Exhibit 1.1
1,500,000 Shares*
METROLOGIC INSTRUMENTS, INC.
Common Stock
UNDERWRITING AGREEMENT
St. Petersburg, Florida
September , 2003
--
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxx & Company, Inc.
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Metrologic Instruments, Inc., a New Jersey corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several Underwriters named in Schedule I hereto (the "Underwriters"),
1,500,000 shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock). The 1,500,000 shares to be purchased from the Company are called
the "Firm Shares." In addition, the Company has agreed to sell to the
----------
* Plus an additional 225,000 shares subject to Underwriter's over-allotment
option.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 2
Underwriters, upon the terms and conditions stated herein, up to an additional
225,000 shares of Common Stock (the "Additional Shares") to cover
over-allotments by the Underwriters, if any. The Firm Shares and the Additional
Shares are collectively referred to in this Agreement as the "Shares." Xxxxxxx
Xxxxx & Associates, Inc., Xxxxxxx Xxxxx & Company, L.L.C. and Xxxxxxx & Company,
Inc. are acting as the representatives of the several Underwriters and in such
capacity are referred to in this Agreement as the "Representatives."
The Company wishes to confirm as follows its agreement with you and the
other several Underwriters, on whose behalf you are acting, in connection with
the several purchases of the Shares from the Company.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 (File No. 333-107583), including a
prospectus subject to completion, relating to the Shares. The Company has also
filed one or more amendments to such registration statement, copies of which
have been furnished to you. After the effective date of such registration
statement, the Company will next file a final prospectus in accordance with
Rules 430A and 424(b) and/or (c). Such registration statement, as amended,
including the financial statements, documents incorporated by reference therein,
exhibits and schedules thereto, at the time when it becomes effective and as
thereafter amended by any post-effective amendment, is referred to in this
Agreement as the "Registration Statement." The prospectus in the form included
in the Registration Statement or, if the prospectus included in the Registration
Statement omits certain information in reliance upon Rule 430A under the Act and
such information is thereafter included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Act, or any prospectus supplement
or as part of a post-effective amendment to the Registration Statement after the
Registration Statement becomes effective, the prospectus as so filed, is
referred to in this Agreement as the "Prospectus." If the Company elects, with
the consent of the Representative, to rely on Rule 434 under the Act, all
references to the Prospectus shall be deemed to include the form of prospectus
and the term sheet contemplated by Rule 434, taken together, provided to the
Underwriters by the Company in reliance on Rule 434 under the Act (the "Rule 434
Prospectus"). If the Company files another registration statement with the
Commission to register a portion of the Shares pursuant to Rule 462(b) under the
Act (the "Rule 462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to include the Registration Statement and the
Rule 462 Registration Statement, as each such registration statement may be
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 3
amended or supplemented pursuant to the Act. The prospectus subject to
completion in the form included in the Registration Statement at the time of the
initial filing of such Registration Statement with the Commission, as such
prospectus is amended or supplemented from time to time until the date of the
Prospectus is referred to in this Agreement as the "Preliminary Prospectus." All
references in this Agreement to the Registration Statement, the Rule 462
Registration Statement, the Rule 434 Prospectus, a Preliminary Prospectus or the
Prospectus, 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"). Any reference in this
Agreement to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of the Registration Statement, such Preliminary Prospectus or the Prospectus, as
the case may be, and any reference to any amendment or supplement to the
Registration Statement, any Preliminary Prospectus or Prospectus shall be deemed
to refer to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the documents
that at the time of filing are incorporated by reference in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto.
2. Agreements to Sell and Purchase. Upon the terms and conditions set forth
herein, the Company agrees to issue and sell an aggregate of 1,500,000 Firm
Shares to the Underwriters. Upon the basis of the representations, warranties
and agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company at a purchase price of $[___] per Share (the
"purchase price per Share"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto.
The Company hereby also agrees to sell to the Underwriters, and, upon the
basis of the representations, warranties and agreements of the Company herein
contained and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right for 30 days from the date of the Prospectus to
purchase from the Company up to 225,000 Additional Shares at the purchase price
per Share for the Firm Shares. The Additional Shares may be purchased solely for
the purpose of covering over-allotments, if any, made in connection with the
offering of the Firm Shares. If any Additional Shares are to be purchased, each
Underwriter, severally and not jointly, agrees to purchase the number of
Additional Shares (subject to such adjustments as you may
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 4
determine to avoid fractional shares) that bears the same proportion to the
total number of Additional Shares to be purchased by the Underwriters as the
number of Shares set forth opposite the name of such Underwriter in Schedule I
hereto bears to the total number of Shares. The option to purchase Additional
Shares may be exercised at any time within 30 days after the date of the
Prospectus, but no more than once.
3. Terms of Public Offering. The Company has been advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
Not later than 12:00 p.m. on the second business day following the date the
Shares are 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.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx at 10:00 a.m. eastern time, on September , 2003, or such
--
other place, time and date not later than 1:30 p.m., eastern time, on 10
business days following original contemplated Closing Date as the
Representative shall designate by notice to the Company (the time and date of
such closing are called the "Closing Date"). The place of closing for the Firm
Shares and the Closing Date may be varied by agreement between the
Representatives and the Company. The Company hereby acknowledges that
circumstances under which the Representatives may provide notice to postpone the
Closing Date as originally scheduled include any determination by the Company 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
11 hereof.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at the offices of Xxxxxxx Xxxxx &
Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx, at 10:00 a.m.
eastern time, on such date or dates (the "Additional Closing Date") (which may
be the same as the Closing Date, but shall in no event be
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 5
earlier than the Closing Date nor earlier than three nor later than ten business
days after the giving of the notice hereinafter referred to) as shall be
specified in a written notice, from the Representatives on behalf of the
Underwriters to the Company, of the Underwriters' determination to purchase a
number, specified in such notice, of Additional Shares. Such notice may be given
at any time within 30 days after the date of the Prospectus and must set forth
(i) the aggregate number of Additional Shares as to which the Underwriters are
exercising the option and (ii) the names and denominations in which the
certificates for which the Additional Shares are to be registered. The place of
closing for the Additional Shares and the Additional Closing Date may be varied
by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 p.m. eastern time, not later than the second
full business day preceding the Closing Date or the Additional Closing Date, as
the case may be. Such certificates shall be made available to you for inspection
and packaging at The Depository Trust Company ("DTC") not later than 9:30 a.m.
eastern time, on the business day immediately preceding the Closing Date or the
Additional Closing Date, as the case may be. The certificates evidencing the
Firm Shares and any Additional Shares to be purchased hereunder shall be
delivered to you on the Closing Date or the Additional Closing Date, as the case
may be through the facilities of DTC, against payment of the purchase price
therefor by wire transfer of immediately available funds to accounts specified
in writing, not later than the close of business on the business day immediately
preceding the Closing Date or the Additional Closing Date, as the case may be,
by the Company. Payment for
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 6
the Shares sold by the Company hereunder shall be delivered by the
Representatives to the Company.
It is understood that the Representatives have been authorized, for their
own account and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price per Share for the Firm
Shares and the Additional Shares, if any, that the Underwriters have agreed to
purchase. Xxxxxxx Xxxxx and Associates, Inc., individually and not as
Representative of the Underwriters, may, but shall not be obligated to, make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by the Representatives by the Closing Date or the Additional
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.
