EXHIBIT 1.01
RWD TECHNOLOGIES, INC.
_________ Shares Common Stock/1/
UNDERWRITING AGREEMENT
______________, 1997
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxxx Securities
As Representatives of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. Introductory. RWD Technologies, Inc. ("Company"), a Maryland
corporation, has an authorized capital stock consisting of 50,000,000 shares of
Common Stock, $.10 par value ("Common Stock"), of which _____________ shares
were outstanding as of _____________ __, 1997 and of which such shares of Common
Stock that are authorized and unissued may be, but as of such date have not
been, classified by the Company's Board of Directors into shares of Preferred
Stock. The Company proposes to issue and sell __________ shares of its
authorized but unissued Common Stock (the "Firm Shares") to the several
underwriters named in Schedule A as it may be amended by the Pricing Agreement
hereinafter defined ("Underwriters"), who are acting severally and not jointly.
In addition, the Company and certain stockholders of the Company (referred to as
the "Selling Stockholders" and named in Schedule B) propose to grant to the
Underwriters an option to purchase up to _________ additional shares of Common
Stock ("Option Shares") as provided in Section 5 hereof. The Firm Shares and,
to the extent such option is exercised, the Option Shares, are hereinafter
collectively referred to as the "Shares."
You have advised the Company and the Selling Stockholders that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon as you deem advisable after the registration statement
hereinafter referred to becomes effective, if it has not yet become effective,
and the Pricing Agreement hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company, the Selling Stockholders and the Representatives,
acting on behalf of the several Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto ("Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company, the Selling Stockholders and the
Representatives and shall specify such applicable
---------------------
/1/ Plus an option to acquire up to ______________________ additional shares to
cover overallotments.
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information as is indicated in Exhibit A hereto. The offering of the Shares
will be governed by this Agreement, as supplemented by the Pricing Agreement.
From and after the date of the execution and delivery of the Pricing Agreement,
this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company and each of the Selling Stockholders hereby confirm their
agreements with the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-_______) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("Commission") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 Act;" unless indicated to
the contrary, all references herein to specific rules are rules promulgated
under the 0000 Xxx); and the Company has so prepared and has filed such
amendments thereto, if any, and such amended preliminary prospectuses as
may have been required to the date hereof and will file such additional
amendments thereto and such amended prospectuses as may hereafter be
required. There have been or will promptly be delivered to you three
signed copies of such registration statement and amendments, three copies
of each exhibit filed therewith, and conformed copies of such registration
statement and amendments (but without exhibits) and of the related
preliminary prospectus or prospectuses and final forms of prospectus for
each of the Underwriters.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant to
Rule 430A(b) and/or Rule 434), as from time to time amended or
supplemented, are hereinafter referred to as the "Registration Statement,"
and the "Prospectus," respectively, except that if any revised prospectus
shall be provided to the Underwriters by the Company for use in connection
with the offering of the Shares which differs from the Prospectus on file
at the Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer to
such revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434 of
the 1933 Act, all references to "Prospectus" shall be deemed to include,
without limitation, the form of prospectus and the term sheet, taken
together, provided to the Underwriters by the Company in accordance with
Rule 434 of the 1933 Act ("Rule 434 Prospectus"). Any registration
statement (including any amendment or supplement thereto or information
which is deemed part thereof) filed by the Company under Rule 462(b) ("Rule
462(b) Registration Statement") shall be deemed to be part of the
"Registration Statement" as defined herein, and any prospectus (including
any amendment or supplement thereto or information which is deemed part
thereof) included in such registration statement shall be deemed to be part
of the "Prospectus", as defined herein, as appropriate. The Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder are hereinafter collectively referred to as the
"Exchange Act."
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
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and, as of its date, has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein not misleading; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case
may be, the Registration Statement, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in all
material respects conformed or will in all material respects conform to the
requirements of the 1933 Act, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will 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 representation or warranty as to information contained in or
omitted from any preliminary prospectus, the Registration Statement, the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for use
in the preparation thereof.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Maryland,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus; the Company is duly qualified to
do business as a foreign corporation under the corporation law of, and is
in good standing as such in, each jurisdiction in which it owns or leases
substantial properties, has an office, or in which substantial business is
conducted and such qualification is required except in any such case where
the failure to so qualify or be in good standing would not have a material
adverse effect upon the Company; and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction, revoking, limiting
or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.
(d) The issued and outstanding shares of capital stock of the Company
as set forth in the Prospectus have been duly authorized and validly
issued, are fully paid and nonassessable, and conform to the description
thereof contained in the Prospectus.
(e) The Shares to be sold by the Company have been duly authorized and
when issued, delivered and paid for pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and will conform to the
description thereof contained in the Prospectus.
(f) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws and will not result in the breach, or be in contravention, of any
provision of any agreement, franchise, license, indenture, mortgage, deed
of trust, or other instrument to which the Company is a party or by which
the Company or its property may be bound or affected, or any order, rule or
regulation applicable to the Company of any court or regulatory body,
administrative agency or other governmental body having jurisdiction over
the Company or property, or any order of any court or governmental agency
or authority entered in any proceeding to which the Company was or is now a
party or by which it is bound. No consent, approval, authorization or
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other order of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this
Agreement or the Pricing Agreement or the consummation of the transactions
contemplated herein or therein, except for compliance with the 1933 Act and
blue sky laws applicable to the public offering of the Shares by the
several Underwriters and clearance of such offering with the
National Association of Securities Dealers, Inc. ("NASD"). This Agreement
has been duly executed and delivered by the Company.
