Draft of June 26, 1998
2,250,000 SHARES
ANALYTICAL SURVEYS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED _____, 1998
TABLE OF CONTENTS
INTRODUCTORY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . 2
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . 2
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. . . . . . . . . . . . . . 2
(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS.. . . . . . . . . . . . 3
(c) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY.. . . . . . . . . . 3
(d) THE UNDERWRITING AGREEMENT.. . . . . . . . . . . . . . . . . . . . . 3
(e) AUTHORIZATION OF THE COMMON. . . . . . . . . . . . . . . . . . . . . 3
(f) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS.. . . . . . . . . 4
(g) NO MATERIAL ADVERSE CHANGE.. . . . . . . . . . . . . . . . . . . . . 4
(h) INDEPENDENT ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . 4
(i) PREPARATION OF THE FINANCIAL STATEMENTS. . . . . . . . . . . . . . . 4
(j) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS
SUBSIDIARIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(k) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS.. . . . . . . . . . . 5
(l) STOCK EXCHANGE LISTING.. . . . . . . . . . . . . . . . . . . . . . . 6
(m) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED.. . . . . . . . . . . . . . . . 6
(n) NO MATERIAL ACTIONS OR PROCEEDINGS.. . . . . . . . . . . . . . . . . 6
(o) INTELLECTUAL PROPERTY RIGHTS.. . . . . . . . . . . . . . . . . . . . 7
(p) ALL NECESSARY PERMITS, ETC.. . . . . . . . . . . . . . . . . . . . . 7
(q) TITLE TO PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . 7
(r) TAX LAW COMPLIANCE.. . . . . . . . . . . . . . . . . . . . . . . . . 7
(s) COMPANY NOT AN "INVESTMENT COMPANY". . . . . . . . . . . . . . . . . 8
(t) INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(u) NO PRICE STABILIZATION OR MANIPULATION.. . . . . . . . . . . . . . . 8
(v) RELATED PARTY TRANSACTIONS.. . . . . . . . . . . . . . . . . . . . . 8
(w) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. . . . . . . . . . . . . 8
(x) COMPLIANCE WITH ENVIRONMENTAL LAWS.. . . . . . . . . . . . . . . . . 8
(y) ERISA COMPLIANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . 9
(z) EXCHANGE ACT COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . .10
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.. . . . . . .10
(a) THE UNDERWRITING AGREEMENT.. . . . . . . . . . . . . . . . . . . . .10
(b) THE CUSTODY AGREEMENT AND POWER OF ATTORNEY. . . . . . . . . . . . .10
(c) TITLE TO COMMON SHARES TO BE SOLD; ALL AUTHORIZATIONS OBTAINED.. . .11
(d) DELIVERY OF THE COMMON SHARES TO BE SOLD.. . . . . . . . . . . . . .11
(e) NON-CONTRAVENTION; NO FURTHER AUTHORIZATIONS OR
APPROVALS REQUIRED.. . . . . . . . . . . . . . . . . . . . . . . . .11
(f) NO REGISTRATION OR OTHER SIMILAR RIGHTS. . . . . . . . . . . . . . .11
(g) NO FURTHER CONSENTS, ETC.. . . . . . . . . . . . . . . . . . . . . .12
(h) DISCLOSURE MADE BY SUCH SELLING SHAREHOLDER IN THE PROSPECTUS. . . .12
(i) NO PRICE STABILIZATION OR MANIPULATION.. . . . . . . . . . . . . . .12
(j) CONFIRMATION OF COMPANY REPRESENTATIONS AND WARRANTIES.. . . . . . .12
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.. . . . . . . .13
A. THE FIRM COMMON SHARES.. . . . . . . . . . . . . . . . . . . . . . .13
B. THE FIRST CLOSING DATE.. . . . . . . . . . . . . . . . . . . . . . .13
C. THE OPTIONAL COMMON SHARES; THE SECOND CLOSING DATE. . . . . . . . .13
D. PUBLIC OFFERING OF THE COMMON SHARES.. . . . . . . . . . . . . . . .14
E. PAYMENT FOR THE COMMON SHARES. . . . . . . . . . . . . . . . . . . .14
F. DELIVERY OF THE COMMON SHARES. . . . . . . . . . . . . . . . . . . .15
G. DELIVERY OF PROSPECTUS TO THE UNDERWRITERS.. . . . . . . . . . . . .15
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SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY AND THE SELLING
SHAREHOLDERS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
A. COVENANTS OF THE COMPANY.. . . . . . . . . . . . . . . . . . . . . .15
(a) REPRESENTATIVES' REVIEW OF PROPOSED AMENDMENTS AND SUPPLEMENTS.. . .15
(b) SECURITIES ACT COMPLIANCE. . . . . . . . . . . . . . . . . . . . . .15
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER
SECURITIES ACT MATTERS.. . . . . . . . . . . . . . . . . . . . . . .16
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS.. . . . .16
(e) BLUE SKY COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . . .16
(f) USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . .17
(g) TRANSFER AGENT.. . . . . . . . . . . . . . . . . . . . . . . . . . .17
(h) EARNINGS STATEMENT.. . . . . . . . . . . . . . . . . . . . . . . . .17
(i) PERIODIC REPORTING OBLIGATIONS.. . . . . . . . . . . . . . . . . . .17
(j) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.. . . . . . . .17
(k) FUTURE REPORTS TO THE REPRESENTATIVES. . . . . . . . . . . . . . . .18
(l) EXCHANGE ACT COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . .18
B. COVENANTS OF THE SELLING SHAREHOLDERS.. . . . . . . . . . . . . . . . . .18
(a) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.. . . . . . . .18
(b) DELIVERY OF FORMS W-8 AND W-9. . . . . . . . . . . . . . . . . . . .18
SECTION 4. PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . . . . .19
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. . . . . . . .19
(a) ACCOUNTANTS' COMFORT LETTER. . . . . . . . . . . . . . . . . . . . .20
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER;
NO OBJECTION FROM NASD.. . . . . . . . . . . . . . . . . . . . . . .20
(c) NO MATERIAL ADVERSE CHANGE OR RATINGS AGENCY CHANGE. . . . . . . . .20
(d) OPINION OF COUNSEL FOR THE COMPANY.. . . . . . . . . . . . . . . . .20
(e) OPINION OF COUNSEL FOR THE UNDERWRITERS. . . . . . . . . . . . . . .21
(f) OFFICERS' CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . .21
(g) BRING-DOWN COMFORT LETTER. . . . . . . . . . . . . . . . . . . . . .21
(h) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. . . . . . . . . . .21
(i) SELLING SHAREHOLDERS' CERTIFICATE. . . . . . . . . . . . . . . . . .22
(j) SELLING SHAREHOLDERS' DOCUMENTS. . . . . . . . . . . . . . . . . . .22
(k) LOCK-UP AGREEMENT FROM CERTAIN SHAREHOLDERS OF THE COMPANY
OTHER THAN SELLING SHAREHOLDERS. . . . . . . . . . . . . . . . . . .22
(l) ADDITIONAL DOCUMENTS.. . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. . . . . . . . . . . . .23
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. . . . . . . . . . . . . . . . .23
SECTION 8. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .23
(a) INDEMNIFICATION OF THE UNDERWRITERS. . . . . . . . . . . . . . . . .23
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS.. . . . .26
(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.. . . . . . . . .26
(d) SETTLEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 9. CONTRIBUTION.. . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITER.. . . . . . .29
SECTION 11. TERMINATION OF THIS AGREEMENT.. . . . . . . . . . . . . . . . .29
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.. . . . . .30
SECTION 13. NOTICES.. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
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SECTION 14. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 15. PARTIAL UNENFORCEABILITY. . . . . . . . . . . . . . . . . . . .32
SECTION 16. LEGAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
(a) GOVERNING LAW PROVISIONS . . . . . . . . . . . . . . . . . . . . . .32
(b) CONSENT TO JURISDICTION. . . . . . . . . . . . . . . . . . . . . . .32
(c) WAIVER OF IMMUNITY.. . . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING SHAREHOLDERS TO SELL
AND DELIVER COMMON SHARES. . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 18. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . .33
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UNDERWRITING AGREEMENT
_______, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXX XXXXXXXX XXXXXXX, a division of Xxxx Xxxxxxxx Incorporated
As Representatives of the several Underwriters
c/o NATIONSBANC XXXXXXXXXX SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY.
