EXHIBIT 1.1
X.X. XXXXXX SECURITIES INC.
Lowrance Electronics, Inc.
_____Shares of Common Stock
Underwriting Agreement
__________,2004
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Lowrance Electronics, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to X.X. Xxxxxx Securities Inc. (the "Underwriter"),
for whom an aggregate of _______ shares and, at the option of the Underwriter,
up to an additional _______ shares, of Common Stock, par value $0.10 per share
(the "Stock"), of the Company and the stockholders of the Company named in
Schedule I hereto (the "Selling Stockholders") propose to sell to the
Underwriter an aggregate of _______ shares and, at the option of the
Underwriter, up to an additional _______ shares of Stock. The aggregate of
_______ shares to be sold by the Company and the Selling Stockholders is herein
called the "Underwritten Shares" and the aggregate of _______ additional shares
to be sold by the Company and the Selling Stockholders is herein called the
"Option Shares". The Underwritten Shares and the Option Shares are herein
referred to as the "Shares".
The Company hereby confirms its agreement with the Underwriter
concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (File No.
______________) including a prospectus, relating to the Shares. Such
registration statement, as amended at the time it becomes effective, including
the information, if any, deemed pursuant to Rule 430A under the Securities Act
to be part of the registration statement at the time of its effectiveness ("Rule
430 Information"), is referred to herein as the "Registration Statement"; and as
used herein, the term "Preliminary Prospectus" means each prospectus included in
such registration statement (and any amendments thereto) before it becomes
effective, any prospectus filed with the Commission pursuant to Rule 424(a)
under the Securities Act and the prospectus included in the Registration
Statement at the time of its effectiveness that omits Rule 430A Information, and
the term "Prospectus" means the prospectus in the form first used to confirm
sales of the Shares. If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be
2
deemed to include such Rule 462 Registration Statement. Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Registration Statement and the Prospectus.
2. Purchase of the Shares by the Underwriter. (a) The Company and each
of the Selling Stockholders agree, severally and not jointly, to sell the Shares
to the Underwriter as set forth opposite the name of the Underwriter in Schedule
II hereto and as provided in this Agreement, and the Underwriter, on the basis
of the representations, warranties and agreements set forth herein and subject
to the conditions set forth herein, agrees to purchase from the Company and each
of the Selling Stockholders at a purchase price per share of $ _______ (the
"Purchase Price") the number of Underwritten Shares to be sold by the Company
and each of the Selling Stockholders as set forth opposite their respective
names in Schedule I.
In addition, the Company and each of the Selling Stockholders, as and
to the extent indicated in Schedule I hereto agree, severally and not jointly,
to sell the Option Shares to the Underwriter and the Underwriter shall have the
option to purchase at its election up to [ ] Option Shares at the Purchase
Price. The Underwriter, on the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, shall have
the option to purchase from the Company and each of the Selling Stockholders at
the Purchase Price the number of Option Shares as to which such election shall
have been exercised. Any such election to purchase Option Shares shall be made
in proportion to the maximum number of Option Shares to be sold by the Company
and each Selling Stockholder as set forth in Schedule I hereto.
The Underwriter may exercise the option to purchase the Option Shares
at any time and from time to time on or before the thirtieth day following the
date of this Agreement, by written notice from the Underwriter to the Company
and the Attorney-in-Fact (as defined below). Such notice shall set forth the
aggregate number of Option Shares as to which the option is being exercised and
the date and time when the Option Shares are to be delivered and paid for which
may be the same date and time as the Closing Date (as hereinafter defined) but
shall not be earlier than the Closing Date nor later than the tenth full
business day (as hereinafter defined) after the date of such notice. Any such
notice shall be given at least two Business Days prior to the date and time of
delivery specified therein.
(b) The Company and the Selling Stockholders understand that the
Underwriter intends to make a public offering of the Shares as soon after the
effectiveness of this Agreement as in the judgment of the Underwriter is
advisable, and initially to offer the Shares on the terms set forth in the
Prospectus. The Company and the Selling Stockholders acknowledge and agree that
the Underwriter may offer and sell Shares to or through any affiliate of the
Underwriter and that any such affiliate may offer and sell Shares purchased by
it to or through the Underwriter.
(c) Payment for the Shares shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Underwriter and by the Attorneys-in-Fact (as defined below), or any of them,
with regard to payment to the Selling Stockholders in the case of the
Underwritten Shares, at the offices of Cravath, Swaine & Xxxxx LLP, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M. New York City time on _____,
2004, or at such other time or place on the same or such other date, not later
than the fifth business day thereafter, as the Underwriter and the Company and
the Attorneys-in-Fact may agree upon in writing or, in
3
the case of the Option Shares, on the date and at the time and place specified
by the Representative in the written notice of the Underwriter's election to
purchase such Option Shares. The time and date of such payment for the
Underwritten Shares are referred to herein as the "Closing Date" and the time
and date for such payment for the Option Shares, if other than the Closing Date,
are herein referred to as the "Additional Closing Date".
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Underwriter for the account of the Underwriter of the Shares to be purchased
on such date in definitive form registered in such names and in such
denominations as the Underwriter shall request in writing not later than two
full business days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the sale of
the Shares duly paid by the Company or the Selling Stockholders, as the case may
be. The certificates for the Shares will be made available for inspection and
packaging by the Underwriter at the office of X.X. Xxxxxx Securities Inc. set
forth above not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date or the Additional Closing Date, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to the Underwriter and the Selling Stockholders that:
(a) Preliminary Prospectus. No order preventing or suspending the use
of any Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, complied in all material
respects with the Securities Act and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
the Underwriter furnished to the Company in writing by such Underwriter
expressly for use in any Preliminary Prospectus, such information consisting
solely of the information set forth as such in Section 8(c) hereof.
(b) Registration Statement and Prospectus. No order suspending the
effectiveness of the Registration Statement has been issued by the Commission
and no proceeding for that purpose has been initiated or threatened by the
Commission; as of the applicable effective date of the Registration Statement
and any amendment thereto, the Registration Statement complied and will comply
in all material respects with the Securities Act, and did not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and as of the applicable filing date of the Prospectus
and any amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation and warranty with respect to any
statements or omissions made in reliance upon and in conformity with information
relating to the Underwriter furnished to the Company in writing by such
Underwriter expressly for use in the Registration Statement and the Prospectus
and any
4
amendment or supplement thereto, such information consisting solely of the
information set forth as such in Section 8(c) hereof.