5. Covenants and Agreements of the Company.
The Company covenants and agrees with the several Underwriters as follows:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective, if it has not already
become effective, and will advise you promptly and, if requested by you, will
confirm such advice in writing (i) when the Registration Statement has become
effective and the time and date of any filing of any post-effective Registration
Statement or any amendment or supplement to any Preliminary Prospectus or the
Prospectus and the time and date that any post-effective amendment to the
Registration Statement becomes effective, (ii) if Rule 430A under the Act is
employed, when the Prospectus has been timely filed pursuant to Rule 424(b)
under the Act, (iii) of the receipt of any comments of the Commission, or any
request by the Commission for amendments or supplements to the Registration
Statement, any Preliminary Prospectus or the Prospectus or for additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purposes and (v) within the period of time
referred to in Section 5(e) below, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of any event that comes to the attention of the Company that
makes any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue in any
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 7
material respect or that requires the making of any additions thereto or changes
therein in order to make the statements therein (in the case of the Prospectus,
in light of the circumstances under which they were made) not misleading in any
material respect, or of the necessity to amend or supplement the Prospectus (as
then amended or supplemented) to comply with the Act or any other law. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible time. If
the Company elects, with the consent of the Representative, to rely on Rule 434
under the Act, the Company will provide the Underwriters with copies of the form
of Rule 434 Prospectus (including copies of a term sheet that complies with the
requirements of Rule 434 under the Act), in such number as the Underwriters may
reasonably request, and file with the Commission in accordance with Rule 424(b)
of the Act the form of Prospectus complying with Rule 434(b)(2) of the Act
before the close of business on the first business day immediately following the
date hereof. If the Company elects not to rely on Rule 434 under the Act, the
Company will provide the Underwriters with copies of the form of Prospectus, in
such number as the Underwriters may reasonably request, and file with the
Commission such Prospectus in accordance with Rule 424(b) of the Act before the
close of business on the first business day immediately following the date
hereof.
(b) The Company will furnish to you, without charge, two signed
duplicate originals of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, and will also furnish to you, without charge, such number of
conformed copies of the Registration Statement as originally filed and of each
amendment thereto as you may reasonably request.
(c) The Company will not file any Rule 462 Registration Statement or
any amendment to the Registration Statement or make any amendment or supplement
to the Prospectus unless (i) you shall have previously been advised thereof and
been given a reasonable opportunity to review such filing, amendment or
supplement and (ii) you have not reasonably objected to such filing, amendment
or supplement after being so advised and having been given a reasonable
opportunity to review such filing, amendment or supplement.
(d) Prior to the execution and delivery of this Agreement, the Company
has delivered or will deliver to you, without charge, in such quantities as you
have requested or may hereafter reasonably request, copies of each form of the
Preliminary Prospectus. Consistent with the provisions of Section 5(e) hereof,
the Company consents to the use, in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers, prior to the date
of the Prospectus, of each Preliminary Prospectus so furnished by the Company.
(e) As soon after the execution and delivery of this Agreement as is
practicable and thereafter from time to time for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or a dealer
(the "Prospectus Delivery Period"), and for so long a period as you may
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 8
request for the distribution of the Shares, the Company will deliver to each
Underwriter and each dealer, without charge, as many copies of the Prospectus
(and of any amendment or supplement thereto) as they may reasonably request. The
Company consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are offered
by the several Underwriters and by all dealers to whom Shares may be sold, both
in connection with the offering and sale of the Shares and for such period of
time thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If at any time prior to the
later of (i) the completion of the distribution of the Shares pursuant to the
offering contemplated by the Registration Statement or (ii) the expiration of
prospectus delivery requirements with respect to the Shares under Section 4(3)
of the Act and Rule 174 thereunder, any event shall occur that in the judgment
of the Company or in the opinion of counsel for the Underwriters is required to
be set forth in the Prospectus (as then amended or supplemented) or should be
set forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with the Act or any other law,
the Company will forthwith prepare and, subject to Sections 5(a) and 5(c)
hereof, file with the Commission and use its best efforts to cause to become
effective as promptly as possible an appropriate supplement or amendment
thereto, and will furnish to each Underwriter who has previously requested
Prospectuses, without charge, a reasonable number of copies thereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration
or qualification for so long as required to complete the distribution of the
Shares; provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to general service of process in suits, other than
those arising out of the offering or sale of the Shares, as contemplated by this
Agreement and the Prospectus, in any jurisdiction where it is not now so
subject. In the event that the qualification of the Shares in any jurisdiction
is suspended, the Company shall so advise you promptly in writing. The Company
will use its best efforts to qualify or register its Common Stock for sale in
non-issuer transactions under (or obtain exemptions from the application of) the
Blue Sky laws of each state where necessary to permit market making transactions
and secondary trading and will comply with such Blue Sky laws and will continue
such qualifications, registrations and exemptions in effect for a period of two
years after the date hereof.
(g) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, a consolidated earnings
statement (in form complying with the provisions of Rule 158), which need not be
audited, covering a twelve-month period
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 9
commencing after the effective date of the Registration Statement and the Rule
462 Registration Statement, if any, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(h) During the period ending three years from the date hereof, the
Company will furnish to you and, upon your request, to each of the other
Underwriters, (i) as soon as available, a copy of each proxy statement,
quarterly or annual report or other report of the Company mailed to shareholders
or filed with the Commission, the National Association of Securities Dealers,
Inc. (the "NASD") or the Nasdaq Stock Market ("Nasdaq") or any national
securities exchange and (ii) from time to time such other information concerning
the Company as you may reasonably request.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provision hereof (except pursuant to a termination
under Section 12 hereof) or if this Agreement shall be terminated by the
Underwriters because of any inability, failure or refusal on the part of the
Company to perform in all material respects any agreement herein or to comply in
all material respects with any of the terms or provisions hereof or to fulfill
in all material respects any of the conditions of this Agreement, the Company
agrees to reimburse you and the other Underwriters for all out-of-pocket
expenses (including travel expenses and reasonable fees and expenses of counsel
for the Underwriters, but excluding wages and salaries paid by you) reasonably
incurred by you in connection herewith.
(j) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder in accordance with the statements under the
caption "Use of Proceeds" in the Prospectus.
(k) If Rule 430A under the Act is employed, the Company will timely
file the Prospectus or term sheet (as described in Rule 434(b) under the Act)
pursuant to Rule 424(b) under the Act.
(l) For a period of 90 days after the date of the Prospectus first
filed pursuant to Rule 424(b) under the Act, without your prior written consent,
the Company will not, (i) directly or indirectly, issue, sell, offer or contract
to sell or otherwise dispose of or transfer any shares of Common Stock or
securities convertible into or exchangeable or exercisable for shares of Common
Stock (collectively, "Company Securities") or any rights to purchase Company
Securities, or file any registration statement under the Act with respect to any
of the foregoing or (ii) enter into any swap or other agreement that transfers,
in whole or in part, directly or indirectly, the economic consequences of
ownership of Company Securities whether any such swap or transaction is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
except to the Underwriters pursuant to this Agreement and except for (1) grants
of options pursuant to the Company's stock option, stock bonus or other stock
plans or arrangements in effect as of the date hereof and described in the
Prospectus (2) issuances of shares of Common Stock upon the exercise of options
outstanding as of the date hereof under such stock plans and pursuant to the
Company's employee stock purchase plan and (3) the
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 10
issuance of shares of Common Stock on exercise of the warrant held by certain
Selling Shareholders (collectively, "Permitted Issuances").