Analytical Surveys, Inc., a Colorado corporation (the "Company), proposes
to issue and sell to the several underwriters named in SCHEDULE A (the
"Underwriters") an aggregate of 1,750,000 shares of its Common Stock, no par
value per share (the "Common Stock"); and the shareholders of the Company named
on SCHEDULE B (collectively, the "Selling Shareholders") severally propose to
sell to the Underwriters an aggregate of 500,000 shares of Common Stock. The
1,750,000 shares of Common Stock to be sold by the Company and the 500,000
shares of Common Stock to be sold by the Selling Shareholders are collectively
called the "Firm Common Shares". In addition, the Company has granted to the
Underwriters an option to purchase up to an additional 262,500 shares of Common
Stock and the Selling Shareholders have severally granted to the Underwriters an
option to purchase up to an additional 75,000 shares of Common Stock, each
Selling Shareholder selling up to the amount set forth opposite such Selling
Shareholder's name on SCHEDULE B, all as provided in Section 2. The additional
262,500 shares to be sold by the Company and the additional 75,000 shares to be
sold by the Selling Shareholders pursuant to such option are collectively called
the "Optional Common Shares". The Firm Common Shares and, if and to the extent
such option is exercised, the Optional Common Shares are collectively called the
"Common Shares". NationsBanc Xxxxxxxxxx Securities LLC ("NMSI") and Xxxx
Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated, have agreed to act
as representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File
No. 333-[___]), which contains a form of prospectus to be used in connection
with the public offering and sale of the Common Shares. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including all
documents incorporated or deemed incorporated by reference therein, any
information deemed to be a part thereof at the time of effectiveness pursuant to
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Rule 430A or Rule 434 under the Securities Act or the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder (collectively, the
"Exchange Act"), is called the "Registration Statement". Any registration
statement filed by the Company pursuant to Rule 462(b) under the Securities Act
is called the "Rule 462(b) Registration Statement", and from and after the date
and time of filing of the Rule 462(b) Registration Statement the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
Such prospectus, in the form first used by the Underwriters to confirm sales of
the Common Shares, is called the "Prospectus"; PROVIDED, HOWEVER, if the Company
has, with the consent of NMSI, elected to rely upon Rule 434 under the
Securities Act, the term "Prospectus" shall mean the Company's prospectus
subject to completion (each, a "preliminary prospectus") dated ______, 1998
(such preliminary prospectus is called the "Rule 434 preliminary prospectus"),
together with the applicable term sheet (the "Term Sheet") prepared and filed by
the Company with the Commission under Rules 434 and 424(b) under the Securities
Act and all references in this Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus or the Term Sheet, or any amendments or supplements
to any of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the Exchange Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
The Company and each of the Selling Shareholders hereby confirm their
respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents, warrants and covenants to each Underwriter
as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS.
The Registration Statement and any Rule 462(b) Registration Statement
have been declared effective by the Commission under the Securities Act.
The Company has complied to the Commission's satisfaction with all requests
of the Commission for additional or supplemental information. No stop order
suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for such
purpose have been instituted or are pending or, to the best knowledge of the
Company, are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed complied in
all material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX
2
(except as may be permitted by Regulation S-T under the Securities Act), was
identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Common Shares. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and at all
subsequent times, 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 to make the statements therein not misleading. The Prospectus,
as amended or supplemented, as of its date and at all subsequent times, did
not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing
by the Representatives expressly for use therein. There are no contracts or
other documents required to be described in the Prospectus or to be filed as
exhibits to the Registration Statement which have not been described or
filed as required.
(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS.
The Company has delivered to each of the Representatives one complete
manually signed copy of the Registration Statement and of each consent and
certificate of experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and preliminary prospectuses and
the Prospectus, as amended or supplemented, in such quantities and at such
places as the Representatives have reasonably requested for each of the
Underwriters.
(c) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY.
The Company has not distributed and will not distribute, prior to the
later of the Second Closing Date (as defined below) and the completion of
the Underwriters' distribution of the Common Shares, any offering material
in connection with the offering and sale of the Common Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(d) THE UNDERWRITING AGREEMENT.
This Agreement has been duly authorized, executed and delivered by, and
is a valid and binding agreement of, the Company, enforceable in accordance
with its terms, except as rights to indemnification hereunder may be limited
by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(e) AUTHORIZATION OF THE COMMON.
The Common Shares to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale pursuant to this Agreement
and, when issued and
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delivered by the Company pursuant to this Agreement, will be validly issued,
fully paid and nonassessable.
(f) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS.
There are no persons with registration or other similar rights to have
any equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this Agreement other
than the Selling Shareholders with respect to the Common Shares included in
the Registration Statement, except for such rights as have been exercised or
duly and validly waived.
(g) NO MATERIAL ADVERSE CHANGE.
Except as otherwise disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Prospectus: (i)
there has been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, operations
or prospects, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as one
entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred
any material liability or obligation, indirect, direct or contingent, not in
the ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been
no dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company or other subsidiaries,
any of its subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class of capital
stock.
(h) INDEPENDENT ACCOUNTANTS.
KPMG Peat Marwick LLP, who have expressed their opinion with respect to
the financial statements (which term as used in this Agreement includes the
related notes thereto) and supporting schedules filed with the Commission as
a part of the Registration Statement and included in the Prospectus, are
independent public or certified public accountants as required by the
Securities Act and the Exchange Act.
(i) PREPARATION OF THE FINANCIAL STATEMENTS.
The financial statements filed with the Commission as a part of the
Registration Statement and included in the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as of
and at the dates indicated and the results of their operations and cash
flows for the periods specified. The supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein. Such financial statements and supporting schedules have been
prepared in conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary--Summary Selected Financial Data",
"Selected Financial Data" and "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement.
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(j) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS
SUBSIDIARIES.
Each of the Company and its subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and, in the case of the Company, to enter into
and perform its obligations under this Agreement. The Company is duly
qualified as a foreign corporation to transact business and is in good
standing in Indiana, North Carolina, Texas and Wisconsin and each of the
Company and each subsidiary is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change. All of the issued and outstanding capital stock of each subsidiary
has been duly authorized and validly issued, is fully paid and nonassessable
and is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance or
claim. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed
in Exhibit 22i to the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1997, Cartotech, Inc. and Interra Technologies.
(k) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS.
The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus under the caption "Capitalization" (other
than for subsequent issuances, if any, pursuant to employee benefit plans
described in the Prospectus or upon exercise of outstanding options or
warrants described in the Prospectus). The Common Stock (including the
Common Shares) conforms in all material respects to the description thereof
contained in or incorporated by reference into the Prospectus. All of the
issued and outstanding shares of Common Stock (including the shares of
Common Stock owned by Selling Shareholders) have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any of its subsidiaries
other than those accurately described in the Prospectus. The description of
the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth
in or incorporated by reference into the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
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(l) STOCK EXCHANGE LISTING.
The Common Stock (including the Common Shares) is registered pursuant
to Section 12(g) of the Exchange Act and is listed on the Nasdaq National
Market, and the Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the Nasdaq National Market
nor has the Company received any notification that the Commission or the
National Association of Securities Dealers, Inc. (the "NASD") is
contemplating terminating such registration or listing.
(m) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED.
Neither the Company nor any of its subsidiaries is in violation of its
charter or by-laws or is in default (or, with the giving of notice or lapse
of time, would be in default) ("Default") under any indenture, mortgage,
loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound (including, without limitation, the
Company's term loan and lines of credit with BankOne Colorado N.A., or to
which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an "Existing Instrument"), except for such
Defaults as would not, individually or in the aggregate, result in a
Material Adverse Change. The Company's execution, delivery and performance
of this Agreement and consummation of the transactions contemplated hereby
and by the Prospectus (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions of
the charter or by-laws of the Company or any subsidiary, (ii) will not
conflict with or constitute a breach of, or 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, or require
the consent of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change, and
(iii) will not result in any violation of any law, administrative regulation
or administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company's execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been obtained
or made by the Company and are in full force and effect under the Securities
Act, applicable state securities or blue sky laws and from the NASD.
(n) NO MATERIAL ACTIONS OR PROCEEDINGS.
There are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened (i) against
or affecting the Company or any of its subsidiaries, (ii) which has as the
subject thereof any officer or director of, or property owned or leased by,
the Company or any of its subsidiaries, or (iii) relating to environmental
or discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined
adversely to the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of
the transactions contemplated by this Agreement. No material labor
6
dispute with the employees of the Company or any of its subsidiaries exists
or, to the best of the Company's knowledge, is threatened or imminent.
(o) INTELLECTUAL PROPERTY RIGHTS.
The Company and its subsidiaries own or possess sufficient trademarks,
trade names, patent rights, copyrights, licenses, approvals, trade secrets
and other similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as now conducted, and the
expected expiration of any of such Intellectual Property Rights would not
result in a Material Adverse Change. Neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would result in a
Material Adverse Change.
(p) ALL NECESSARY PERMITS, ETC.
The Company and each subsidiary possess such valid and current
certificates, authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct their
respective businesses, and neither the Company nor any subsidiary has
received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material Adverse
Change.
(q) TITLE TO PROPERTIES.