(g) The accountants who have expressed their opinions with respect to
certain of the financial statements and schedules included in the
Registration Statement are independent accountants as required by the 1933
Act.
(h) The financial statements and schedules of the Company included in
the Registration Statement present fairly the financial position of the
Company as of the respective dates of such financial statements, and the
results of operations and cash flows of the Company for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed in the Prospectus; and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein. The financial information set forth in the
Prospectus under "Selected Financial Data" presents fairly on the basis
stated in the Prospectus, the information set forth therein.
The pro forma information included in the Prospectus present
fairly the information shown therein, have been prepared in accordance with
generally accepted accounting principles and the Commission's rules and
guidelines with respect to pro forma information, have been properly
compiled on the pro forma basis described therein, and, in the opinion of
the Company, the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate under the circumstances.
(i) The Company is not in violation of its charter or in default under
any consent decree, or in default with respect to any material provision of
any lease, loan agreement, franchise, license, permit or other contract
obligation to which it is a party; and there does not exist any state of
facts which constitutes an event of default as defined in such documents or
which, with notice or lapse of time or both, would constitute such an event
of default, in each case, except for defaults which neither singly nor in
the aggregate are material to the Company.
(j) There are no material legal or governmental proceedings pending,
or to the Company's knowledge, threatened to which the Company is or may be
a party or of which material property owned or leased by the Company is or
may be the subject, or related to environmental or discrimination matters
which are not disclosed in the Prospectus, or which question the validity
of this Agreement or the Pricing Agreement or any action taken or to be
taken pursuant hereto or thereto.
(k) There are no holders of securities of the Company having rights to
registration thereof or preemptive rights to purchase Common Stock.
(l) The Company has good and marketable title to all the properties
and assets reflected as owned in the financial statements hereinabove
described (or elsewhere in the Prospectus), subject to no lien, mortgage,
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pledge, charge or encumbrance of any kind except those, if any, reflected
in such financial statements (or elsewhere in the Prospectus) or which are
not material to the Company. The Company holds its leased properties which
are material to the Company under valid and binding leases.
(m) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(n) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company has not incurred any material
liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there has
not been any material adverse change in its condition (financial or
otherwise) or results of operations nor any material change in its capital
stock, short-term debt or long-term debt.
(o) The Company agrees not to sell, contract to sell or otherwise
dispose of any Common Stock or securities convertible into Common Stock
(except Common Stock issued pursuant to currently outstanding options,
warrants or convertible securities) for a period of 180 days after this
Agreement becomes effective without the prior written consent of the
Representatives. The Company has obtained agreements in the form of
Exhibit B hereto from each of its officers and directors and from certain
of its stockholders who collectively own ________ shares of Common Stock.
(p) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required.
(q) The Company owns and possesses all right, title and interest in
and to, or has duly licensed from third parties, all patents, patent
rights, trade secrets, inventions, know-how, trademarks, trade names,
copyrights, service marks and other proprietary rights ("Trade Rights")
material to the business of the Company. The Company has not received any
notice of infringement, misappropriation or conflict from any third party
as to such material Trade Rights which has not been resolved or disposed
of, and the Company has not infringed, misappropriated or otherwise
conflicted with material Trade Rights of any third parties, which
infringement, misappropriation or conflict would have a material adverse
effect upon the condition (financial or otherwise) or results of operations
of the Company.
(r) The conduct of the business of the Company is in compliance in all
respects with applicable federal, state, local and foreign laws and
regulations, except where the failure to be in compliance would not have a
material adverse effect upon the condition (financial or otherwise) or
results of operations of the Company.
(s) All offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times exempt from the registration
requirements of the 1933 Act and were duly registered with or the subject
of an available exemption from the registration requirements of the
applicable state securities or blue sky laws.
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(t) The Company has filed all necessary federal and state income and
franchise tax returns and has paid all taxes shown as due thereon, and
there is no tax deficiency that has been, or to the knowledge of the
Company might be, asserted against the Company or any of its properties or
assets that would or could be expected to have a material adverse affect
upon the condition (financial or otherwise) or results of operations of the
Company.
(u) The Company has filed a registration statement pursuant to Section
12(g) of the Exchange Act to register the Common Stock thereunder, has
filed an application to list the Shares on the Nasdaq National Market, and
has received notification that the listing has been approved, subject to
notice of issuance or sale of the Shares, as the case may be.
(v) The Company is not, and does not intend to conduct its business in
a manner in which it would become, an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940, as amended ("Investment
Company Act").
(w) The Company has made a timely and valid election to be treated as
an "S corporation" for federal and state law tax purposes effective on
__________ __, 19__ and, prior to the First Closing Date, as hereinafter
defined, such S corporation election has not been terminated or revoked
pursuant to Section 1362 of the Internal Revenue Code of 1986, as amended,
for the periods ended on or before ___________ __, 1997.
(x) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-
198, An Act Relating to Disclosure of Doing Business with Cuba, and the
Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
SECTION 3. Representations, Warranties and Covenants of the Selling
Stockholders.
(a) Each Selling Stockholder severally represents and warrants to, and
agrees with, the Company and the several Underwriters that:
(i) Such Selling Stockholder has, and on the First Closing
Date or the Second Closing Date hereinafter defined, as the case may
be, will have, valid marketable title to the Shares proposed to be
sold by such Selling Stockholder hereunder on such date and full
right, power and authority to enter into this Agreement and the
Pricing Agreement and to sell, assign, transfer and deliver such
Shares hereunder, free and clear of all voting trust arrangements,
liens, encumbrances, equities, claims and community property rights;
and upon delivery of and payment for such Shares hereunder, the
Underwriters will acquire valid marketable title thereto, free and
clear of all voting trust arrangements, liens, encumbrances, equities,
claims and community property rights.