(c) Financial Statements. The financial statements and the related
notes thereto included in the Registration Statement and the Prospectus comply
in all material respects with the applicable requirements of the Securities Act
and the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act"), as
applicable, and present fairly the financial position of the Company and its
subsidiaries as of the dates indicated and the results of their operations and
the changes in their cash flows for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods covered thereby,
and the supporting schedules included in the Registration Statement present
fairly the information required to be stated therein; and the other financial
information included in the Registration Statement and the Prospectus regarding
the Company has been derived from the accounting records of the Company and its
subsidiaries and presents fairly the information shown thereby.
(d) No Material Adverse Change. Since the date of the most recent
financial statements of the Company included in the Registration Statement and
the Prospectus, (i) there has not been any change in the capital stock or
long-term debt (other than in the ordinary course of business with respect to
the revolving line of credit) of the Company or any of its subsidiaries, or any
dividend or distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock, or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the business, properties, management, financial position,
stockholders' equity, results of operations or prospects of the Company and its
subsidiaries taken as a whole; (ii) neither the Company nor any of its
subsidiaries has entered into any transaction or agreement that is material to
the Company and its subsidiaries taken as a whole or incurred any liability or
obligation, direct or contingent, that is material to the Company and its
subsidiaries taken as a whole; and (iii) neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case as otherwise disclosed in the Registration Statement and the
Prospectus.
(e) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority could not reasonably be expected to,
individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, stockholders' equity,
results of operations or prospects of the Company and its subsidiaries taken as
a whole (a "Material Adverse Effect"). The Company does not own or control,
directly or indirectly, any
5
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21 to the Registration Statement.
(f) Capitalization. The Company has an authorized capitalization as set
forth in the Prospectus under the heading "Capitalization"; all the outstanding
shares of capital stock of the Company (including the Shares to be sold by the
Selling Stockholders) have been duly and validly authorized and issued and are
fully paid and non-assessable and are not subject to any pre-emptive or similar
rights; except as described in or expressly contemplated by the Prospectus,
there are no outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the
Company or any of its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options; the capital
stock of the Company conforms in all material respects to the description
thereof contained in the Registration Statement and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on voting
or transfer or any other claim of any third party except for a security interest
by Fleet Capital Corporation on all of the assets of the Company, including the
stock of each subsidiary of the Company, pursuant to the Loan and Security
Agreement dated December 15, 1993, as amended, by the Company in favor of
Barclays Business Credit, Inc. (N/K/A Fleet Capital Corporation).
(g) Due Authorization. The Company has full right, power and authority
to execute and deliver this Agreement and to perform its obligations hereunder
and thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery by it of this Agreement and the
consummation by it of the transactions contemplated hereby has been duly and
validly taken.
(h) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(i) The Shares. The Shares to be issued and sold by the Company
hereunder have been duly authorized by the Company and, when issued and
delivered and paid for as provided herein, will be duly and validly issued and
will be fully paid and nonassessable and will conform to the descriptions
thereof in the Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights.
(j) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any
6
court or arbitrator or governmental or regulatory authority, except, in the case
of clauses (ii) and (iii) above, for any such default or violation that could
not reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect.
(k) No Conflicts. The execution, delivery and performance by the
Company of this Agreement, the issuance and sale of the Shares to be sold by the
Company hereunder, the issuance by the Company of the Shares to be issued upon
exercise of the Options (as hereinafter defined) and the consummation by the
Company of the transactions contemplated by this Agreement will not (i) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, except for such conflict, breach, violation, default, lien, charge or
encumbrance that could not reasonably be expected to result in a Material
Adverse Effect, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except for such violation that could not reasonably be
expected to result in a Material Adverse Effect.
(l) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of this Agreement, the issuance and sale of the Shares to be sold
by the Company hereunder, the issuance by the Company of the Shares to be issued
upon the exercise of the Options and the consummation by the Company of the
transactions contemplated by this Agreement, except for the registration of the
Shares under the Securities Act and such consents, approvals, authorizations,
orders and registrations or qualifications as may be required under applicable
state securities laws in connection with the purchase and distribution of the
Shares by the Underwriter.
(m) Legal Proceedings. Except as described in the Prospectus, there are
no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its subsidiaries is or may be
a party or to which any property of the Company or any of its subsidiaries is or
may be the subject that, individually or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could reasonably be
expected to have a Material Adverse Effect or materially and adversely affect
the ability of the Company to perform its obligations under this Agreement; to
the best knowledge of the Company, no such investigations, actions, suits or
proceedings are threatened or contemplated by any governmental or regulatory
authority or threatened by others; and (i) there are no current or pending
legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Prospectus that are not
so described and (ii) there are no statutes, regulations or contracts or other
documents that are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Registration Statement or the
Prospectus that are not so filed or described.
7
(n) Independent Accountants. Deloitte & Touche LLP are independent
public accountants with respect to the Company and its subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and its interpretations and rulings
thereunder ("Independent Accountants"), and Xxxxxx Xxxxxxxx LLP, at the time
that they were the Company's accountants, were Independent Accountants.
(o) Title to Real and Personal Property. The Company and its
subsidiaries have good and marketable title in fee simple to, or have valid
rights to lease or otherwise use, all items of real and personal property that
are material to the respective businesses of the Company and its subsidiaries,
in each case free and clear of all liens, encumbrances, claims and defects and
imperfections of title except those that (i) do not materially interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries or (ii) could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(p) Title to Intellectual Property. The Company and its subsidiaries
own or possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective businesses;
and the conduct of their respective businesses will not conflict in any material
respect with any such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement or conflict with any
such rights of others.
(q) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company
or any of its subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement and the Prospectus and that is not
so described.
(r) Investment Company Act. The Company is not and, after giving effect
to the offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be required to register as an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, "Investment Company
Act").
(s) Taxes. The Company and its subsidiaries have paid all federal,
state, local and foreign taxes and filed all tax returns required to be paid or
filed through the date hereof; and except as otherwise disclosed in the
Prospectus, there is no tax deficiency that has been, or could reasonably be
expected to be, asserted against the Company or any of its subsidiaries or any
of their respective properties or assets, which if determined adversely to the
Company, could reasonably be expected to have a Material Adverse Effect.