The Company and each of its subsidiaries has good and marketable title
to all the properties and assets reflected as owned in the financial
statements referred to in Section 1(A) (i) above (or elsewhere in the
Prospectus), in each case free and clear of any security interests,
mortgages, liens, encumbrances, equities, claims and other defects, except
such as do not materially affect the value of such property so as to cause a
Material Adverse Change and do not interfere with the use made or proposed
to be made of such property by the Company or such subsidiary so as to cause
a Material Adverse Change. The real property, improvements, equipment and
personal property held under lease by the Company or any subsidiary are held
under valid and enforceable leases, with such exceptions as are not material
and do not interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the Company or
such subsidiary so as to cause a Material Adverse Change.
(r) TAX LAW COMPLIANCE.
The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns or have properly
requested extensions thereof and have paid all taxes required to be paid by
any of them and, if due and payable, any related or similar assessment, fine
or penalty levied against any of them, except such as would not result in a
Material Adverse Change. The Company has made adequate charges, accruals and
reserves in the applicable financial statements referred to in Section 1(A)
(i) above in respect of all federal, state and foreign income and franchise
taxes for all periods as to which the tax liability of the Company or any of
its subsidiaries has not been finally determined, except such as would not
result in a Material Adverse Change.
7
(s) COMPANY NOT AN "INVESTMENT COMPANY".
The Company has been advised of the rules and requirements under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
The Company is not, and after receipt of payment for the Common Shares will
not be, an "investment company" within the meaning of Investment Company Act
and will conduct its business in a manner so that it will not become subject
to the Investment Company Act.
(t) INSURANCE.
Each of the Company and its subsidiaries are insured by recognized,
financially sound and reputable institutions with policies in such amounts
and with such deductibles and, in the reasonable judgement of the Company,
covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and
personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes. The
Company has no reason to believe that it or any subsidiary will not be able
(i) to renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar institutions as
may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Change. Since January
1, 1993, neither the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
(u) NO PRICE STABILIZATION OR MANIPULATION.
The Company has not taken and will not take, directly or indirectly,
any action designed to or that might be reasonably expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Shares.
(v) RELATED PARTY TRANSACTIONS.
There are no business relationships or related-party transactions
involving the Company or any subsidiary or any other person required to be
described in the Prospectus which have not been described as required.
(w) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS.
Neither the Company nor any of its subsidiaries nor, to the best of the
Company's knowledge, any employee or agent of the Company or any subsidiary,
has made any contribution or other payment to any official of, or candidate
for, any federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Prospectus.
(x) COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except as would not, individually or in the aggregate, result in a
Material Adverse Change (i) neither the Company nor any of its subsidiaries
is in violation of any federal,
8
state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products (collectively,
"Materials of Environmental Concern"), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required
for the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries received
any written communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or any of its
subsidiaries is in violation of any Environmental Law; (ii) there is no
claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company has received
written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal
injuries, attorneys' fees or penalties arising out of, based on or resulting
from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the
Company or any of its subsidiaries, now or in the past (collectively,
"Environmental Claims"), pending or, to the best of the Company's knowledge,
threatened against the Company or any of its subsidiaries or any person or
entity whose liability for any Environmental Claim the Company or any of its
subsidiaries has retained or assumed either contractually or by operation of
law; and (iii) to the best of the Company's knowledge, there are no past or
present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could be
expected to result in a violation of any Environmental Law or form the basis
of a potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law.
(y) ERISA COMPLIANCE.
The Company and its subsidiaries and any "employee benefit plan" (as
defined under the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in
compliance with ERISA except for such instances that singly or in the
aggregate would not result in a Material Adverse Change. "ERISA Affiliate"
means, with respect to the Company or a subsidiary, any member of any group
of organizations described in Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
subsidiary is a member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company, its subsidiaries or
any of their ERISA Affiliates except for such instances that singly or in
the aggregate would not result in a Material Adverse Change. No "employee
benefit plan" established or maintained by the Company, its subsidiaries or
any of their ERISA Affiliates, if such "employee benefit plan" was
terminated, would have any "amount
9
of unfunded benefit liabilities" (as defined under ERISA), except for such
instances that singly or in the aggregate would not result in a Material
Adverse Change. Neither the Company, its subsidiaries nor any of their
ERISA Affiliates has incurred or reasonably expects to incur any liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B
of the Code, except for such instances that singly or in the aggregate would
not result in a Material Adverse Change. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.
(z) EXCHANGE ACT COMPLIANCE.
The documents incorporated or deemed to be incorporated by reference in
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the Exchange Act, and, when read together with the other
information in the Prospectus, at the time the Registration Statement and
any amendments thereto become effective and at the First Closing Date and
the Second Closing Date, as the case may be, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the 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.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be
a representation and warranty by the Company to each Underwriter as to the
matters set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder severally represents, warrants and covenants to
each Underwriter as follows:
(a) THE UNDERWRITING AGREEMENT.
This Agreement has been duly authorized, executed and delivered by or
on behalf of such Selling Shareholder and is a valid and binding agreement
of such Selling Shareholder, enforceable in accordance with its terms,
except as rights to indemnification and contribution hereunder may be
limited by applicable law and except as the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(b) THE CUSTODY AGREEMENT AND POWER OF ATTORNEY.
Each of the (i) Custody Agreement signed by such Selling Shareholder
and American Securities Transfer Inc., as custodian (the "Custodian"),
relating to the deposit of the Common Shares to be sold by such Selling
Shareholder (the "Custody Agreement") and (ii) Power of Attorney appointing
certain individuals named therein as such Selling Shareholder's
attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set forth
therein relating to the transactions contemplated hereby and by the
Prospectus (the "Power of Attorney"), of such Selling Shareholder has been
duly authorized, executed and delivered by
10
such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder, enforceable in accordance with its terms, except as
rights to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(c) TITLE TO COMMON SHARES TO BE SOLD; ALL AUTHORIZATIONS OBTAINED.
Such Selling Shareholder has, and on the First Closing Date and the
Second Closing Date (as defined below) will have, good and valid title to
all of the Common Shares which may be sold by such Selling Shareholder
pursuant to this Agreement on such date and the legal right and power
required by law to enter into this Agreement and its Custody Agreement and
Power of Attorney, to sell, transfer and deliver all of the Common Shares
which may be sold by such Selling Shareholder pursuant to this Agreement and
to comply with its other obligations hereunder and thereunder.
(d) DELIVERY OF THE COMMON SHARES TO BE SOLD.
Delivery of and payment for the Common Shares which are sold by such
Selling Shareholder pursuant to this Agreement will pass good and valid
title to such Common Shares, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or other claim, assuming that the
purchaser of such Common Stock acquires such Common Stock with due power and
authority.
(e) NON-CONTRAVENTION; NO FURTHER AUTHORIZATIONS OR APPROVALS
REQUIRED.
The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, this
Agreement, the Custody Agreement and the Power of Attorney will not
contravene or conflict with, result in a breach of, or constitute a Default
under, or require the consent of any other party to, the charter or by-laws,
partnership agreement, trust agreement or other organizational documents of
such Selling Shareholder or any other agreement or instrument to which such
Selling Shareholder is a party or by which it is bound or under which it is
entitled to any right or benefit (other than the consents and waivers
referred to in section 1(B) (g) hereof), any provision of applicable law or
any judgment, order, decree or regulation applicable to such Selling
Shareholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Shareholder. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the consummation by such Selling Shareholder of the
transactions contemplated in this Agreement, except as provided in Section
1(B)(g) hereof and except for the registration of the Common Shares under
the Securities Act and such approvals, authorizations, registrations or
qualifications as may be required under the Securities Act, applicable state
securities or blue sky laws and from the NASD.
(f) NO REGISTRATION OR OTHER SIMILAR RIGHTS.
Such Selling Shareholder does not have any registration or other
similar rights to have any equity or debt securities registered for sale by
the Company under the Registration
11
Statement or included in the offering contemplated by this Agreement, except
for such rights as are described in the Prospectus under "Shares Eligible
for Future Sale".
(g) NO FURTHER CONSENTS, ETC.
Except for the (i) exercise by Xxx X. Xxxxxx of certain registration
rights pursuant to that Registration Rights Agreement dated as of July 2,
1997 (the "Xxxxxx Registration Rights Agreement"), (ii) consent of such
Selling Shareholder to the respective number of Common Shares to be sold by
each of the Selling Shareholders pursuant to this Agreement and (iii)
waiver by the Company of certain provisions contained in the Xxxxxx
Registration Rights Agreement as to the number of Common Shares to be sold
by Xxx X. Xxxxxx in the offering, no consent, approval or waiver is required
under any instrument or agreement to which such Selling Shareholder is a
party or by which it is bound or under which it is entitled to any right or
benefit, in connection with the offering, sale or purchase by the
Underwriters of any of the Common Shares which may be sold by such Selling
Shareholder under this Agreement or the consummation by such Selling
Shareholder of any of the other transactions contemplated hereby.