(m) Prior to the Closing Date or the Additional Closing Date, as the
case may be, the Company will furnish to you, as promptly as possible, copies of
any unaudited interim consolidated financial statements of the Company and its
subsidiaries prepared for any period subsequent to the periods covered by the
financial statements appearing in the Prospectus.
(n) The Company will comply with all provisions of any undertakings
contained in Item 17 of Part II of the Registration Statement.
(o) The Company will not at any time, directly or indirectly, take any
action designed, or which might reasonably be expected to cause or result in, or
which will constitute, stabilization or manipulation of the price of the shares
of Common Stock to facilitate the sale or resale of any of the Shares.
(p) The Company will timely file with Nasdaq all documents and notices
required by Nasdaq to be filed with them.
(q) During the Prospectus Delivery Period, the Company will file all
documents required to be filed with the Commission pursuant to Sections 13, 14
and 15 of the Exchange Act in the manner and within the time periods required by
the Exchange Act.
6. Representations and Warranties of the Company.
The Company hereby represents and warrants to each Underwriter that:
(a) The Company satisfies all of the requirements of the Act for use
of Form S-3 for the offering of Shares contemplated hereby. Each Preliminary
Prospectus included as part of the Registration Statement as originally filed or
as part of any amendment or supplement thereto, or filed pursuant to Rule 424(a)
under the Act, complied as to form when so filed in all material respects with
the provisions of the Act, except that this representation and warranty does not
apply to statements in or omissions from such Preliminary Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
or on behalf of any Underwriter through the Representatives expressly for use
therein. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus and no proceeding for that purpose has been
instituted or threatened by the Commission or the securities authority of any
state or other jurisdiction.
(b) The Company has prepared each of the Registration Statement, any
Rule 462 Registration Statement and any post-effective amendment thereto, and
the Prospectus and any amendments or supplements thereto. The Registration
Statement (including any Rule 462 Registration Statement), in the form in which
it becomes effective and also in such form as it
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 11
may be when any post-effective amendment thereto shall become effective, and the
Prospectus, and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, will comply as to form in all
material respects with the provisions of the Act and will not at any such times
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 statements therein not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the Prospectus (or
any amendment or supplement thereto) made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by or on behalf of any Underwriter through the Representatives expressly for use
therein.
(c) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, and any further
Incorporated Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder; no such Incorporated Document when it was filed (or, if
an amendment with respect to any such document was filed, when such amendment
was filed), contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further Incorporated Document,
when it is filed, will contain an untrue statement of a material fact or will
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
(d) The capitalization of the Company is and will be as set forth in
the Prospectus as of the date set forth therein subject to the Permitted
Issuances. All the outstanding shares of Common Stock of the Company are, and as
of the Closing Date and the Additional Closing Date, as the case may be, will
be, duly authorized and validly issued, fully paid and nonassessable and free of
any preemptive or similar rights; except as set forth in the Prospectus, the
Company is not a party to or bound by any outstanding options, warrants or
similar rights to subscribe for, or contractual obligations to issue, sell,
transfer or acquire, any of its capital stock or any securities convertible into
or exchangeable for any of such capital stock; the Shares to be issued and sold
to the Underwriters by the Company hereunder have been duly authorized and, when
issued and delivered to the Underwriters against full payment therefor in
accordance with the terms hereof will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; the capital stock of
the Company conforms to the description thereof in the Registration Statement
and the Prospectus (or any amendment or supplement thereto); and the delivery of
certificates for the Shares being sold by the Company against payment therefor
pursuant to the terms of this Agreement will pass valid title to the Shares
being sold by the Company, free and clear of any claim, encumbrance or defect in
title, to the several Underwriters purchasing such shares in good faith and
without notice of any lien, claim or encumbrance. The certificates for the
Shares being sold by the Company are in valid and sufficient form.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 12
(e) Each of the Company and its subsidiaries is a corporation or other
legal entity duly organized and validly existing as a corporation, or other
legal entity, in good standing under the laws of the state or jurisdiction of
its incorporation with full corporate power and authority to own, lease and
operate its properties and to conduct its business as presently conducted and as
described in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) and is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify has not had
and would not reasonably be expected to have a material adverse effect on the
condition (financial or other), business, properties, net worth, results of
operations or prospects of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(f) Except as disclosed in the Prospectus, the issued shares of
capital stock of each of the Company's subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable and are owned by the
Company free and clear of any security interests, liens, encumbrances, equities
or claims other than those granted to PNC Bank, National Association under the
Company's Amended and Restated Credit Agreement dated July 9, 2002, as amended
by Amendment No. 1, dated January 31, 2003 (the "Credit Agreement"). The Company
does not have any subsidiaries and does not own a material interest in or
control, directly or indirectly, any other corporation, partnership, joint
venture, association, trust or other business organization, except as set forth
in Exhibit 21 to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, which is incorporated by reference into the
Registration Statement. As used in this Agreement, subsidiaries shall mean
direct and indirect subsidiaries of the Company.
(g) Except as disclosed in the Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened, against the Company or its subsidiaries or to which the Company or
its subsidiaries or any of their properties are subject, that are required to be
described in the Registration Statement or the Prospectus (or any amendment or
supplement thereto). Except as described in the Prospectus, there is no action,
suit, inquiry, proceeding or investigation by or before any court or
governmental or other regulatory or administrative agency or commission pending
or, to the knowledge of the Company, threatened, against or involving the
Company or its subsidiaries, which might individually or in the aggregate
prevent or adversely affect the transactions contemplated by this Agreement or
which would reasonably be expected to result in a Material Adverse Effect, nor
to the Company's knowledge, is there any basis for any such action, suit,
inquiry, proceeding or investigation. There are no agreements, contracts,
indentures, leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that are not
described, filed or incorporated by reference in the Registration Statement and
the Prospectus as required by the Act. All such contracts to which the Company
or any of its subsidiaries is a party have been duly authorized, executed and
delivered by the Company or the applicable subsidiary, constitute valid and
binding agreements of the Company or the applicable subsidiary and are
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 13
enforceable against the Company or the applicable subsidiary in accordance with
the terms thereof, except as enforceability thereof may be limited by (i) the
application of bankruptcy, reorganization, insolvency and other laws affecting
creditors' rights generally and (ii) equitable principles being applied at the
discretion of a court before which any proceeding may be brought. Neither the
Company nor the applicable subsidiary has received notice or been made aware
that any other party is in breach of or default to the Company under any of such
contracts.
(h) Neither the Company nor any of its subsidiaries is (i) in
violation of (A) its certificate or articles of incorporation or bylaws, or
other organizational documents, (B) any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of its
subsidiaries or (C) any decree of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries, which in the
case of each of (B) and (C) would reasonably be expected to have a Material
Adverse Effect; or (ii) in default in the performance of any obligation,
agreement or condition contained in (A) any bond, debenture, note or any other
evidence of indebtedness or (B) any agreement, indenture, lease or other
instrument (each of (A) and (B), an "Existing Instrument") to which the Company
or any of its subsidiaries is a party or by which any of their properties may be
bound, which default would reasonably be expected to have a Material Adverse
Effect; and there does not exist any state of facts that constitutes an event of
default on the part of the Company or any of its subsidiaries as defined in such
documents or that, with notice or lapse of time or both, would constitute such
an event of default.