(t) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities
8
that are necessary for the ownership or lease of their respective properties or
the conduct of their respective businesses as described in the Registration
Statement and the Prospectus, except where the failure to possess or make the
same could not, individually or in the aggregate, have a Material Adverse
Effect; and except as described in the Prospectus, neither the Company nor any
of its subsidiaries has received notice of any revocation or modification of any
such license, certificate, permit or authorization or has any reason to believe
that any such license, certificate, permit or authorization will not be renewed
in the ordinary course.
(u) No Labor Disputes. No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company, is contemplated or threatened.
(v) Compliance With Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"); (ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except in any such case for any such failure to comply, or failure to receive
required permits, licenses or approvals, or liability as could not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect.
(w) Compliance With ERISA. Each employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"); no prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code, has occurred with respect to any such
plan excluding transactions effected pursuant to a statutory or administrative
exemption; and for each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no "accumulated funding
deficiency" as defined in Section 412 of the Code has been incurred, whether or
not waived, and the fair market value of the assets of each such plan (excluding
for these purposes accrued but unpaid contributions) exceeds the present value
of all benefits accrued under such plan determined using reasonable actuarial
assumptions.
(x) Accounting and Disclosure Controls. The Company and its
subsidiaries maintain systems of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
9
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-14 under the Exchange Act) that are effective in ensuring that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the rules and forms of the
Commission, including, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the Company's management, including its principal executive officer or
officers and its principal financial officer or officers, as appropriate to
allow timely decisions regarding required disclosure.
(y) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and insures
against such losses and risks as are adequate to protect the Company and its
subsidiaries and their respective businesses; and neither the Company nor any of
its subsidiaries has (i) received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(z) No Unlawful Payments. Neither the Company nor any of its
subsidiaries nor, to the best knowledge of the Company, any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(aa) No Restrictions on Subsidiaries. No subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company.
(bb) No Broker's Fees. Neither the Company nor any of its subsidiaries
is a party to any contract, agreement or understanding with any person (other
than this Agreement) that would give rise to a valid claim against the Company
or any of its subsidiaries or the Underwriter for a brokerage commission,
finder's fee or like payment in connection with the offering and sale of the
Shares.
(cc) No Registration Rights. No person has the right to require the
Company or any of its subsidiaries to register any securities for sale under the
Securities Act by reason of the filing of the Registration Statement with the
Commission or the issuance and sale of the Shares to be sold by the Company
hereunder or, to the knowledge of the Company, the sale of the Shares to be sold
by the Selling Stockholder hereunder.
10
(dd) No Stabilization. The Company has not taken, directly or
indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the Shares.
(ee) Business With Cuba. The Company has complied with all provisions
of Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating
to doing business with the Government of Cuba or with any person or affiliate
located in Cuba.
(ff) Margin Rules. Neither the issuance, sale and delivery of the
Shares nor the application of the proceeds thereof by the Company as described
in the Registration Statement and the Prospectus will violate Regulation T, U or
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors.
(gg) Forward-Looking Statements. No forward-looking statement (within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
(hh) Statistical and Market Data. Nothing has come to the attention of
the Company that has caused the Company to believe that the statistical and
market-related data included in the Registration Statement and the Prospectus is
not based on or derived from sources that are reliable and accurate in all
material respects.
(ii) No securities or preferred stock of or guaranteed by the Company
or any of its subsidiaries has been rated by any "nationally recognized
statistical rating organization", as such term is defined by the Commission for
purposes of Rule 436 (g)(2) under the Securities Act.
(jj) The Options. The unissued Shares issuable upon the exercise of
options (the "Options") to be exercised by certain of the Selling Stockholders
(the "Optionholders") have been duly authorized by the Company, validly reserved
for issuance, and at the time of delivery to the Underwriter with respect to
such Shares, such Shares will be issued and delivered in accordance with the
provisions of the Stock Option Agreements between the Company and such Selling
Stockholders pursuant to which such Options were granted (the "Option
Agreements") and will be validly issued, fully paid and non-assessable and will
conform to the description thereof in the Prospectus.
(kk) The Option Agreements. The Options were duly authorized and issued
pursuant to the Option Agreements and constitute valid and binding obligations
of the Company and the Optionholders are entitled to the benefits provided by
the Option Agreements; the Option Agreements were duly authorized, executed and
delivered and constitute valid and legally binding agreements enforceable
against the Company in accordance with their terms except as enforceability may
be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or by equitable principles relating to
enforceability; and the Options and the Option Agreements conform to the
descriptions thereof in the Prospectus.
(ll) Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part
of the Company or any of the Company's directors or officers, in their
capacities as such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of
2002 and the rules and regulations promulgated in
11
connection therewith (the "Xxxxxxxx-Xxxxx Act"), including Section 402 related
to loans and Sections 302 and 906 related to certifications.
4. Representations and Warranties of the Selling Stockholders. Each of
the Selling Stockholders severally represents and warrants to the Underwriter
and the Company that:
(a) Required Consents; Authority. All consents, approvals,
authorizations and orders necessary for the execution and delivery by such
Selling Stockholder of this Agreement and the Power of Attorney (the "Power of
Attorney") and the Custody Agreement (the "Custody Agreement") hereinafter
referred to, and for the sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder, have been obtained; and such Selling Stockholder
has full right, power and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder hereunder; this Agreement, the
Power of Attorney and the Custody Agreement have each been duly authorized,
executed and delivered by such Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by
such Selling Stockholder of this Agreement, the Power of Attorney and the
Custody Agreement, the sale of the Shares to be sold by such Selling Stockholder
and the consummation by such Selling Stockholder of the transactions herein and
therein contemplated will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of such Selling Stockholder pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling Stockholder
is bound or to which any of the property or assets of such Selling Stockholder
is subject or (ii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory agency.
(c) Title to Shares. Such Selling Stockholder has good and
valid title to the Shares to be sold at the Closing Date or the Additional
Closing Date, as the case may be, by such Selling Stockholder hereunder (other
than the Shares to be issued upon exercise of Options), free and clear of all
liens, encumbrances, equities or adverse claims; such Selling Stockholder will
have, immediately prior to the Closing Date or the Additional Closing Date, as
the case may be, assuming due issuance of any Shares to be issued upon exercise
of Options, good and valid title to the Shares to be sold at the Closing Date or
the Additional Closing Date, as the case may be, by such Selling Stockholder,
free and clear of all liens, encumbrances, equities or adverse claims; and, upon
delivery of the certificates representing such Shares and payment therefor
pursuant hereto, good and valid title to such Shares, free and clear of all
liens, encumbrances, equities or adverse claims, will pass to the Underwriter.