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(ii) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or which might be
reasonably expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.
(iii) Such Selling Stockholder agrees with the Company and
the Underwriters not to sell, contract to sell or otherwise dispose of
any Common Stock or securities convertible into Common Stock for a
period of 180 days after this Agreement becomes effective without the
prior written consent of the Representatives.
(b) Each of the Selling Stockholders represents and warrants to, and agrees
with, the Underwriters to the same effect as the representations and warranties
of the Company set forth in Section 2 of this Agreement.
In order to document the Underwriter's compliance with the reporting and
withholding provisions of the Internal Revenue Code of 1986, as amended, with
respect to the transactions herein contemplated, each of the Selling
Stockholders agrees to deliver to you prior to or on the First Closing Date, as
hereinafter defined, a properly completed and executed United States Treasury
Department Form W-8 or W-9 (or other applicable form of statement specified by
Treasury Department regulations in lieu thereof).
SECTION 4. Representations and Warranties of the Underwriters. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company and the Selling Stockholders that the information set forth (a) on
the cover page of the Prospectus with respect to price, underwriting discount
and terms of the offering and (b) under "Underwriting" in the Prospectus was
furnished to the Company by and on behalf of the Underwriters for use in
connection with the preparation of the Registration Statement and is correct and
complete in all material respects.
SECTION 5. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters named in Schedule A hereto, and the Underwriters agree, severally
and not jointly, to purchase from the Company _________ Firm Shares from the
Company at the price per share set forth in the Pricing Agreement. The
obligation of each Underwriter to the Company shall be to purchase from the
Company that number of full shares which (as nearly as practicable, as
determined by you) bears to ______________, the same proportion as the number of
Shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Shares to be purchased by all Underwriters
under this Agreement. The initial public offering price and the purchase price
shall be set forth in the Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act, (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section 12) following the date the Registration Statement becomes
effective (or, if the Company has elected to rely upon Rule 430A, the fourth
business day, if permitted under Rule 15c6-1 under the Exchange Act, (or the
third business day if required under Rule 15c6-1 under the Exchange Act) after
execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company, the Company will deliver to you at the offices of counsel for the
Underwriters or through the facilities of The Depository Trust Company for the
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accounts of the several Underwriters, certificates representing the Firm Shares
to be sold by it against payment of the purchase price therefor by delivery of
federal or other immediately available funds, by wire transfer or otherwise, to
the Company. Such time of delivery and payment is herein referred to as the
"First Closing Date." The certificates for the Firm Shares so to be delivered
will be in such denominations and registered in such names as you request by
notice to the Company prior to 10:00 A.M., Chicago Time, on the second business
day preceding the First Closing Date, and will be made available at the
Company's expense for checking and packaging by the Representatives at 10:00
A.M., Chicago Time, on the business day preceding the First Closing Date.
Payment for the Firm Shares so to be delivered shall be made at the time and in
the manner described above at the offices of counsel for the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company and the Selling Stockholders hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
_______ Option Shares, at the same purchase price per share to be paid for the
Firm Shares, for use solely in covering any overallotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised at any time (but not more than once) within 30 days
after the date of the initial public offering upon notice by you to the Company
and the Selling Stockholder setting forth the aggregate number of Option Shares
as to which the Underwriters are exercising the option, the names and
denominations in which the certificates for such shares are to be registered and
the time and place at which such certificates will be delivered. Such time of
delivery (which may not be earlier than the First Closing Date), being herein
referred to as the "Second Closing Date," shall be determined by you, but if at
any time other than the First Closing Date, shall not be earlier than three nor
later than ten full business days after delivery of such notice of exercise. The
number of Option Shares to be purchased from the Company and each Selling
Stockholder are set forth in Schedule B hereto. If less than all Option Shares
are to be purchased, the Underwriters shall, severally and not jointly, first
purchase from each Selling Stockholder the number of shares set forth opposite
each Selling Stockholder's name in Schedule B hereto to the extent of the number
of Option Shares with respect to which the option is being exercised (or if the
total number of Option Shares with respect to which the option is being
exercised is less than the sum of the number of shares set forth opposite each
Selling Stockholder's name in Schedule B hereto, then the number of Option
Shares to be purchased from each Selling Stockholder shall be in the same
proportions as the number of Option Shares to be sold by each bears to the sum
of the number of Option Shares set forth opposite each such Selling
Stockholder's name in Schedule B hereto), and then shall, severally and not
jointly, purchase from the Company any remaining number of shares with respect
to which the option is being exercised. The number of Option Shares to be
purchased by each Underwriter shall be determined by multiplying the number of
Option Shares to be sold by the Company and the Selling Stockholders pursuant to
such notice of exercise by a fraction, the numerator of which is the number of
Firm Shares to be purchased by such Underwriter as set forth opposite its name
in Schedule A and the denominator of which is the total number of Firm Shares
(subject to such adjustments to eliminate any fractional share purchases as you
in your absolute discretion may make). Certificates for the Option Shares will
be made available at the Company's expense for checking and packaging at 10:00
A.M., Chicago Time, on the business day preceding the Second Closing Date. The
manner of payment for and delivery of the Option Shares shall be the same as for
the Firm Shares as specified in the preceding paragraph.