(i) The execution and delivery of this Agreement on behalf of the
Company and the performance by the Company of its obligations under this
Agreement have been duly and validly authorized by the Company and this
Agreement has been duly executed and delivered on behalf of the Company, and
constitutes a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent
enforceability may be limited by (i) the application of bankruptcy,
reorganization, insolvency and other laws affecting creditors' rights generally
and (ii) equitable principles being applied at the discretion of a court before
which any proceeding may be brought, and except as rights to indemnity and
contribution hereunder may be limited by or unenforceable under federal or state
securities laws.
(j) None of the issuance and sale of the Shares by the Company, the
execution, delivery of this Agreement on behalf of the Company or performance of
this Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby (i) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the Shares
under the Act, the listing of the Shares for trading on Nasdaq, and compliance
with the securities or Blue Sky laws of various jurisdictions, all of which will
be, or have been, effected in accordance with this Agreement and except for the
NASD's clearance of the underwriting terms of the offering contemplated hereby
as required under the NASD's Rules of Fair Practice), (ii) conflicts with or
will conflict with or constitutes or will constitute a breach of, or a default
under, the Company's certificate or articles
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 14
of incorporation or the Company's bylaws or any agreement, indenture, lease or
other instrument to which the Company or any of its subsidiaries is a party or
by which any of its properties may be bound, (iii) violates any statute, law,
regulation, ruling, filing, judgment, injunction, order or decree applicable to
the Company or any of its subsidiaries or any of their properties, or (iv)
results in a breach of, or default or Debt Repayment Triggering event (as
defined below) under, or results 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 requires the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, defaults, liens,
charges or encumbrances that will not, individually or in the aggregate, result
in a Material Adverse Effect. As used herein, a "Debt Repayment Triggering
Event" means any event or condition that gives, or with the giving of notice or
lapse of time would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company or any of its subsidiaries; provided, however, a Debt Repayment
Triggering Event shall not include any requirement of repayment of indebtedness
under the Credit Agreement from the proceeds of the offering contemplated by
this Agreement.
(k) Except as described in the Prospectus, neither the Company nor any
of its subsidiaries has outstanding and at the Closing Date and the Additional
Closing Date, as the case may be, will have outstanding any options to purchase,
or any warrants to subscribe for, or any securities or obligations convertible
into, or any contracts or commitments to issue or sell, any shares of Common
Stock or any such warrants or convertible securities or obligations. No holder
of securities of the Company has rights to the registration of any securities of
the Company, as a result of or in connection with the filing of the Registration
Statement or the consummation of the transactions contemplated hereby that have
not been satisfied or heretofore waived in writing.
(l) Ernst & Young LLP, the certified public accountants who have
certified the financial statements (including the related notes thereto and
supporting schedules) filed as part of the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants as required by the Act and the Exchange Act and the applicable rules
and regulations promulgated thereunder.
(m) The financial statements, together with related schedules and
notes, included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly in all material respects the
financial condition, results of operations, cash flows and changes in financial
position of the Company on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Registration Statement and
Prospectus (and any amendment or supplement thereto) is accurately presented in
all material respects and prepared on a basis consistent with such financial
statements, the books and records
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 15
of the Company and in compliance with applicable regulations of the Commission.
No other financial statements or schedules are required to be included in the
Registration Statement.
(n) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i)
neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, indirect, direct or contingent, or entered into any
material transaction that is not in the ordinary course of business, (ii)
neither the Company nor any of its subsidiaries has sustained any material loss
or interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance, (iii) except
for dividends made in the ordinary course of business by certain of the
Company's subsidiaries, neither the Company nor any of its subsidiaries has paid
or declared any dividends or other distributions with respect to its capital
stock and the Company is not in default under the terms of any class of capital
stock of the Company or any outstanding debt obligations, (iv) subject to the
Permitted Issuances, there has not been any change in the authorized or
outstanding capital stock of the Company or any material change in the
indebtedness of the Company (in each case, other than in the ordinary course of
business) and (v) there has not been any material adverse change, or any
development involving or that would reasonably be expected to result in a
Material Adverse Effect.
(o) All offers and sales of the Company's capital stock and other debt
or other securities prior to the date hereof were made in compliance with or
were the subject of an available exemption from the Act and all other applicable
state and federal laws or regulations, or any actions under the Act or any state
or federal laws or regulations in respect of any such offers or sales are
effectively barred by effective waivers or statutes of limitation.
(p) The Common Stock (including the Shares) is registered pursuant to
Section 12(g) of the Exchange Act and is listed on Nasdaq, 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 Nasdaq, nor has the Company received any notification that the
Commission or Nasdaq is contemplating terminating such registration or listing.
(q) The Company has not distributed and will not distribute, and has
not authorized the Underwriters to distribute, any offering material in
connection with the offering and sale of the Shares other than the Preliminary
Prospectus, the Prospectus or other offering material, if any, as permitted by
the Act.
(r) Other than excepted activity pursuant to Regulation M under the
Exchange Act, the Company has not taken and will not take, directly or
indirectly, any action that constituted, or any action designed to, or that
might reasonably be expected to cause or result in or constitute, under the Act
or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or for any other purpose.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 16
(s) The Company and each of its subsidiaries have filed all tax
returns required to be filed (other than certain state or local tax returns, as
to which the failure to file, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect), which returns are
complete and correct in all material respects, and neither the Company nor any
subsidiary is in default in the payment of any taxes that were payable pursuant
to said returns or any assessments with respect thereto. Except as disclosed in
the Prospectus or as would not reasonably be expected to have a Material Adverse
Effect, all deficiencies asserted as a result of any federal, state, local or
foreign tax audits have been paid or finally settled and no issue has been
raised in any such audit that, by application of the same or similar principles,
reasonably could be expected to result in a proposed deficiency for any other
period not so audited. There are no outstanding agreements or waivers extending
the statutory period of limitation applicable to any federal, state, local or
foreign tax return for any period. On the Closing Date and the Additional
Closing Date, as the case may be, all stock transfer and other taxes that are
required to be paid in connection with the sale of the shares to be sold by the
Company to the Underwriters will have been fully paid by the Company and all
laws imposing such taxes will have been complied with.
(t) Except as set forth in the Prospectus, there are no transactions
with "affiliates" (as defined in Rule 405 promulgated under the Act) or any
officer, director or security holder of the Company (whether or not an
affiliate) that are required by the Act to be disclosed in the Registration
Statement. Additionally, no relationship, direct or indirect, exists between the
Company or any of its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any subsidiary on the
other hand that is required by the Act to be disclosed in the Registration
Statement and the Prospectus that is not so disclosed.
(u) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an investment company
within the meaning of the Investment Company Act of 1940, as amended.