(d) No Stabilization. Such Selling Stockholder has not taken
and will not take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or manipulation
of the price of the Shares.
(e) Registration Statement and Prospectus. As of the
applicable effective date of the Registration Statement and any amendment
thereto, the Registration Statement complied and will comply in all material
respects with the Securities Act, and did not and will not contain any
12
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; and as of the applicable filing date of the Prospectus and any
amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that such Selling Stockholder makes no representation and warranty with respect
to any statements or omissions made in reliance upon and in conformity with
information relating to the Underwriter furnished to the Company in writing by
such Underwriter expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto, such information consisting
solely of the information set forth as such in Section 8(c) hereof.
(f) Material Information. Such Selling Stockholder represents
and warrants to the Underwriter as of the date hereof, as of the Closing Date
and as of the Additional Closing Date, as the case may be, that the sale of the
Securities by such Selling Stockholder is not and will not be prompted by any
material information concerning the Company which is not set forth in the
Registration Statement or the Prospectus.
(g) Representations and Warranties of the Company. Such
Selling Stockholder has no reason to believe that the representations and
warranties of the Company contained in Section 3 are not true and correct, is
familiar with the Registration Statement and Prospectus and has no knowledge of
any material fact, condition or information not disclosed in the Prospectus that
has had, or could reasonably be expected to have, a Material Adverse Effect.
(h) No Registration Rights. There are no contracts, agreements
or understandings between such Selling Stockholder and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant to
the Registration Statement.
Each of the Selling Stockholders represents and warrants that
certificates in negotiable form representing all of the Shares to be sold by
such Selling Stockholders hereunder other than any such Shares to be issued upon
the exercise of Options, have been, and each of the Selling Stockholders who is
selling Shares upon the exercise of Options represents and warrants that duly
completed and executed irrevocable Option exercise notices, in the forms
specified by the relevant Option Agreement, with respect to all of the Shares to
be sold by such Selling Stockholders hereunder have been, placed in custody
under a Custody Agreement relating to such Shares, in the form heretofore
furnished to you, duly executed and delivered by such Selling Stockholder to
[_______], as custodian (the "Custodian"), and that such Selling Stockholder has
duly executed and delivered Powers of Attorney, in the form heretofore furnished
to you, appointing the person or persons indicated in Schedule I hereto, and
each of them, as such Selling Stockholder's Attorneys-in-fact (the
"Attorneys-in-Fact" or any one of them the "Attorney-in Fact") with authority to
execute and deliver this Agreement on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the Underwriter to the Selling
Stockholders as provided herein, to authorize the delivery of the Shares to be
sold by such Selling Stockholder hereunder, to authorize (if applicable) the
exercise of the Options to be
13
exercised with respect to the Shares to be sold by such Selling Stockholder
hereunder and otherwise to act on behalf of such Selling Stockholder in
connection with the transactions contemplated by this Agreement and the Custody
Agreement.
Each of the Selling Stockholders specifically agrees that the
Shares represented by the certificates or the irrevocable Option exercise
notice, in either case held in custody for such Selling Stockholder under the
Custody Agreement, are subject to the interests of the Underwriter hereunder,
and that the arrangements made by such Selling Stockholder for such custody, and
the appointment by such Selling Stockholder of the Attorneys-in-Fact by the
Power of Attorney, are to that extent irrevocable. Each of the Selling
Stockholders specifically agrees that the obligations of such Selling
Stockholder hereunder shall not be terminated by operation of law, whether by
the death or incapacity of any individual Selling Stockholder, or, in the case
of an estate or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a partnership,
corporation or similar organization, by the dissolution of such partnership,
corporation or organization, or by the occurrence of any other event. If any
individual Selling Stockholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be terminated, or if
any such partnership, corporation or similar organization should be dissolved,
or if any other such event should occur, before the delivery of the Shares
hereunder, certificates representing such Shares shall be delivered by or on
behalf of such Selling Stockholder in accordance with the terms and conditions
of this Agreement and the Custody Agreement, and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if
such death, incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the Attorneys-in-Fact, or
any of them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
5. Further Agreements of the Company. The Company covenants and agrees
with each Underwriter that:
(a) Effectiveness of the Registration Statement. The Company will use
its reasonable best efforts to cause the Registration Statement to become
effective at the earliest possible time and, if required, will file the final
Prospectus with the Commission within the time periods specified by Rule 424(b)
and Rule 430A under the Securities Act and the Company will furnish copies of
the Prospectus to the Underwriter in New York City prior to 10:00 A.M., New York
City time, on the business day next succeeding the date of this Agreement in
such quantities as the Underwriter may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i)
to the Underwriter, two signed copies of the Registration Statement as
originally filed and each amendment thereto, in each case including all exhibits
and consents filed therewith; and (ii) to the Underwriter (A) a conformed copy
of the Registration Statement as originally filed and each amendment thereto
(without exhibits) and (B) during the Prospectus Delivery Period, as many copies
of the Prospectus (including all amendments and supplements thereto) as the
Underwriter may reasonably request. As used herein, the term "Prospectus
Delivery Period" means such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriter a
prospectus relating to the Shares is required by law to be delivered in
connection with sales of the Shares by the Underwriter or any dealer.
14
(c) Amendments or Supplements. Before filing any amendment or
supplement to the Registration Statement or the Prospectus, the Company will
furnish to the Underwriter and counsel for the Underwriter a copy of the
proposed amendment or supplement for review and will not file any such proposed
amendment or supplement to which the Underwriter reasonably objects.
(d) Notice to the Representative. The Company will advise the
Underwriter promptly, and confirm such advice in writing, (i) when the
Registration Statement has become effective; (ii) when any amendment to the
Registration Statement has been filed or becomes effective; (iii) when any
supplement to the Prospectus or any amendment to the Prospectus has been filed;
(iv) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or the receipt of any
comments from the Commission relating to the Registration Statement or any other
request by the Commission for any additional information; (v) of the issuance by
the Commission of any order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or the initiation or threatening of any proceeding for that
purpose; (vi) of the occurrence of any event within the Prospectus Delivery
Period as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not
misleading; and (vii) of the receipt by the Company of any notice with respect
to any suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its best efforts to prevent the issuance of
any such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification of the Shares and, if any such order is
issued, will obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If during the Prospectus
Delivery Period (i) any event shall occur or condition shall exist as a result
of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading or (ii) it is necessary to amend or supplement the
Prospectus to comply with law, the Company will immediately notify the
Underwriter thereof and forthwith prepare and, subject to paragraph (c) above,
file with the Commission and furnish to the Underwriter and to such dealers as
the Underwriter may designate, such amendments or supplements to the Prospectus
as may be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Underwriter shall reasonably request and will continue such qualifications in
effect so long as required for distribution of the Shares.