You have advised the Company and the Selling Stockholders that each
Underwriter has authorized you to accept delivery of its Shares, to make payment
and to receipt therefor. You, individually and not as the Representatives of
the Underwriters, may make payment for any Shares to be purchased by any
Underwriter whose funds shall not have been received by you by the First Closing
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Date or the Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any
obligation hereunder.
SECTION 6. Covenants of the Company. The Company covenants and agrees
that:
(a) The Company will advise you and the Selling Stockholders promptly
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of any
proceedings for that purpose, or of any notification of the suspension of
qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceedings for that purpose, and will also advise
you and the Selling Stockholders promptly of any request of the Commission
for amendment or supplement of the Registration Statement, of any
preliminary prospectus or of the Prospectus, or for additional information.
(b) The Company will give you and the Selling Stockholders notice of
its intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any Rule 462(b)
Registration Statement or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file at the Commission at the time the Registration
Statement became or becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) and any term
sheet as contemplated by Rule 434) and will furnish you and the Selling
Stockholders with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which you or counsel for the Underwriters shall reasonably
object.
(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements of
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
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which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to deliver
a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(e) The Company will not, prior to the earlier of the Second Closing
Date or termination or expiration of the related option, incur any
liability or obligation, direct or contingent, or enter into any material
transaction, other than in the ordinary course of business, except as
contemplated by the Prospectus.
(f) The Company will not acquire any capital stock of the Company
prior to the earlier of the Second Closing Date or termination or
expiration of the related option nor will the Company declare or pay any
dividend or make any other distribution upon the Common Stock payable to
stockholders of record on a date prior to the earlier of the Second Closing
Date or termination or expiration of the related option, except in either
case as contemplated by the Prospectus.
(g) Not later than ______________, 1998, the Company will make
generally available to its security holders an earnings statement (which
need not be audited) covering a period of at least 12 months beginning
after the effective date of the Registration Statement, which will satisfy
the provisions of the last paragraph of Section 11(a) of the 1933 Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as you may reasonably request, for the
purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate, and will continue such qualifications in
effect so long as reasonably required for the distribution of the Shares.
The Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction where
it is not currently qualified or where it would be subject to taxation as a
foreign corporation.
(j) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon as
practicable after the filing thereof, of each report filed by the Company
with the Commission, any securities exchange or the NASD; (ii) as soon as
practicable after the release thereof, of each material press release in
respect of the Company; and (iii) as soon as available, of each report of
the Company mailed to stockholders.
(k) The Company will use the net proceeds received by it from the sale
of the Shares being sold by it in the manner specified in the Prospectus.
(l) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately following the execution of the
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Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A, Rule 424(b)
and/or Rule 434, copies of an amended Prospectus, or, if required by such
Rule 430A and/or Rule 434, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file, or transmit for
filing, a Rule 462(b) Registration Statement not later than the date of the
execution of the Pricing Agreement. If a Rule 462(b) Registration
Statement is filed, the Company shall make payment of, or arrange for
payment of, the additional registration fee owing to the Commission
required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market
and will file with the Commission in a timely manner all reports on Form SR
required by Rule 463 and will furnish you copies of any such reports as
soon as practicable after the filing thereof.
(n) The Company will not file with the Commission any registration
statement registering any options or shares that have been or may be
granted or issued, as the case may be, under its stock option plan(s),
including without limitation its Amended and Restated Equity Participation
Plan, until at least 90 days after this Agreement becomes effective without
the prior written consent of the Representatives and will not file with the
Commission any registration statement registering any shares that have been
or may be issued under its stock purchase plan(s), including without
limitation its Employee Stock Purchase Plan, until at least 180 days after
this Agreement becomes effective without the prior written consent of the
Representatives.
SECTION 7. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company agrees to pay (i) all costs,
fees and expenses (other than legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution of the Registration Statement, each
preliminary prospectus and the Prospectus (including all exhibits, financial
statements and financial statement schedules) and all amendments and supplements
provided for herein, this Agreement, the Pricing Agreement and the Blue Sky
Memorandum, (ii) all costs, fees and expenses (including legal fees not to
exceed $_____________ and disbursements of counsel for the Underwriters)
incurred by the Underwriters in connection with qualifying or registering all or
any part of the Shares for offer and sale under blue sky laws, including the
preparation of a blue sky memorandum relating to the Shares and clearance of
such offering with the NASD; and (iii) all fees and expenses of the Company's
transfer agent, printing of the certificates for the Shares and all transfer
taxes, if any, with respect to the sale and delivery of the Shares to the
several Underwriters.
The provisions of this Section shall not affect any agreement which the
Company and the Selling Stockholders may make for the allocation or sharing of
such expenses and costs.
SECTION 8. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
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the Company and the Selling Stockholders herein set forth as of the date hereof
and as of the First Closing Date or the Second Closing Date, as the case may be,
to the accuracy of the statements of officers of the Company made pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company, the Selling Stockholders or you, shall
be contemplated by the Commission. If the Company has elected to rely upon
Rule 430A and/or Rule 434, the information concerning the initial public
offering price of the Shares and price-related information shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within the
prescribed period and the Company will provide evidence satisfactory to the
Representatives of such timely filing (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rules 430A and 424(b)). If a Rule
462(b) Registration Statement is required, such Registration Statement
shall have been transmitted to the Commission for filing and become
effective within the prescribed time period and, prior to the First Closing
Date, the Company shall have provided evidence of such filing and
effectiveness in accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except the financial statements and financial
statement schedules) shall have been approved by counsel for the
Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company, whether or not arising in the ordinary course of business,
which, in the judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or purchase of the Shares
as contemplated hereby.