(v) Each of the Company and its subsidiaries has good and valid title
to all property (real and personal) described in the Prospectus as being owned
by it, free and clear of all liens, claims, security interests or other
encumbrances except (i) such as are described in the Prospectus or (ii) such as
are not materially burdensome and do not have or would not reasonably be
expected to result in a Material Adverse Effect to the use of the property or
the conduct of the business of the Company. All property (real and personal)
held under lease by the Company and its subsidiaries is held by it under valid,
subsisting and enforceable leases with only such exceptions as in the aggregate
are not materially burdensome and do not have or would not reasonably be
expected to result in a Material Adverse Effect to the use of the property or
the conduct of the business of the Company.
(w) Each of the Company and its subsidiaries has all permits,
licenses, franchises, approvals, consents and authorizations of governmental or
regulatory authorities (hereinafter "permit" or "permits") as are necessary to
own or lease its properties and to conduct its business in the manner described
in the Prospectus, subject to such qualifications as may be set forth in
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 17
the Prospectus, except where the failure to have obtained any such permit has
not had and would not reasonably be expected to have a Material Adverse Effect;
each of the Company and its subsidiaries has operated and is operating its
business in material compliance with and not in material violation of any of its
obligations with respect to each such permit and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or termination
of any such permit or result in any other material impairment of the rights of
any such permit, subject in each case to such qualification as may be set forth
in the Prospectus; and, except as described in the Prospectus, such permits
contain no restrictions that are materially burdensome to the Company or any of
its subsidiaries.
(x) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) The Company and its subsidiaries are (i) in compliance with any
and all applicable federal, state, local and foreign laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or other approvals would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect. Neither the Company nor
any of its subsidiaries has been named as a "potentially responsible party"
under the Comprehensive Environmental Response Compensation and Liability Act of
1980, as amended. Neither the Company nor any of its subsidiaries owns, leases
or occupies any property that appears on any list of hazardous sites compiled by
any state or local governmental agency.
(z) Except as disclosed in the Prospectus, each of the Company and its
subsidiaries owns and has full right, title and interest in and to, or has valid
licenses to use, each trade name, trademark, service xxxx, patent, copyright,
approval, trade secret and other similar rights (collectively "Intellectual
Property") under which the Company and its subsidiaries conduct all or any
material part of its business, and the Company has not created any lien or
encumbrance on, or granted any right or license with respect to, any such
Intellectual Property except where the failure to own or obtain a license or
right to use any such Intellectual Property has not and would not reasonably be
expected to have a Material Adverse Effect; except as disclosed in the
Prospectus, there is no claim pending against the Company or its subsidiaries
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 18
with respect to any Intellectual Property and the Company and its subsidiaries
have not received notice or otherwise become aware that any Intellectual
Property that it uses or has used in the conduct of its business infringes upon
or conflicts with the rights of any third party.
(aa) The Company has procured Lock-Up Agreements, in the form of
Exhibit A attached hereto, from each of the Company's directors and those
executive officers of the Company specified by you.
(bb) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which it is engaged;
and neither the Company nor any of its subsidiaries has reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a comparable cost.
(cc) 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 in
all material respects with ERISA and all other applicable state and federal
laws. "ERISA Affiliate" means, with respect to the Company or a subsidiary, any
member of any group or organization described in Sections 414(b), (c), (m) or
(o) of the Code of which the Company or such subsidiary is a member. No
"reportable event" (as defined in 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. No "employee
benefit plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates, if such "employee benefit plan" were terminated,
would have any "amount of unfunded benefit liabilities" (as defined in ERISA).
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. 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, that would cause the loss of such qualification.
(dd) No officer, director, or to the knowledge of the Company, any
five percent or greater shareholder of the Company, has a direct or indirect
affiliation or association with any member of the NASD other than one of our
directors, Xxxxxxx Xxxxx-Xxxxxx, a managing director of Xxxxxx Xxxxxxxxxx Xxxxx
LLC.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Company
agrees to pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 19
accountants in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof and of any Preliminary
Prospectus to the Underwriters and dealers; (ii) the printing and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, each Preliminary
Prospectus, any "Canadian wrapper" required for the use of such documents in
Canada, the Blue Sky memoranda, the Master Agreement Among Underwriters, this
Agreement, the Selected Dealers Agreement and all amendments or supplements to
any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) consistent with the provisions of Section
5(f), all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws, Blue Sky laws or Canadian
provincial securities laws, including reasonable attorneys' fees and
out-of-pocket expenses of the counsel for the Underwriters in connection
therewith; (iv) the filing fees incident to securing any required review by the
NASD of the fairness of the terms of the sale of the Shares and the reasonable
fees and disbursements of the Underwriters' counsel relating thereto provided
that the aggregate fees and expenses for Underwriters' counsel under this clause
(iv) and (iii) above shall not exceed $15,000, plus the cost of retaining local
counsel in Canada for the preparation of a "Canadian Wrap," if required; (v) the
fees and expenses associated with listing the Shares on Nasdaq; (vi) the costs
and charges of any transfer agent or registrar; (vii) the cost of the tax
stamps, if any, in connection with the issuance and delivery of the Shares to
the respective Underwriters; (viii) all other fees, costs and expenses referred
to in Item 13 of the Registration Statement; and (ix) the transportation,
lodging, graphics and other expenses for Company personnel incidental to the
Company's preparation for and participation in the "roadshow" for the offering
contemplated hereby. Except as provided in this Section 7 and in Section 8
hereof, the Underwriters shall pay their own expenses, including the fees and
disbursements of their counsel. In addition, in the event that the proposed
offering is terminated for the reasons set forth in Section 5(i) hereof, the
Company agrees to reimburse the Underwriters as provided in Section 5(i).
8. Indemnification and Contribution. Subject to the limitations in this
paragraph below, the Company agrees to indemnify and hold harmless you and each
other Underwriter, the directors, officers, employees and agents of each
Underwriter, and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses, including
reasonable costs of investigation and reasonable attorneys' fees and expenses
(collectively, "Damages") arising out of or based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, except to the extent that any such
Damages arise out of or are based upon an untrue statement or omission or
alleged untrue statement or omission that has been made therein or omitted
therefrom in reliance upon and in conformity with the information
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 20
furnished in writing to the Company by or on behalf of any Underwriter through
the Representatives, expressly for use in connection therewith or (ii) any
inaccuracy in or breach of the representations and warranties of the Company
contained herein or any failure of the Company to perform its obligations
hereunder or under law; provided, however, that with respect to any untrue
statement or omission made in any Preliminary Prospectus, the indemnity
agreement contained in this paragraph shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter or to
any officer, director, employee or agent of any Underwriter) from whom the
person asserting any such Damages purchased the Shares concerned if both (A) a
copy of the Prospectus was not sent or given to such person at or prior to the
written confirmation of the sale of such Shares to such person as required by
the Act and (B) the untrue statement or omission in the Preliminary Prospectus
was corrected in the Prospectus. This indemnification shall be in addition to
any liability that the Company may otherwise have.
In addition to its other obligations under this Section 8, the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any inaccuracy in the representations and warranties
of the Company herein or failure to perform its obligations hereunder, all as
set forth in this Section 8, the party against whom indemnification is being
sought will reimburse each Underwriter on a monthly basis for all reasonable
legal or other out-of-pocket expenses incurred in connection with investigating
or defending any such claim, action, investigation, inquiry or other proceeding
(to the extent documented by reasonably itemized invoices therefor),
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligation of the Company to reimburse each Underwriter
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, each
Underwriter shall promptly return it to the person(s) from whom it was received.