(g) Earning Statement. The Company will make generally available to its
security holders and the Underwriter as soon as practicable an earning statement
that satisfies the
15
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months beginning
with the first fiscal quarter of the Company occurring after the "effective
date" (as defined in Rule 158) of the Registration Statement.
(h) Clear Market. For a period of 90 days after the date of the initial
public offering of the Shares, the Company will not (i) offer, pledge, announce
the intention to sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Stock or any securities convertible into or exercisable or
exchangeable for Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Stock, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of the Underwriter; provided,
however, that the Company may issue (i) Shares to be sold hereunder, and (ii)
options to purchase its Stock, or Stock upon the exercise of outstanding options
as described in the Prospectus, pursuant to any stock option, stock bonus or
other stock plan or arrangement described in the Prospectus, but in the case of
newly issued options, only if the holders of such options or shares issued upon
exercise of such options agree or have agreed in writing not to directly or
indirectly offer, pledge, announce the intention to sell, sell, transfer or
dispose of any Stock or securities exercisable or exchangeable for Stock during
such 90-day period without the prior written consent of the Underwriter.
(i) Use of Proceeds. The Company will apply the net proceeds from the
sale of the Shares as described in the Prospectus under the heading "Use of
Proceeds".
(j) No Stabilization. The Company will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the Shares.
(k) Exchange Listing. The Company will use its best efforts to list for
quotation the Shares on the National Association of Securities Dealers Automated
Quotations National Market (the "Nasdaq National Market").
(l) Reports. So long as the Shares are outstanding, the Company will
furnish to the Underwriter, as soon as they are available, copies of all reports
or other communications (financial or other) furnished to holders of the Shares,
and copies of any reports and financial statements furnished to or filed with
the Commission or any national securities exchange or automatic quotation
system.
6. Further Agreements of the Selling Stockholders. Each of the Selling
Stockholders covenants and agrees with the Underwriter that:
(a) Clear Market. For a period of 90 days after the date of
the initial public offering of the Shares, such Selling Stockholder will not (i)
offer, pledge, announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of,
16
directly or indirectly, any shares of Stock or any securities convertible into
or exercisable or exchangeable for Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Stock or such other securities, in
cash or otherwise or (iii) make any demand for or exercise any right with
respect to the registration of any shares of Stock or any security convertible
into or exercisable or exchangeable for Stock without the prior written consent
of the Underwriter, in each case other than the Shares to be sold by such
Selling Stockholder hereunder.
(b) Tax Form. It will deliver to the Underwriter prior to or
at the Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by the
Treasury Department regulations in lieu thereof) in order to facilitate the
Underwriter's documentation of their compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated.
7. Conditions of Underwriter's Obligations. The obligation of the
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be as provided
herein is subject to the performance by the Company and each of the Selling
Stockholders of their respective covenants and other obligations hereunder and
to the following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration Statement
(or if a post-effective amendment thereto is required to be filed under the
Securities Act, such post-effective amendment) shall have become effective, and
the Underwriter shall have received notice thereof, not later than 5:00 P.M.,
New York City time, on the date hereof; no order suspending the effectiveness of
the Registration Statement shall be in effect, and no proceeding for such
purpose shall be pending before or threatened by the Commission; the Prospectus
shall have been timely filed with the Commission under the Securities Act and in
accordance with Section 5(a) hereof; and all requests by the Commission for
additional information shall have been complied with to the reasonable
satisfaction of the Underwriter.
(b) Representations and Warranties. The respective representations and
warranties of the Company and the Selling Stockholders contained herein shall be
true and correct on the date hereof and on and as of the Closing Date or the
Additional Closing Date, as the case may be; and the statements of the Company
and its officers and of each of the Selling Stockholders made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date or the Additional Closing Date, as the case may be.
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, no event or condition of a type described in Section
3(d) hereof shall have occurred or shall exist, which event or condition is not
described in the Prospectus (excluding any amendment or supplement thereto) and
the effect of which in the judgment of the Underwriter makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the terms
and in the manner contemplated by this Agreement and the Prospectus.
17
(d) Officer's Certificate. The Underwriter shall have received on and
as of the Closing Date or the Additional Closing Date, as the case may be, a
certificate (i) of the chief financial officer or chief accounting officer of
the Company and one additional senior executive officer of the Company who is
satisfactory to the Underwriter (A) confirming that such officers have carefully
reviewed the Registration Statement and the Prospectus and, to the best
knowledge of such officers, the representation of the Company set forth in
Section 3(b) hereof is true and correct, (B) confirming that the other
representations and warranties of the Company in this Agreement are true and
correct and that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date and (C) to the effect set forth in paragraphs (a), (c) and (d)
above and (ii) of the Selling Stockholders, in form and substance reasonably
satisfactory to the Underwriter, (A) confirming that the representation of such
Selling Stockholders set forth in Section 4(e) hereof is true and correct and
(B) confirming that the other representations and warranties of such Selling
Stockholders in this agreement are true and correct and that the such Selling
Stockholders have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to such Closing
Date.
(e) Comfort Letters. On the date of this Agreement and on the Closing
Date or the Additional Closing Date, as the case may be, Deloitte & Touche LLP
shall have furnished to the Underwriter, at the request of the Company, letters,
dated the respective dates of delivery thereof and addressed to the Underwriter,
in form and substance reasonably satisfactory to the Underwriter, containing
statements and information of the type customarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus; provided, that the letter delivered on the Closing Date or the
Additional Closing Date, as the case may be, shall use a "cut-off" date no more
than three business days prior to such Closing Date or such Additional Closing
Date, as the case may be.
(f) Opinion of Counsel for the Company. Xxxxx Xxxxxxx & Xxxx LLP,
counsel for the Company, shall have furnished to the Underwriter their written
opinion, dated the Closing Date or the Additional Closing Date, as the case may
be, and addressed to the Underwriter, in form and substance reasonably
satisfactory to the Underwriter, to the effect set forth in Annex A hereto.