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(f) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Piper & Marbury L.L.P., counsel for the
Company and for the Selling Stockholders, addressed to the
Underwriters and dated the First Closing Date or the Second Closing
Date, as the case may be, to the effect that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and the Company has been duly qualified to do
business as a foreign corporation under the corporation law of,
and is in good standing as such in, every jurisdiction where the
ownership or leasing of property, or the conduct of its business
requires such qualification except where the failure so to
qualify would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of
the Company;
(2) the authorized capital stock of the Company, of which
there is outstanding the amount set forth in the Registration
Statement and Prospectus (except for subsequent issuances, if
any, pursuant to stock options or other rights referred to in the
Prospectus), conforms as to legal matters in all material
respects to the description thereof in the Registration Statement
and Prospectus;
(3) the issued and outstanding capital stock of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable;
(4) the certificates for the Shares to be delivered
hereunder are in due and proper form, and when duly countersigned
by the Company's transfer agent and delivered to you or upon your
order against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement and the Pricing
Agreement, the Shares represented thereby will be duly authorized
and validly issued, fully paid and nonassessable;
(5) the Registration Statement has become effective under
the 1933 Act, and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act, and
the Registration Statement (including the information deemed to
be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) and/or Rule 434, if
applicable), the Prospectus and each amendment or supplement
thereto (except for the financial statements, financial statement
schedules and other statistical or financial data included
therein as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the
1933 Act; such counsel have no reason to believe that either the
Registration Statement (including the information deemed to be
part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A(b) and/or Rule 434, if applicable) or the
Prospectus, or the Registration Statement or the Prospectus as
13
amended or supplemented (except as aforesaid), as of their
respective effective or issue dates, 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, if applicable, as of the First Closing Date or the
Second Closing Date, as the case may be, contained any untrue
statement of a material fact or omitted to state any material
fact necessary to make the statements therein not misleading in
the light of the circumstances under which they were made; the
statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations are accurate and
fairly and correctly present the information required to be
presented by the 1933 Act or the rules and regulations
thereunder, in all material respects and such counsel does not
know of any statutes, rules and regulations required to be
described or referred to in the Registration Statement or the
Prospectus that are not described or referred to therein as
required; and such counsel does not know of any legal or
governmental proceedings pending or threatened required to be
described in the Prospectus which are not described as required,
nor of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described or filed, as required;
(6) the statements under the captions "Management - Employee
Benefit Plans," "Certain Transactions," "Description of Capital
Stock" and "Shares Eligible for Future Sale" in the Prospectus,
insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and
fairly and correctly present, in all material respects, the
information called for with respect to such documents and
matters;
(7) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder have been duly
authorized by all necessary corporate action and this Agreement
and the Pricing Agreement have been duly executed and delivered
by and on behalf of the Company, and are legal, valid and binding
agreements of the Company, except as enforceability of the same
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights and
by the exercise of judicial discretion in accordance with general
principles applicable to equitable and similar remedies and
except as to those provisions relating to indemnities for
liabilities arising under the 1933 Act as to which no opinion
need be expressed; and no approval, authorization or consent of
any public board, agency, or instrumentality of the United States
or of any state or other jurisdiction is necessary in connection
with the issue or sale of the Shares by the Company pursuant to
this Agreement (other than under the 1933 Act and the rules of
the NASD) or the consummation by the Company of any other
transactions contemplated hereby;
(8) the execution and performance of this Agreement will not
contravene any of the provisions of, or result in a default
under, any agreement, franchise, license, indenture, mortgage,
deed of trust, or other instrument known to such counsel, of the
Company or by which its property is bound and which contravention
14
or default would be material to the Company; or violate any of
the provisions of the charter or bylaws of the Company or, so far
as is known to such counsel, violate any statute, order, rule or
regulation of any regulatory or governmental body having
jurisdiction over the Company;
(9) to such counsel's knowledge, all offers and sales of the
Company's capital stock since __________ __, 1994 were at all
relevant times exempt from the registration requirements of the
1933 Act and were duly registered or the subject of an available
exemption from the registration requirements of the applicable
state securities or blue sky laws;
(10) with respect to each Selling Stockholder, this
Agreement and the Pricing Agreement have been duly authorized,
executed and delivered by or on behalf of each such Selling
Stockholder; and the performance of this Agreement and the
Pricing Agreement and the consummation of the transactions herein
contemplated by each such Selling Stockholder will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any indenture, mortgage,
deed of trust, note agreement or other agreement or instrument
known to such counsel to which any of such Selling Stockholders
is a party or by which any is bound or to which any property of
such Selling Stockholders is subject, or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over any of such Selling
Stockholders or any of their properties; and no consent,
approval, authorization or order of any court or governmental
agency or body is required for the consummation of the
transactions contemplated by this Agreement and the Pricing
Agreement in connection with the sale of Shares to be sold by
such Selling Stockholders hereunder, except such as have been
obtained under the 1933 Act and such as may be required in
connection with the clearance of the offering with the NASD;
(11) each Selling Stockholder has full right, power and
authority to enter into this Agreement and the Pricing Agreement
and to sell, transfer and deliver the Shares to be sold on the
First Closing Date or the Second Closing Date, as the case may
be, by such Selling Stockholder hereunder and good and marketable
title to such Shares so sold, free and clear of all voting trust
arrangements, liens, encumbrances, equities, claims and community
property rights whatsoever, has been transferred to the
Underwriters (who counsel may assume to be bona fide purchasers)
who have purchased such Shares hereunder;
(12) this Agreement and the Pricing Agreement are legal,
valid and binding agreements of each Selling Stockholder except
as enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles applicable to
equitable and similar remedies and except with respect to those
provisions relating to indemnities for liabilities arising under
the 1933 Act, as to which no opinion need be expressed; and
15
(13) the Company is not an "investment company" or a person
"controlled by" an "investment company" within the meaning of the
Investment Company Act.