(h) DISCLOSURE MADE BY SUCH SELLING SHAREHOLDER IN THE PROSPECTUS.
All information furnished by or on behalf of such Selling Shareholder
in writing to the Company expressly for use in the Registration Statement
and Prospectus is, and on the First Closing Date and the Second Closing Date
will be, true, correct, and complete in all material respects, and does not,
and on the First Closing Date and the Second Closing Date will not, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading. Such Selling Shareholder
confirms as accurate the number of shares of Common Stock set forth opposite
such Selling Shareholder's name in the Prospectus under the caption
"Principal and Selling Shareholders" (both prior to and after giving effect
to the sale of the Common Shares).
(i) NO PRICE STABILIZATION OR MANIPULATION.
Such Selling Shareholder has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Common
Shares.
(j) CONFIRMATION OF COMPANY REPRESENTATIONS AND WARRANTIES.
Such Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in Section 1(A)
hereof are not true and correct in all material respects, is familiar with
the Registration Statement and the Prospectus and has no knowledge of any
material fact, condition or information not disclosed in the Registration
Statement or the Prospectus which has had or may have a Material Adverse
Change and is not prompted to sell shares of Common Stock by any information
concerning the Company which is not set forth in the Registration Statement
and the Prospectus.
Any certificate signed by or on behalf of any Selling Shareholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Shareholder to each
Underwriter as to the matters covered thereby.
12
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
A. THE FIRM COMMON SHARES.
Upon the terms herein set forth, (i) the Company agrees to issue and sell
to the several Underwriters an aggregate of 1,750,000 Firm Common Shares and
(ii) the Selling Shareholders agree to sell to the several Underwriters an
aggregate of 500,000 Firm Common Shares, each Selling Shareholder selling the
number of Firm Common Shares set forth opposite such Selling Shareholder's name
on SCHEDULE B. On the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein set
forth, the Underwriters agree, severally and not jointly, to purchase from the
Company and the Selling Shareholders the respective number of Firm Common Shares
set forth opposite their names on SCHEDULE A. The purchase price per Firm
Common Share to be paid by the several Underwriters to the Company and the
Selling Shareholders shall be $[___] per share.
B. THE FIRST CLOSING DATE.
Delivery of certificates for the Firm Common Shares to be purchased by the
Underwriters and payment therefor shall be made at the offices of NMSI, 000
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such other place as may be
agreed to by the Company and the Representatives) at 6:00 a.m. San Francisco
time, on [4TH BUSINESS DAY AFTER DATE OF THIS AGREEMENT] ______, 1998 or such
other time and date not later than 10:30 a.m. San Francisco time, on [10
BUSINESS DAYS AFTER THE 1ST CLOSING] ____, 1998 as the Representatives shall
designate by notice to the Company (the time and date of such closing are called
the "First Closing Date"). The Company and the Selling Shareholders hereby
acknowledge that circumstances under which the Representatives may provide
notice to postpone the First Closing Date as originally scheduled include, but
are in no way limited to, any determination by the Company, the Selling
Shareholders or the Representatives to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 10.
C. THE OPTIONAL COMMON SHARES; THE SECOND CLOSING DATE.
In addition, on the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein set
forth, the Company and the Selling Shareholders hereby grant an option to the
several Underwriters to purchase, severally and not jointly, up to an aggregate
of 337,500 Optional Common Shares from the Company and the Selling Shareholders
at the purchase price per share to be paid by the Underwriters for the Firm
Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company and the Selling Shareholders, which notice may be
given at any time within 30 days from the date of this Agreement. Such notice
shall set forth (i) the aggregate number of Optional Common Shares as to which
the Underwriters are exercising the option, (ii) the names and denominations in
which the certificates for the Optional Common Shares are to be registered and
(iii) the time, date and place at which such certificates will be delivered
(which time and date may be simultaneous with, but not earlier than, the First
Closing Date; and in such case the term "First Closing Date" shall refer to the
time and date of delivery of certificates for the Firm Common Shares and the
Optional Common Shares). Such time and date of delivery, if subsequent to the
First Closing Date, is called the "Second Closing
13
Date" and shall be determined by the Representatives and shall not be earlier
than three nor later than five full business days after delivery of such notice
of exercise. If any Optional Common Shares are to be purchased, (a) each
Underwriter agrees, severally and not jointly, to purchase the number of
Optional Common Shares (subject to such adjustments to eliminate fractional
shares as the Representatives may determine) that bears the same proportion to
the total number of Optional Common Shares to be purchased as the number of Firm
Common Shares set forth on SCHEDULE A opposite the name of such Underwriter
bears to the total number of Firm Common Shares and (b) the Company and each
Selling Shareholder agrees, severally and not jointly, to sell the number of
Optional Common Shares (subject to such adjustments to eliminate fractional
shares as the Representatives may determine) that bears the same proportion to
the total number of Optional Common Shares to be sold as the number of Optional
Common Shares set forth in SCHEDULE B opposite the name of such Selling
Shareholder (or, in the case of the Company, as the number of Optional Common
Shares to be sold by the Company as set forth in the paragraph "Introductory" of
this Agreement) bears to the total number of Optional Common Shares. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company and the Selling
Shareholders.
D. PUBLIC OFFERING OF THE COMMON SHARES.
The Representatives hereby advise the Company and the Selling Shareholders
that the Underwriters intend to offer for sale to the public, as described in
the Prospectus, their respective portions of the Common Shares as soon after
this Agreement has been executed and the Registration Statement has been
declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
E. PAYMENT FOR THE COMMON SHARES.
Payment for the Common Shares to be sold by the Company shall be made at
the First Closing Date (and, if applicable, at the Second Closing Date) by wire
transfer of immediately available funds to the order of the Company. Payment
for the Common Shares to be sold by the Selling Shareholders shall be made at
the First Closing Date (and, if applicable, at the Second Closing Date) by wire
transfer of immediately available funds to the order of the Custodian.
It is understood that the Representatives have been authorized, for their
own accounts and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm Common
Shares and any Optional Common Shares the Underwriters have agreed to purchase.
NMSI, individually and not as the Representative of the Underwriters, may (but
shall not be obligated to) make payment for any Common Shares to be purchased by
any Underwriter whose funds shall not have been received by the Representatives
by the First Closing Date or the Second Closing Date, as the case may be, for
the account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
Each Selling Shareholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Common Shares to be sold by such Selling Shareholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Shareholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Shareholder hereunder and to hold such amounts for the account of such
Selling Shareholder with the Custodian under the Custody Agreement.
14
F. DELIVERY OF THE COMMON SHARES.
The Company and the Selling Shareholders shall deliver, or cause to be
delivered, to the Representatives for the accounts of the several Underwriters
certificates for the Firm Common Shares to be sold by them at the First Closing
Date, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The Company and
the Selling Shareholders shall also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters, certificates for
the Optional Common Shares the Underwriters have agreed to purchase from them at
the First Closing Date or the Second Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The certificates for the Common
Shares shall be in definitive form and registered in such names and
denominations as the Representatives shall have requested at least two full
business days prior to the First Closing Date (or the Second Closing Date, as
the case may be) and shall be made available for inspection on the business day
preceding the First Closing Date (or the Second Closing Date, as the case may
be) at a location in New York City as the Representatives may designate. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriters.
G. DELIVERY OF PROSPECTUS TO THE UNDERWRITERS.
Not later than 12:00 p.m. on the second business day following the date the
Common Shares of released by the Underwriters for sale to the public, the
Company shall deliver or cause to be delivered copies of the Prospectus in such
quantities and at such places as the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
A. COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each Underwriter as follows:
(a) REPRESENTATIVES' REVIEW OF PROPOSED AMENDMENTS AND SUPPLEMENTS.
During such period beginning on the date hereof and ending on the later
of the First Closing Date or such date, as in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus including any amendment or supplement
through incorporation by reference of any report filed under the Exchange
Act, the Company shall furnish to the Representatives for review a copy of
each such proposed amendment or supplement, and the Company shall not file
any such proposed amendment or supplement to which the Representatives
reasonably object.
(b) SECURITIES ACT COMPLIANCE.
After the date of this Agreement, the Company shall promptly advise the
Representatives in writing (i) of the receipt of any comments of, or
requests for additional or
15
supplemental information from, the Commission, (ii) of the time and date of
any filing of any post-effective amendment to the Registration Statement or
any amendment or supplement to any preliminary prospectus or the Prospectus,
(iii) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any
order preventing or suspending the use of any preliminary prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange upon
which the it is listed for trading or included or designated for quotation,
or of the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order at
the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b), 430A and 434, as
applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under such Rule 424(b) were
received in a timely manner by the Commission.
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER SECURITIES
ACT MATTERS.
If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement
the Prospectus in order to make a statement or statements as to material
facts made therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if in the opinion of the
Representatives or counsel for the Underwriters it is otherwise necessary to
amend or supplement the Prospectus to comply with law, the Company agrees to
promptly prepare (subject to Section 3(A)(a) hereof), file with the
Commission and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Prospectus so that the statement
or statements as to material facts in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus
is delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS.