(g) Opinion of Counsel for the Selling Stockholders. Xxxxx Liddell &
Xxxx LLP, counsel for the Selling Stockholders, shall have furnished to the
Underwriter their written opinion, dated the Closing Date or the Additional
Closing Date, as the case may be, and addressed to the Underwriter, in form and
substance reasonably satisfactory to the Underwriter, to the effect set forth in
Annex B hereto.
(h) Opinion of Counsel for the Underwriter. The Underwriter shall have
received on and as of the Closing Date or the Additional Closing Date, as the
case may be, an opinion of Cravath, Swaine & Xxxxx LLP, counsel for the
Underwriter, with respect to such matters as the Underwriter may reasonably
request, and such counsel shall have received such documents and information as
they may reasonably request to enable them to pass upon such matters.
18
(i) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any federal, state or foreign governmental or regulatory authority
that would, as of the Closing Date or the Additional Closing Date, as the case
may be, prevent the issuance or sale of the Shares; and no injunction or order
of any federal, state or foreign court shall have been issued that would, as of
the Closing Date or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares.
(j) Good Standing. The Underwriter shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, satisfactory
evidence of the good standing of the Company and its subsidiaries in their
respective jurisdictions of organization and their good standing as foreign
entities in such other jurisdictions as the Underwriter may reasonably request,
in each case in writing or any standard form of telecommunication from the
appropriate Governmental Authorities of such jurisdictions.
(k) Exchange Listing. The Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved for
listing on The Nasdaq National Market, subject to official notice of issuance.
(l) Lock-up Agreements. The "lock-up" agreements, each substantially in
the form of Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions of
shares of Stock or certain other securities, delivered to you on or before the
date hereof, shall be full force and effect on the Closing Date or the
Additional Closing Date, as the case may be.
(m) Additional Documents. On or prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company and the Selling
Stockholders shall have furnished to the Underwriter such further certificates
and documents as the Underwriter may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
8. Indemnification and Contribution.
(a) Indemnification of the Underwriter by the Company. The Company
agrees to indemnify and hold harmless the Underwriter, its affiliates, directors
and officers and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, legal fees and other expenses incurred in connection with
any suit, action or proceeding or any claim asserted, as such fees and expenses
are incurred), joint or several, that arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or any Preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities arise
19
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to the Underwriter furnished to the Company in writing by
the Underwriter through the Underwriter expressly for use therein, it being
understood and agreed that the only such information furnished by the
Underwriter consists of the information described as such in subsection (c)
below.
(b) Indemnification of the Underwriter by the Selling Stockholders.
Each of the Selling Stockholders severally agrees to indemnify and hold harmless
the Underwriter, its affiliates, directors and officers and each person, if any,
who controls the Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, the legal fees
and other expenses incurred in connection with any suit, action or proceeding or
any claim asserted, as such fees and expenses are incurred), joint or several,
that arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) or any Preliminary
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to the Underwriter furnished to the Company in writing by the
Underwriter through the Underwriter expressly for use therein, it being
understood and agreed that the only such information furnished by the
Underwriter consists of the information described as such in subsection (c)
below.
(c) Indemnification of the Company and the Selling Stockholders. The
Underwriter agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and each of the Selling Stockholders to the same
extent as the indemnity set forth in paragraph (a) above, but only with respect
to any losses, claims, damages or liabilities that arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to the
Underwriter furnished to the Company in writing by the Underwriter expressly for
use in the Registration Statement and the Prospectus (or any amendment or
supplement thereto) or any Preliminary Prospectus, it being understood and
agreed upon that the only such information furnished by the Underwriter consists
of the following information in the Prospectus furnished on behalf of the
Underwriter: the concession and reallowance figures appearing in the fifth
paragraph under the caption "Underwriting" and the information contained in the
ninth, tenth and eleventh paragraphs under the caption "Underwriting" insofar as
such paragraphs describe passive market making and stabilization.
(d) Notice and Procedures. If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be brought
or asserted against any person in respect of which indemnification may be sought
pursuant to the preceding paragraphs of this Section 8, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnification may be sought (the "Indemnifying Person") in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may
20
have under this Section 8 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 8. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 8 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be paid or reimbursed as they are incurred. Any such separate firm for the
Underwriter, its affiliates, directors and officers and any control persons of
the Underwriter shall be designated in writing by X.X. Xxxxxx Securities Inc.,
any such separate firm for the Company, its directors, its officers who signed
the Registration Statement and any control persons of the Company shall be
designated in writing by the Company and any such separate firm for the Selling
Stockholders shall be designated in writing by the Attorney-in-Fact. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested that an Indemnifying
Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.
21
(e) Contribution. If the indemnification provided for in paragraphs
(a), (b) and (c) above is unavailable to an Indemnified Person or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person 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 and the Selling Stockholders on the one hand
and the Underwriter on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriter on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriter on the other shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company and the Selling Stockholders from the sale of the Shares and the
total underwriting discounts and commissions received by the Underwriter in
connection therewith, in each case as set forth in the table on the cover of the
Prospectus bear to the aggregate offering price of the Shares. The relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriter on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Selling Stockholders or by the Underwriter and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(f) Limitation on Liability. The Company, the Selling Stockholders and
the Underwriter agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
Selling Stockholders or the Underwriter were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (e) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (e) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 8, in no event shall the
Underwriter be required to contribute any amount in excess of the amount by
which the total underwriting discounts and commissions received by the
Underwriter with respect to the offering of the Shares exceeds the amount of any
damages that the 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(g) Non-Exclusive Remedies. The remedies provided for in this Section 8
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any Indemnified Person at law or in equity.
22
9. Effectiveness of Agreement. This Agreement shall become effective
upon the later of (i) the execution and delivery hereof by the parties hereto
and (ii) receipt by the Company and the Underwriter of notice of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment thereto).
10. Termination. This Agreement may be terminated in the absolute
discretion of the Underwriter, by notice to the Company and the Selling
Stockholders, if after the execution and delivery of this Agreement and prior to
the Closing Date or, in the case of the Option Shares, prior to the Additional
Closing Date (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade; (ii) trading of any securities issued or guaranteed by the Company shall
have been suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities shall have been declared by
federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis, either within or outside the United States, that, in the
judgment of the Underwriter, is material and adverse and makes it impracticable
or inadvisable to proceed with the offering, sale or delivery of the Shares on
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated by this Agreement and the Prospectus.