In rendering such opinion, such counsel may state that they
are relying upon the certificate of __________, the transfer agent for
the Common Stock, as to the number of shares of Common Stock at any
time or times outstanding, and that insofar as their opinion under
clause (5) above relates to the accuracy and completeness of the
Prospectus and Registration Statement, it is based upon a general
review with the Company's representatives and independent accountants
of the information contained therein, without independent verification
by such counsel of the accuracy or completeness of such information.
Such counsel may also rely upon the opinions of other competent
counsel and, as to factual matters, on certificates of the Selling
Stockholders and of officers of the Company and of state officials, in
which case their opinion is to state that they are so doing and copies
of said opinions or certificates are to be attached to the opinion
unless said opinions or certificates (or, in the case of certificates,
the information therein) have been furnished to the Representatives in
other form.
(ii) Such opinion or opinions of Xxxxx, Day, Xxxxxx & Xxxxx,
counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the
incorporation of the Company, the validity of the Shares to be sold by
the Company, the Registration Statement and the Prospectus and other
related matters as you may reasonably require, and the Company shall
have furnished to such counsel such documents and shall have exhibited
to them such papers and records as they request for the purpose of
enabling them to pass upon such matters.
(iii) A certificate of the chief executive officer and the
principal financial officer of the Company, dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such
Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best
knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated under
the 1933 Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty of
the Company as to the facts required in the immediately foregoing
clauses (1) and (2) of this subparagraph to be set forth in said
certificate.
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(iv) A certificate of each Selling Stockholder dated the
First Closing Date or the Second Closing Date, as the case may be, to
the effect that the representations and warranties of such Selling
Stockholder set forth in Section 3 of this Agreement are true and
correct as of such date and the Selling Stockholder has complied with
all the agreements and satisfied all the conditions on the part of
such Selling Stockholder to be performed or satisfied at or prior to
such date.
(v) At the time the Pricing Agreement is executed and also
on the First Closing Date or the Second Closing Date, as the case may
be, there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Xxxxxx Xxxxxxxx LLP,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, to the effect set forth in Schedule C. There
shall not have been any change or decrease specified in the letters
referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(vi) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxx, Day, Xxxxxx & Xxxxx, counsel for the Underwriters, which approval
shall not be unreasonably withheld. The Company shall furnish you with such
manually signed or conformed copies of such opinions, certificates, letters and
documents as you request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company and the Selling
Stockholders without liability on the part of any Underwriter or the Company or
any Selling Stockholder, except for the expenses to be paid or reimbursed by the
Company pursuant to Sections 7 and 9 hereof and except to the extent provided in
Section 11 hereof.
SECTION 9. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company or the
Selling Stockholders to perform any agreement herein or to comply with any
provision hereof, unless such failure to satisfy such condition or to comply
with any provision hereof is due to the default or omission of any Underwriter,
the Company agrees to reimburse you and the other Underwriters upon demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been reasonably incurred by you and them in connection
with the proposed purchase and the sale of the Shares. Any such termination
shall be without liability of any party to any other party except that the
provisions of this Section, Section 7 and Section 11 shall at all times be
effective and shall apply.
SECTION 10. Effectiveness of Registration Statement. You, the Company and
the Selling Stockholders will use your, its and their best efforts to cause the
Registration Statement to become effective, if it has not yet become effective,
17
and to prevent the issuance of any stop order suspending the effectiveness of
the Registration Statement and, if such stop order be issued, to obtain as soon
as possible the lifting thereof.
SECTION 11. Indemnification.
(a) The Company and each Selling Stockholder, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the 1933 Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter or such controlling person may become subject under the 1933
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company and/or such
Selling Stockholders, as the case may be), 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, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant to Rule
430A and/or Rule 434, if applicable, any preliminary prospectus, the Prospectus,
or any amendment or supplement thereto, 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; and
will reimburse each Underwriter and each such controlling person for any legal
or other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that neither the Company nor any
Selling Stockholder will be liable in any such case to the extent that (i) 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, the Prospectus or any
amendment or supplement thereto 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 therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Shares in any case where
such delivery is required by the 1933 Act. In addition to their other
obligations under this Section 11(a), the Company and the Selling Stockholders
agree that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 11(a), they will reimburse the Underwriters on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's and the Selling Stockholders' obligation to
reimburse the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. This indemnity agreement will be in addition to any liability
which the Company and the Selling Stockholders may otherwise have.
Without limiting the full extent of the Company's agreement to indemnify
each Underwriter, as herein provided, each Selling Stockholder shall be liable
under the indemnity agreements contained in paragraph (a) of this Section only
for an amount not exceeding the proceeds received by such Selling Stockholder
from the sale of Shares hereunder.