The Company agrees to furnish the Representatives, without charge,
during the Prospectus Delivery Period, as many copies of the Prospectus and
any amendments and supplements thereto (including any documents incorporated
or deemed incorporated by reference therein) as the Representatives may
request.
(e) BLUE SKY COMPLIANCE.
The Company shall cooperate with the Representatives and counsel for the
Underwriters to qualify or register the Common Shares for sale under (or
obtain exemptions from the application of) the state securities or blue sky
laws or Canadian provincial Securities laws of those jurisdictions
designated by the Representatives, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long
as required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to take any action
that would subject it to general service of process in any such jurisdiction
where it is not presently qualified or where it would be subject to taxation
as a foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or any
such exemption
16
relating to) the Common Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best
efforts to obtain the withdrawal thereof at the earliest possible moment.
(f) USE OF PROCEEDS.
The Company shall apply the net proceeds from the sale of the Common
Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectus.
(g) TRANSFER AGENT.
The Company shall engage and maintain, at its expense, a registrar and
transfer agent for the Common Stock.
(h) EARNINGS STATEMENT.
As soon as practicable, the Company will make generally available to its
security holders and to the Representatives an earnings statement (which
need not be audited) covering the twelve-month period ending [___] that
satisfies the provisions of Section 11(a) of the Securities Act.
(i) PERIODIC REPORTING OBLIGATIONS.
During the Prospectus Delivery Period the Company shall file, on a
timely basis, with the Commission and the Nasdaq National Market all reports
and documents required to be filed under the Exchange Act.
(j) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.
During the period of 90 days following the date of the Prospectus, the
Company will not, without the prior written consent of NMSI (which consent
may be withheld at the sole discretion of NMSI), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or
establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock, options or
warrants to acquire shares of the Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other than as
contemplated by this Agreement with respect to the Common Shares); PROVIDED,
HOWEVER, that the Company may issue, and file registration statements on
Form S-8 with respect to, shares of its Common Stock or options to purchase
its Common Stock, or Common Stock upon exercise of options, pursuant to any
stock option, stock bonus or other stock plan or arrangement described in or
incorporated by reference into the Prospectus.
17
(k) FUTURE REPORTS TO THE REPRESENTATIVES.
During the period of five years hereafter the Company will furnish to
the Representatives at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000,
Attention: Xxxxx Xxxxxxxxx (i) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, shareholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public or
certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report
filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital
stock.
(l) EXCHANGE ACT COMPLIANCE.
During the Prospectus Delivery Period, the Company will file all
documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act in the manner and within the time periods
required by the Exchange Act.
B. COVENANTS OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder further covenants and agrees with each
Underwriter:
(a) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.
Such Selling Shareholder will not, without the prior written consent of
NMSI (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including
without limitation any short sale), pledge, transfer, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the Exchange
Act, or otherwise dispose of any shares of Common Stock, options or warrants
to acquire shares of Common Stock, or securities exchangeable or exercisable
for or convertible into shares of Common Stock currently or hereafter owned
either of record or beneficially (as defined in Rule 13d-3 under Securities
Exchange Act of 1934, as amended) by the undersigned, or publicly announce
the undersigned's intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of trading on
the date 90 days after the date of the Prospectus.
(b) DELIVERY OF FORMS W-8 AND W-9.
To deliver to the Representatives prior to the First Closing Date a
properly completed and executed United States Treasury Department Form W-8
(if the Selling Shareholder is a non-United States person) or Form W-9 (if
the Selling Shareholder is a United States Person).
NMSI, on behalf of the several Underwriters, may, in its sole discretion,
waive in writing the performanc}e by the Company or any Selling Shareholder of
any one or more of the foregoing covenants or extend the time for their
performance.
18
SECTION 4. PAYMENT OF EXPENSES.
The Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Common Shares (including
all printing and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Common Stock, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Common Shares
to the Underwriters, (iv) all fees and expenses of the Company's counsel,
independent public or certified public accountants and other advisors, (v) all
costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement (including
financial statements, exhibits, schedules, consents and certificates of
experts), each preliminary prospectus and the Prospectus, and all amendments and
supplements thereto, and this Agreement, (vi) all reasonable filing fees,
attorneys' fees and expenses incurred by the Company or the Underwriters in
connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Representatives, preparing
and printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions,
(vii) the filing fees incident to, and the reasonable fees and expenses of
counsel for the Underwriters in connection with, the NASD's review and approval
of the Underwriters' participation in the offering and distribution of the
Common Shares, (viii) the fees and expenses associated with including the Common
Shares on the Nasdaq National Market, (ix) fees and expenses of the Custodian,
(x) expenses and taxes incident to the sale and delivery of the Common Shares to
be sold by such Selling Shareholders to the Underwriters hereunder (which taxes,
if any, may be deducted by the Custodian under the provisions of Section 2 of
this Agreement) and (xi) all other fees, costs and expenses referred to in Item
14 of Part II of the Registration Statement. Except as provided in this
Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay
their own expenses, including the fees and disbursements of their counsel.
The Selling Shareholders further agree with each Underwriter to pay
(directly or by reimbursement) all fees and expenses incident to the performance
of their obligations under this Agreement which are not otherwise specifically
provided for herein, including but not limited to fees and expenses of counsel
and other advisors for such Selling Shareholders.
This Section 4 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Shareholders, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and pay for the
Common Shares as provided herein on the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Shareholders set forth in Section 1 hereof as of the date hereof and
as of the First Closing Date as though then made and, with respect to the
Optional Common Shares, as of the Second Closing Date as though then made, to
the timely performance
19
by the Company and the Selling Shareholders of their respective covenants and
other obligations hereunder, and to each of the following additional conditions:
(a) ACCOUNTANTS' COMFORT LETTER.
On the date hereof, the Representatives shall have received from KPMG
Peat Marwick LLC, independent public or certified public accountants for the
Company, a letter dated the date hereof addressed to the Underwriters, in
form and substance satisfactory to the Representatives, containing
statements and information of the type ordinarily included in accountant's
"comfort letters" to underwriters, delivered according to Statement of
Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration Statement and the Prospectus (and the
Representatives shall have received an additional conformed copy of such
accountants' letter for each of the several Underwriters).
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER; NO
OBJECTION FROM NASD.
For the period from and after effectiveness of this Agreement and prior
to the First Closing Date and, with respect to the Optional Common Shares,
the Second Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act)
in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment
to the Registration Statement containing the information required by such
Rule 430A, and such post-effective amendment shall have become effective;
or, if the Company elected to rely upon Rule 434 under the Securities Act
and obtained the Representatives' consent thereto, the Company shall have
filed a Term Sheet with the Commission in the manner and within the time
period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment to the Registration Statement, shall be in effect and no
proceedings for such purpose shall have been instituted or threatened by
the Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) NO MATERIAL ADVERSE CHANGE.
For the period from and after the date of this Agreement and prior to
the First Closing Date and, with respect to the Optional Common Shares, the
Second Closing Date in the judgment of the Representatives there shall not
have occurred any Material Adverse Change.
(d) OPINION OF COUNSEL FOR THE COMPANY.
On each of the First Closing Date and the Second Closing Date, the
Representatives shall have received the favorable opinion of Xxxxxxx &
Xxxxxx L.L.C., counsel for the
20
Company, dated as of such Closing Date, the form of which is attached as
EXHIBIT A (and the Representatives shall have received an additional
conformed copy of such counsel's legal opinion for each of the several
Underwriters).
(e) OPINION OF COUNSEL FOR THE UNDERWRITERS.
On each of the First Closing Date and the Second Closing Date, the
Representatives shall have received the favorable opinion of Summit Law
Group, P.L.L.C., counsel for the Underwriters, dated as of such Closing
Date, with respect to the matters set forth in paragraphs (i), (vii) (with
respect to subparagraph (i) only), (viii), (ix), (x) (xi) and (xiii) (with
respect to the caption "Underwriting" under subparagraph (i) only), and the
next-to-last paragraph of EXHIBIT A (and the Representatives shall have
received an additional conformed copy of such counsel's legal opinion for
each of the several Underwriters).
(f) OFFICERS' CERTIFICATE.
On each of the First Closing Date and the Second Closing Date, the
Representatives shall have received a written certificate executed by the
Chief Executive Officer and President of the Company and the Chief Financial
Officer of the Company, dated as of such Closing Date, to the effect set
forth in subsections (b)(ii) and (c)(ii) of this Section 5, and further to
the effect that:
(i) for the period from and after the date of this Agreement and
prior to such Closing Date, there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the Company
set forth in Section 1(A) of this Agreement are true and correct with the
same force and effect as though expressly made on and as of such Closing
Date; and
(iii) the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior to
such Closing Date.