11. Payment of Expenses. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company will pay or cause to be paid all costs and expenses incident to the
performance of its obligations hereunder, including without limitation, (i) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Shares and any taxes payable in that connection; (ii) the costs incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement, the Preliminary Prospectus and the Prospectus (including
all exhibits, amendments and supplements thereto) and the distribution thereof;
(iii) the costs of reproducing and distributing this Agreement; (iv) the fees
and expenses of the Company's counsel and independent accountants; (v) the fees
and expenses incurred in connection with the registration or qualification and
determination of eligibility for investment of the Shares under the laws of such
jurisdictions as the Underwriter may designate and the preparation, printing and
distribution of a Blue Sky Memorandum (including the related fees and expenses
of counsel for the Underwriter); (vi) the cost of preparing stock certificates;
(vii) the costs and charges of any transfer agent and any registrar; (viii) all
expenses and application fees incurred in connection with any filing with, and
clearance of the offering by, the National Association of Securities Dealers,
Inc.; (ix) all expenses incurred by the Company in connection with any "road
show" presentation to potential investors including, without limitation,
transportation in connection with the "road show"; and (x) all expenses and
application fees related to the listing of the Shares on The Nasdaq National
Market.
(b) If (i) this Agreement is terminated pursuant to Section 10, (ii)
the Company or the Selling Stockholders for any reason fail to tender the Shares
for delivery to the Underwriter or (iii) the Underwriter declines to purchase
the Shares for any reason permitted under this Agreement, the Company agrees to
reimburse the Underwriter for all out-of-pocket costs and
23
expenses (including the fees and expenses of their counsel) reasonably incurred
by the Underwriter in connection with this Agreement and the offering
contemplated hereby.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and any controlling persons
referred to in Section 8 hereof. Nothing in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
No purchaser of Shares from the Underwriter shall be deemed to be a successor
merely by reason of such purchase.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Selling
Stockholders and the Underwriter contained in this Agreement or made by or on
behalf of the Company, the Selling Stockholders or the Underwriter pursuant to
this Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Shares and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation
made by or on behalf of the Company, the Selling Stockholders or the
Underwriter.
14. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; (b) the term "business day" means
any day other than a day on which banks are permitted or required to be closed
in New York City; and (c) the term "subsidiary" has the meaning set forth in
Rule 405 under the Securities Act.
(a) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriter
shall be given to the Representative c/o X.X. Xxxxxx Securities Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000); Attention: Syndicate
Desk. Notices to the Company shall be given to it at Lowrance Electronics, Inc.,
00000 Xxxx Xxxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000, (Fax: (000) 000-0000);
Attention: Xxxxxxx X. Xxxxxxxx. Notices to the Selling Stockholders shall be
given to the Attorneys-in-Fact at 00000 Xxxx Xxxxxx Xxxxx, Xxxxx, Xxxxxxxx
00000, (Fax: (000) 000-0000); Attention: Xxxxxxx X. Xxxxxxxx.
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(c) Counterparts. This Agreement may be signed in counterparts (which
may include counterparts delivered by any standard form of telecommunication),
each of which shall be an original and all of which together shall constitute
one and the same instrument.
(d) Amendments or Waivers. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
(e) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
24
If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Very truly yours,
LOWRANCE ELECTRONICS, INC.,
By:
------------------------------
Name:
Title:
SELLING STOCKHOLDERS,
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
As Attorneys-in-Fact acting
on behalf of each of the
Selling Stockholders named
in Schedule I to this
Agreement.
Accepted: , 2004
-----------
X.X. XXXXXX SECURITIES INC.
By
----------------------------
Authorized Signatory
SCHEDULE I
Number of Number of
Selling Stockholders: Underwritten Shares: Option Shares:
--------------------- -------------------- --------------
SCHEDULE II
Underwriter Number of Shares
----------- ----------------
X.X. Xxxxxx Securities Inc.
-----------------------
Total
ANNEX A
[Form of Opinion of Xxxxx Xxxxxxx & Xxxx LLP]
(-) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion; the Prospectus
was filed with the Commission pursuant to the subparagraph of Rule 424(b) under
the Securities Act specified in such opinion on the date specified therein; and
no order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose is pending or, to the best knowledge
of such counsel, threatened by the Commission.
(-) The Registration Statement and the Prospectus (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Securities Act.
(-) The Company and each of its subsidiaries have been duly organized
and are validly existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect.
(-) The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization"; all the outstanding shares of
capital stock of the Company (including the Shares to be sold by the Selling
Stockholders) have been duly and validly authorized and issued and are fully
paid and non-assessable; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Registration
Statement and the Prospectus; and all the outstanding shares of capital stock or
other equity interests of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable.
(-) The Company has full right, power and authority to execute and
deliver the Underwriting Agreement and to perform its obligations thereunder;
and all action required to be taken for the due and proper authorization,
execution and delivery of the Underwriting Agreement and the consummation by the
Company of the transactions contemplated thereby have been duly and validly
taken.
(-) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(-) The Shares to be issued and sold by the Company hereunder have been
duly authorized, and when delivered to and paid for by the Underwriter in
accordance with the terms
2
of this Agreement, will be validly issued, fully paid and non-assessable and the
issuance of the Shares is not subject to any preemptive or similar rights.
(-) Neither the Company nor any of its subsidiaries is (i) in violation
of its charter or by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of its property or assets is subject; or (iii) in
violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority, except in the
case of clauses (ii) and (iii) above, for any such default or violation that
could not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.
(-) The execution, delivery and performance by the Company of the
Underwriting Agreement, the issuance and sale of the Shares to be sold by the
Company and delivered on the Closing Date or the Additional Closing Date, as the
case may be, the issuance by the Company of the Shares to be issued upon the
exercise of the Options, and compliance by the Company with the terms of, and
the consummation of the transactions contemplated by, the Underwriting Agreement
will not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or by-laws or similar organizational documents of
the Company or any of its subsidiaries or (iii) result in the violation of any
law or statute or any judgment, order or regulation of any court or arbitrator
or governmental or regulatory authority except, in the case of clauses (i) and
(iii) above, for such conflict, breach or violation that could not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect.
(-) No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company
of the Underwriting Agreement, the issuance and sale of the Shares to be sold by
the Company and delivered on the Closing Date or the Additional Closing Date, as
the case may be, the issuance by the Company of the Shares to be issued upon the
exercise of the Options, and compliance by the Company with the terms thereof
and the consummation of the transactions contemplated by the Underwriting
Agreement, except for the registration of the Shares under the Securities Act
and such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities laws in
connection with the purchase and distribution of the Shares by the Underwriter.