Any such interim reimbursement payments that are not made to the Underwriters
within 30 days of a request for reimbursement shall bear interest compounded
daily
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 21
at a rate determined on the basis of the base lending rate announced from time
to time by The Wall Street Journal from the date of such request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company, such Underwriter or such controlling person shall promptly
notify in writing the party(s) against whom indemnification is being sought (the
"indemnifying party" or "indemnifying parties"), and such indemnifying party(s)
shall assume the defense thereof, including the employment of counsel reasonably
acceptable to such Underwriter or such controlling person and the payment of all
reasonable fees of and expenses incurred by such counsel. Such Underwriter or
any such controlling person shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person, unless (i) the indemnifying party(s) has (have) agreed in
writing to pay such fees and expenses, (ii) the indemnifying party(s) has (have)
failed to assume the defense and employ counsel reasonably acceptable to the
Underwriter or such controlling person or (iii) the named parties to any such
action (including any impleaded parties) include both such Underwriter or such
controlling person and the indemnifying party(s), and such Underwriter or such
controlling person shall have been advised by its counsel that one or more legal
defenses may be available to the Underwriter that may not be available to the
Company, or that representation of such indemnified party and any indemnifying
party(s) by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the indemnifying party(s) shall not have
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 22
the right to assume the defense of such action on behalf of such Underwriter or
such controlling person (but the Company, shall not be liable for the fees and
expenses of more than one counsel for the Underwriters and such controlling
persons)). The indemnifying party(s) shall not be liable for any settlement of
any such action effected without its (their several) written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, the indemnifying party(s) agree(s) to indemnify
and hold harmless any Underwriter and any such controlling person from and
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment, but in the case of a judgment only to the extent stated
in the first paragraph of this Section 8.
Each Underwriter agrees, severally and jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing several indemnity from the Company to each Underwriter, but only with
respect to information furnished in writing by or on behalf of such Underwriter
expressly for use in the Registration Statement, the Prospectus or any
Preliminary Prospectus, or any amendment or supplement thereto. If any action or
claim shall be brought or asserted against the Company, any of its directors,
any of its officers or any such controlling person based on the Registration
Statement, the Prospectus or any Preliminary Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph, such Underwriter shall have the rights
and duties given to the Company by the immediately preceding paragraph (except
that if the Company shall have assumed the defense thereof such Underwriter
shall not be required to do so, but may employ
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 23
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officers and any such controlling persons,
shall have the rights and duties given to the Underwriters by the immediately
preceding paragraph.
In any event, the Company will not, without the prior written consent of
the Representatives, settle or compromise or consent to the entry of any
judgment in any proceeding or threatened claim, action, suit or proceeding in
respect of which the indemnification may be sought hereunder (whether or not a
Representative or any person who controls either of the Representatives within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act is a
party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of all Underwriters and
such controlling persons from all liability arising out of such claim, action,
suit or proceeding.
If the indemnification provided for in this Section 8 is unavailable or
insufficient for any reason whatsoever (other than because of the express
limitations contained in this Section 8) to an indemnified party in respect of
any Damages referred to herein, then an indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Damages (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters on the other hand, from the
offering and sale of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative and several fault of the Company on the one hand, and the
Underwriters on the other hand, in connection with the
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 24
statements or omissions that resulted in such Damages as well as any other
relevant equitable considerations. The relative and several benefits received by
the Company on the one hand, and the Underwriters on the other hand, shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus; provided
that, in the event that the Underwriters shall have purchased any Additional
Shares hereunder, any determination of the relative benefits received by the
Company or the Underwriters from the offering of the Shares shall include the
net proceeds (before deducting expenses) received by the Company, and the
underwriting discounts and commissions received by the Underwriters, from the
sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand, and the
Underwriters on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or by 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 Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 was determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 25
Damages referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in excess
of the amount of the underwriting commissions received by such underwriter in
connection with the Shares underwritten by it and distributed to the public. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule I
hereto (or such numbers of Firm Shares increased as set forth in Section 10
hereof) and not joint.
Notwithstanding the second paragraph of this Section 8, any Damages for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as Damages are incurred after receipt of reasonably itemized invoices therefor.
The indemnity, contribution and reimbursement agreements contained in this
Section 8 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, their respective directors or officers
or any person controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder and (iii) any termination of this Agreement. A successor to
any Underwriter or any person controlling any Underwriter, or
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 26
to the Company, their respective directors or officers or any person controlling
the Company, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 8.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second paragraph of this
Section 8, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
pursuant to the Code of Arbitration Procedure of the NASD. Any such arbitration
must be commenced by service of a written demand for arbitration or written
notice of intention to arbitrate, therein electing the arbitration tribunal. In
the event the party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Such an arbitration would be limited to
the operation of the interim reimbursement provisions contained in the second
and fourth paragraphs of this Section 8, and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses that is
created by the provisions of the second paragraph of this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase the Firm Shares hereunder are subject to the following
conditions:
(a) The Registration Statement shall have become effective not later
than 10:00 p.m., New York City time, on the date hereof, or at such later date
and time as shall be consented to in writing by the Representatives, and all
filings required by Rules 424(b), 430A and 462 under the Act shall have been
timely made.
(b) You shall be reasonably satisfied that since the respective dates
as of which information is given in the Registration Statement and Prospectus,
(i) there shall not have been any change in the capital stock of the Company or
any material change in the indebtedness (in each case, except as permitted
herein or other than in the ordinary course of business) of the Company, (ii)
except as set forth or contemplated by the Registration Statement or the
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 27
Prospectus, no material oral or written agreement or other transaction shall
have been entered into by the Company that is not in the ordinary course of
business or that would reasonably be expected to result in a material reduction
in the future earnings of the Company, (iii) no loss or damage (whether or not
insured) to the property of the Company or any of its subsidiaries shall have
been sustained that had or would reasonably be expected to have a Material
Adverse Effect, (iv) no legal or governmental action, suit or proceeding
affecting the Company or any of its properties that is material to the Company
or that affects or would reasonably be expected to affect the transactions
contemplated by this Agreement shall have been instituted or threatened and (v)
there shall not have been any material change in the condition (financial or
otherwise), business, management, results of operations or prospects of the
Company or its subsidiaries that makes it impractical or inadvisable in your
reasonable business judgment to proceed with the public offering or purchase of
the Shares as contemplated hereby.
(c) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP,
counsel to the Company, substantially to the effect that:
(i) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of New Jersey,
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto).
(ii) Each of the Company's subsidiaries is a (a) corporation duly
incorporated or (b) a limited liability company duly formed, and
validly existing in good standing under the laws of the jurisdiction
of its incorporation or formation, with full corporate or limited
liability company power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto). Except as disclosed in the Prospectus, all of the
outstanding shares of capital stock or equity interests of each of the
subsidiaries have been duly authorized and validly issued, and are
fully paid and nonassessable, and are owned by the Company directly,
or indirectly through one of the other subsidiaries, free and clear of
any perfected security interest created under Article 9 of the Uniform
Commercial Code, except for such security interest in favor of PNC
Bank, National Association under the Credit Agreement.