(g) BRING-DOWN COMFORT LETTER.
On each of the First Closing Date and the Second Closing Date, the
Representatives shall have received from KPMG Peat Marwick L.L.C.,
independent public or certified public accountants for the Company, a letter
dated such date, in form and substance satisfactory to the Representatives,
to the effect that they reaffirm the statements made in the letter furnished
by them pursuant to subsection (a) of this Section 5, except that the
specified date referred to therein for the carrying out of procedures shall
be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be (and the Representatives shall have
received an additional conformed copy of such accountants' letter for each
of the several Underwriters.)
(h) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS.
On each of the First Closing Date and the Second Closing Date, the
Representatives shall have received the favorable opinion of Xxxxx Xxxxxxxx
Xxxx & Xxxxxxx, counsel for the Selling Shareholders, dated as of such
Closing Date, the form of which is attached as EXHIBIT
21
B (and the Representatives shall have received an additional conformed copy
of such counsel's legal opinion for each of the several Underwriters.)
(i) SELLING SHAREHOLDERS' CERTIFICATE.
On each of the First Closing Date and the Second Closing Date, the
Representatives shall have received a written certificate executed by the
Attorney-in-Fact of each Selling Shareholder, dated as of such Closing Date,
to the effect that:
(i) the representations, warranties and covenants of such Selling
Shareholder set forth in Section 1(B) of this Agreement are true and
correct with the same force and effect as though expressly made by such
Selling Shareholder on and as of such Closing Date; and
(ii) such Selling Shareholder has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date.
(j) SELLING SHAREHOLDERS' DOCUMENTS.
On the date hereof, the Company and the Selling Shareholders shall have
furnished for review by the Representatives copies of the Powers of Attorney
and Custody Agreements executed by each of the Selling Shareholders and such
further information, certificates and documents as the Representatives may
reasonably request.
(k) LOCK-UP AGREEMENT FROM CERTAIN SHAREHOLDERS OF THE COMPANY.
On the date hereof, the Company shall have furnished to the
Representatives an agreement in the form of EXHIBIT C hereto from each
director, officer and Selling Shareholder, and such agreement shall be in
full force and effect on each of the First Closing Date and the Second
Closing Date.
(l) ADDITIONAL DOCUMENTS.
On or before each of the First Closing Date and the Second Closing Date,
the Representatives and counsel for the Underwriters shall have received
such information, documents and opinions as they may reasonably require for
the purposes of enabling them to pass upon the issuance and sale of the
Common Shares as contemplated herein, or in order to evidence the accuracy
of any of the representations and warranties, or the satisfaction of any of
the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Shareholders at any
time on or prior to the First Closing Date and, with respect to the Optional
Common Shares, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
22
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
If this Agreement is terminated by the Representatives pursuant to
Section 5, Section 7, Section 10, Section 11 or Section 17, or if the sale to
the Underwriters of the Common Shares on the First Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company or the Selling Shareholders to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Representatives
and the other Underwriters (or such Underwriters as have terminated this
Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Common Shares, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company or the Selling Shareholders to
any Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4
and 6 hereof, (b) of any Underwriter to the Company or the Selling Shareholders,
or (c) of any party hereto to any other party except that the provisions of
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters by the Company.
The Company agrees to indemnify and hold harmless each Underwriter, its
officers and employees, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which
such Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based
(i) upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, including
any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (iii) in whole
or in part upon any inaccuracy in the representations and warranties of the
Company contained herein;
23
or (iv) in whole or in part upon any failure of the Company to perform its
obligations hereunder or under law; or (v) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Common Stock or the offering contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon any matter covered
by clause (i) or (ii) above, PROVIDED that the Company shall not be liable
under this clause (v) to the extent that a court of competent jurisdiction
shall have determined by a final judgment that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its bad faith
or willful misconduct; and to reimburse each Underwriter and each such
controlling person for any and all expenses (including the reasonable fees
and disbursements of counsel chosen by NMSI) as such expenses are reasonably
incurred by such Underwriter or such controlling person in connection with
investigating, defending, settling (pursuant to Section 8(e)), compromising
or paying any such loss, claim, damage, liability, expense or action;
PROVIDED, HOWEVER, that the foregoing indemnity agreement shall not apply to
any loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and PROVIDED, FURTHER, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit
of any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Common Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Common Shares to
such person, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage, liability or
expense. The indemnity agreement set forth in this Section 8(a) shall be in
addition to any liabilities that the Company may otherwise have.
(b) INDEMNIFICATION OF THE UNDERWRITERS BY THE SELLING SHAREHOLDERS.
Each of the Selling Shareholders, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter, its officers and employees,
and each person, if any, who controls any Underwriter within the meaning of
the Securities Act and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Selling
Shareholder), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based
(i) upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, including
any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company or the Representatives, directly or through such
24
Selling Shareholder's representatives, specifically for inclusion therein;
or (ii) upon any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or the
Representatives, directly or through such Selling Shareholder's
representatives, specifically for inclusion therein; or (iii) in whole or in
part upon any inaccuracy in the representations and warranties of such
Selling Shareholder contained herein; or (iv) in whole or in part upon any
failure of such Selling Shareholder to perform their respective obligations
hereunder or under law; or (v) any act or failure to act or any alleged act
or failure to act by any Underwriter in connection with, or relating in any
manner to, the Common Stock or the offering contemplated hereby, and which
is included as part of or referred to in any loss, claim, damage, liability
or action arising out of or based upon any matter covered by clause (i) or
(ii) above, PROVIDED that such Selling Shareholder shall not be liable under
this clause (v) to the extent that a court of competent jurisdiction shall
have determined by a final judgment that such loss, claim, damage, liability
or action resulted directly from any such acts or failures to act undertaken
or omitted to be taken by such Underwriter through its bad faith or willful
misconduct; and to reimburse each Underwriter and each such controlling
person for any and all expenses (including the reasonable fees and
disbursements of counsel chosen by NMSI) as such expenses are reasonably
incurred by such Underwriter or such controlling person in connection with
investigating, defending, settling (pursuant to Section 8(e)), compromising
or paying any such loss, claim, damage, liability, expense or action;
PROVIDED, HOWEVER, that the foregoing indemnity agreement shall not apply to
any loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and PROVIDED, FURTHER, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit
of any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Common Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Common Shares to
such person, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage, liability or
expense; and PROVIDED, FURTHER, that with respect to any untrue statement or
omission made in the Registration Statement, the Prospectus or any
supplement or amendment thereto, the liability of each Selling Shareholder
under this paragraph shall be limited to an amount equal to the net proceeds
received by the Selling Shareholders from the sale of the Common Shares sold
by such Selling Shareholder to the Underwriters pursuant to the terms
hereof. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that the Selling Shareholders may otherwise
have.
25
(c) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS BY THE
UNDERWRITERS.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Shareholders and each person,
if any, who controls the Company or any Selling Shareholder within the
meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer, Selling Shareholder or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the
written consent of such Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
arises out of or is based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
preliminary prospectus, the Prospectus (or any amendment or supplement
thereto), in reliance upon and in conformity with written information
furnished to the Company and the Selling Shareholders by the Representatives
expressly for use therein; and to reimburse the Company, or any such
director, officer, Selling Shareholder or controlling person for any and all
expenses (including the reasonable fees and disbursements of counsel chosen
by the Company and the Selling Shareholders) as such expenses are reasonably
incurred by the Company, the Selling Shareholders or such controlling person
in connection with investigating, defending, settling (pursuant to Section
8(e)), compromising or paying any such loss, claim, damage, liability,
expense or action. The Company and each of the Selling Shareholders, hereby
acknowledges that the only information that the Underwriters have furnished
to the Company and the Selling Shareholders expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) are the statements set forth (A) as the
last two paragraphs on the inside front cover page of the Prospectus
concerning stabilization and passive market making by the Underwriters and
(B) in the table following the first paragraph and as the second and last
paragraphs under the caption "Underwriting" in the Prospectus; and the
Underwriters confirm that such statements are correct. The indemnity
agreement set forth in this Section 8(c) shall be in addition to any
liabilities that each Underwriter may otherwise have.
(d) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
this Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
under the indemnity agreement contained in this Section 8, for contribution
under Section 9 or otherwise, except to the extent it is prejudiced as a
proximate result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled
26
to participate in, and, to the extent that it shall elect, jointly with all
other indemnifying parties similarly notified, by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from
such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party
and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election so to assume
the defense of such action and approval by the indemnified party of counsel,
the indemnifying party will not be liable to such indemnified party under
this Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with
the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more
than one separate counsel (together with local counsel), approved by the
indemnifying party (NMSI in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases the
fees and expenses of counsel shall be at the expense of the indemnifying
party.
(e) SETTLEMENTS.
