder by a written
communication to the other notice parties.
14. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives,
successors and to the extent provided in Section 7 herein the officers and
directors and controlling persons referred to in Section 7(e), and no other
person will have any right or obligation hereunder.
15. Representation of Underwriters. You will act for the several Underwriters
in connection with this financing, and any action under this Agreement taken by
the jointly will be binding upon all of the Underwriters.
16. Counterparts. This Agreement may be executed 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 Agreement.
17. Entire Agreement. This Agreement and the Schedules hereto contain the
entire agreement between the parties hereto in connection with the subject
matter hereof and supersede all prior agreements, written and verbal, with
respect to such subject matter.
18. Amendment. This Agreement and the Schedules hereto may not be amended,
modified or altered without the written agreement of the Company, the Selling
Shareholders and the Representatives.
25
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us one of the counterparts hereof, whereupon it will
become a binding agreement among the Company, the Selling Shareholders and the
several Underwriters in accordance with its terms.
Very truly yours,
AFC CABLE SYSTEMS, INC.
By:______________________________
Name:____________________________
Title:___________________________
Selling Shareholders
By:_______________________________
Attorney-in-Fact__________________
Agreed for themselves and on behalf of and as
the Representatives of the other
Underwriters named in
Schedule A hereto.
XXXXXX XXXXXXX INCORPORATED
XXXXXX X. XXXXX & CO. INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
By: XXXXXX XXXXXXX INCORPORATED
By:_____________________________
Name:______________________
Title:_____________________
26
SCHEDULE A
Number of Firm
Shares to Be
Underwriters Purchased
------------ -------------
Xxxxxx Xxxxxxx Incorporated _______
Xxxxxx X. Xxxxx & Co. Incorporated _______
The Xxxxxxxx-Xxxxxxxx Company, Inc. _______
Total...................................... _______
_______
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SCHEDULE B
Schedule of Selling Shareholders
Number of Firm Shares
Selling Shareholder to be sold
------------------- ----------------------
Xxxxx X. Xxxxxxx 341,412
Xxxxx X. Xxxxx 175,000
Xxxxxx X. Xxxxx 175,000
Xxxxx Xxxxxxxx University 40,000
The Xxxxxxx Foundation 20,000
AFC Monogram Partners, L.P. 48,588
.............
Total 800,000
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SCHEDULE C
Schedule of Principal Selling Shareholder
Xxxxx X. Xxxxxxx
29