18
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, and each Selling Stockholder and each person, if any, who controls
the Company within the meaning of the 1933 Act or the Exchange Act, against any
losses, claims, damages or liabilities to which the Company, or any such
director, officer, Selling Stockholder or controlling person may become subject
under the 1933 Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, any
preliminary prospectus, the Prospectus, or any amendment or supplement thereto,
or 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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectus, or any amendment or supplement thereto in reliance
upon and in conformity with Section 4 of this Agreement or any other written
information furnished to the Company by such Underwriter through the
Representatives specifically for use in the preparation thereof; and will
reimburse any legal or other expenses reasonably incurred by the Company, or any
such director, officer, Selling Stockholder or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action. In addition to their other obligations under this Section 11(b), the
Underwriters agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 11(b), they will reimburse the Company and the Selling Stockholders
on a monthly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company and the Selling Stockholders
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(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 an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
19
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
Selling Stockholders and the Underwriters from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, the Selling Stockholders and the Underwriters in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
respective relative benefits received by the Company, the Selling Stockholders
and the Underwriters shall be deemed to be in the same proportion in the case of
the Company and the Selling Stockholders, as the total price paid to the Company
and the Selling Stockholders for the Shares by the Underwriters (net of
underwriting discount but before deducting expenses), and in the case of the
Underwriters as the underwriting discount received by them bears to the total of
such amounts paid to the Company and the Selling Stockholders and received by
the Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company, the Selling Stockholders and the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the Company, by the
Selling Stockholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section, no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
20
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section are several in proportion to their
respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
SECTION 12. Default of Underwriters. It shall be a condition to the
agreement and obligation of the Company and the Selling Stockholders to sell and
deliver the Shares hereunder, and of each Underwriter to purchase the Shares
hereunder, that, except as hereinafter in this paragraph provided, each of the
Underwriters shall purchase and pay for all Shares agreed to be purchased by
such Underwriter hereunder upon tender to the Representatives of all such Shares
in accordance with the terms hereof. If any Underwriter or Underwriters default
in their obligations to purchase Shares hereunder on the First Closing Date and
the aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the Representatives may make arrangements satisfactory to the Company and
the Selling Stockholders for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
date the nondefaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the Shares which such
defaulting Underwriters agreed but failed to purchase on such date. If any
Underwriter or Underwriters so default and the aggregate number of Shares with
respect to which such default or defaults occur is more than the above
percentage and arrangements satisfactory to the Representatives and the Company
and the Selling Stockholders for the purchase of such Shares by other persons
are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter or the Company or
the Selling Stockholders, except for the expenses to be paid by the Company
pursuant to Section 7 hereof and except to the extent provided in Section 11
hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 13. Effective Date. This Agreement shall become effective
immediately as to Sections 7, 9, 11 and 14 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday,
Sunday or holiday (and in that event this Agreement shall become effective at
such hour on the business day next succeeding such Saturday, Sunday or holiday);
but this Agreement shall nevertheless become effective at such earlier time
after the Pricing Agreement is executed and delivered as you may determine on
and by notice to the Company and the Selling Stockholders or by release of any
Shares for sale to the public. For the purposes of this Section, the Shares
shall be deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Shares or upon the release by you of
21
telegrams (i) advising Underwriters that the Shares are released for public
offering, or (ii) offering the Shares for sale to securities dealers, whichever
may occur first.
SECTION 14. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
and the Selling Stockholders or by you by notice to the Company and the
Selling Stockholders at any time prior to the time this Agreement shall
become effective as to all its provisions, and any such termination shall
be without liability on the part of the Company or the Selling Stockholders
to any Underwriter (except for the expenses to be paid or reimbursed
pursuant to Section 7 hereof and except to the extent provided in Section
11 hereof) or of any Underwriter to the Company or the Selling
Stockholders.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 5, if exercised, may be
cancelled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or
United States authorities, or (iii) there shall have been any change in
financial markets or in political, economic or financial conditions which,
in the opinion of the Representatives, either renders it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the
terms set forth in the Prospectus or materially and adversely affects the
market for the Shares, or (iv) there shall have been an outbreak of major
armed hostilities between the United States and any foreign power which in
the opinion of the Representatives makes it impractical or inadvisable to
offer or sell the Shares. Any termination pursuant to this paragraph (b)
shall be without liability on the part of any Underwriter to the Company or
the Selling Stockholders or on the part of the Company to any Underwriter
or the Selling Stockholders (except for expenses to be paid or reimbursed
pursuant to Section 7 hereof and except to the extent provided in Section
11 hereof).
SECTION 15. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
principals, members, officers or directors or any controlling person, or the
Selling Stockholders as the case may be, and will survive delivery of and
payment for the Shares sold hereunder.
SECTION 16. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, with a copy to Xxxx X. Xxxxxxx, Esq. at Xxxxx, Day,
Xxxxxx & Xxxxx, 00 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000; if sent to the
Company will be mailed, delivered or telegraphed and confirmed to the Company at
its corporate headquarters with a copy to Xxxx Xxxxxx Nord, Esq. at Piper &
Marbury L.L.P., 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000; and if sent
to the Selling Stockholders will be mailed, delivered or telegraphed and
confirmed to the Selling Stockholders at such address as they have previously
furnished to the Company and the Representatives, with a copy to Xxxx Xxxxxx
Nord, Esq. at Piper & Marbury L.L.P., 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000.
22
SECTION 17. Successors. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section 11,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
SECTION 18. Representation of Underwriters. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 19. Partial Unenforceability. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 20. Applicable Law. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
23
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company, the Selling Stockholders and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
RWD TECHNOLOGIES, INC.
By
----------------------------
Chief Executive Officer
SELLING STOCKHOLDERS
By
----------------------------
Xxxx X. Xxxxxx
By
----------------------------
X. Xxxxxx Xxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXXX SECURITIES
Acting as Representatives of the
several Underwriters named in
Schedule A.
By Xxxxxxx Xxxxx & Company, L.L.C.
By
--------------------------------
Principal
24
SCHEDULE A
Number of
Firm Shares
Underwriter to be Purchased
-------------------------------- ---------------
Xxxxxxx Xxxxx & Company, L.L.C
Xxxxxxxxxx Securities
--------
TOTAL
========
25
SCHEDULE B
Number of Number of
Firm Shares Option Shares
to be Sold to be Sold
----------- -------------
Company
Selling Stockholders:
Xxxx X. Xxxxxx
X. Xxxxxx Xxxxxx
------- -------
TOTAL
======= =======
26
SCHEDULE C
Comfort Letter of Xxxxxx Xxxxxxxx LLP
(1) They are independent public accountants with respect to the
Company within the meaning of the 1933 Act.
(2) In their opinion the financial statements and schedules of the
Company included in the Registration Statement and the financial statements of
the Company from which the information presented under the caption "Selected
Financial Data" has been derived which are stated therein to have been examined
by them comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company responsible for financial and accounting matters
as to transactions and events subsequent to December 31, 1996, a reading of
minutes of meetings of the stockholders and directors of the Company since
December 31, 1996, a reading of the latest available interim unaudited financial
statements of the Company (with an indication of the date thereof) and other
procedures as specified in such letter, nothing came to their attention which
caused them to believe that (i) the pro forma financial information of the
Company included in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of such information and (ii) at a
specified date not more than five days prior to the date thereof in the case of
the first letter and not more than two business days prior to the date thereof
in the case of the second and third letters, there was any change in the capital
stock or long-term debt or short-term debt (other than normal payments) of the
Company or any decrease in net current assets or stockholders' equity as
compared with amounts shown on the latest balance sheet of the Company included
in the Registration Statement or for the period from the date of such balance
sheet to a date not more than five days prior to the date thereof in the case of
the first letter and not more than two business days prior to the date thereof
in the case of the second and third letters, there were any decreases, as
compared with the corresponding period of the prior year, in net sales, income
before income taxes or in the total or per share amounts of net income except,
in all instances, for changes or decreases which the Prospectus discloses have
occurred or may occur or which are set forth in such letter.
(4) They have carried out specified procedures, which have been agreed
to by the Representatives, with respect to certain information in the Prospectus
specified by the Representatives, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company.
27
EXHIBIT A
RWD TECHNOLOGIES, INC.
_______ Shares Common Stock/2/
PRICING AGREEMENT
_______________, 1997
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxxx Securities
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated
_________________, 1997 (the "Underwriting Agreement") relating to the sale by
the Company and the Selling Stockholders and the purchase by the several
Underwriters for whom Xxxxxxx Xxxxx & Company, L.L.C. and Xxxxxxxxxx Securities
are acting as representatives (the "Representatives"), of the above Shares. All
terms herein shall have the definitions contained in the Underwriting Agreement
except as otherwise defined herein.
Pursuant to Section 5 of the Underwriting Agreement, the Company and
the Selling Stockholders agree with the Representatives as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the
several Underwriters shall be $_____________, being an amount equal to the
initial public offering price set forth above less $____________ per share.
Schedule A is amended as follows:
-----------------
/2/ Plus an option to acquire up to ___ additional shares to cover
overallotments.
28
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Stockholders and the several Underwriters, including you, all in accordance with
its terms.
Very truly yours,
RWD TECHNOLOGIES, INC.
By
----------------------------
Chief Executive Officer
SELLING STOCKHOLDERS
By
----------------------------
Xxxx X. Xxxxxx
By
----------------------------
X. Xxxxxx Xxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXXX SECURITIES
Acting as Representatives of the
several Underwriters
By Xxxxxxx Xxxxx & Company, L.L.C.
By
--------------------------------
Principal
29
EXHIBIT B
[Form of Lock-up Agreement]
RWD TECHNOLOGIES, INC.
Initial Public Offering of Shares of Common Stock
-------------------------------------------------
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxxx Securities,
as Representatives of the Several Underwriters
named in Schedule A to the Underwriting Agreement
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), by and among RWD
Technologies, Inc., a Maryland corporation (the "Company"), the Selling
Shareholder named therein and each of you as representatives of the several
Underwriters named therein, relating to an underwritten initial public offering
of Common Stock, $.10 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, I agree not to offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce an offering, sale or
contract of sale of, any shares of Common Stock beneficially owned by me or any
securities convertible into or exchangeable or exercisable for shares of Common
Stock (such securities being hereinafter referred to as "Rights") for a period
of 180 days following the date of the Prospectus (as defined in the Underwriting
Agreement) without your prior written consent. The foregoing restriction is
expressly agreed to preclude me from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
such disposition during such 180-day period, even if such shares of Common Stock
or Rights would be disposed of by someone other than myself. I understand that
such prohibited hedging or other transactions would include transactions such as
a short sale (whether or not against the box) and a purchase, sale or grant of
any right (including a put or call option) with respect to any such shares of
Common Stock or Rights or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from such shares of Common Stock or Rights. I also agree and
consent to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of the Common Stock or Rights held by me except in
compliance with this restriction.
If for any reason the Underwriting Agreement is terminated prior to
the First Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above will likewise be terminated.
Yours very truly,
-----------------------------
Print name and address:
-----------------------------
-----------------------------
Date: ______________________, 1997 -----------------------------
30