The indemnifying party under this Section 8 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 party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
Section 8(d) hereof, the indemnifying party agrees that it 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 such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) the indemnified party
gives the indemnifying party three business days prior notice of any
proposed settlement. In any event, no indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
27
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held to
be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then (subject to the first sentence of Section 8(a)) each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Shareholders, on the one hand, and the Underwriters, on the other hand, from the
offering of the Common Shares pursuant to this Agreement and the relative fault
of the Company and the Selling Shareholders, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or omissions
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholders, on the one hand, and the Underwriters, on
the other hand, in connection with the offering of the Common Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Common Shares pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders, and the total underwriting discount received by the Underwriters,
in each case as set forth on the front cover page of the Prospectus (or, if
Rule 434 under the Securities Act is used, the corresponding location on the
Term Sheet) bear to the aggregate initial public offering price of the Common
Shares as set forth on such cover. The relative fault of the Company and the
Selling Shareholders, on the one hand, and the Underwriters, on the other hand,
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company or the
Selling Shareholders, on the one hand, or the Underwriters, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(d), any reasonable legal or
other fees or expenses incurred by such party in connection with investigating
or defending any action or claim. The provisions set forth in Section 8(d) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; PROVIDED, HOWEVER, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(d) for purposes of indemnification.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
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. The
Underwriters' obligations to contribute pursuant to this Section 9 are several,
and not joint, in proportion to their respective underwriting commitments as set
forth opposite their names in SCHEDULE A. Each Selling Shareholder's obligation
to contribute
28
pursuant to this Section 9 are several, and not joint, in proportion to the net
proceeds to be received by such Selling Shareholder pursuant to the sale of
Common Shares hereunder. For purposes of this Section 9, each officer and
employee of an Underwriter and each person, if any, who controls an Underwriter
within the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company with the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as the
Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITER.
If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the several Underwriters shall fail or refuse to purchase
Common Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on SCHEDULE A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party (other than the defaulting Underwriter or Underwriters) except that
the provisions of Section 4, Section 8 and Section 9 shall at all times be
effective and shall survive such termination. In any such case either the
Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT.
Prior to the First Closing Date this Agreement maybe terminated by the
Representatives by notice given to the Company and the Selling Shareholders if
at any time (i) trading or quotation in any of the Company's securities shall
have been suspended or limited by the Commission or by the Nasdaq Stock Market,
or trading in securities generally on either the Nasdaq Stock Market or the New
York Stock Exchange shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, New York, Colorado or California authorities;
(iii) there shall have
29
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international political,
financial or economic conditions, as in the judgment of the Representatives is
material and adverse and makes it impracticable to market the Common Shares in
the manner and on the terms described in the Prospectus or to enforce contracts
for the sale of securities; (iv) in the judgment of the Representatives there
shall have occurred any Material Adverse Change; or (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Representatives may interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured. Any termination
pursuant to this Section 11 shall be without liability on the part of (a) the
Company or the Selling Shareholders to any Underwriter, except that the Company
and the Selling Shareholders shall be obligated to reimburse the expenses of the
Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (b)
any Underwriter to the Company or the Selling Shareholders, or (c) of any party
hereto to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and
other statements of the Company, of its officers, of the Selling Shareholders
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Shareholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES.
All communications hereunder shall be in writing and shall be mailed, hand
delivered or telecopied and confirmed to the parties hereto as follows:
If to the Representatives:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company:
30
Analytical Surveys, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to:
Xxxxxxx & Xxxxxx L.L.C.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
If to the Selling Shareholders:
American Securities Transfer, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: [___]
Attention: [___]
with a copy to:
Xxxxx Xxxxxxxx Xxxx & Xxxxxxx
000 X. Xxxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
SECTION 14. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the parties
hereto, including any substitute Underwriters pursuant to Section 10 hereof, and
to the benefit of the employees, officers and directors and controlling persons
referred to in Section 8 and Section 9, and in each case their respective
successors, and personal representatives, and no other person will have any
right or obligation hereunder. The term "successors" shall not include any
purchaser of the Common Shares as such from any of the Underwriters merely by
reason of such purchase.
31
SECTION 15. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
SECTION 16. LEGAL.
(a) GOVERNING LAW PROVISIONS.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SUCH STATE.
(b) CONSENT TO JURISDICTION.
Any legal suit, action or proceeding arising out of or based upon this
Agreement or the transactions contemplated hereby ("Related Proceedings") may be
instituted in the federal courts of the United States of America located in the
City and County of San Francisco or the courts of the State of California in
each case located in the City and County of San Francisco (collectively, the
"Specified Courts"), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a "Related Judgment"), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.
(c) WAIVER OF IMMUNITY.
With respect to any Related Proceeding, each party irrevocably waives, to
the fullest extent permitted by applicable law, all immunity (whether on the
basis of sovereignty or otherwise) from jurisdiction, service of process,
attachment (both before and after judgment) and execution to which it might
otherwise be entitled in the Specified Courts, and with respect to any Related
Judgment, each party waives any such immunity in the Specified Courts or any
other court of competent jurisdiction, and will not raise or claim or cause to
be pleaded any such immunity at or in respect of any such Related Proceeding or
Related Judgment, including, without limitation, any immunity pursuant to the
United States Foreign Sovereign Immunities Act of 1976, as amended.
32
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING SHAREHOLDERS TO SELL AND
DELIVER COMMON SHARES.
If one or more of the Selling Shareholders shall fail to sell and deliver
to the Underwriters the Common Shares to be sold and delivered by such Selling
Shareholders at the First Closing Date pursuant to this Agreement, then the
Underwriters may at their option, by written notice from the Representatives to
the Company and the Selling Shareholders, either (i) terminate this Agreement
without any liability on the part of any Underwriter or, except as provided in
Sections 4, 6, 8 and 9 hereof, the Company or the Selling Shareholders, or
(ii) purchase the shares which the Company and other Selling Shareholders have
agreed to sell and deliver in accordance with the terms hereof. If one or more
of the Selling Shareholders shall fail to sell and deliver to the Underwriters
the Common Shares to be sold and delivered by such Selling Shareholders pursuant
to this Agreement at the First Closing Date or the Second Closing Date, then the
Underwriters shall have the right, by written notice from the Representatives to
the Company and the Selling Shareholders, to postpone the First Closing Date or
the Second Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
SECTION 18. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. The Table of Contents and the Section
headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, any preliminary prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
33
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company and the Custodian the enclosed copies
hereof, whereupon this instrument, along with all counterparts hereof, shall
become a binding agreement in accordance with its terms.
Very truly yours,
ANALYTICAL SURVEYS, INC.
By:
--------------------------------
Xxxxxx X. Xxxxxx,
President and Chief Executive Officer
SELLING SHAREHOLDERS NAMED ON SCHEDULES B & C
By:
--------------------------------
(Attorney-in-fact)
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in San Francisco, California as of the date first above
written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXX XXXXXXXX XXXXXXX, A DIVISION OF XXXX XXXXXXXX INCORPORATED
Acting as Representatives of the several Underwriters named in the attached
Schedule A.
By NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
------------------------
Name:
Title:
34
SCHEDULE A
NUMBER OF
FIRM COMMON
UNDERWRITERS SHARES
TO BE PURCHASED
NationsBanc Xxxxxxxxxx Securities LLC ....
Xxxx Xxxxxxxx Xxxxxxx, a division of Xxxx
Xxxxxxxx Incorporated ....................
[___] ....................................
[___] ....................................
[___] ....................................
Total ............................... 2,250,000
SCHEDULE B
SELLING SHAREHOLDER NUMBER OF MAXIMUM NUMBER
FIRM COMMON OF OPTIONAL
SHARES COMMON SHARES
TO BE SOLD TO BE SOLD
Xxx X. Xxxxxx
C/o Analytical Surveys, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 46204.................. 300,000 45,000
Xxxx X. Xxxxxx
C/o Analytical Surveys, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 46204.................. 200,000 30,000
------- ------
Total............................... 500,000 75,000
EXHIBIT A
[THE FINAL OPINION IN DRAFT FORM WILL BE ATTACHED AS EXHIBIT A AT THE TIME THIS
AGREEMENT IS EXECUTED.]
Opinion of counsel for the Company to be delivered pursuant to
Section 5(e) of the Underwriting Agreement.
References to the Prospectus in this EXHIBIT A include any supplements
thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Colorado.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in the States of Indiana, North Carolina,
Texas and Wisconsin in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions (other than the States of
Indiana, North Carolina, Texas and Wisconsin) where the failure to so qualify
or to be in good standing would not, individually or in the aggregate, result
in a Material Adverse Change.
(iv) Each significant subsidiary (as defined in Rule 405 under the
Securities Act) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus
and, to the best knowledge of such counsel, is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material Adverse Change.
(v) All of the issued and outstanding capital stock of each such
significant subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or, to the best knowledge of such counsel, any pending or
threatened claim.