(iii) The capitalization of the Company conforms in all material
respects to the description thereof contained in the Prospectus under
the caption "Capitalization" and the Shares conform in all material
respects to the description of the Common Stock in the Prospectus.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 28
(iv) All shares of capital stock of the Company outstanding prior
to the issuance of the Shares to be issued and sold by the Company
hereunder are free of (a) any preemptive rights arising under the
Company's Certificate of Incorporation, as amended, or by the New
Jersey Business Corporation Act or (b) to our knowledge similar rights
that entitle or will entitle any person to acquire any Shares upon the
issuance thereof by the Company.
(v) Neither the execution, delivery or performance of this
Agreement, compliance by the Company with the provisions of this
Agreement nor consummation by the Company of the transactions
contemplated by this Agreement (a) violates the provisions of the
Certificate of Incorporation, as amended or Bylaws of the Company, (b)
violates any present statute, rule or regulation promulgated by the
United States or the New Jersey Business Corporation Act that is
normally applicable both to general business corporations which are
not engaged in regulated business activities and to transactions of
the type contemplated by this Agreement, or (c) constitutes or will
constitute a material breach of, or a default under, any material
agreement or instrument known to us to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary may be
bound or filed as an exhibit to the Registration Statement. In
rendering the opinion in clause (c), we have assumed that each
document referred to therein will be enforced as written and we have
interpreted such documents as if the laws of the State of New Jersey
were the governing law applicable to such documents.
(vi) The descriptions in the Registration Statement and the
Prospectus of contracts and other documents are accurate in all
material respects and fairly present the information required to be
shown, and we do not know of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement that are not
described and filed as required.
(vii) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official
is required on the part of the Company (except as have been obtained
under the Act and the Securities Exchange Act of 1934, as amended, or
such as may be required by the NASD or under state securities or Blue
Sky laws governing the purchase and distribution of the Shares, as to
which Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP express no opinion) for
the valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 29
(viii) The Company has the corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The
Agreement has been duly authorized, executed and delivered on behalf
of the Company by, and constitutes the legal valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as to the extent enforceability may
be limited by (i) the application of bankruptcy, reorganization,
insolvency or other laws affecting creditors' rights generally and
(ii) equitable principles being applied at the discretion of a court
before which any proceeding may be brought, and except as rights to
indemnity and contribution hereunder may be limited by or
unenforceable under federal or state securities laws.
(ix) The Shares to be issued and sold to the Underwriters by the
Company hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment in full therefor in
accordance with the terms hereof, such Shares will be validly issued,
fully paid and nonassessable. The Shares are free of (a) any
preemptive rights arising under the Company's Certificate of
Incorporation, as amended, bylaws, or the New Jersey Business
Corporation Act, or (b) to our knowledge, similar rights that entitle
or will entitle any person to acquire any of the Shares upon the sale
of the Shares by the Company.
(x) The Registration Statement, including any Rule 462
Registration Statement, the Prospectus, including the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectus, as of their respective
effective or issue dates (other than the financial statements and the
notes thereto and schedules and other financial and statistical data
found in or derived from the internal accounting and other financial
records of the Company and its subsidiaries which is included therein
or incorporated by reference or in exhibits to or excluded from the
Registration Statement, as to which no opinion need be given) comply
as to form in all material respects with the requirements of the Act
and the regulations thereunder. The conditions for the use of Form
S-3, set forth in the General Instructions thereto have been
satisfied.
(xi) The descriptions in the Prospectus of statutes, regulations
or legal or governmental proceedings, insofar as they purport to
summarize certain of the provisions thereof, are accurate in all
material respects and fairly present the information required to be
presented by the Act and the rules and regulations thereunder.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 30
(xii) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal investor" for, an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(xiii) The statements in the Prospectus under the captions
"Description of Capital Stock," and "Shares Eligible for Future Sale,"
in each case insofar as such statements constitute a summary of
documents referred to therein or matters of law fairly summarize, in
all material respects, the information called for with respect to such
documents and matters.
In rendering such opinion, counsel may rely, to the extent they deem such
reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials, provided that counsel shall state their
belief that they and you are justified in relying thereon. Copies of all such
certificates shall be furnished to you and your counsel on the Closing Date and
the Additional Closing Date, as the case may be. As to matters of law of all
jurisdictions other than New Jersey, counsel may rely on the opinion of a firm
licensed to practice law in such other jurisdiction reasonably acceptable to the
Representatives or, in the alternative, may have such firm render such opinion
to the Representatives directly. In rendering its opinion, counsel shall be
permitted to assume that the laws of the State of Florida that purport to govern
this Agreement are the same as the laws of the State of New Jersey and no
opinion regarding Florida shall be required.
In addition to the opinions set forth above, such counsel shall state that
during the course of his participation in the preparation of the Registration
Statement and the Prospectus and the amendments thereto, nothing has come to the
attention of such counsel that has caused such counsel to believe or given such
counsel reason to believe that the Registration Statement or the Prospectus or
any amendment thereto (except for the financial statements and other financial
and accounting information contained therein or omitted therefrom as to which no
opinion need be
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 31
expressed), at the date thereof, 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 Registration
Statement or the Prospectus as of the date of the opinion (except as aforesaid),
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) You should have received the Closing Date (and the Additional
Closing Date, if any) an opinion of Xxxxx Xxxxx, Esq., General Counsel of the
Company, substantially to the effect that:
(i) Except as set forth in the Prospectus, the Company is not a
party to or bound by any outstanding options, warrants or similar
rights to subscribe for, or contractual obligations to issue, sell,
transfer or acquire, any of its capital stock or any securities
convertible into or exchangeable for any of such capital stock.
(ii) Neither the Company nor any of its subsidiaries is in
violation of its certificate or articles of incorporation or bylaws
and is not in default in the performance of any obligation, agreement
or condition contained in any bond, indenture, note or other evidence
of indebtedness or any other agreement or obligation of the Company,
where the default would have, individually or in the aggregate, a
Material Adverse Effect.
(iii) Except as described in the Registration Statement or
Prospectus, there is no action, suit, inquiry, proceeding, or
investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to the
knowledge of such counsel, threatened, against or involving the
Company or its subsidiaries, or the properties of either the Company
or any of its subsidiaries: (A) which might individually or in the
aggregate prevent or adversely affect the transactions contemplated by
this Agreement or result in a Material Adverse Effect, nor, to the
knowledge of such counsel, is there any basis for any such action,
suit, inquiry, proceeding or investigation; or (B) that are required
to be described in the Registration Statement or Prospectus (or any
amendment or supplement thereto) that are not described as required
therein.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 32
(v) The statements in the Prospectus under the captions "Business
- Government Regulations" and "Business - Legal Proceedings," insofar
as such statement constitute matters of law or summaries of legal
matters, fairly summarize, in all material respects, the matters
referred to therein.
In addition to the opinions set forth above, such counsel shall state that
during the course of his participation in the preparation of the Registration
Statement and the Prospectus and the amendments thereto, nothing has come to the
attention of such counsel that has caused such counsel to believe or given such
counsel reason to believe that the Registration Statement or the Prospectus or
any amendment thereto (except for the financial statements and other financial
and accounting information contained therein or omitted therefrom as to which no
opinion need be expressed), at the date thereof, 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
Registration Statement or the Prospectus as of the date of the opinion (except
as aforesaid), contains an untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) You shall have received on the Closing Date and Additional Closing
Date, as the case may be, an opinion of Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, as
counsel for the Underwriters, dated the Closing Date or Additional Closing Date,
as the case may be, with respect to the issuance and sale of the Shares, the
Registration Statement and other related matters as you may reasonably request,
and the Company and its counsel shall have furnished to your counsel such
documents as your counsel may reasonably request for the purpose of enabling
them to pass upon such matters.
(f) You shall have received letters addressed to you, in form and
substance reasonably satisfactory to you, and dated the date of this Agreement
and dated as of the Closing Date or the Additional Closing Date, as the case may
be, from the firm of Ernst & Young LLP, independent certified public
accountants.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 33
(g) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued by the Commission and no proceedings for that
purpose shall be pending or, to the knowledge of the Company, shall be
threatened or contemplated by the Commission at or prior to the Closing Date or
Additional Closing Date, as the case may be; (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending or, to the
knowledge of the Company, threatened or contemplated by the authorities of any
jurisdiction; (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities; (iv) after
the date hereof, no amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first submitted to
you and you did not object thereto in good faith; and (v) all of the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects (except for such representations
and warranties qualified by materiality, which representations and warranties
shall be true and correct in all respects) on and as of the date hereof and on
and as of the Closing Date or Additional Closing Date, as the case may be, as if
made on and as of the Closing Date or Additional Closing Date, as the case may
be, and you shall have received a certificate, dated the Closing Date and signed
by the chief executive officer and the chief financial officer of the Company
(or such other officers as are acceptable to you) to the effect set forth in
this Section 9(g) and in Sections 9(b) and 9(i) hereof.
(h) The Company shall not have failed in any material respect at or
prior to the Closing Date or the Additional Closing Date, as the case may be, to
have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date or Additional Closing Date, as the case may be.
(i) The Company shall have furnished or caused to have been furnished
to you such further certificates and documents as you shall have reasonably
requested.
(j) At or prior to the Closing Date, you shall have received the
Lock-Up Agreements from each of the Company's directors and certain of the
Company's executive officers, in substantially the form of Exhibit A hereto.
(k) At or prior to the effective date of the Registration Statement,
you shall have received a letter from the Corporate Financing Department of the
NASD confirming that such Department has determined to raise no objections with
respect to the fairness or reasonableness of the underwriting terms and
arrangements of the offering contemplated hereby.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 34
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of the Additional Closing
Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraphs (c), (d) and
(e) shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9 shall
not have been satisfied when and as required by this Agreement, this Agreement
may be terminated by you by notifying the Company of such termination in writing
or by telegram at or prior to such Closing Date, but you shall be entitled to
waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective upon
the execution and delivery hereof by the parties hereto; provided, however, that
the provisions of Sections 7 and 8 shall at all times be effective.
11. Defaulting Underwriters. If any one or more of the Underwriters shall
fail or refuse to purchase Firm Shares that it or they have agreed to purchase
hereunder, and the aggregate number of Firm Shares that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion in which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares that such
defaulting Underwriter or Underwriters agreed, but failed or refused to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case that does not result in termination of this Agreement,
either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven (7) days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or any other documents
or arrangements may be effected. Any action taken under this
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 35
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any such default of any such Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, in your sole judgment,
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or Nasdaq, (ii) trading in securities generally on the NYSE or Nasdaq
shall have been suspended or materially limited, or minimum or maximum prices
shall have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by any such exchange or
by order of the Commission or any court or other governmental authority, (iii) a
general moratorium on commercial banking activities shall have been declared by
either federal or New York State authorities or (iv) there shall have occurred
any outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions or
other material event the effect of which on the financial markets of the United
States is such as to make it, in your reasonable business judgment,
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of the Shares. Notice of such cancellation shall be promptly given to
the Company and its counsel by telegraph, telecopy or telephone and shall be
subsequently confirmed by letter.
13. Information Furnished by the Underwriters. The Company acknowledges
that (i) the sentence on the cover page of the Registration Statement relating
to delivery of the Shares and (ii) the section under the caption "Underwriting"
in the Prospectus, constitute the only information furnished by or on behalf of
the Underwriters through you or on your behalf as such information is referred
to in Sections 6(a), 6(b) and 8 hereof.
14. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered
(i) to the Company
Metrologic Instruments, Inc.
00 Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: C. Xxxxx Xxxxxxx
with a copy to
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 36
Attention: Xxxxxx X. Xxxxx, Esq.
(ii) to the Underwriters
Xxxxxxx Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Legal Department
with a copy to
Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
Suite 3100, Promenade II
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company and its directors and officers.
15. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without reference
to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together shall
constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
The Company and the Underwriters each hereby irrevocably waive any right
they may have to a trial by jury in respect to any claim based upon or arising
out of this Agreement or the transactions contemplated hereby.
[Signatures on next page]
Xxxxxxx Xxxxx & Associates, Inc.
September , 2003
--
Page 37
Please confirm that the foregoing correctly sets forth the agreement among
the Company, and the several Underwriters.
Very truly yours,
METROLOGIC INSTRUMENTS, INC.
By:
-------------------------------------
C. Xxxxx Xxxxxxx
Its: Chairman and Chief Executive Officer
CONFIRMED as of the date first above
mentioned, on behalf of the
Representatives and the other
several Underwriters named in
Schedule I hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
By:
--------------------------------
Authorized Representative
SCHEDULE I
Number
Name Firm Shares
---------------------------------------------------------------- -----------
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxx & Company, Inc.
---------
Total: 1,500,000
=========
EXHIBIT A
LOCKUP AGREEMENT
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxxxx Xxxxx & Company
Xxxxxxx & Co., Inc.
As Representative of the
Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Re: Metrologic Instruments, Inc.
Public Offering of Common Stock
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Metrologic
Instruments, Inc., a New Jersey corporation (the "Company"), and you as
representative of a group of Underwriters named therein, relating to an
underwritten public offering (the "Offering") of common stock, $0.01 par value
(the "Common Stock"), of the Company, pursuant to a Registration Statement on
Form S-3.
In consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not, except as provided below and without the prior written
consent of Xxxxxxx Xxxxx & Associates, Inc. (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 sales), pledge, transfer,
establish and open a "put equivalent position" within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended (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 hereinafter owned either of record or beneficially (as defined in
Rule 13d-3 under the 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 to a date
90 days after the date of the final prospectus for the Offering (the "Lockup
Period"); provided, however, that such consent shall not be required for
dispositions pursuant to (i) the Underwriting Agreement, (ii) the tender of
shares of Common Stock to the Company for the purpose of paying the exercise
price and any applicable withholding taxes in connection with the exercise of
outstanding stock options granted by the Company, (iii) the transfer of shares
of Common Stock to the Company in connection with the repurchase of such shares
by the Company, (iv) a bona fide gift of Common Stock, provided that the donee
agrees in writing to be bound by the terms hereof and (v) the transfer of Common
Stock, by will or intestacy or to a trust the beneficiary of which is a family
member of the transferor provided that prior to any such transfer each
transferee agrees to be bound by the terms hereof.
The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of Common Stock or other securities of the Company held by
the undersigned except in compliance with this agreement. The undersigned is
aware that you are relying upon this letter agreement in agreeing to act as
underwriters in the Offering.
Very truly yours,
Dated , 2003
-------------
(Signature)
(Printed Name)
(Address)
-------------------------------
-----------------------------------------
-----------------------------------------
