1
Exhibit 1.1
13,400,000 SHARES
QK HEALTHCARE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
February __, 2000
XXXXXX BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX BARNEY INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
QK Healthcare, Inc., a Delaware corporation (the "Company"), proposes to
sell 13,400,000 shares (the "Firm Stock") of the Company's Common Stock, par
value $.001 per share (the "Common Stock"). In addition, the Company proposes to
grant to the Underwriters named on Schedule 1 hereto (the "Underwriters") an
option to purchase up to an additional 2,010,000 shares of the Common Stock on
the terms and for the purposes set forth in Section 3 (the "Option Stock"). The
Firm Stock and the Option Stock, if purchased, are hereinafter collectively
called the "Stock." As used in this agreement, the term "Principal Stockholders"
shall mean collectively the persons named on Schedule 2 hereto. This is to
confirm the agreement concerning the purchase of the Stock from the Company by
the Underwriters.
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock has
(i) been prepared by the Company in conformity with the requirements of the
United States Securities Act of 1933 (the "Securities Act") and the rules and
regulations (the "Rule and Regulations") of the United States Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the
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Securities Act and (iii) become effective under the Securities Act. Copies of
such registration statement and the amendments thereto have been delivered by
the Company to you as the representatives (the "Representatives") of the
Underwriters. As used in this Agreement, "Effective Time" means the date and the
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statement, as amended at the Effective Time, including
all information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with Section
6 hereof and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus, as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) 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; provided that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to register or qualify does not have a material adverse effect
on the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and
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has all power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged; and the Company does not directly
or indirectly own and has not made any investment in any of the capital stock
of, or any other proprietary interest in, any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company, governmental authority or other
entity of any kind.
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the description thereof contained in the Prospectus.
(f) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company.
(g) The execution, delivery and performance of this Agreement by the
Company, the consummation of the transactions contemplated hereby, and the
application of the net proceeds from the offering and sale of the Stock in the
manner set forth in the Prospectus under the caption "Use of Proceeds," will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company are subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the Company or any
material statute or any material order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or the
Company's properties or assets; and except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities Exchange
Act of 1934 (the "Exchange Act") and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated
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hereby.
(h) The Company has full corporate power and authority to enter into
the Credit Agreement, dated [February] __, 2000 (the "Credit Agreement"), among
the Company, [ ] and [ ]. The Credit Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid and binding
agreement of and is enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally and moratorium laws in effect from time to time and by
equitable principles restricting the availability of equitable remedies.
(i) The execution, delivery and performance of the Credit Agreement by
the Company, the consummation of the transactions contemplated thereby, and the
application of the net proceeds from the credit facility under the Credit
Agreement in the manner set forth in the Prospectus will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets of
the Company are subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of or any material statute or any material
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of the Company's properties or assets; and
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of the Credit Agreement by the Company and the
consummation of the transactions contemplated thereby.
(j) Each of the Company and the other parties to the following
agreements (collectively including the Company, the "Reorganization Parties,"
and each individually, a "Reorganization Party") has full corporate or other
applicable power and authority (to the extent that it is party to such
agreements) to enter into: (i) the Agreement and Plan of Corporate Separation
and Reorganization for QK Healthcare, Inc., dated [February] ___, 2000 (the
"Company Reorganization Agreement"), among Quality King Distributors, Inc.
("QKD"), and each of the Principal Stockholders, (ii) the Agreement and Plan of
Corporate Separation for Pro's Choice Beauty Care, Inc., dated [February] ___,
2000 (the "Pro Choice Reorganization Agreement"), among QKD, Xxxx Xxxxxxxx and
the Estate of Xxxxxxx Xxxxxxxx, as represented by [ ], (iii) the
Indemnification, Noncompetition and Tax Cooperation Agreement, dated [February]
___, 2000 (the "Indemnity Agreement"),
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among the Company, QKD and Pro's Choice Beauty Care, Inc., (iv) the Support
Services Agreement, dated [February] ___, 2000 (the "Support Services
Agreement"), between the Company and QKD, (v) the Registration Rights Agreement,
dated [February] [ ], 2000 (the "Registration Rights Agreement"), among the
Company and the Principal Stockholders, and (vi) the Sublease Agreement, dated
[February] ___, 2000 (the "Sublease Agreement"), between the Company and QKD.
The Company Reorganization Agreement, the Pro Choice Reorganization Agreement,
the Indemnity Agreement, the Support Services Agreement, the Registration Rights
Agreement and the Sublease Agreement are collectively referred to as the
"Reorganization Agreements," and each individually as a "Reorganization
Agreement." The transactions contemplated by the Reorganization Agreements and
as described in "Related Party Transactions" in the Prospectus are referred to
as the "Reorganization." Each of the Reorganization Agreements has been duly
authorized, executed and delivered by each of the Reorganization Parties party
thereto and constitutes a valid and binding agreement of and is enforceable
against each Reorganization Party party thereto in accordance with its terms,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization and other laws affecting creditors' rights generally
and moratorium laws in effect from time to time and by equitable principles
restricting the availability of equitable remedies.
(k) (i) The execution, delivery and performance of each Reorganization
Agreement by each Reorganization Party party thereto and the consummation of the
transactions contemplated thereby and by the Reorganization do not and will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which any
Reorganization Party is a party or by which any Reorganization Party is bound or
to which any of the property or assets of any Reorganization Party are subject,
nor do such actions nor will they result in any violation of the provisions of
the charter, by-laws or other organizational documents of any Reorganization
Party or any material statute or any material order, rule or regulation of any
court or governmental agency or body having jurisdiction over any Reorganization
Party or any Reorganization Party's properties or assets; (ii) no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body was or is required for the execution,
delivery and performance of each Reorganization Agreement by each Reorganization
Party party thereto and the consummation of the transactions contemplated
thereby and by the Reorganization; (iii) QKD has received a ruling by the
Internal Revenue Service (the "IRS Ruling") to the effect that the transactions
contemplated by the Reorganization Agreements will qualify as (A) tax-free
reorganizations under Sections 361(a) and 368(a)(1)(D) of the Internal Revenue
Code of
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1986, as amended, including the regulations and published interpretations
thereunder (the "Code"), and (B) tax-free exchanges under Section 355 of the
Code, and has received no notification from the Internal Revenue Service that
such IRS Ruling has been or is anticipated to be amended, revoked or withdrawn;
(iv) the Reorganization has been consummated in conformity with the description
thereof contained in the Prospectus and as contemplated by the IRS Ruling; and
(v) each of QKD and Pro's Choice Beauty Care, Inc. is, after the consummation of
the Reorganization, Solvent. As used herein, the term "Solvent" means, with
respect to an entity on a particular date, that on such date (P) the fair value
of the assets of the entity at a fair valuation will exceed the debts and
liabilities, subordinated, contingent or otherwise, of the entity, (Q) the
present fair salable value of the entity's business taken as a whole is greater
than the amount that will be required to pay the probable liabilities of the
entity on its debts as they become absolute and matured, (R) the entity is able
to realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature, and (S) the entity does not have
unreasonably small capital. For all purposes of clauses (P) through (S) in the
preceding sentence, the amount of the contingent liabilities at any time shall
be computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(l) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act.
(m) Except as described in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding the date
of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulation D or S of, the Securities Act.
(n) The Company has not sustained, since the date of the latest audited
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not been any
change in the capital stock or long-term debt of
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the Company or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity, results of operations,
business or prospects of the Company, otherwise than as set forth or
contemplated in the Prospectus.
(o) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved; the pro forma financial statements included in the Prospectus have
been prepared on a basis consistent with the historical financial statements
included therein and in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements, the assumptions used in
preparing the pro forma financial statements included in the Prospectus provide
a reasonable basis for presenting the significant effects directly attributable
to the transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions and the pro forma
columns therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts; and the other financial
and statistical information and data included in the Prospectus derived from the
historical and pro forma financial statements are accurately presented in all
material respects and prepared on a basis consistent with the financial
statements, historical and pro forma, included in the Prospectus and the books
and records of the Company.
(p) BDO Xxxxxxx, LLP, who have certified certain financial statements
of the Company, whose report appears in the Prospectus and who have delivered
the initial letter referred to in Section 9(h) hereof, are independent public
accountants as required by the Securities Act and the Rules and Regulations.
(q) The Company owns no real property but has good and marketable title
in fee simple to all personal property owned by it, free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company; and all real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company.
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(r) The Company carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged in similar
businesses in similar industries.
(s) The Company owns or possesses adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights and licenses necessary for
the conduct of its business and has no reason to believe that the conduct of its
business will conflict with, and has not received any notice of any claim of
conflict with, any such rights of others.
(t) There are no legal or governmental proceedings pending to which the
Company is a party or of which any property or assets of the Company is the
subject which, if determined adversely to the Company, might have a material
adverse effect on the general affairs, management, financial position,
stockholders' equity, results of operations, business or prospects of the
Company; and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(u) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration Statement
or incorporated therein by reference as permitted by the Rules and Regulations.
(v) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus which is not so described.
(w) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent which might be expected to have a
material adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company.
(x) The Company has no "employee benefit plan" (as defined under the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA")). The
Reorganization will not give rise to any material liability with respect to any
"employee
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benefit plan" (as defined in ERISA) under which the Company has, or reasonably
could have, any liability or obligation.
(y) The Company has filed all federal, state and local income and
franchise tax returns and elections required to be filed through the date hereof
and has paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company which has had (nor does the Company have any knowledge
of any tax deficiency which, if determined adversely to the Company, might have)
a material adverse effect on the general affairs, management, financial
position, stockholders' equity, results of operations, business or prospects of
the Company.
(z) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(aa) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the recorded accountability for its assets is compared
with existing assets at reasonable intervals.
(bb) The Company is not (i) in violation of its charter or by-laws,
(ii) in default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which any of
its properties or assets is subject or (iii) in violation in any material
respect of any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject, including, but not limited
to, the Prescription Drug Marketing Act, the Controlled Substances Act, the
Federal Food, Drug and Cosmetic Act, the Occupational Safety and Health Act, and
any comparable or related state or local statutes or regulations and applicable
state laws regulating pharmacy or wholesaling practices and worker safety (all
such laws, statutes, orders, rules, regulations, policies, guidelines,
judgments,
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decisions and orders, collectively, "Applicable Laws"). Except as described in
the Prospectus, the Company holds all licenses, certificates, approvals and
permits from all state, United States, and other regulatory authorities
(together, "Permits"), that are required for the conduct of the business of the
Company, all of which are valid and in full force and effect; and there is no
proceeding pending or, to the knowledge of the Company, threatened which may
cause any such Permit to be withdrawn, canceled, suspended or not renewed. The
Company has implemented procedures and controls reasonable for the conduct of
its business to ensure compliance with Applicable Laws, the requirements of any
Permits and any requirements of product manufacturers regarding the purchase,
sale, storage or shipping of such products.
(cc) Neither the Company, nor any director, officer, agent, employee or
other person associated with or acting on behalf of the Company, has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(dd) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company (or, to the
knowledge of the Company, any of its predecessors in interest) at, upon or from
any of the property now or previously owned or leased by the Company in
violation of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the general
affairs, management, financial position, stockholders' equity, results of
operations, business or prospects of the Company; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or with respect to which the Company
has knowledge, except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such spills, discharges,
leaks, emissions, injections, escapes, dumpings and releases, a material adverse
effect on the general affairs, management,
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financial position, stockholders' equity, results of operations, business or
prospects of the Company; and the terms "hazardous wastes," "toxic wastes,"
"hazardous substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
(ee) The Company is not, and upon application of the proceeds of the
offering of the Stock as described in the Prospectus will not be, an "investment
company" within the meaning of such term under the Investment Company Act of
1940 and the rules and regulations of the Commission thereunder.
(ff) The Company has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
2. Representations, Warranties and Agreements of the Principal
Stockholders. Each Principal Stockholder severally represents, warrants and
agrees that:
(a) The Principal Stockholder has full right, power and authority to
enter into this Agreement and each Reorganization Agreement to which such
Principal Stockholder is a party; each of this Agreement and the Reorganization
Agreements to which the Principal Stockholder is a party has been duly
authorized, executed and delivered by the Principal Stockholder and constitutes
a valid and binding agreement of and is enforceable against the Principal
Stockholder in accordance with its terms, except as the enforceability hereof
and thereof may be limited by applicable bankruptcy, insolvency, reorganization
and other laws affecting creditors' rights generally and moratorium laws in
effect from time to time and by equitable principles restricting the
availability of equitable remedies; the execution, delivery and performance of
this Agreement and such Reorganization Agreements by the Principal Stockholder
and the consummation by the Principal Stockholder of the transactions
contemplated hereby, thereby and by the Reorganization will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Principal
Stockholder is a party or by which the Principal Stockholder is bound or to
which any of the property or assets of the Principal Stockholder is subject, nor
will such actions result in any violation of the provisions of the formation
documents of the Principal Stockholder or any material statute or any material
order, rule
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or regulation of any court or governmental agency or body having jurisdiction
over the Principal Stockholder or the property or assets of the Principal
Stockholder; and, except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement and such
Reorganization Agreements by the Principal Stockholder and the consummation by
the Principal Stockholder of the transactions contemplated hereby, thereby and
by the Reorganization.
(b) Each of the trust indentures listed on Schedule 2 creates a trust
that is valid under New York law, and each trust indenture remains valid, in
force, existing and has not been amended or revoked since it was originally
signed. The Principal Stockholder is duly qualified and duly acting as trustee
under each of the trust indentures listed on Schedule 2, and has not resigned or
been removed or replaced as trustee under any of such trust indentures. Each of
the trusts created by the trust indentures listed on Schedule 2 owns no real
property but has good and marketable title in fee simple to all personal
property owned by it, free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not materially
affect the value of such property.
(c) The Principal Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof are
not true and correct, is familiar with the Registration Statement and the
Prospectus (as amended or supplemented) and has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement, as
of the effective date, or the Prospectus (or any amendment or supplement
thereto), as of the applicable filing date, which has adversely affected or may
reasonably be expected to adversely affect the business of the Company and is
not prompted to enter into the Reorganization Agreements and cause the Company
to offer the shares of Common Stock by any information concerning the Company
which is not set forth in the Registration Statement and the Prospectus.
(d) The Principal Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
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3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 13,400,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to purchase
up to 2,010,000 shares of Option Stock. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Stock shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $_____ per
share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), as the case may be,
except upon payment for all the Stock to be purchased on such Delivery Date as
provided herein.
4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm Stock,
the several Underwriters propose to offer the Firm Stock for sale upon the terms
and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment for the
Firm Stock shall be made at the office of Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, 1285 Avenue of the Americas, New York, New York, at 10:00 A.M., New
York City time, on the [fourth] full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
referred to as the
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"First Delivery Date." On the First Delivery Date, the Company shall deliver or
cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of this
Agreement and may be exercised in whole or in part from time to time by written
notice being given to the Company by the Representatives. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as the "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date").
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the
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Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Company shall make the certificates representing the Option Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to such Second
Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than Commission's close of business on the second business day following
the execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of the
Stock for offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus or
for additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to the Representatives and to counsel for the
Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement) and (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus and, if the delivery of a prospectus is
required at any time after the Effective
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Time in connection with the offering or sale of the Stock or any other
securities relating thereto and if at such time any events shall have occurred
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or effect
such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Stock at any time nine
months or more after the time of issue of the Prospectus, upon your request but
at the expense of such Underwriter, to prepare and deliver to such Underwriter
as many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing, which consent will not be unreasonably
withheld;
(f) As soon as practicable after the Effective Date (it being
understood that the Company shall have until at least [410] days after the end
of the Company's current fiscal quarter), to make generally available to the
Company's security holders and to deliver to the Representatives an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish
to the Representatives copies of all materials furnished by the Company to its
shareholders and all reports and financial statements furnished by the Company
to the principal national securities exchange upon which the Common Stock may be
listed pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder;
(h) Promptly from time to time to take such action as the
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Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 360 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the Stock and shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights), or sell or grant options, rights or warrants with respect
to any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans existing
on the date hereof), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, in each case without the prior
written consent of Xxxxxx Brothers Inc.; and to cause each officer and director
of the Company to furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not to, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any shares
of Common Stock or securities convertible into or exchangeable for Common Stock
or (2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case for a period of 360 days from the
date of the Prospectus, without the prior written consent of the Xxxxxx Brothers
Inc.;
(j) Prior to the Effective Date, to apply for the listing of the Stock
on the New York Stock Exchange, Inc. and to use its best efforts to complete
that listing, subject only to official notice of issuance and evidence of
satisfactory
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distribution, prior to the First Delivery Date;
(k) Prior to filing with the Commission any periodic report filed
pursuant to Section 13(a) or 15(d) of the Exchange Act that contains information
regarding the use of proceeds from the sale of the Stock being sold by the
Company pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the Underwriters and receive and consider its
comments thereon, and to deliver promptly to the Representatives a signed copy
of each such periodic report filed by it with the Commission that contains the
information described above;
(l) To apply the net proceeds from the sale of the Stock being sold by
the Company as set forth in the Prospectus; and
(m) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
7. Further Agreements of the Principal Stockholders. Each Principal
Stockholder agrees:
(a) For a period of 360 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the Stock) or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
in each case without the prior written consent of the Representative.
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of
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producing and distributing this Agreement and any other related documents in
connection with the offering, purchase, sale and delivery of the Stock; (e) the
filing fees incident to securing any required review by the National Association
of Securities Dealers, Inc. of the terms of sale of the Stock (including related
reasonable fees and expenses of counsel to the Underwriters); (f) any applicable
listing or other fees; (g) the fees and expenses of qualifying the Stock under
the securities laws of the several jurisdictions as provided in Section 6(h) and
of preparing, printing and distributing a Blue Sky Memorandum (including related
reasonable fees and expenses of counsel to the Underwriters); and (h) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement; provided that, except as provided in this Section 8 and in
Section 14, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Stock which
they may sell and the expenses of advertising any offering of the Stock made by
the Underwriters.
9. Conditions of Underwriters' Obligations. The respective obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Principal Stockholders contained herein, to the performance by the Company and
the Principal Stockholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Reorganization
Agreements, the Credit Agreement, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the
transactions
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contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
(d) The Credit Agreement and the Reorganization Agreements, in
substantially the form reviewed by counsel for the Underwriters and filed as
exhibits to the Registration Statement, shall have been executed and delivered
by all of the parties thereto, all obligations of QKD with respect to its prior
credit facility assumed by the Company shall have been discharged in full, and
the new credit facility of the Company, the Reorganization Agreements and the
other transactions contemplated by such agreements and the Reorganization shall
have closed with no conditions to closing under any such agreements waived
without the prior written consent of the Representatives, and in conformity with
the descriptions thereof contained in the Prospectus, and, in the case of the
Reorganization, as contemplated by the IRS Ruling.
(e) Xxxxxxx & Xxxxxx, LLP shall have furnished to the Representatives
its written opinion, as counsel to the Company and the Principal Stockholders,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in
which its ownership or lease of property or the conduct of its
business requires such qualification except where the failure to
register or qualify does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company, and has all power and
authority necessary to own or hold its properties and to conduct the
business in which it is engaged; and the Company has no subsidiaries;
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(ii) The Company has an authorized
capitalization as set forth in the Prospectus, and all of the issued
shares of capital stock of the Company (including the shares of Stock
being delivered on such Delivery Date) have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to
the description thereof contained in the Prospectus;
(iii) There are no preemptive or other
rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the
Company's charter or by-laws or any agreement or other instrument known
to such counsel;
(iv) All real property and buildings held
under lease by the Company is held by it under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property
and buildings by the Company;
(v) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property or assets of the Company are the subject which, if
determined adversely to the Company, might have a material adverse
effect on the financial position, stockholders' equity, results of
operations, business or prospects of the Company; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) The Registration Statement was declared
effective under the Securities Act as of the date and time specified in
such opinion, the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and Regulations specified
in such opinion on the date specified therein and no stop order
suspending the effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission;
(vii) The Registration Statement and the
Prospectus and any further amendments or supplements thereto made by
the Company prior to such Delivery Date (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) comply as to form in
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all material respects with the requirements of the Securities Act and
the Rules and Regulations;
(viii) The statements contained in the
Prospectus under the captions "Business - Government Regulation,"
"Related Party Transactions," "Management - Employment Agreement" and
"Description of the Credit Agreement" insofar as they describe
statutes, rules and regulations or summaries or descriptions of legal
agreements, constitute a fair summary thereof;
(ix) To the best of such counsel's
knowledge, there are no contracts or other documents that are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described or filed as exhibits to the
Registration Statement or incorporated therein by reference as
permitted by the Rules and Regulations;
(x) This Agreement has been duly
authorized, executed and delivered by the Company and, assuming the
accuracy of the Principal Stockholders' representation in Section 2(b)
above, each of the Principal Stockholders;
(xi) The issue and sale of the shares of
Stock being delivered on such Delivery Date by the Company and the
compliance by each of the Company and the Principal Stockholders with
all of the provisions of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which the
Company or any Principal Stockholder is a party or by which the Company
or any Principal Stockholder is bound or to which any of the property
or assets of the Company or any Principal Stockholder are subject, nor
will such actions result in any violation of the provisions of the
charter, by-laws or other formation documents of the Company or any
Principal Stockholder or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any Principal Stockholder or
any of their respective properties or assets; and, except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court
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or governmental agency or body is required for the execution, delivery
and performance of this Agreement by the Company and each of the
Principal Stockholders and the consummation of the transactions
contemplated hereby;
(xii) Each of the Credit Agreement and each
of the Reorganization Agreements has been duly authorized, executed and
delivered by each Reorganization Party party thereto, and constitutes a
valid and binding agreement of such Reorganization Party enforceable
against the Reorganization Party in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law);
(xiii) The compliance by the Company with
all of the provisions of the Credit Agreement and by each
Reorganization Party with all of the provisions of the Reorganization
Agreements to which it is party and the consummation of the
transactions contemplated thereby and by the Reorganization do not and
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which any Reorganization Party is a
party or by which any Reorganization Party is bound or to which any of
the property or assets of any Reorganization Party are subject, nor do
or will such actions result in any violation of the provisions of the
charter, by-laws or other formation documents of any Reorganization
Party or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction
over any Reorganization Party or any of its properties or assets; and
no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body was or
is required for the execution, delivery and performance of the Credit
Agreement and the Reorganization Agreements to which it is party by
each Reorganization Party and the consummation of the transactions
contemplated thereby and by the Reorganization;
(xiv) The Reorganization has been
consummated in conformity with the description thereof contained in the
Prospectus and as contemplated by the IRS Ruling; and
(xv) To the best of such counsel's
knowledge, there are no contracts, agreements or understandings between
the Company and any
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person granting such person the right (other than as set forth in the
Prospectus) to require the Company to file a registration statement
under the Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant
to any other registration statement filed by the Company under the
Securities Act.
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of New York and General Corporation Law of the
State of Delaware and that such counsel is not admitted in the State of
Delaware. Such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated such Delivery Date,
in form and substance satisfactory to the Representatives, to the effect that
(x) such counsel has acted as counsel to the Company on a regular basis and has
acted as counsel to the Company in connection with the preparation of the
Registration Statement, and (y) based on the foregoing, no facts have come to
the attention of such counsel which lead it to believe that the Registration
Statement, as of the Effective Date, contained any 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, or that the
Prospectus contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except for the statements identified in
paragraphs (iii) and (ix) above, insofar as such statements relate to the Stock
and concern legal matters.
(f) The Representatives shall have received from Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as it reasonably requests for the purpose of
enabling it to pass upon such matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from BDO Xxxxxxx, LLP a letter, in form and
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substance satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(h) With respect to the letter of BDO Xxxxxxx, LLP referred to
in the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than three days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and
agreements of the Company in Section 1 are true and correct as of such
Delivery Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Sections 9(a) and
9(k) have been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in their opinion (A) as
of the Effective Date, the Registration Statement and Prospectus did
not include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and
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(B) since the Effective Date no event has occurred which should have
been set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(j) Each Principal Stockholder shall have furnished to the
Representatives on each Delivery Date a certificate, dated such Delivery Date,
signed by, or on behalf of, each Principal Stockholder stating that the
representations, warranties and agreements of such Principal Stockholder
contained herein are true and correct as of such Delivery Date and that such
Principal Stockholder has complied with all agreements contained herein to be
performed by such Principal Stockholder at or prior to such Delivery Date.
(k) (i) The Company shall not have sustained since the date of
the latest audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not have been
any change in the capital stock or long-term debt of the Company or any change,
or any development which could reasonably be expected to involve a prospective
change, in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise than as
set forth or contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Stock
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United States
shall be
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such) as to make it, in the judgment of a majority in interest of the several
Underwriters, impracticable or inadvisable to proceed with the public offering
or delivery of the Stock being delivered on such Delivery Date on the terms and
in the manner contemplated in the Prospectus.
(m) The New York Stock Exchange, Inc. shall have approved the
Stock for listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of the
offering of the Stock ("Marketing Materials"), including any roadshow or
investor presentations made to investors by the Company (whether in person or
electronically), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials, or in any Blue
Sky Application any material fact required to be stated therein or necessary to
make the statements therein not misleading or (iii) any act or failure to act or
any alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Stock or the offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause (i)
or (ii) above (provided that the Company shall not be liable under this clause
(iii) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly
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from any such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 9(g); and provided further that the foregoing
indemnity agreement with respect to any Preliminary Prospectus, the Prospectus
or in any amendment or supplement thereto shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Stock, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented, if the Company shall
have made any amendments or supplements) was not sent or given by or on behalf
of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of Stock to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage or liability, unless such
failure to send or give was the result of noncompliance by the Company with
Section 6(c) hereof. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) The Principal Stockholders, jointly and severally, shall
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, (ii) the omission or alleged omission to
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state in any Preliminary Prospectus, Registration Statement or the Prospectus,
or in any amendment or supplement thereto, any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Principal
Stockholders shall not be liable under this clause (iii) to the extent that it
is determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter, its officers and employees and each such controlling person for any
legal or other expenses reasonably incurred by that Underwriter, its officers
and employees or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Principal
Stockholders shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any such amendment or supplement in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein which information consists solely of the information specified
in Section 9(g). The foregoing indemnity agreement is in addition to any
liability which the Principal Stockholders may otherwise have to any Underwriter
or any officer, employee or controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company), each
Principal Stockholder, and each person, if any, who controls the Company within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company or any such director, officer, Principal Stockholder or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any Preliminary
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30
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company and any such
director, officer, Principal Stockholder or controlling person for any legal or
other expenses reasonably incurred by the Company or any such director, officer,
Principal Stockholder or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee, Principal Stockholder or
controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or any Principal Stockholder under this Section 10 if, in
the reasonable judgment of the Representatives, it is advisable for the
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31
Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Principal Stockholders on the one hand
and the Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Principal Stockholders on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Principal Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Principal
Stockholders on the one hand and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement on the other hand bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of
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32
the Prospectus. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Principal Stockholders or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Principal
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 10(e), 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 10(e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock underwritten by
it and distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 9(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10(e) are
several in proportion to their respective underwriting obligations and not
joint.
(f) Without limiting the Company's agreements under this
Section 10 in any manner, no Principal Stockholder shall be liable in any such
case in respect of any such losses, claims, damages, liabilities or expenses
unless the Underwriter who has the right to indemnification or contribution
hereunder and is seeking indemnification or contribution from such Principal
Stockholder shall have previously sought indemnification or contribution from
the Company in respect thereof and the Company shall have failed to honor and
pay such Underwriter's claim for indemnification or contribution within 30
calendar days of the date such indemnification or contribution is first sought
against the Company (except that the foregoing condition precedent requiring an
Underwriter to so seek indemnification or contribution from the Company (i)
shall not be applicable if an Underwriter has previously sought indemnification
or contribution from the Company with respect to such matters or if such
Underwriter is prohibited from being indemnified by or receiving contribution
from the Company (or from seeking such indemnification or contribution) by the
effect of any order, decree, stay, injunction, statute, legal process or other
matter of law and
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33
(ii) shall not limit the right of an Underwriter at any time to notify a
Principal Stockholder of a claim for indemnification or contribution or
otherwise initiate a claim or proceeding against a Principal Stockholder for
indemnification or contribution prior to the expiration of such 30 calendar
days, but only and solely to the extent necessary to prevent any applicable
statute of limitations from expiring).
(g) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company to sell, the Option Stock), shall
terminate without liability on the part of any non-defaulting Underwriter,
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34
the Company or the Principal Stockholders, except that the Company will continue
to be liable for the payment of expenses to the extent set forth in Sections 8
and 13. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 11, purchases Firm
Stock which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Principal Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
and the Principal Stockholders prior to delivery of and payment for the Firm
Stock if, prior to that time, any of the events described in Sections 9(k) or
9(l) shall have occurred or if the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company or any of the Principal
Stockholders to perform any agreement on its part to be performed, or because
any other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company or any of the Principal Stockholders is not fulfilled,
the Company and the Principal Stockholders will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Stock, and upon demand the Company and the Principal
Stockholders shall pay the full amount thereof to the Representatives. If this
Agreement is terminated pursuant to Section 12 by reason of the default of one
or more Underwriters, neither the Company nor any Principal Stockholder shall be
obligated to reimburse any defaulting Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
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(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 000-000-0000), with a copy, in the case of any notice pursuant to Section
10(d), to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., Three World Financial Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxxxxx X. Xxxx, Executive Vice President and
Chief Financial Officer.
(c) if to any Principal Stockholders, shall be delivered or
sent by mail, telex or facsimile transmission to such Principal Stockholder at
the address set forth on Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Principal Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. and the Company and the Underwriters shall be entitled to
act and rely upon any request, consent, notice or agreement given or made on
behalf of the Principal Stockholders by Xxxxx Xxxxxxxx.
00. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Principal Stockholders and their respective personal Representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Principal Stockholders
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any Underwriter within the meaning of
Section 15 of the Securities Act and (B) the indemnity agreement of the
Underwriters contained in Section 10(c) of this Agreement shall be deemed to be
for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
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36
referred to in this Section 15, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Principal Stockholders and the Underwriters
contained in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
17. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
Each party irrevocably agrees that any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City of New York or the courts of the
State of New York in each case located in the Borough of Manhattan in the City
of New York (collectively, the "Specified Courts"), and irrevocably submits to
the exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as to which
such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. The parties further agree that service of any process, summons,
notice or document by mail to such party's address set forth above shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding in
the Specified Courts, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an
inconvenient forum.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
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20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
38
If the foregoing correctly sets forth the agreement, the Principal
Stockholders and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
QK HEALTHCARE, INC.
By
Name:
Title:
The Principal Stockholders:
Xxxxx Xxxxxxxx, as Trustee under (i) the
Indenture dated November 1, 1998 creating the
Xxxxxxx Xxxxxxxx November 1, 1998 trust (the
"Xxxxxxx Xxxxxxxx November 1, 1998 Trust
Indenture"), (ii) the Indenture dated
November 2, 1998 creating the Xxxxxxx
Xxxxxxxx November 2, 1998 trust (the "Xxxxxxx
Xxxxxxxx November 2, 1998 Trust Indenture"),
(iii) the Indenture dated November 1, 1998
creating the Xxxxxx Xxxxxxxx November 1, 1998
trust (the "Xxxxxx Xxxxxxxx November 1, 1998
Trust Indenture"), and (iv) the Indenture
dated November 2, 1998 creating the Xxxxxx
Xxxxxxxx November 2, 1998 trust (the "Xxxxxx
Xxxxxxxx November 2, 1998 Trust Indenture")
39
Xxxxxxx Xxxxxxxx, as Trustee under (i) the
Indenture dated November 1, 1998 creating the
Xxxxx Xxxxxxxx November 1, 1998 trust (the
"Xxxxx Xxxxxxxx November 1, 1998 Trust
Indenture"), (ii) the Indenture dated
November 2, 1998 creating the Xxxxx Xxxxxxxx
November 2, 1998 trust (the "Xxxxx Xxxxxxxx
November 2, 1998 Trust Indenture"), (iii) the
Xxxxxx Xxxxxxxx November 1, 1998 Trust
Indenture, and (iv) the Xxxxxx Xxxxxxxx
November 2, 1998 Trust Indenture
Xxxxxx Xxxxxxxx, as Trustee under (i) the
Xxxxx Xxxxxxxx November 1, 1998 Trust
Indenture, (ii) the Xxxxx Xxxxxxxx November
2, 1998 Trust Indenture, (iii) the Xxxxxxx
Xxxxxxxx November 1, 1998 Trust Indenture,
and (iv) the Xxxxxxx Xxxxxxxx November 2,
1998 Trust Indenture
40
Accepted:
Xxxxxx Brothers Inc.
Credit Suisse First Boston Corporation
Xxxxxxx Xxxxx Barney Inc.
By: Xxxxxx Brothers Inc.
By
-------------------------
Authorized Representative
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
41
SCHEDULE 1
Number of Underwriters Shares:
Xxxxxx Brothers Inc.
Credit Suisse First Boston Corporation
Xxxxxxx Xxxxx Xxxxxx Inc.
Total
42
SCHEDULE 2
Names and addresses of Principal Stockholders:
1. Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 1, 1998 creating the Xxxxx Xxxxxxxx November 1, 1998
trust (the "Xxxxx Xxxxxxxx November 1, 1998 Trust Indenture").
2. Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 2, 1998 creating the Xxxxx Xxxxxxxx November 2, 1998
trust (the "Xxxxx Xxxxxxxx November 2, 1998 Trust Indenture").
3. Xxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 1, 1998 creating the Xxxxxxx Xxxxxxxx November 1, 1998
trust (the "Xxxxxxx Xxxxxxxx November 1, 1998 Trust Indenture").
4. Xxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 2, 1998 creating the Xxxxxxx Xxxxxxxx November 2, 1998
trust (the "Xxxxxxx Xxxxxxxx November 2, 1998 Trust Indenture").
5. Xxxxx Xxxxxxxx and Xxxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 1, 1998 creating the Xxxxxx Xxxxxxxx November 1, 1998
trust (the "Xxxxxx Xxxxxxxx November 1, 1998 Trust Indenture").
6. Xxxxx Xxxxxxxx and Xxxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 2, 1998 creating the Xxxxxx Xxxxxxxx November 2, 1998
trust (the "Xxxxxx Xxxxxxxx November 2, 1998 Trust Indenture").
Address of all the Principal Stockholders:
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