(vi) The authorized, issued and outstanding capital stock of the
Company (including the Common Stock) conform to the descriptions thereof set
forth or incorporated by reference in the Prospectus. All of the outstanding
shares of Common Stock (including the shares of Common Stock owned by Selling
Shareholders) have been duly authorized and validly issued, are fully paid
and nonassessable and, to the best of such counsel's knowledge,
A-1
have been issued in compliance with the registration and qualification
requirements of federal and state securities laws. The form of certificate
used to evidence the Common Stock is in due and proper form and complies with
all applicable requirements of the charter and by-laws of the Company and the
General Corporation Law of the State of Colorado. The description of the
Company's stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted and exercised thereunder, set forth
in the Prospectus accurately and fairly presents the information required to
be shown with respect to such plans, arrangements, options and rights.
(vii) No shareholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe
for or purchase securities of the Company arising (i) by operation of the
charter or by-laws of the Company, (ii) or the General Corporation Law of the
State of Colorado, or (iii) to the best knowledge of such counsel, otherwise.
(viii) The Underwriting Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
thereunder may be limited by applicable law and except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or
by general equitable principles.
(ix) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant
to the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable.
(x) Each of the Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the Commission
under the Securities Act. To the best knowledge of such counsel, no stop
order suspending the effectiveness of either of the Registration Statement or
the Rule 462(b) Registration Statement, if any, has been issued under the
Securities Act and no proceedings for such purpose have been instituted or
are pending or are contemplated or threatened by the Commission. Any
required filing of the Prospectus and any supplement thereto pursuant to Rule
424(b) under the Securities Act has been made in the manner and within the
time period required by such Rule 424(b).
(xi) The Registration Statement, including any Rule 462(b) Registration
Statement, the Prospectus, including any document incorporated by reference
therein, and each amendment or supplement to the Registration Statement and
the Prospectus including any document incorporated by reference therein, as
of their respective effective or issue dates (other than the financial
statements and supporting schedules included or incorporated by reference
therein or in exhibits to or excluded from the Registration Statement, as to
which no opinion need be rendered) comply as to form in all material respects
with the applicable requirements of the Securities Act and the Exchange Act.
(xii) The Common Stock is listed on the Nasdaq National Market, and to
the best knowledge of such counsel, the Company has taken no action designed
to, or likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq National Market nor has the Company
A-2
received any notification that the Commission or the National Association of
Securities Dealers LLC (the "NASD") is contemplating terminating such
registration or listing.
(xiii) The statements (i) in the Prospectus under the captions "Risk
Factors--Risks Associated with Terms of Customer Contracts; --Shares Eligible
for Future Sale; and --Effect of Certain Charter and Bylaw Provisions,"
"Business--Customer Contracts," "Business--Intellectual Property," "Shares
Eligible for Future Sale," and "Underwriting" and (ii) in Items 14 and 15 of
the Registration Statement, insofar as such statements constitute matters of
law, summaries of legal matters, the Company's charter or by-law provisions,
documents or legal proceedings, or legal conclusions, has been reviewed by
such counsel and fairly present and summarize, in all material respects, the
matters referred to therein.
(xiv) To the best knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xv) To the best knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits
thereto; and the descriptions thereof and references thereto are correct in
all material respects.
(xvi) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of
the Underwriting Agreement and consummation of the transactions contemplated
thereby and by the Prospectus, except as required under the Securities Act,
applicable state securities or blue sky laws and from the NASD.
(xvii) The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder
(other than performance by the Company of its obligations under the
indemnification section of the Underwriting Agreement, as to which no opinion
need be rendered) (i) have been duly authorized by all necessary corporate
action on the part of the Company; (ii) will not result in any violation of
the provisions of the charter or by-laws of the Company or any subsidiary;
(iii) will not constitute a breach of, or 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, [(A) LIST
DEBT INSTRUMENTS] or (B) to the best knowledge of such counsel, any other
material Existing Instrument; or (iv) to the best knowledge of such counsel,
will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any subsidiary.
(xviii) The Company is not, and after receipt of payment for the
Common Shares will not be, an "investment company" within the meaning of
Investment Company Act.
(xix) Except as disclosed in the Prospectus, to the best knowledge of
such counsel, there are no persons with registration or other similar rights
to have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by the
Underwriting Agreement, other than the Selling Shareholders, except for such
rights as have been duly and validly waived.
A-3
(xx) To the best knowledge of such counsel, neither the Company nor any
subsidiary is in violation of its charter or by-laws or any law,
administrative regulation or administrative or court decree applicable to the
Company or any subsidiary or is in Default in the performance or observance
of any obligation, agreement, covenant or condition contained in any material
Existing Instrument, except in each such case for such violations or Defaults
as would not, individually or in the aggregate, result in a Material Adverse
Change.
(xxi) Each document filed pursuant to the Exchange Act (other than the
financial statements and supporting schedules included therein, as to which
no opinion need be rendered) and incorporated or deemed to be incorporated by
reference in the Prospectus complied when so filed as to form in all material
respects with the Exchange Act.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus, and any supplements or
amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as specified above), and
any supplements or amendments thereto, on the basis of the foregoing, nothing
has come to their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the Second Closing
Date, as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief as to
the financial statements or schedules or other financial or statistical data
derived therefrom, included or incorporated by reference in the Registration
Statement or the Prospectus or any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
State of Colorado or the federal law of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representatives) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters; PROVIDED, HOWEVER, that such counsel shall further state
that they believe that they and the Underwriters are justified in relying upon
such opinion of other counsel, and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and public
officials.
A-4
EXHIBIT B
THE FINAL OPINION IN DRAFT FORM WILL BE ATTACHED AS EXHIBIT B AT THE TIME THIS
AGREEMENT IS EXECUTED.
The opinion of such counsel pursuant to Section 5(h) shall be rendered to
the Representatives at the request of the Company and shall so state therein.
References to the Prospectus in this EXHIBIT B include any supplements thereto
at the Closing Date.
(i) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of, and is a valid and binding agreement of, such
Selling Shareholder, enforceable in accordance with its terms, except as
rights to indemnification and contribution thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles.
(ii) The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, the
Underwriting Agreement, Custody Agreement and Power of Attorney will not to
the best of such counsel's knowledge, (a) violate or contravene any provision
of applicable law or regulation, or (b) violate, result in a breach of or
constitute a default under the terms of any other agreement or instrument to
which such Selling Shareholder is a party or by which it is bound, or any
judgment, order or decree applicable to such Selling Shareholder of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Shareholder.
(iii) Such Selling Shareholder has the legal right and power to enter
into the Underwriting Agreement, Custody Agreement and Power of Attorney, to
sell, transfer and deliver all of the Common Shares which may sold by such
Selling Shareholder under the Underwriting Agreement and to comply with its
other obligations under the Underwriting Agreement, Custody Agreement and
Power of Attorney.
(iv) Each of the Custody Agreement and Power of Attorney of such
Selling Shareholder has been duly authorized, executed and delivered by such
Selling Shareholder and is a valid and binding agreement of such Selling
Shareholder, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
B-1
(v) Assuming that the Underwriters purchase the Common Shares which
are sold by such Selling Shareholder pursuant to the Underwriting Agreement
for value, in good faith and without notice of any adverse claim, the
delivery of such Common Shares pursuant to the Underwriting Agreement will
pass good and valid title to such Common Shares, free and clear of any
security interest, mortgage, pledge, lieu encumbrance or other claim.
(vi) To the best of such counsel's knowledge, no consent, approval,
authorization or other order of, or registration or filing with, any court or
governmental authority or agency, is required for the consummation by such
Selling Shareholder of the transactions contemplated in the Underwriting
Agreement, except as required under the Securities Act, applicable state
securities or blue sky laws, and from the NASD.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent they deem proper, on certificates of the Selling Shareholders and
public officials
B-2
EXHIBIT C
[Date]
NationsBanc Xxxxxxxxxx Securities LLC
Xxxx Xxxxxxxx Incorporated
As Representatives of the Several Underwriters
c/o NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: ANALYTICAL SURVEYS, INC. (THE "COMPANY")
----------------------------------------
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representative[s] of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in
carrying out the Offering and in entering into underwriting arrangements with
the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of NMSI (which consent
may be withheld in its sole discretion), directly or indirectly, sell, offer,
contract or grant any option to sell (including without limitation any short
sale), pledge, transfer, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under Securities Exchange Act of 1934, as
amended) by the undersigned, or publicly announce the undersigned's intention to
do any of the foregoing, for a period commencing on the date hereof and
continuing through the close of trading on the date 90 days after the date of
the Prospectus. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
With respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities Act of any
Common Stock owned either of record or beneficially by the undersigned,
including any rights to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
----------------------------------
Printed Name of Holder
By:
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Signature
----------------------------------
Printed Name of Person Signing
(AND INDICATE CAPACITY OF PERSON SIGNING IF
SIGNING AS CUSTODIAN, TRUSTEE, OR ON BEHALF
OF AN ENTITY)
