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PHOENIX INTERNATIONAL LTD., INC.
1,520,000 Shares
of
Common Stock
UNDERWRITING AGREEMENT
August __, 1997
X. X. XXXXXXXX & CO.
WHEAT, FIRST SECURITIES, INC.
ADVEST, INC.
As Representatives of the Several Underwriters
c/o X. X. Xxxxxxxx & Co.
X. X. Xxxxxxxx Financial Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Phoenix International Ltd., Inc., a Florida corporation (the
"Company"), proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters") for whom you are acting as the representatives (the
"Representatives") 1,254,000 shares of the common stock, par value $.01 per
share ("Common Stock"), of the Company (the "Company Shares"), and the
shareholders of the Company named in Schedule II hereto (the "Selling
Shareholders") propose to sell to the Underwriters 266,000 shares of Common
Stock (the "Selling Shareholder Shares"). The Company Shares and the Selling
Shareholder Shares are hereinafter referred to as the "Firm Shares". The Firm
Shares are to be sold to the Underwriters, acting severally and not jointly, in
such amounts as are set forth in Schedule I hereto opposite the name of each
Underwriter. The Company also proposes to grant to the Underwriters an option to
purchase up to 228,000 additional shares of Common Stock as provided for in
Section 3 of this Agreement for the purpose of covering over-allotments in
connection with the distribution and sale of the Firm Shares (the "Option
Shares"). The Firm Shares and the Option Shares are herein called the "Shares."
1. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter and agrees as follows:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), a registration statement on Form S-1
(Registration No. 333-_______), including the related preliminary
prospectus relating to the Shares, and has filed one or more amendments
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thereto. Copies of such registration statement and any amendments,
including any post-effective amendments, and all forms of the related
prospectuses contained therein and any supplements thereto, have been
delivered to you. Such registration statement, together with any
registration statement filed by the Company pursuant to Rule 462(b) of
the Securities Act, including the prospectus, Part II, all financial
schedules and exhibits thereto, and all information deemed to be a part
of such registration statement pursuant to Rule 430A under the
Securities Act, as amended, at the time when it shall become effective,
is herein referred to as the "Registration Statement," and the
prospectus included as part of the Registration Statement on file with
the Commission that discloses all the information that was omitted from
the prospectus on the effective date pursuant to Rule 430A of the Rules
and Regulations (as defined below) and in the form filed pursuant to
Rule 424(b) under the Securities Act is herein referred to as the
"Final Prospectus." The prospectus included as part of the Registration
Statement on the date when the Registration Statement became effective
(including the information deemed to be a part thereof pursuant to Rule
430A) is referred to herein as the "Effective Prospectus." Any
prospectus included in the Registration Statement and in any amendment
thereto prior to the effective date of the Registration Statement is
referred to herein as a "Preliminary Prospectus." For purposes of this
Agreement, "Rules and Regulations" mean the rules and regulations
promulgated by the Commission under either the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, complied with the
requirements of the Securities Act and the Rules and Regulations, and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing does
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page, the paragraphs relating to stabilization
and passive market making practices on the inside front cover and the
first five paragraphs under the caption "Underwriting" in the Final
Prospectus). When the Registration Statement becomes effective and at
all times subsequent thereto up to and including the later of (X) the
First Closing Date (as hereinafter defined) and (Y) the Option Closing
Date (as hereinafter defined), (i) the Registration Statement, the
Effective Prospectus and Final Prospectus and any amendments or
supplements thereto will contain all statements which are required to
be stated therein in accordance with the Securities Act, the Exchange
Act and the Rules and Regulations and will comply with the requirements
of the Securities Act, the Exchange Act and the Rules and Regulations,
and (ii) neither the Registration Statement, the Effective Prospectus
nor the Final Prospectus nor any amendment or supplement thereto will
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they are
made, not misleading; except that the foregoing does not apply to
statements or omissions made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter
specifically for use therein (it being understood that the only
information so provided is the information included in the last
paragraph on the cover page, the paragraphs relating to
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stabilization and passive market making practices on the inside front
cover and the first five paragraphs under the caption "Underwriting" in
the Final Prospectus).
(c) The Company and each subsidiary of the Company (as used
herein, the term "subsidiary" includes any corporation, joint venture
or partnership in which the Company or any subsidiary of the Company
has an ownership interest in excess of 5%) is duly organized and
validly existing and in good standing under the laws of the respective
jurisdictions of their organization or incorporation, as the case may
be, with full corporate power and authority to own their properties and
conduct their businesses as now conducted and described in the Final
Prospectus and the Registration Statement and are duly qualified or
authorized to do business and are in good standing in all jurisdictions
wherein the nature of their business or the character of property owned
or leased may require them to be qualified or authorized to do
business. The Company and its subsidiaries hold all licenses, consents
and approvals, and have satisfied all eligibility and other similar
requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, in each case as material to the conduct of the respective
businesses in which they are engaged. Each of the Company's
subsidiaries is set forth on Exhibit 21.1 to the Registration
Statement.
(d) The outstanding stock of each of the Company's corporate
subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. All of the outstanding stock of each of the Company's
subsidiaries is owned by the Company, clear of any lien, encumbrance,
pledge, equity or claim of any kind, and was issued and sold in
compliance with all applicable federal, state or foreign securities
laws, as the case may be. No shares of capital stock of any of the
Company's subsidiaries have been issued in violation of any preemptive
or similar rights. No options or warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership interests
in any of the Company's subsidiaries are outstanding. Other than as
disclosed in the Effective Prospectus and the Final Prospectus, neither
the Company nor any of its subsidiaries is a partner or joint venturer
in any partnership or joint venture.
(e) The historical capitalization of the Company as of March
31, 1997 is as set forth under the caption "Capitalization" in the
Effective Prospectus and the Final Prospectus, and the Company's
capital stock conforms to the description thereof contained in the
Effective Prospectus and the Final Prospectus, including under the
caption "Description of Capital Stock." All of the issued shares of
capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. None of the issued shares
of capital stock of the Company have been issued in violation of any
preemptive or similar rights. The Shares have been duly and validly
authorized and, upon issuance and delivery and payment therefor in the
manner herein described, will be validly issued, fully paid and
nonassessable. There are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the transfer of,
any shares of Common Stock pursuant to the Company's articles of
incorporation, bylaws or other governing documents or any agreement or
other instrument to which the Company is a party or by which it may be
bound except as described in the Effective Prospectus and the Final
Prospectus and except for restrictions on transfer imposed under
applicable securities laws. Neither the filing of the Registration
Statement nor the offer or sale of the Shares as contemplated by this
Agreement gives rise to any rights for or relating to the
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registration of any shares of Common Stock or any other securities of
the Company, other than rights relating to shares included in the Firm
Shares and such other rights as have been waived by the holder or
holders thereof to the date hereof. The Underwriters will receive good
and marketable title to the Shares to be issued and delivered by the
Company hereunder, free and clear of all liens, encumbrances, claims,
security interests, restrictions, shareholders' agreements and voting
trusts whatsoever. Except as disclosed in the Effective Prospectus and
the Final Prospectus, there are no outstanding warrants, options,
convertible securities or other rights to purchase or commitments of
sale related to or entitling any person to purchase or otherwise
acquire any securities or interest in the Company or any subsidiary.
(f) All offers and sales of the Company's securities prior to
the date hereof were at all relevant times duly registered or the
subject of an available exemption from the registration requirements of
the Securities Act and the applicable state and foreign securities or
Blue Sky laws. and all securities issuable by the Company upon the
conversion, exercise or exchange of presently outstanding securities of
the Company will be duly registered or the subject of an available
exemption from the registration requirements of the Securities Act and
the applicable state and foreign securities or Blue Sky laws.
(g) The Company has full legal right, power and authority to
enter into this Agreement and to issue, sell and deliver the Shares to
the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms. No consent, approval,
authorization or order of any court or governmental agency or body or
third party is required for the performance of this Agreement by the
Company or the consummation by the Company of the transactions
contemplated hereby, except such as have been obtained and such as may
be required by the National Association of Securities Dealers, Inc.
("NASD") or under the Securities Act, or state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by
the Underwriters. The issue and sale of the Shares by the Company, the
Company's performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in a breach or
violation of, or conflict with, any of the terms and provisions of, or
constitute a default by the Company or any of its subsidiaries under,
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or to which the Company or any of its subsidiaries or any of
their respective properties is subject, the articles of incorporation
or bylaws of the Company or any of its subsidiaries or any statute or
any judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to the Company or any subsidiary
or any of their respective properties. Neither the Company nor any
subsidiary is in violation of its articles of incorporation, bylaws or
other governing instrument or any law, administrative rule or
regulation or arbitrators' or administrative or court decree, judgment
or order or in violation or default (there being no existing state of
facts which with notice or lapse of time or both would constitute a
default) in the performance or observance of any obligation, agreement,
covenant or condition contained in any material contract, indenture,
deed of trust, mortgage, loan agreement, note, lease, agreement or
other instrument or permit to which it is a party or by which it or any
of its properties is or may be bound.
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(h) The consolidated financial statements and the related
notes of the Company, together with related notes and schedules,
included in the Registration Statement, the Effective Prospectus and
the Final Prospectus present fairly the financial position, results of
operations and changes in financial position and cash flow of the
Company and its subsidiaries at the dates and for the periods to which
they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout
the periods indicated, and all adjustments necessary for a fair
presentation of results for such periods have been made. The other
financial statements and schedules included in or as schedules to the
Registration Statement conform to the requirements of the Securities
Act, the Exchange Act and the Rules and Regulations and present fairly
the information presented therein for the periods shown. The financial
and statistical data set forth in the Effective Prospectus and the
Final Prospectus, including such data under the captions "Prospectus
Summary," "Recent Developments Summary of Recent Operating Results,"
"Use of Proceeds," "Capitalization," "Selected Consolidated Financial
and Operating Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business," "Management,"
"Principal and Selling Shareholders," and "Certain Transactions,"
present fairly the information set forth therein, and such data has
been compiled and presented on a basis consistent with the financial
statements presented therein and in the books and records of the
Company. The Company and its subsidiaries have no material contingent
obligations that are required to be disclosed in the Company's
financial statements in accordance with generally accepted accounting
principles which have not been so disclosed in the financial statements
included in the Registration Statement. Ernst & Young, LLP, who have
certified the financial statements of the Company, are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(i) Subsequent to December 31, 1996, neither the Company nor
any subsidiary has sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which is not
disclosed in the Effective Prospectus and the Final Prospectus; and
subsequent to the respective dates as of which information is given in
the Registration Statement, the Effective Prospectus and the Final
Prospectus, (i) neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions not in the ordinary course of
business, and (ii) there has not been any change in the capital stock,
partnership interests, joint venture interests, long-term debt,
obligations under capital leases or short-term borrowings of the
Company and its subsidiaries or any issuance of options, warrants or
rights to purchase the capital stock of the Company, or any adverse
change, or any development involving a prospective adverse change, in
the general affairs, management, business, prospects, financial
position, net worth or results of operations of the Company or its
subsidiaries, except in each case as described in or contemplated by
the Effective Prospectus and the Final Prospectus.
(j) Except as described in the Effective Prospectus and the
Final Prospectus, there is not pending or, to the knowledge of the
Company, threatened any action, suit, proceeding, inquiry or
investigation to which the Company, any of its subsidiaries or any of
their officers or directors is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court,
administrative agency, governmental
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agency, body or otherwise, wherein an unfavorable decision, ruling or
finding could prevent or materially hinder the consummation of this
Agreement or result in a material adverse change in the business
condition (financial or other), prospects, financial position, net
worth or results of operations of the Company or its subsidiaries.
(k) There are no contracts or other documents required by the
Securities Act or by the Rules and Regulations to be described in the
Registration Statement, the Effective Prospectus or the Final
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described or filed as required.
(l) Except as described in the Effective Prospectus and the
Final Prospectus, the Company and each of its subsidiaries have good
and marketable title to all real and material personal property owned
by them, free and clear of all liens, charges, encumbrances or defects,
except those reflected in the financial statements hereinabove
described. The real and personal property and buildings referred to in
the Effective Prospectus and the Final Prospectus which are leased from
others by the Company are held under valid, subsisting and enforceable
leases. The Company or its subsidiaries owns or leases all such
properties as are necessary to its operations as now conducted.
(m) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences and (v) such controls would prevent or detect errors or
irregularities in amounts that would be material in relation to the
Company's financial statements. Neither the Company nor any of its
subsidiaries, nor any director, officer, agent, employee or other
person acting on behalf of the Company or any such subsidiary, has,
directly or indirectly used any funds of the Company or any of its
subsidiaries for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from funds of the
Company or any of its subsidiaries; violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any bribe,
rebate, payoff, influence payment, kickback or other payment, or
received or retained any funds, in violation of any law, rule or
regulation.
(n) The Company and its subsidiaries have filed all federal,
state, local and foreign [income and franchise] tax returns required to
be filed through the date hereof and have paid all taxes shown as due
therefrom; and there is no tax deficiency, assessment, fine or penalty
or that has been, nor does the Company or any subsidiary have knowledge
of any tax deficiency, assessment, fine or penalty which is likely to
be, asserted against the Company or its subsidiaries, which if
determined adversely could materially and adversely affect the
earnings, assets, affairs, business prospects or condition (financial
or other) of the Company or its subsidiaries. All tax liabilities
incurred as of the respective dates of the financial statements have
been adequately provided for in the financial statements of the
Company.
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(o) The Company and its subsidiaries operate their business in
each jurisdiction in which the Company or any of its subsidiaries is
doing business in conformity with all applicable statutes, ordinances,
decrees, orders, rules and regulations of all applicable governmental
bodies, including federal, state and local governing bodies in the
United States and all foreign governments in areas outside of the
United States. The Company and its subsidiaries have all licenses,
approvals or consents to operate their respective business in all
locations in which such businesses are currently being operated, and
the Company and its subsidiaries are not aware of any existing or
imminent matter which may adversely impact their operations or business
prospects other than as specifically disclosed in the Effective
Prospectus and the Final Prospectus. The Company has not engaged in any
activity, whether alone or in concert with one of its customers,
creating the potential for exposure to civil or criminal monetary
liability or other material sanctions under federal, state or foreign
laws regulating consumer credit transactions, debt collection practices
or other violations of law.
(p) Neither the Company nor any of its subsidiaries have
failed to file with the applicable regulatory authorities any
statement, report, information or form required by any applicable law,
regulation or order; all such filings or submissions were in compliance
with applicable laws when filed and no deficiencies have been asserted
by any regulatory commission, agency or authority with respect to such
filings or submissions. Neither the Company nor any of its subsidiaries
have failed to maintain in full force and effect any license or permit
necessary or proper for the conduct of its business, or received any
notification that any revocation or limitation thereof is threatened or
pending, and there is not pending any change under any law, regulation,
license or permit which could materially adversely affect its business,
operations, property or business prospects. Neither the Company nor any
of its subsidiaries have received any notice of violation of or been
threatened with a charge of violating, and are not under investigation
with respect to a possible violation of, any provision of any law,
regulation or order.
(q) No labor dispute exists with the Company's employees or
with employees of its subsidiaries or is imminent which could
materially adversely affect the Company or any of its subsidiaries. The
Company is not aware of any existing or imminent labor disturbance by
its employees or by any employees of its subsidiaries which could be
expected to adversely affect the condition (financial or otherwise),
results of operations, properties, affairs, management, business
affairs or business prospects of the Company or any of its
subsidiaries.
(r) The Company and its subsidiaries own or possess the
licenses, patents, patent rights, copyrights, trademarks, service
marks, trade names and proprietary and other confidential information
and trade secrets presently employed by them in connection with the
businesses now operated by them, and neither the Company nor any of its
subsidiaries have received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, alone or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in any adverse change in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company or its subsidiaries.
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(s) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and adequate for the conduct
of their respective businesses and the value of their respective
properties and is customary for companies engaged in similar
industries; and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a comparable cost.
(t) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distributions on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary or
from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company.
(u) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
(v) Neither the Company nor any of its subsidiaries nor any of
the directors, officers, employees or agents of the Company and its
subsidiaries have taken, and they will not take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might be expected to constitute, stabilization or
manipulation of the price of the Common Stock.
(w) The Shares to be sold by the Company have been approved
for listing on the Nasdaq National Market (the "Nasdaq National
Market") upon notice of issuance, and the Shares to be sold by the
Selling Shareholders are listed on the Nasdaq National Market.
(x) The Company has previously disclosed and delivered or made
available to the Underwriters or their representatives prior to the
date the Registration Statement was declared effective copies of all
pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus or
other incentive plans, all other written employee programs,
arrangements or agreements, all medical, vision, dental or other health
plans, all life insurance plans and all other employee benefit plans or
fringe benefit plans, including, without limitation, "employee benefit
plans" as that term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), adopted,
maintained, sponsored in whole or in part or contributed to by the
Company, its predecessors or any subsidiary of the Company or its
predecessors for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors or other beneficiaries and
under which employees, retirees, dependents, spouses, directors,
independent contractors or other beneficiaries are eligible to
participate (collectively, the "Company Benefit Plans").
The Company and its subsidiaries (and each predecessor of the
Company or a subsidiary that adopted or contributed to a Company
Benefit Plan) have maintained all
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Company Benefit Plans (including filing all reports and returns
required to be filed with respect thereto) in accordance with their
terms and in compliance with the applicable terms of ERISA, the
Internal Revenue Code and any other applicable federal and state laws
the breach or violation of which would have, individually or in the
aggregate, a material adverse effect on the earnings, assets, affairs,
business prospects or condition (financial or otherwise) of the Company
and its subsidiaries. Each Company Benefit Plan which is intended to be
qualified under Section 401(a) of the Internal Revenue Code has either
received a favorable determination letter from the Internal Revenue
Service or timely requested such a letter and has at all times been
maintained in accordance with Section 401 of the Internal Revenue Code,
except where any failure to receive or seek such a favorable
determination letter or so maintain such Company Benefit Plan would not
have, individually or in the aggregate, a material adverse effect on
the earnings, assets, affairs, business prospects or condition
(financial or otherwise) of the Company and its subsidiaries. Neither
the Company nor its subsidiaries has engaged in a transaction with
respect to any Company Benefit Plan that, assuming the taxable period
of such transaction expired as of the date hereof, would subject the
Company or any subsidiary to a tax or penalty imposed by either Section
4975 of the Internal Revenue Code or Section 502(i) of ERISA in amounts
which are reasonably likely to have, individually or in the aggregate,
a material adverse effect on the earnings, assets, affairs, business
prospects or condition (financial or otherwise) of the Company and its
subsidiaries.
Neither the Company nor any subsidiary is obligated to provide
post-retirement medical benefits or any other unfunded post-retirement
welfare benefits (except COBRA continuation coverage required to be
provided by ERISA Section 601), which such liabilities to the Company
would have, individually or in the aggregate, a material adverse effect
on the earnings, assets, affairs, business prospects or condition
(financial or otherwise) of the Company and its subsidiaries. Neither
the Company nor any member of a group of trades or businesses under
common control (as defined in ERISA Sections 4001(a)(14) and
4001(b)(1)) with the Company have at any time within the last six years
sponsored, contributed to or been obligated under Title I or IV of
ERISA to contribute to a "defined benefit plan" (as defined in ERISA
Section 3(35)). Within the last six years, neither the Company nor any
member of a group of trades or businesses under common control (as
defined in ERISA Sections 4001(a)(14) and 4001(b)(1)) with Company have
had an "obligation to contribute" (as defined in ERISA Section 4212) to
a "multiemployer plan" (as defined in ERISA Sections 4001(a)(3) and
3(37)(A)).
(y) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to
occupational safety and health, and the Company and its subsidiaries
have received all permits, licenses or other approvals required of them
under applicable federal and state laws and regulations to conduct
their respective businesses, and the Company and each such subsidiary
is in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals which would not, singly or in the aggregate,
result in a material adverse effect on the earnings, assets, affairs,
business prospects or condition (financial or otherwise) of the Company
and its subsidiaries.
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(z) Except where such failure to comply or violation would
not, singly or in the aggregate, have a material adverse effect on the
earnings, assets, affairs, business prospects or condition (financial
or otherwise) of the Company and its subsidiaries, (i) the Company has
complied with the Immigration Reform and Control Act of 1986 and all
Regulations promulgated thereunder ("IRCA") with respect to the
completion and maintenance of Forms I-9, Employment Eligibility
Verification Forms, for all of its current employees and reverification
of the employment status of any and all employees whose employment
authorization documents indicated a limited period of employment
authorization; (ii) with respect to all former employees who left the
Company's employment within three years prior to the date hereof, the
Company has complied with IRCA with respect to the maintenance of Forms
I-9 for at least three years or for one year beyond the date of
termination, whichever is later; (iii) the Company has not violated any
applicable laws relating to immigration and has employed only
individuals authorized to work in the United States and has never been
the subject of any inspection or investigation relating to its
compliance with or violation of IRCA; and (iv) the Company has not been
warned, fined or otherwise penalized by reason of any failure to comply
with IRCA, and no such proceeding is pending or threatened.
(aa) The property, assets and operations of the Company and
its subsidiaries comply in all material respects with all applicable
federal, state or local law, common law, doctrine, rule, order, decree,
judgment, injunction, license, permit or regulation relating to
environmental matters (the "Environmental Laws"), except to the extent
that failure to comply with such Environmental Laws would not have a
material adverse effect on the earnings, business, management,
properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and its subsidiaries. To the
knowledge of the Company, none of the property, assets or operations of
the Company and its subsidiaries is the subject of any foreign,
federal, state or local investigation evaluating whether any remedial
action is needed to respond to a release into the environment of any
substance regulated by, or form the basis of liability under, any
Environmental Laws (a "Hazardous Material"), or is in contravention of
any Environmental Law that would have a material adverse effect on the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and its
subsidiaries. Neither the Company nor the Subsidiary has received any
notice or claim, nor are there pending, reasonably anticipated or, or
to the Company's knowledge, threatened lawsuits against them with
respect to violations of an Environmental Law or in connection with the
release of any Hazardous Material into the environment. Neither the
Company nor the Subsidiary has any material contingent liability in
connection with any release of Hazardous Material into the environment.
(bb) The Phoenix System includes design, performance and
functionality so that a customer will not experience invalid or
incorrect results or abnormal software operation related to calendar
year 2000. The Phoenix System includes calendar year 2000 compatibility
capabilities, including, but not limited to, date data century
recognition, same century and multiple century formula and date value
calculations, and user interface date data values that reflect the
century.
(cc) Neither the Company nor any of its subsidiaries has
received or is aware of any communication (written or oral) relating to
the termination or modification or
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threatened termination or modification of any of the agreements
described in or referred to in the Effective Prospectus or the Final
Prospectus, nor is it aware of any communication (written or oral)
relating to any determination not to renew or extend any agreement
described in or referred to in the Effective Prospectus or the Final
Prospectus at the end of the current term of any such agreement.
(dd) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
2. Representations, Warranties and Covenants of the Selling
Shareholders. Each of the Selling Shareholders, severally and not jointly,
represents, warrants and covenants to each Underwriter and agrees as
follows:
(a) Such Selling Shareholder now has, and at the First Closing
Date, or upon the exercise of options for the purchase of such Shares
will have, good and marketable title to the Selling Shareholder Shares
to be sold by such Selling Shareholder, free and clear of any liens,
encumbrances, equities and claims (other than as imposed by the
Securities Act or this Agreement), and full right, power and authority
to effect the sale and delivery of such Selling Shareholder Shares; and
upon the delivery of and payment for the Selling Shareholder Shares
pursuant to this Agreement, good and marketable title to such Selling
Shareholder Shares, free and clear of any liens, encumbrances,
equities, claims, security interests, restrictions, shareholder
agreements or voting trusts, will be transferred to the Underwriters.
(b) Such Selling Shareholder has duly executed and delivered
the Custody Agreement and Power of Attorney in the form previously
delivered to the Representatives, appointing each of Xxxxxx Xxxxxxxxxx
and Xxxxx X. Xxxxxxxx as such Selling Shareholder's duly authorized
attorney-in-fact (the "Attorney-in-Fact") and [American Stock Transfer
& Trust Company] as the duly authorized custodian (the "Custodian") of
the Selling Shareholder Shares. The Attorneys-in-Fact are authorized to
execute, deliver and perform this Agreement on behalf of such Selling
Shareholder, to deliver the Selling Shareholder Shares to be sold by
such Selling Shareholder hereunder, to accept payment therefor and
otherwise to act on behalf of such Selling Shareholder in connection
with this Agreement. Shares of Common Stock, in suitable form for
transfer, representing the Selling Shareholder Shares to be sold by
such Selling Shareholder hereunder have been deposited with the
Custodian pursuant to the Custody Agreement and Power of Attorney for
the purpose of delivery pursuant to this Agreement. Such Selling
Shareholder agrees that its Selling Shareholder Shares on deposit with
the Custodian are subject to the interest of the Underwriters
hereunder, that the arrangements made for such custody and the
appointment of the Attorneys-in-Fact are to that extent irrevocable,
and that the obligations of such Selling Shareholder hereunder shall
not be terminated by any act or deed of the Selling Shareholders (or by
any other person, firm or corporation, including the Company, the
Custodian or the Underwriters) or by operation of law (including the
death of an individual Selling Shareholder or the dissolution of a
corporate Selling Shareholder) or by the occurrence of any other event
or events, except as provided in this Agreement and the Custody
Agreement. If such Selling Shareholder should dissolve, die or become
incapacitated, or if any other event should occur, before the delivery
of the Shares of such Selling Shareholder hereunder, which renders such
Selling Shareholder incapable of acting
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12
on his or its own behalf, the Selling Shareholder Shares deposited with
the Custodian shall be delivered by the Custodian in accordance with
the terms and conditions of this Agreement as if such dissolution,
death, incapacity, or other event had not occurred, regardless of
whether or not the Custodian or the Attorneys-in-Fact shall have
received notice thereof.
(c) Such Selling Shareholder, acting individually or through
the Attorneys-in-Fact, has duly executed and delivered this Agreement.
This Agreement constitutes a legal, valid and binding obligation of
such Selling Shareholder, enforceable against such Selling Shareholder
in accordance with its terms. All authorizations and consents necessary
for the execution and delivery of this Agreement and the Custody
Agreement and Power of Attorney on behalf of such Selling Shareholder
and for the sale and delivery of the Selling Shareholder Shares to be
sold by such Selling Shareholder hereunder have been given. Such
Selling Shareholder has the legal capacity and full right, power and
authority to execute this Agreement and the Custody Agreement and Power
of Attorney.
(d) The performance of this Agreement and the Custody
Agreement and Power of Attorney and the consummation of the
transactions contemplated hereby and thereby by such Selling
Shareholder will not result in a breach or violation of, or conflict
with, any of the terms or provisions of, or constitute a default by
such Selling Shareholder under, any indenture, mortgage, deed of trust,
trust (constructive or other), loan agreement, lease, franchise,
license or other agreement or instrument to which such Selling
Shareholder or any of such Selling Shareholder's properties is bound,
any statute, or any judgment, decree, order, rule or regulation of any
court or governmental agency or body applicable to such Selling
Shareholder or any of such Selling Shareholder's properties, or result
in a breach of any of the terms and provisions of, or constitute a
default under, the organizational documents of such Selling
Shareholder, if not an individual.
(e) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock. Such Selling Shareholder
has not distributed and will not distribute any prospectus or other
offering material in connection with the offer and sale of the Shares
other than any Preliminary Prospectus filed with the Commission or the
Final Prospectus or other material permitted by the Securities Act.
(f) For a period of 180 days from the effective date of the
Registration Statement, such Selling Shareholder agrees that it will
not, except as expressly provided herein or with the prior written
approval of X. X. Xxxxxxxx & Co., directly or indirectly, make, agree
to or cause any offer, sale (including short sale), loan, pledge or
other disposition of, or grant any options or other rights with respect
to, or otherwise reduce any risk of ownership of, directly or
indirectly, any shares of Common Stock or other capital stock of the
Company, or any securities that are convertible into or exchangeable or
exercisable for shares of Common Stock or other capital stock of the
Company, or derivatives thereof, or request the registration of any of
the foregoing.
(g) To the knowledge of such Selling Shareholder, the
representations and warranties of the Company in Section 1 of this
Agreement are true and correct. Such Selling Shareholder has reviewed
and is familiar with the Registration Statement as
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originally filed with the Commission, and as amended, and the
Preliminary Prospectus. To the knowledge of such Selling Shareholder,
there are no facts, conditions or information not disclosed in such
Preliminary Prospectus that have adversely affected or could adversely
affect the business, financial position, net worth or results of
operations, or could adversely affect the properties or assets, of the
Company or any of its subsidiaries. To the knowledge of such Selling
Shareholder, the Preliminary Prospectus does not include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such Selling
Shareholder represents that it was not prompted to sell the Selling
Shareholder Shares by any information concerning the Company or any
subsidiary that is not set forth in the Preliminary Prospectus, the
Effective Prospectus or the Final Prospectus.
(h) At the time the Registration Statement became effective
(A) such parts of the Registration Statement and any amendments and
supplements thereto as specifically refer to such Selling Shareholder
did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and (B) such parts of the Effective
Prospectus and Final Prospectus as specifically refer to such Selling
Shareholder did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(i) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder agrees to deliver to you prior
to or at the First Closing Date (as defined below) a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(j) Any certificate signed by or on behalf of such Selling
Shareholder as such and delivered to the Representatives or to counsel
for the Representatives shall be deemed a representation and warranty
by such Selling Shareholder to each Underwriter as to the matters
covered thereby.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell 1,254,000 Firm
Shares and each of the Selling Shareholders agrees to sell to each of
the Underwriters the number of Firm Shares set forth opposite their
names in Schedule II hereto, and each of the Underwriters, severally
and not jointly, agrees to purchase at a purchase price of $_____ per
share, the number of Firm Shares set forth opposite such Underwriter's
name in Schedule I hereto.
(b) The Company also grants to the Underwriters an option to
purchase, solely for the purpose of covering over-allotments in
connection with the distribution and sale of the Firm Shares, all or
any portion of the Option Shares at the purchase price per share set
forth above. The option granted hereby may be exercised as to all or
any part of
-13-
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the Option Shares at any time within 30 days after the date the
Registration Statement becomes effective or, if such 30th day shall be
a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading. The Underwriters
shall not be under any obligation to purchase any Option Shares prior
to the exercise of such option. The option granted hereby may be
exercised by the Underwriters by the Representatives giving written
notice or notice by telephone (confirmed in writing) to the Company
setting forth the number of Option Shares to be purchased and the date
and time for delivery of and payment for such Option Shares and stating
that the Option Shares referred to in such notice are to be used for
the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares. If such notice is given prior
to the First Closing Date (as defined herein), the date set forth
therein for such delivery and payment shall not be earlier than two
full business days thereafter or the First Closing Date, whichever
occurs later. If such notice is given on or after the First Closing
Date, the date set forth therein for such delivery and payment shall
not be earlier than three full business days thereafter. In either
event, the date so set forth shall not be more than 15 full business
days after the date of such notice. The date and time set forth in such
notice is herein called the "Option Closing Date." Upon exercise of the
option, the Company shall become obligated to sell to the Underwriters,
and, subject to the terms and conditions herein set forth, the
Underwriters shall become obligated to purchase, for the account of
each Underwriter, from the Company the number of Option Shares
specified in such notice. Option Shares shall be purchased for the
accounts of the Underwriters in proportion to the number of Firm Shares
set forth opposite such Underwriter's name in Schedule I hereto, except
that the respective purchase obligations of each Underwriter shall be
adjusted so that no Underwriter shall be obligated to purchase
fractional Option Shares. To the extent, if any, that the option is
exercised, payment for the Option Shares shall be made on the Option
Closing Date in same day funds by certified or bank cashier's check
drawn to the order of, or by wire transfer to the account of the
Company against delivery of certificates therefor at the offices of
X.X. Xxxxxxxx & Co., 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000,
or at such other place as you and the Company shall agree upon.
(c) Certificates in definitive form for the Firm Shares which
each Underwriter has agreed to purchase hereunder shall be delivered by
or on behalf of the Company and the Selling Shareholders to the
Underwriters for the account of such Underwriter against payment by
such Underwriter or on its behalf of the purchase price therefor, by
wire transfer or certified or official bank check payable in same day
funds, to the order of the Company or the Selling Shareholders, as the
case may be, at the offices of X. X. Xxxxxxxx & Co., 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as may be
agreed upon by X.X. Xxxxxxxx & Co., the Company and the Selling
Shareholders, at 10:00 A.M., Nashville time, on the third (or if the
Firm Shares are priced, as contemplated by Rule 15c6-1(c) promulgated
pursuant to the Exchange Act, after 4:30 P.M., Washington, D.C. time,
the fourth) full business day after this Agreement becomes effective,
or at such other time not later than the seventh full business day
thereafter as the Representatives, the Company and the
Attorneys-in-Fact may determine, such time of delivery against payment
being herein referred to as the "First Closing Date." The First Closing
Date and the Option Closing Date are herein individually referred to as
the "Closing Date" and collectively referred to as the "Closing Dates."
Certificates in definitive form for the Option Shares which each
Underwriter shall have agreed to purchase hereunder shall be similarly
delivered by or on behalf of the Company on the
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Option Closing Date. The certificates in definitive form for the Shares
to be delivered will be in good delivery form and in such denominations
and registered in such names as X.X. Xxxxxxxx & Co. may request not
less than 48 hours prior to the First Closing Date or the Option
Closing Date, as the case may be. Such certificates will be made
available for checking and packaging, at a location designated by you,
at least 24 hours prior to the First Closing Date or the Option Closing
Date, as the case may be. It is understood that you may (but shall not
be obligated to) make payment on behalf of any Underwriter or
Underwriters for the Shares to be purchased by such Underwriter or
Underwriters. No such payment shall relieve such Underwriter or
Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. After the Registration Statement
becomes effective, the several Underwriters propose to offer for sale to the
public the Firm Shares and any Option Shares which may be sold at the price and
upon the terms set forth in the Final Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms.
5. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective and to comply with the
provisions of and make all requisite filings with the Commission
pursuant to Rules 424, 430A, 434 and 462(b), if relied upon by the
Company, of the Rules and Regulations and to notify you promptly in
writing of all such filings. The Company shall notify you promptly in
writing of any request by the Commission for any amendment of or
supplement (including any Term Sheet) to the Registration Statement,
the Effective Prospectus or the Final Prospectus or for additional
information; the Company shall prepare and file with the Commission,
promptly upon your request, any amendments of or supplements to the
Registration Statement, the Effective Prospectus or the Final
Prospectus which, in your reasonable opinion, may be necessary or
advisable in connection with the distribution of the Shares; and the
Company shall not file any amendment of or supplement to the
Registration Statement, the Effective Prospectus or the Final
Prospectus to which you reasonably object after reasonable notice
thereof. The Company shall advise you promptly after it receives notice
and obtains knowledge of the issuance by the Commission or any
jurisdiction or other regulatory body of any stop order or other order
suspending the effectiveness of the Registration Statement, suspending
or preventing the use of any Preliminary Prospectus, the Effective
Prospectus or the Final Prospectus or suspending the qualification of
the Shares for offering or sale in any jurisdiction, or of the
institution of any proceedings for any such purpose; and the Company
shall use its best efforts to prevent the issuance of any stop order or
other such order and, should a stop order or other such order be
issued, to obtain as soon as possible the lifting thereof.
(b) The Company will take or cause to be taken all necessary
action and furnish to whomever you direct such information as may be
reasonably required in qualifying the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Underwriters may designate and will continue such qualifications in
effect for as long as may be reasonably necessary to complete the
distribution and for a period of not less than one year after the
Effective Date; provided that, in connection
-15-
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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 in which the Company is not currently so subject.
(c) Within the time during which a Final Prospectus relating
to the Shares is required to be delivered under the Securities Act, the
Company shall comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and the Final Prospectus. If
during such period any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to
amend the Registration Statement or supplement the Final Prospectus to
comply with the Securities Act, the Company shall promptly notify you
and shall amend the Registration Statement or supplement the Final
Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will furnish without charge to the
Representatives copies of the Registration Statement (three of which
shall be signed and shall be accompanied by all exhibits thereto) and
will furnish without charge to the Representatives, each Underwriter
and to any dealer in securities each Preliminary Prospectus, the
Effective Prospectus and the Final Prospectus, and all amendments and
supplements thereto, including any prospectus or supplement prepared
after the effective date of the Registration Statement, in each case as
soon as available and in such quantities as the Underwriters may
reasonably request.
(e) The Company will (i) deliver to you at such office or
offices as you may designate as many copies of the Preliminary
Prospectus and Final Prospectus as you may reasonably request, and (ii)
for a period of not more than nine months after the Registration
Statement becomes effective or such longer period that a Final
Prospectus relating to the Shares is required to be delivered under the
Securities Act, send to the Underwriters as many additional copies of
the Final Prospectus and any supplement thereto as you may reasonably
request.
(f) The Company shall make generally available to its security
holders, in the manner contemplated by Rule 158(b) under the Securities
Act as promptly as practicable and in any event no later than 45 days
after the end of its fiscal quarter in which the first anniversary of
the effective date of the Registration Statement occurs, an earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act covering a period of at least 12 consecutive months beginning after
the effective date of the Registration Statement.
(g) The Company will apply the net proceeds from the sale of
the Shares as set forth under the caption "Use of Proceeds" in the
Final Prospectus.
(h) During a period of three years from the effective date of
the Registration Statement, the Company will furnish to the
Representatives, without charge, copies of all
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reports and other communications (financial or other) furnished by the
Company to its shareholders and, as soon as available, copies of any
reports or financial statements furnished or filed by the Company to or
with the Commission or any national securities exchange or
over-the-counter market on which any class of securities of the Company
may be listed or traded and such additional information concerning the
business and financial condition of the Company and its subsidiaries as
you from time to time may reasonably request.
(i) The Company will, from time to time, after the effective
date of the Registration Statement file with the Commission such
reports as are required by the Securities Act, the Exchange Act and the
Rules and Regulations, and shall also file with state securities
commissions in states where the Shares have been sold by you (as you
shall have advised us in writing) such reports as are required to be
filed by the securities acts and the regulations of those states.
(j) Except pursuant to this Agreement or with the prior
written consent of X.X. Xxxxxxxx & Co., the Company will not, and the
Company has provided agreements executed by all of the Company's
officers, directors, holders of one percent (1%) or more of the issued
and outstanding shares of Common Stock and holders of options to
purchase one percent (1%) or more of the shares of Common Stock issued
and outstanding on the date hereof providing that none of them will,
for a period of 180 days from the effective date of the Registration
Statement and except as contemplated by this Agreement, directly or
indirectly, make, agree to or cause any offer, sale (including short
sale), loan, pledge or other disposition of, or grant any options or
other rights with respect to, or otherwise reduce any risk of
ownership, directly or indirectly, of any shares of Common Stock or
other capital stock of the Company, or any securities that are
convertible into or exchangeable or exercisable for shares of Common
Stock or other capital stock of the Company, or derivatives thereof, or
request the registration of any of the foregoing, except that the
Company may (i) grant options pursuant to the Company's stock option
plans described in the Registration Statement in the ordinary course of
business consistent with past practice, (ii) issue shares of Common
Stock or securities convertible into Common Stock solely to owners of
capital stock of any company acquired by the Company, and (iii) issue
shares of Common Stock upon the exercise of such options or any of the
Company's outstanding stock options as described in the Registration
Statement or stock options granted under clause (i) above.
(k) If at any time during the 30 day period after the
Registration Statement is declared effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which, in your opinion, the market price for the Shares has been or is
likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Final Prospectus), the Company will, after written notice from you
advising it to do so, prepare, consult with you concerning the
substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting
on such rumor, publication or event.
(l) Neither the Company nor any of its officers, directors or
affiliates will take, directly or indirectly, any action designed to
cause or result in, or which might
-17-
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constitute or be expected to constitute, stabilization or manipulation
of the price of the Common Stock.
(m) The Company will cause the Shares to be listed on the
Nasdaq National Market at each Closing Date and will use its reasonable
best efforts to cause the Shares to be so listed for at least one year
from the date hereof.
(n) The Company shall not invest or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as
would require the Company or the Subsidiary to register as an
investment company under the 0000 Xxx.
(o) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
6. Expenses. The Company and the Selling Shareholders agree
with the Underwriters that (a) whether or not the transactions contemplated by
this Agreement are consummated or this Agreement becomes effective or is
terminated, the Company will pay all fees and expenses incident to the
performance of the obligations of the Company and the Selling Shareholders,
including, but not limited to, (i) the Commission's registration fee, (ii) the
expenses of printing (or reproducing) and distributing the Registration
Statement (including the financial statements therein and all amendments and
exhibits thereto), each Preliminary Prospectus, the Effective Prospectus, the
Final Prospectus, any amendments or supplements thereto, and this Agreement and
other underwriting documents, including Underwriter's Questionnaires,
Underwriter's Powers of Attorney, Blue Sky Memoranda, Agreements Among
Underwriters and Selected Dealers Agreements, (iii) fees and expenses of
accountants and counsel for the Company and the Selling Shareholders, (iv)
expenses of registration or qualification of the Shares under state Blue Sky and
securities laws, including the fees and disbursements of counsel to the
Underwriters in connection therewith, (v) filing fees paid or incurred by the
Underwriters and related fees and expenses of counsel to the Underwriters in
connection with filings with the NASD, (vi) expenses of listing the Shares on
the Nasdaq National Market, (vii) any expenses for travel, lodging and meals
incurred by the Company in connection with marketing, dealer and other meetings
attended by the Company and the Underwriters in marketing the Shares, (viii) the
costs and charges of the Company's transfer agent and registrar and the cost of
preparing the certificates for the Shares, and (ix) all other costs and expenses
incident to the performance of its obligations hereunder not otherwise provided
for in this Section; and (b) all out-of-pocket expenses, including counsel fees,
disbursements and expenses, incurred by the Underwriters in connection with
investigating, preparing to market and marketing the Shares and proposing to
purchase and purchasing the Shares under this Agreement will be borne and paid
by the Company if the sale of the Shares provided for herein is not consummated
by reason of the termination of this Agreement by the Representatives pursuant
to Sections 10 or 13(iv) or pursuant to Section 13(ii) because of any failure or
refusal on the part of the Company or the Selling Shareholders to comply with
the terms in all material respects or fulfill in all material respects any of
the conditions of this Agreement. To the extent, if at all, that any of the
Selling Shareholders engage special legal counsel to represent them in
connection with the transactions contemplated by this Agreement, the fees and
expenses of such counsel shall be borne by such Selling Shareholder. Any
transfer taxes imposed on the sale of the Shares to the several Underwriters
will be paid by the Company and the Selling Shareholders pro rata. The Company
and the Selling Shareholders have agreed between themselves with regard to the
sharing of fees and expenses. It is understood, however, that except as provided
in this Section 6 and Sections 8 and 10, the Underwriters will pay all of their
own costs
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and expenses, including the fees of their counsel and any advertising expenses
in connection with any offers they may make.
7. Conditions to the Underwriters' Obligations. The respective
obligations of the Underwriters hereunder shall be subject, in their discretion,
to the accuracy of the representations and warranties of the Company and the
Selling Shareholders herein as of the date hereof and as of the Closing Date as
if made on and as of the Closing Date, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance by
the Company and the Selling Shareholders of all of their covenants and
agreements hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective not later than 4:00
p.m., Washington, D.C. time, on the day following the date of this
Agreement, or such later time and date as shall have been consented to
by the Representatives, and all filings required by Rule 424, Rule
430A, 434 or Rule 462(b), if applicable, of the Rules and Regulations
shall have been made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Underwriters, shall be contemplated by
the Commission; any request of the Commission for additional
information (to be included in the Registration Statement or the Final
Prospectus or otherwise) shall have been complied with to your
reasonable satisfaction; and the NASD, upon review of the terms of the
public offering of the Shares, shall not have objected to such offering
or the terms or the Underwriters' participation in the same.
(b) No Underwriter shall have advised the Company that the
Registration Statement, Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or any supplement
thereto, contains an untrue statement of fact which, in your judgment,
is material, or omits to state a fact which, in your judgment, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Representatives shall have received an opinion, dated
the Closing Date, from Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.,
counsel for the Company and the Selling Shareholders, to the effect
that:
(i) The Company is a corporation duly organized and
validly existing and in good standing under the laws of the
State of Florida, with full corporate power and authority to
own its properties and conduct its business as now conducted.
(ii) Each of the Company's subsidiaries (as defined
in this Agreement) is a corporation duly organized and validly
existing and in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power
and authority to own its properties and conduct its business
as now conducted. The outstanding stock of each of the
Company's subsidiaries is duly authorized, validly issued,
fully paid and nonassessable. All of the outstanding stock of
each of the subsidiaries is owned by the Company, free and
clear of all possessory (and, to the knowledge of such
counsel, other) liens, encumbrances, pledges, equities or
claims of any kind. To the knowledge of such counsel, no
options or warrants or other
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rights to purchase from the Company or any subsidiary,
agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or of
ownership interests in any of the Company's subsidiaries are
outstanding.
(iii) The Company and each of its subsidiaries is
duly qualified or authorized to do business as a foreign
corporation in good standing in all jurisdictions where the
nature of its business or character of property owned or
leased by it require it to be so qualified or authorized to do
business, except where the failure to be so qualified or
authorized to do business would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(iv) As of the date specified therein, the Company
had historical authorized and issued capital stock as set
forth under the caption "Capitalization" in the Final
Prospectus, and the Company's capital stock conforms to the
description thereof contained under the caption "Description
of Capital Stock" in the Final Prospectus. All of the issued
shares of Common Stock (including the Selling Shareholder
Shares and the Option Shares) have been duly authorized and
are validly issued, fully paid and nonassessable. The Company
Shares have been duly and validly authorized, and upon
issuance thereof and payment therefor as provided in this
Agreement, will be validly issued, fully paid and
nonassessable.
(v) None of the issued shares of capital stock of the
Company (including the Selling Shareholder Shares and the
Option Shares) have been issued in violation of or subject to
any preemptive or similar rights arising under, and there are
no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the transfer of, the Shares
or any other shares of Common Stock pursuant to, the Company's
Articles of Incorporation, Bylaws or, to the knowledge of such
counsel, any agreement (other than this Agreement) or
instrument to which the Company or a Selling Shareholder is a
party or by which it may be bound. To the knowledge of such
counsel, neither the filing of the Registration Statement nor
the offer or sale of the Shares as contemplated thereby gives
rise to any rights for or relating to the registration of any
shares of Common Stock or any other securities of the Company,
other than rights relating to shares included in the Firm
Shares or the Option Shares and such other rights as have been
waived by the holder or holders thereof to the date hereof.
Upon issuance of the Company Shares and payment therefor as
provided in this Agreement, the Underwriters will receive good
and marketable title to the Company Shares, free and clear of
all liens, encumbrances, claims, security interests,
restrictions, shareholders agreements and voting trusts
whatsoever. The form of certificate for the Shares is in due
and proper form.
(vi) All sales of the Company's securities prior to
the date hereof were at all relevant times duly registered or
exempt from the registration requirements of the Act and, to
the knowledge of such counsel, were duly registered or the
subject of an exemption from the registration requirements of
applicable state and foreign securities or blue sky laws, or
if not registered or exempt in compliance with the Act and
applicable state and foreign securities or blue sky laws, to
the knowledge of such counsel, any private rights of action
for rescission or damages
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arising from such failure to register any such securities are
time barred by applicable statutes of limitations or equitable
principles, including laches.
(vii) No consent, approval, authorization or order of
any court, governmental agency or body or, to the knowledge of
such counsel, any third party, is required for the performance
of this Agreement by the Company or the consummation by the
Company of the transactions contemplated hereby, except such
as have been obtained under the Act and such as may be
required from the NASD or under state securities or blue sky
laws in connection with the purchase and distribution of the
Shares by the several Underwriters. The performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby will not conflict with
or result in a breach or violation by the Company or any of
its subsidiaries of any of the terms or provisions of, or
constitute a default by the Company or any of its subsidiaries
under, (a) the Articles of Incorporation or Bylaws of the
Company or any of its subsidiaries, (b) any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or to which the Company or any of its
subsidiaries or their properties are subject and that is an
exhibit to the Registration Statement (each a "Material
Agreement"); (c) any federal statute or (d) to the knowledge
of such counsel, any judgment, decree, order, rule or
regulation of any court or governmental agency or body
applicable to the Company or any of its subsidiaries or their
properties; provided, however, that such counsel need not
express any opinion under this paragraph (vii) as to
compliance with federal securities laws (certain aspects of
which are covered elsewhere in this Agreement) or as to
compliance with the securities or blue sky laws of any other
jurisdiction.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the
valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms,
and the Company has the full corporate power and authority to
enter into this Agreement and to issue, sell and deliver the
Company Shares to be sold by it to the Underwriters as
provided herein.
(ix) To the knowledge of such counsel, except as
described in the Final Prospectus, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any of its subsidiaries
is a party, or to which the property of the Company or any of
its subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to
the Company or any of its subsidiaries, could result in a
material adverse change in the business, financial position,
net worth or results of operations, or could materially
adversely affect the properties or assets, of the Company and
its subsidiaries, taken as a whole.
(x) No default exists and no event has occurred
which, with notice or after the lapse of time to cure or both,
would constitute a default in the due performance and
observance of any term, covenant or condition of any Material
Agreement, which default or event would have material adverse
effect on the Company and its subsidiaries, taken as a whole.
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(xi) Neither the Company nor any subsidiary is in
violation of its Articles of Incorporation or Bylaws or, to
the knowledge of such counsel, in violation of any law,
administrative rule or regulation or arbitrators' or
administrative or court decree, judgment or order or, to the
knowledge of such counsel, in violation or default (there
being no existing state of facts, to the knowledge of such
counsel, which with notice or lapse of time or both would
constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any
Material Agreement, where such violation or default could have
a material adverse effect on the business, financial position,
net worth or results of operations, or could materially
adversely affect the properties or assets, of the Company and
its subsidiaries, taken as a whole, taking into account any
enforceable and valid indemnity that the Company may have from
a third party.
(xii) The Registration Statement and all
post-effective amendments thereto have become effective under
the Act, no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge
of such counsel, no proceedings for that purpose have been
instituted or are pending, threatened or contemplated by the
Commission. All filings required by Rules 424, 430A, 434 and
462(b), if relied upon by the Company, of the Rules and
Regulations have been made. The Registration Statement, the
Effective Prospectus and Final Prospectus, and any amendments
or supplements thereto, as of their respective effective or
issue dates, complied as to form with the requirements of the
Act and the Rules and Regulations (other than the financial
statements, data and schedules which are contained therein,
and the section captioned "Underwriting" contained therein, as
to which such counsel need not express any opinion). The
descriptions in the Registration Statement, the Effective
Prospectus and the Final Prospectus of statutes, regulations,
legal and governmental proceedings, and contracts and other
documents are accurate in all material respects and present
fairly the information required to be stated. To the knowledge
of such counsel, there are no pending or threatened legal or
governmental proceedings, statutes or regulations required to
be described in the Final Prospectus which are not described
nor are there any contracts or other documents of a character
required to be described in the Registration Statement or the
Final Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as
required. The Shares to be sold by the Company have been
approved for listing on the Nasdaq National Market upon notice
of issuance, and the Shares to be sold by the Selling
Shareholders are listed on the Nasdaq National Market.
(xiii) The Company is not, and will not be as a
result of the consummation of the transactions contemplated by
this Agreement, an "investment company" within the meaning of
the 1940 Act.
(xiv) This Agreement and the Custody Agreement and
Power of Attorney described herein have been duly executed and
delivered by or on behalf of each of the Selling Shareholders
and constitute valid and binding agreements of such Selling
Shareholders enforceable against such Selling Shareholders. To
the
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knowledge of such counsel, there are no facts which would
cause any Selling Shareholder to lack the legal capacity and
full right, power and authority to execute this Agreement and
the Custody Agreement and Power of Attorney.
(xv) To the knowledge of such counsel, the
performance of this Agreement and the Custody Agreement and
Power of Attorney and the consummation of the transactions
contemplated thereby by each of the Selling Shareholders will
not result in a breach or violation of, or conflict with, any
of the terms or provisions of, or constitute a default by any
Selling Shareholder under, any indenture, mortgage, deed of
trust, trust (constructive or other), loan agreement, lease
franchise, license or other agreement or instrument to which
such Selling Shareholder or any of such Selling Shareholder's
properties is bound, any statute, or any judgment, decree,
order, rule or regulation of any court or governmental agency
or body applicable to such Selling Shareholder; provided,
however, that such counsel need not express any opinion under
this paragraph (xv) as to compliance with federal securities
laws (certain aspects of which are covered elsewhere in this
Agreement) or as to compliance with the securities or blue sky
laws of any other jurisdiction.
(xvi) To the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental
agency or body is required for the consummation by the Selling
Shareholders of the transactions contemplated by this
Agreement in connection with the Selling Shareholder Shares to
be sold by each Selling Shareholder hereunder, except such as
have been obtained under the Act and such as may be required
from the NASD or under state securities or blue sky laws in
connection with the purchase and distribution of the Shares by
the several Underwriters.
(xvii) As of the Closing Date, the Selling
Shareholders have made good delivery, duly endorsed, to the
Underwriters or to a financial intermediary designated by the
Underwriters, of the Selling Shareholder Shares and, assuming
that the Underwriters constitute bona fide purchasers as
defined in Section 8-302 of the Uniform Commercial Code, the
Selling Shareholders have transferred all rights and interests
therein to the Underwriters free and clear of any and all
liens, pledges, encumbrances, charges, agreements, equities,
claims, security interests, restrictions, shareholder
agreements or voting trusts.
In addition to the matters set forth above, such opinion
letter shall also include a statement to the effect that nothing has
come to the attention of such counsel which leads them to believe that
the Registration Statement, the Effective Prospectus and the Final
Prospectus or any amendment or supplement thereto contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading (except that such counsel need express no view as to
financial statements, schedules and other financial information
included therein).
(d) The Representatives shall have received an opinion or
opinions, dated the Closing Date, of Xxxxxx & Bird LLP, counsel for the
Underwriters, with respect to the Registration Statement and the Final
Prospectus and such other related matters as the Underwriters may
require, and the Company shall have furnished to such counsel such
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documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(e) The Representatives shall have received from Ernst &
Young, LLP, a letter dated the date hereof and, at the Closing Date, a
second letter dated the Closing Date in form and in substance
satisfactory to the Representatives, stating that they are independent
public accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the applicable Rules and
Regulations, and to the effect that:
(i) In their opinion, the financial statements and
schedules examined by them and included in the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and
the published Rules and Regulations and are presented in
accordance with generally accepted accounting principles
consistently applied; and they have made a review in
accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, and/or
condensed financial statements derived from audited financial
statements of the Company;
(ii) The unaudited summary and selected financial
information included in the Preliminary Prospectus and the
Final Prospectus under the captions "Prospectus Summary" and
"Selected Consolidated Financial and Operating Data" agrees
with the corresponding amounts in the audited financial
statements included in the Final Prospectus or previously
reported on by them;
(iii) On the basis of a reading of the latest
available interim consolidated financial statements
(unaudited) of the Company and its subsidiaries, a reading of
the minute books of the Company and its subsidiaries,
inquiries of officials of the Company responsible for
financial and accounting matters and other specified
procedures, all of which have been agreed to by the
Representatives, nothing came to their attention that caused
them to believe that:
(A) the unaudited financial statements
included in the Registration Statement do not comply
as to form in all material respects with the
accounting requirements of the federal securities
laws and the related published rules and regulations
thereunder or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with the basis for the
audited financial statements contained in the
Registration Statement;
(B) any other unaudited financial statement
data included in the Final Prospectus do not agree
with the corresponding items in the unaudited
consolidated financial statements from which data was
derived and any such unaudited data were not
determined on a basis substantially consistent with
the basis for the corresponding amounts in the
audited financial statements included in the
Prospectus;
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(C) at a specified date not more than three
days prior to the date of delivery of such respective
letter, there was any change in the consolidated
capital stock, decline in shareholders' equity or
increase in long-term debt of the Company and its
subsidiaries, or other items specified by the
Underwriters, in each case as compared with amounts
shown in the latest balance sheets included in the
Final Prospectus, except in each case for changes,
decreases or increases which the Final Prospectus
discloses have occurred or may occur or which are
described in such letters; and
(D) for the period from the closing date of
the latest consolidated statements of operations
included in the Effective Prospectus and the Final
Prospectus to a specified date not more than three
days prior to the date of delivery of such respective
letter, there were any decreases in total revenues or
net income of the Company, or other items specified
by the Underwriters, or any increases in any items
specified by the Underwriters, in each case as
compared with the corresponding period of the
preceding year, except in each case for decreases
which the Final Prospectus discloses have occurred or
may occur or which are described in such letter.
(iv) They have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information specified by
you which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the
Effective Prospectus and the Final Prospectus and have
compared and agreed such amounts, percentages financial
information with the accounting records of the Company and its
subsidiaries or to analyses and schedules prepared by the
Company and its subsidiaries from its detailed accounting
records.
In the event that the letters to be delivered referred to
above set forth any such changes, decreases or increases, it shall be a
further condition to the obligations of the Underwriters that the
Underwriters shall have determined, after discussions with officers of
the Company responsible for financial and accounting matters and with
Ernst & Young LLP, that such changes, decreases or increases as are set
forth in such letters do not reflect a material adverse change in the
shareholders' equity or long-term debt of the Company as compared with
the amounts shown in the latest consolidated balance sheets of the
Company included in the Final Prospectus, or a material adverse change
in total revenues or net income, of the Company, in each case as
compared with the corresponding period of the prior year.
(f) There shall have been furnished to you a certificate,
dated the Closing Date and addressed to you, signed by the Chief
Executive Officer and by the Chief Financial Officer of the Company to
the effect that:
(i) the representations and warranties of the Company
in Section 1 of this Agreement are true and correct, as if
made at and as of the Closing Date, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
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(ii) the Registration Statement has become effective
under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been issued,
and no proceedings for that purpose have been initiated or are
pending or, to their knowledge, threatened under the
Securities Act;
(iii) all filings required by Rules 424, 430A, 434
and 462(b), if relied upon by the Company, of the Rules and
Regulations have been made;
(iv) they have carefully examined the Registration
Statement, the Effective Prospectus and the Final Prospectus,
and any amendments or supplements thereto, and such documents
do not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
Statement, the Effective Prospectus or the Final Prospectus
which has not been so set forth.
(g) The representations and warranties of the Selling
Shareholders shall be true and correct as if made at and as of the
Closing Date, and each Selling Shareholder shall deliver to you a
certificate to that effect, dated the Closing Date, signed by each
Selling Shareholder or such Selling Shareholder's duly appointed
Attorney-in-Fact.
(h) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus, and
except as stated therein, the Company and its subsidiaries have not
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any court or governmental action, order or decree, or become
a party to or the subject of any litigation which is material to the
Company or its subsidiaries, nor shall there have been any material
adverse change, or any development involving a prospective material
adverse change, in the business, properties, key personnel,
capitalization, net worth, results of operations or condition
(financial or other) of the Company or its subsidiaries, which loss,
interference, litigation or change, in your judgment, shall render it
inadvisable to commence or continue the offering of the Shares at the
offering price to the public set forth on the cover page of the
Prospectus or to proceed with the delivery of the Shares.
(i) The Shares to be sold by the Company shall have been
approved for listing upon notice of issuance on the Nasdaq National
Market, and the Shares to be sold the Selling Shareholders shall be
listed on the Nasdaq National Market.
(j) The agreements relating to the matters described
in Section 5(j) hereof shall be in full force and effect.
(k) You shall have been furnished by the Company and the
Selling Shareholders such additional documents and certificates as you
may reasonably request.
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All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory to the Representatives and their counsel. The
Company and the Selling Shareholders shall furnish to the Representatives such
conformed copies of such opinions, certificates, letters and documents in such
quantities as the Representatives shall reasonably request.
The respective obligations of the Underwriters to purchase and pay for
the Option Shares shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Shares, except that all references to
the "Closing Date" shall be deemed to refer to the Option Closing Date, if it
shall be a date other than the Closing Date.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Securities Act against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based in whole or in
part upon (i) any inaccuracy in the representations and warranties of
the Company and the Selling Shareholders contained herein, (ii) any
failure of the Company or the Selling Shareholders to perform their
obligations hereunder or under law or (iii) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement thereto,
any audio or visual materials supplied by the Company and used in
connection with the marketing of the Shares, including without
limitation, slides, videos, films and tape recordings, or in any Blue
Sky application or other written information furnished by the Company
filed in any state or other jurisdiction in order to qualify any or all
of the Shares under the securities laws thereof (a "Blue Sky
Application"), or arise out of or are based upon the omission or
alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or
any amendment or supplement thereto or any Blue Sky Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
and each such controlling person of each Underwriter upon demand for
any legal or other expenses reasonably incurred by such Underwriter or
such controlling person of each Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, whether or not such Underwriter
or controlling person is a party to any action or proceeding; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, or liability arises out of or
is based upon (i) any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or
such amendment or such supplement in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
specifically for use therein (it being understood that the only
information so provided is the information included in the last
paragraph on the cover page, the paragraphs relating to stabilization
and passive market making practices on the inside front cover and in
the first five paragraphs under the caption "Underwriting" in any
Preliminary Prospectus and the Final Prospectus and the Effective
Prospectus) or
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(ii) the failure of the Underwriters to deliver the Final Prospectus
after the effective date, as required under Section 4(3) of the
Securities Act and Rule 174 thereunder (provided, that such failure to
deliver was not the result of the failure of the Company to timely
supply sufficient quantities of the Final Prospectus to the
Underwriters upon the Underwriter's reasonable request).
(b) Each of the Selling Shareholders, severally and not
jointly, agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
the Securities Act against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based in whole or in part upon (i) any inaccuracy
in the representations and warranties of such Selling Shareholder
contained herein, (ii) any failure of such Selling Shareholder to
perform his respective obligations hereunder or under law or (iii) any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus,
the Effective Prospectus or Final Prospectus, or any amendment or
supplement thereto, or in any Blue Sky Application or arise out of or
are based upon the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus or any amendment or supplement thereto
or any Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter and each such controlling person of
each Underwriter for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person of each Underwriter in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided,
however, that a Selling Shareholder shall only be liable in his
capacity as a Selling Shareholder pursuant to clause (iii) to the
extent that any statements in or omissions or alleged omissions to
state in the Registration Statement, any Preliminary Prospectus, the
Effective Prospectus, the Final Prospectus or any amendment or
supplement thereto are based upon written information furnished to the
Company by such Selling Shareholder specifically for use therein or to
the extent such Selling Shareholder has failed to bring to the
attention of the Underwriters anything that has come to the attention
of such Selling Shareholder (or solely with respect to Xx. Xxxxxx
Xxxxxxxxxx, the Xxxxxxxxxx Family Limited Partnership, the Xxxxxx and
Xxxxx Xxxxxxxxxx Charitable Remainder Trust and E&C's Charities, any
matter that Xx. Xxxxxxxxxx knew or should have known in his capacity as
founder, principal shareholder, Chairman of the Board, Chief Executive
Officer and director of the Company, and solely with respect to Xx.
Xxxxx X. Xxxxxxxx and Xx. Xxxxxxx Xxxxxx, any matter that Xx. Xxxxxxxx
knew or should have known in his capacity as President, Chief Operating
Officer and director of the Company) to cause such Selling Shareholder
to believe that there is any untrue statement relating to the Company
of any material fact contained in the Registration Statement, the
Preliminary Prospectus, the Effective Prospectus, the Final Prospectus,
or any amendment or supplement thereto, or any omission to state
therein a material fact relating to the Company required to be stated
therein or necessary to make the statements therein not misleading;
provided further, that the Selling Shareholders shall not be liable
pursuant to clause (iii) to the extent that any such loss, claim,
damage, or liability arises out of or is based upon (a) any untrue
statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Preliminary Prospectus, the
Effective Prospectus or Final Prospectus or such amendment or such
supplement in
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reliance upon and in conformity with written information furnished to
the Company by any Underwriter specifically for use therein (it being
understood that the only information so provided is the information
included in the last paragraph on the cover page, the paragraphs
relating to stabilization and passive market making practices on the
inside front cover and the first five paragraphs under the caption
"Underwriting" in any Preliminary Prospectus and the Final Prospectus
and the Effective Prospectus), (b) the third sentence under the heading
"Legal Matters" or (c) the failure of the Underwriters to deliver the
Final Prospectus after the effective date, as required under Section
4(3) of the Securities Act and Rule 174 thereunder (provided, that if
such failure to deliver was the result of the failure of the Company to
timely supply sufficient quantities of the Final Prospectus to the
Underwriters upon the Underwriter's reasonable request, then the
Company shall indemnify the Underwriters and other persons set forth in
this Section 8(b) with respect to any associated losses, claims,
damages or liabilities pursuant to Section 8(a) above).
(c) Notwithstanding Section 8(b) above, in no event shall the
liability of any Selling Shareholder under Section 8(b) exceed the net
proceeds received by such Selling Shareholder from the Underwriters
with respect to the sale of the Shares.
(d) Neither the Company nor any Selling Shareholder will,
without prior written consent of the Representatives, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding (or related cause of
action or portion thereof) in respect of which indemnification may be
sought hereunder (whether or not such Underwriter is a party to such
claim, action, suit or proceeding) unless such settlement, compromise
or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding (or
related cause of action or portion thereof).
(e) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act and each of the
Selling Shareholders against any losses, claims, damages or liabilities
to which the Company or any such director, officer or controlling
person or the Selling Shareholders may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus or
Final Prospectus or any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page, the paragraphs relating to stabilization
and passive market making practices on the inside front cover and the
first five paragraphs under the caption "Underwriting" in any
Preliminary Prospectus and in the Effective Prospectus and the Final
Prospectus);
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(f) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may wish, jointly with
any other counsel satisfactory to such indemnified party; and after
notice from the indemnifying party to such indemnified party of its
election to so assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation, except that the indemnified party shall have the right
to employ separate counsel if, in its reasonable judgment, it is
advisable for the indemnified party and any other similarly situated
indemnified party to be represented by separate counsel, and in that
event the fees and expenses of separate counsel shall be paid by the
indemnifying party. However, in no event, shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in
addition to local counsel, if any) separate from their own counsel for
all indemnified parties in connection with any action or separate, but
similar or related, actions arising out of the same general allegations
or circumstances.
(g) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding part of this Section 8 is for any reason held to be
unavailable to the Underwriters, the Company or the Selling
Shareholders or is insufficient to hold harmless an indemnified party,
then the Company and the Selling Shareholders shall contribute to the
damages paid by the Underwriters, and the Underwriters shall contribute
to the damages paid by the Company and the Selling Shareholders;
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled,
there shall be considered the relative benefits received by each party
from the offering of the Shares (taking into account the portion of the
proceeds of the offering realized by each), the parties' relative
knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent
any statement or omission, and any other equitable considerations
appropriate under the circumstances. The Company and the Selling
Shareholders and the Underwriters agree that it would not be equitable
if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were treated as one entity
for such purpose). No Underwriter or person controlling such
Underwriter shall be obligated to make contribution hereunder which in
the aggregate exceeds the underwriting discount applicable to the
Shares purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages which such Underwriter and its
controlling persons have otherwise been required to pay in respect of
the same or any similar claim. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section,
each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Securities Act shall have the same rights to
contribution as such Underwriter, and each director of the Company,
each officer
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of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of
the Securities Act, and the Selling Shareholders shall have the same
rights to contribution as the Company.
(h) The obligations of the Company and the Selling
Shareholders under this Section 8 shall be in addition to any liability
which the Company and the Selling Shareholders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Securities
Act; and the obligations of the Underwriters under this Section 8 shall
be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company and to each person, if any,
who controls the Company within the meaning of the Securities Act and
to the Selling Shareholders.
9. Default of Underwriters. If any Underwriter defaults in its
obligation to purchase Shares hereunder and if the total number of Shares which
such defaulting Underwriter agreed but failed to purchase is ten percent or less
of the total number of Shares to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each
non-defaulting Underwriter in Schedule I hereto bears to the total number of
Shares set forth opposite the names of all the non-defaulting Underwriters) the
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter so defaults and the total number of Shares with
respect to which such default or defaults occur is more than ten percent of the
total number of Shares to be sold hereunder, and arrangements satisfactory to
the other Underwriters, the Company and the Selling Shareholders for the
purchase of such Shares by other persons (who may include the non-defaulting
Underwriters) are not made within 36 hours after such default, this Agreement,
insofar as it relates to the sale of the Shares, will terminate without
liability on the part of the non-defaulting Underwriters, the Company or the
Selling Shareholders except for (i) the provisions of Section 8 hereof, and (ii)
the expenses to be paid or reimbursed by the Company pursuant to Section 6
hereof. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9. Nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. Default by the Selling Shareholders. If the Selling
Shareholders shall fail to sell the number of Selling Shareholder Shares that
the Selling Shareholders are obligated to sell, the Representatives may, at
their option, by notice to the Company, either (a) require the Company to sell
and deliver the number of Selling Shareholder Shares as to which the Selling
Shareholders have defaulted or such lesser number as may be requested by the
Representatives, (b) elect to purchase the Firm Shares that the Company and the
non-defaulting Selling Shareholders have agreed to sell pursuant to this
Agreement, or (c) terminate this Agreement without liability on the part of the
Underwriters or the Company, except for the provisions of Section 8 hereof and
the expenses to be paid or reimbursed by the Company pursuant to Section 6
hereof.
In the event of a default under this Section that does not result in
the termination of this Agreement, the Representatives shall have the right to
postpone the First Closing Date for a period not exceeding ten days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. No action taken pursuant to this Section
shall relieve the Company or the Selling Shareholder so defaulting from
liability, if any, in respect of such default.
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11. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, the Selling Shareholders and the Underwriters set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Selling Shareholders, any Underwriter or any controlling person,
(ii) any termination of this Agreement, and (iii) delivery of and payment for
the Shares.
12. Effective Date. This Agreement shall become effective at
whichever of the following times shall first occur: (i) at 11:30 a.m., Eastern
Standard Time, on the next full business day following the date on which the
Registration Statement becomes effective or (ii) at such time after the
Registration Statement has become effective as the Representatives shall
release the Firm Shares for sale to the public; provided, however, that the
provisions of Sections 6, 8, 11 and 12 hereof shall at all times be effective.
For purposes of this Section 12, the Firm Shares shall be deemed to have been
so released upon the release by the Representatives for publication, at any
time after the Registration Statement has become effective, of any newspaper
advertisement relating to the Firm Shares or upon the release by the
Representatives of telegrams offering the Firm Shares for sale to securities
dealers, whichever may occur first.
13. Termination. This Agreement may be terminated by the
Representatives by notice to the Company and the Selling Shareholders (i) at any
time before it becomes effective in accordance with Section 12 hereof; (ii) in
the event that at or prior to the First Closing Date the Company or the Selling
Shareholders shall have failed, refused or been unable to perform any agreement
on the part of the Company or the Selling Shareholders to be performed hereunder
(or any other condition to the obligations of the Underwriters hereunder is not
fulfilled); (iii) if at or prior to the Closing Date trading in securities on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or materially limited or minimum or maximum
prices shall have been established on either of such Exchanges or the Nasdaq
National Market, or a banking moratorium shall have been declared by Federal or
state authorities; (iv) if at or prior to the Closing Date trading in securities
of the Company shall have been suspended; or (v) if there shall have been such a
material change in general economic, political or financial conditions or if the
effect of international conditions on the financial markets in the United States
shall be such as, in your reasonable judgment, makes it inadvisable to commence
or continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to proceed with the delivery of the
Shares. Termination of this Agreement pursuant to this Section 13 shall be
without liability of any party to any other party other than as provided in
Sections 6 and 8 hereof.
14. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be mailed or delivered or
telegraphed and confirmed in writing to the Representatives in care of X. X.
Xxxxxxxx & Co., X. X. Xxxxxxxx Financial Center, 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, or, if sent to the
Company or the Selling Shareholders, shall be mailed, delivered or telegraphed
and confirmed in writing to the Company at 000 Xxxxxxxxxxxxx Xxxxxxx,
Xxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx Xxxxxxxxxx.
15. Miscellaneous. This Agreement shall inure to the benefit of
and be binding upon the several Underwriters, the Company, the Selling
Shareholders and their respective successors and legal representatives. Nothing
expressed or mentioned in this Agreement is intended or shall be
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construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Company, the Selling Shareholders and the several Underwriters and for the
benefit of no other person except that (i) the representations and warranties of
the Company and the Selling Shareholders contained in this Agreement shall also
be for the benefit of any person or persons who control any Underwriter within
the meaning of Section 15 of the Securities Act, and (ii) the indemnities by the
Underwriters shall also be for the benefit of the directors of the Company,
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Securities Act. No purchaser of Shares from any Underwriter will be deemed a
successor because of such purchase. The validity and interpretation of this
Agreement shall be governed by the laws of the State of Tennessee. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument. You hereby represent and warrant to the Company that you have
authority to act hereunder on behalf of the several Underwriters, and any action
hereunder taken by you will be binding upon all the Underwriters.
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If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between the Company, the Selling Shareholders and each of the several
Underwriters.
Very truly yours,
PHOENIX INTERNATIONAL LTD., INC.
By:
-------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
SELLING SHAREHOLDERS
By:
-------------------------------------
Attorney-in-Fact
Confirmed and accepted as of the
date first above written.
X. X. XXXXXXXX & CO.
WHEAT, FIRST SECURITIES, INC.
ADVEST, INC.
For themselves and as Representatives
of the Several Underwriters
By: X. X. Xxxxxxxx & Co.
By:
--------------------------------------
(Authorized Representative)
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SCHEDULE I
UNDERWRITERS
Number of Option
Number of Shares to be Purchased
Firm Shares If Maximum
Underwriter to be Purchased Option Exercised
----------- --------------- ----------------
X. X. Xxxxxxxx & Co.
Wheat, First Securities, Inc.
Advest, Inc.
TOTAL 1,520,000 228,000
========= =======
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SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
FIRM SHARES
Number of Firm Shares
Selling Shareholder to be Sold
------------------- ---------------------
Xxxxxx Xxxxxxxxxx 50,000
The Yusefzadeh Family Limited Partnership 42,500
Xxxxx Xxxxxxxx 16,262
Xxxxxxx X. Xxxx 5,000
Xxxxxx and Xxxxx Xxxxxxxxxx Charitable 100,738
Remainder Trust
O. Xxx Xxxxxx 5,000
First Citizens National Bank Charitable 15,000
Foundation
Xxxxxxx Xxxxxx 10,000
Iowa Savings Bank Charitable Foundation 5,000
E&C's Charities 12,500
Kanabec Credit Corporation 4,000
-------
TOTAL 266,000
=======
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