(-) To the best knowledge of such counsel, except as described in the
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any
3
property of the Company or any of its subsidiaries is or may be the subject
which, individually or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, could reasonably be expected to have a Material
Adverse Effect; and to the best knowledge of such counsel, no such
investigations, actions, suits or proceedings are threatened or contemplated by
any governmental or regulatory authority or threatened by others.
(-) The descriptions in the Prospectus of statutes, legal, governmental
and regulatory proceedings and contracts and other documents are accurate in all
material respects; the statements in the Prospectus under the headings "U.S.
federal tax considerations for non-U.S. holders of common stock", "Description
of capital stock" and "Underwriting", and in the Registration Statement in items
14 and 15, to the extent that they constitute summaries of the terms of stock,
matters of law or regulation or legal conclusions, fairly summarize the matters
described therein in all material respects; and, to the best knowledge of such
counsel, (A) there are no current or pending legal, governmental or regulatory
actions, suits or proceedings that are required under the Securities Act to be
described in the Prospectus and that are not so described and (B) there are no
statutes, regulations or contracts and other documents that are required under
the Securities Act to be filed as exhibits to the Registration Statement or
described in the Prospectus and that have not been so filed or described.
(-) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be required to register as an "investment company" or
an entity "controlled" by an "investment company" within the meaning of the
Investment Company Act.
(-) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership or
lease of their respective properties or the conduct of their respective
businesses as described in the Registration Statement and the Prospectus, except
where the failure to possess or make the same could not reasonably be expected
to, individually or in the aggregate, have a Material Adverse Effect; and except
as described in the Prospectus, neither the Company nor any of its subsidiaries
has received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course.
(-) Each of the Company and its subsidiaries owns, possesses or has the
right to use the Intellectual Property employed by it in connection with the
business conducted by it as of the date hereof.
(-) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as described or referred to in the Prospectus or such as
do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, existing and
enforceable leases with such exceptions
4
as are not material and do not interfere with the use made or proposed to be
made of such property and buildings by the Company or its subsidiaries.
(-) Each of the Company and its subsidiaries is in compliance with all
Environmental Laws, except, in each case, where noncompliance, individually or
in the aggregate, would not have a material adverse effect on the Company and
its subsidiaries taken as a whole; there are no legal or governmental
proceedings pending, or to the knowledge of such counsel, threatened against or
affecting the Company or any of its subsidiaries under any Environmental Law
which, individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the Company and its subsidiaries taken as a whole.
Such counsel shall also state that they have participated in
conferences with representatives of the Company and with representatives of its
independent accountants and counsel at which conferences the contents of the
Registration Statement and the Prospectus and any amendment and supplement
thereto and related matters were discussed and, although such counsel assume no
responsibility for the accuracy, completeness or fairness of the Registration
Statement, the Prospectus and any amendment or supplement thereto (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Registration Statement, at the time of
its effective date (including the information, if any, deemed pursuant to Rule
430A to be part of the Registration Statement at the time of effectiveness),
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 or any amendment or supplement thereto as
of its date and the Closing Date contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(other than the financial statements and other financial data contained therein,
as to which such counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and public officials that
are furnished to the Underwriter.
The opinion of Xxxxx Xxxxxxx & Xxxx LLP described above shall be
rendered to the Underwriter at the request of the Company and shall so state
therein.
ANNEX B
[Form of Opinion of Counsel For
The Selling Stockholders]
( ) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders.
( ) A Power of Attorney and a Custody Agreement have been duly
authorized, executed and delivered by each Selling Stockholder and constitute
valid and binding agreements of each Selling Stockholder in accordance with
their terms.
( ) Each Selling Stockholder is the record, beneficial and lawful owner
of all of the Shares to be sold by such Selling Stockholder and has valid and
marketable title to such Shares, and upon delivery of and payment for the
Shares, the Underwriter will acquire valid and marketable title to the shares,
free and clear of any mortgage, pledge, security interest, lien, claim or other
encumbrance or restriction on transferability or any adverse claim.
( ) The sale of the Shares and the execution and delivery by the
Selling Shareholder of, and the performance by the Selling Shareholder of its
obligations under, the Underwriting Agreement, and the consummation of the
transactions contemplated therein, (i) have been duly authorized on the part of
each of the Selling Stockholders, and (ii) will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material agreement
or instrument to which any Selling Stockholder is a party or by which any
Selling Stockholder is bound or to which any of the property or assets of any
Selling Stockholder is subject, nor will any such action result in any violation
of the provisions of the charter or by-laws or similar organizational documents
of any Selling Stockholder or any applicable law or statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over such Selling Stockholder or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the sale of the Shares
or the consummation by the Selling Stockholders of the transactions contemplated
by the Underwriting Agreement, except such consents, approvals, authorizations,
registrations or qualifications as have been obtained under the Securities Act
and as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriter, and except
for such consents, approvals, authorizations, registrations or qualifications
that could not reasonably be expected to result in a material adverse effect to
the Selling Shareholders, including their ability to consummate the transaction.
The opinion of counsel described above shall be rendered to the
Underwriter at the request of the Selling Stockholders and shall so state
therein.
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
______ __, 2004
X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Lowrance Electronics, Inc. --- Public Offering
Ladies and Gentlemen:
The undersigned understands that you propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") with Lowrance Electronics,
Inc., a Delaware corporation (the "Company"), providing for the public offering
(the "Public Offering") by X.X. Xxxxxx Securities Inc. (the "Underwriter"), of
common stock, of the Company (the "Securities"). Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
In consideration of the Underwriter's agreement to purchase and make
the Public Offering of the Securities, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of the Underwriter, the
undersigned will not, during the period ending 90 days after the date of the
prospectus relating to the Public Offering (the "Prospectus"), (1) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock, $0.10 per share par value,
of the Company (the "Common Stock") or any securities convertible into or
exercisable or exchangeable for Common Stock (including without limitation,
Common Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and securities which may be issued upon exercise of a stock option or
warrant) or (2) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. In addition, the undersigned agrees that, without the prior written
consent of the Underwriter it will not, during the period ending 90 days after
the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
2
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does
not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released form all obligations under this Letter Agreement.
The undersigned understands that the Underwriter is entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this Letter Agreement.
3
This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
[NAME OF STOCKHOLDER]
By:
------------------------------
Name:
Title:
