2,500,000 Shares(1)
WORKFLOW MANAGEMENT, INC.
Common Stock
UNDERWRITING AGREEMENT
June __, 1998
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXX XXXXXXX XXXX XXXXXX
XXXXX BROTHERS & CO., LTD.
as Representatives of the several Underwriters
(the "Representatives")
c/o BancAmerica Xxxxxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Workflow Management, Inc., a Delaware corporation (the "Company"),
addresses you as the Representatives of each of the persons, firms and
corporations listed in Schedule A hereto (hereinafter collectively called the
"Underwriters") and hereby confirms its respective agreements with the
several Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell
2,500,000 shares of its authorized and unissued Common Stock, par value $0.001
per share, to the several Underwriters. The 2,500,000 shares of the Company's
Common Stock, par value $0.001 per share, to be sold by the Company are
hereinafter collectively called the "Firm Shares". The Company also proposes to
grant to the Underwriters an option to purchase up to 375,000 additional
---------------
(1) Plus an option to purchase up to 375,000 additional shares from the Company
to cover over-allotments, if any.
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shares of the Company's Common Stock, par value $0.001 per share,
respectively, as provided in Section 7 hereof. The up to 375,000 additional
shares of the Company's Common Stock, par value $0.001 per share, to be sold
by the Company if the Underwriters exercise such option pursuant to Section 7
are hereinafter collectively called the "Option Shares". As used in this
Agreement, the term "Shares" shall include the Firm Shares and the Option
Shares. All shares of the Company's Common Stock, par value $0.001 per share,
to be outstanding after giving effect to the sales contemplated hereby,
including the Shares, are hereinafter referred to as "Common Stock".
2. Representations, Warranties and Agreements of the
Company.
The Company represents and warrants to and agrees with each of
the Underwriters that:
(a) A registration statement on Form S-1 (File No.
333-47505) with respect to the Shares, including a prospectus subject to
completion, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
applicable rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the Act and has
been filed with the Commission; such amendments to such registration
statement, such amended prospectuses subject to completion and such
abbreviated registration statements pursuant to Rule 462(b) of the Rules and
Regulations as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file
such additional amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration
statements as may hereafter be required. Copies of such registration
statement and amendments, of each related prospectus subject to completion
(the "Preliminary Prospectuses") and of any abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations have been
delivered to you.
If the registration statement relating to the Shares has
been declared effective under the Act by the Commission, the Company will
prepare and promptly file with the Commission the information omitted from
the registration statement pursuant to
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Rule 43OA(a) or, if BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several
Underwriters, shall agree to the utilization of Rule 434 of the Rules and
Regulations, the information required to be included in any term sheet filed
pursuant to Rule 434(b) or (c), as applicable, of the Rules and Regulations
pursuant to subparagraph (1), (4) or (7) of Rule 424(b) of the Rules and
Regulations or as part of a post-effective amendment to the registration
statement (including a final form of prospectus). If the registration
statement relating to the Shares has not been declared effective under the
Act by the Commission, the Company will prepare and promptly file an
amendment to the registration statement, including a final form of
prospectus, or, if BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several
Underwriters, shall agree to the utilization of Rule 434 of the Rules and
Regulations, the information required to be included in any term sheet filed
pursuant to Rule 434(b) or (c), as applicable, of the Rules and Regulations.
The term "Registration Statement" as used in this Agreement shall mean such
registration statement, including financial statements, schedules and
exhibits, in the form in which it became or becomes, as the case may be,
effective (including, if the Company omitted information from the
registration statement pursuant to Rule 43OA(a) or files a term sheet
pursuant to Rule 434 of the Rules and Regulations, the information deemed to
be a part of the registration statement at the time it became effective
pursuant to Rule 43OA(b) or Rule 434(d) of the Rules and Regulations) and, in
the event of any amendment thereto or the filing of any abbreviated
registration statement pursuant to Rule 462(b) of the Rules and Regulations
relating thereto after the effective date of such registration statement,
shall also mean (from and after the effectiveness of such amendment or the
filing of such abbreviated registration statement) such registration
statement as so amended, together with any such abbreviated registration
statement. The term "Prospectus" as used in this Agreement shall mean the
prospectus relating to the Shares as included in such Registration Statement
at the time it becomes effective (including, if the Company omitted
information from the Registration Statement pursuant to Rule 43OA(a) of the
Rules and Regulations, the information deemed to be a part of the
Registration Statement at the time it became effective pursuant to Rule
43OA(b) of the Rules and Regulations); provided, however, that if in reliance
on Rule 434 of the Rules and Regulations and with the consent of BancAmerica
Xxxxxxxxx Xxxxxxxx, on behalf of the several Underwriters, the Company shall
have provided to the
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Underwriters a term sheet pursuant to Rule 434(b) or (c), as applicable,
prior to the time that a confirmation is sent or given for purposes of
Section 2(10)(a) of the Act, the term "Prospectus" shall mean the "prospectus
subject to completion" (as defined in Rule 434(g) of the Rules and
Regulations) last provided to the Underwriters by the Company and circulated
by the Underwriters to all prospective purchasers of the Shares (including
the information deemed to be a part of the Registration Statement at the time
it became effective pursuant to Rule 434(d) of the Rules and Regulations).
Notwithstanding the foregoing, if any revised prospectus shall be provided to
the Underwriters by the Company for use in connection with the offering of
the Shares that differs from the prospectus referred to in the immediately
preceding sentence (whether or not such revised prospectus is required to be
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to the Underwriters for such
use. If in reliance on Rule 434 of the Rules and Regulations and with the
consent of BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several
Underwriters, the Company shall have provided to the Underwriters a term
sheet pursuant to Rule 434(b) or (c), as applicable, prior to the time that a
confirmation is sent or given for purposes of Section 2(10)(a) of the Act,
the Prospectus and the term sheet, together, will not be materially different
from the prospectus in the Registration Statement.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or, to the Knowledge of the
Company, instituted proceedings for that purpose, and each such Preliminary
Prospectus has conformed in all material respects to the requirements of the
Act and the Rules and Regulations and, as of its date, has not included any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and at the time the Registration
Statement became or becomes, as the case may be, effective and at all times
subsequent thereto up to and on the Closing Date (as hereinafter defined) and
on any later date on which Option Shares are to be purchased, (i) the
Registration Statement and the Prospectus, and any amendments or supplements
thereto, contained and will contain all material information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the
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requirements of the Act and the Rules and Regulations, (ii) the Registration
Statement, and any amendments or supplements thereto, did not and will not
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) the Prospectus, and any amendments or
supplements thereto, did not and will not include any 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 under which they were
made, not misleading; provided, however, that none of the representations and
warranties contained in this subparagraph (b) shall apply to information
contained in or omitted from the Registration Statement or the Prospectus, or
any amendments or supplements thereto, in reliance upon, and in conformity
with, written information relating to any Underwriter furnished to the
Company by or on behalf of such Underwriter specifically for use in the
preparation thereof.
(c) Each of the Company and its subsidiaries that have
been incorporated has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, and each subsidiary organized as a limited liability company
has been duly organized and is validly existing as a limited liability
company and is in good standing under the laws of the jurisdiction of its
organization with full power and authority (corporate or other) to own, lease
and operate its properties and conduct its business as described in the
Prospectus; the Company owns all of the outstanding capital stock of its
subsidiaries free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest, except as may be pledged as
security for the $150.0 million credit facility from Bankers Trust Company
(the "BT Credit Facility") or as otherwise disclosed in the Prospectus; each
of the Company and its subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified or
be in good standing would not have a material adverse effect on the condition
(financial or otherwise), earnings, operations or business of the Company and
its subsidiaries considered as one enterprise (a "Material Adverse Effect");
no proceeding is pending or to the Knowledge of the Company has been
instituted in any such jurisdiction, revoking, limiting or
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curtailing, or seeking to revoke, limit or curtail, such power and authority
or qualification; each of the Company and its subsidiaries is in possession
of and operating in compliance with all authorizations, licenses,
certificates, consents, orders and permits from state, federal and other
regulatory authorities which are material to the conduct of its business or
where failure to possess or operate in compliance therewith would not have a
Material Adverse Effect, all of which are valid and in full force and effect;
neither the Company nor any of its subsidiaries is in violation of its
respective charter or bylaws in the case of a corporation or certificate of
organization or operating agreement in the case of a limited liability
company, or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material bond,
debenture, note or other evidence of indebtedness, or in any material lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of its subsidiaries or their
respective properties may be bound, except such as would not have a Material
Adverse Effect; and neither the Company nor any of its subsidiaries is in
material violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective properties of which it has knowledge,
except as contemplated by the Prospectus or where any such violation or
default would not have a Material Adverse Effect. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than SFI, Hano Document Printers, Inc., United Envelope Co., Inc., Xxx
Envelope Co., Inc., Huxley Envelope Corp., Pocono Envelope Corp., Data
Business Forms Limited, and Astrid Offset Corp., SFI of Delaware, LLC, United
Envelope, LLC and 3303471 Canada Limited, and all references in this
Agreement to "subsidiaries" refer to the foregoing entities.
(d) The Company has full corporate right, power and
authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of
the Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law, including federal
or state securities
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laws, or the public policy underlying such laws, and except as the
enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; the
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a material breach or violation of any of the
terms and provisions of, or constitute a default under, (i) any material
bond, debenture, note or other evidence of indebtedness, or under any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of its subsidiaries or
their respective properties may be bound, (ii) the charter or bylaws of the
Company or any of its subsidiaries in the case of a corporation or the
certificate of organization or operating agreement in the case of a limited
liability company or (iii) any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or governmental
agency or body, domestic or foreign, having jurisdiction over the Company or
any of its subsidiaries or over their respective properties, except as
contemplated by the Prospectus or where any such breach or violation would
not have a Material Adverse Effect. No consent, approval, authorization or
order of or qualification with any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or over their respective properties is required for the
execution and delivery of this Agreement and the consummation by the Company
or any of its subsidiaries of the transactions herein contemplated, except
such as may be required under the Act, the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), applicable Candadian securities laws or
state or other securities or Blue Sky laws or by the National Association of
Securities Dealers, Inc. (the "NASD"), all of which requirements have been
satisfied in all material respects.
(e) There is not any pending or, to the Company's
knowledge, threatened action, suit, claim or proceeding against the Company,
any of its subsidiaries or any of their respective properties, assets or
rights or, to the Company's knowledge, any of their respective officers or
directors before any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over
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their respective officers or properties or otherwise which (i) if adversely
determined would have a Material Adverse Effect, (ii) if adversely determined
would reasonably prevent consummation of the transactions contemplated hereby
or (iii) is required to be disclosed in the Registration Statement or the
Prospectus and is not so disclosed; and there are no agreements, contracts,
leases or documents of the Company or any of its subsidiaries of a character
required to be described or referred to in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement by the
Act or the Rules and Regulations which have not been accurately described in
all material respects in the Registration Statement or the Prospectus or
filed as exhibits to the Registration Statement.
(f) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities (other than
such preemptive rights or other rights to subscribe for or purchase
securities as were fully complied with or expressly waived or with respect to
the violation of which the right to make a claim is barred by the applicable
statute of limitations), and the authorized and outstanding capital stock of
the Company conforms in all material respects as is set forth in the
Prospectus under the caption "Capitalization" and conforms in all material
respects to the statements relating thereto contained in the Registration
Statement and the Prospectus (and such statements correctly state in all
material respects the substance of the instruments defining the
capitalization of the Company); the Firm Shares and the Option Shares to be
purchased from the Company hereunder have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company against payment therefor in accordance with the
terms of this Agreement, will be duly and validly issued and fully paid and
nonassessable, and will be sold free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest; and no preemptive right,
co-sale right, registration right, right of first refusal or other similar
right of stockholders exists with respect to any of the Firm Shares or the
Option Shares to be purchased from the Company hereunder or the issuance and
sale thereof other than those that have been expressly waived prior to the
date hereof and those that will
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automatically expire upon and will not apply to the consummation of the
transactions contemplated on the Closing Date. No further approval or
authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale or transfer of the Shares except
as may be required under the Act, the Exchange Act or state or other
securities or Blue Sky laws or the NASD. All issued and outstanding shares of
capital stock of each subsidiary of the Company which are owned by the
Company have been duly authorized and validly issued and are fully paid and
nonassessable, and were not issued in violation of or subject to any
preemptive right, or other rights to subscribe for or purchase shares (other
than such preemptive rights or other rights to subscribe for or purchase
securities as were fully complied with or expressly waived or with respect to
the violation of which the right to make a claim is barred by the applicable
statute of limitations), and are owned by the Company free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest,
except as security for the BT Credit Facility or as otherwise disclosed in
the Prospectus. Except as disclosed in the Prospectus and the financial
statements of the Company, and the related notes thereto, included in the
Prospectus, neither the Company nor any subsidiary has outstanding any
options to purchase, or any preemptive rights or other rights to subscribe
for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or any
such options, rights, convertible securities or obligations. The description
of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(g) Each of the accounting firms that has examined certain
of the financial statements that are filed with the Commission as a part of
the Registration Statement and are included in the Prospectus, are to the
Company's knowledge, independent accountants within the meaning of the Act
and the Rules and Regulations; the financial statements (including the
related notes) included in the Registration Statement and the Prospectus (and
any amendments or supplements thereto) present fairly, in all material
respects, the financial position, the results of operations and cash flows of
the applicable company at the dates and for the
9
periods indicated in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated except as may
otherwise be stated therein. The interim financial statements set forth in
the Registration Statement and the Prospectus (and any amendments and
supplements thereto) have been prepared, to the extent such information
relates to the Company, on a basis consistent with the audited financial
statements and reflect all adjustments that are necessary to a fair statement
of the results for the interim periods presented. All pro forma financial
information included in the Prospectus has been prepared, in all material
respects, in accordance with the Commission's rules and guidelines with
respect to pro forma financial information. No financial statements or
schedules, other than the financial statements or schedules that are included
in the Registration Statement, are required to be included in the
Registration Statement.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and
except as described in the Prospectus, there has not been (i) any material
adverse change in the condition (financial or otherwise), earnings,
operations or business of the Company and its subsidiaries considered as one
enterprise, (ii) any transaction that is material to the Company and its
subsidiaries considered as one enterprise, except transactions entered in the
ordinary course of business, (iii) any obligation, direct or contingent, that
is material to the Company and its subsidiaries that would have a Material
Adverse Effect, except obligations incurred in the ordinary course of
business, (iv) any change in the capital stock or outstanding indebtedness of
the Company or any of its subsidiaries that would have a Material Adverse
Effect, (v) any dividend or distribution of any kind declared, paid or made
on the capital stock of the Company or any of its subsidiaries or (vi) any
loss or damage (whether or not insured) to the property of the Company or any
of its subsidiaries which has been sustained or will have been sustained that
would have a Material Adverse Effect.
(i) Except as set forth in the Registration Statement and
the Prospectus, (i) each of the Company and its subsidiaries has good and
marketable title to all properties and assets described in the Registration
Statement and the Prospectus as owned by it, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest, other than
such
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as would not have a Material Adverse Effect, (ii) the agreements to which the
Company or any of its subsidiaries is a party described in the Registration
Statement and the Prospectus are valid agreements, to the Company's
knowledge, enforceable by the Company and its subsidiaries (as applicable),
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles,
and, to the Company's knowledge, the other contracting party or parties
thereto are not in material breach or material default under any of such
agreements and (iii) each of the Company and its subsidiaries has, to the
Company's knowledge, valid and enforceable leases for all properties
described in the Registration Statement and the Prospectus as leased by it,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
Except as set forth in the Registration Statement and the Prospectus, the
Company owns or leases all such properties as are necessary to its operations
as now conducted or as proposed to be conducted.
(j) The Company and its subsidiaries have timely filed all
necessary federal, state and foreign income and franchise tax returns and
have paid all taxes shown thereon as due, and there is no tax deficiency that
has been or, to the Company's knowledge, might be asserted against the
Company or any of its subsidiaries that might have a Material Adverse Effect;
and all tax liabilities are adequately provided for on the books of the
Company and its subsidiaries.
(k) The Company and its subsidiaries maintain insurance
with insurers of recognized financial responsibility of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company or any of its subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect; neither the Company nor any such subsidiary, since the date of its
acquisition, has been refused any insurance coverage sought or applied for;
and neither the Company nor any
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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 cost that would not have a Material Adverse Effect.
(l) To the Company's knowledge, no labor disturbance by
the employees of the Company or any of its subsidiaries exists or is
imminent; and, except as provided in the Prospectus, to the Company's
knowledge, there is no existing or imminent labor disturbance by the
employees of any of its principal suppliers, subassemblers, value added
resellers, subcontractors, original equipment manufacturers, authorized
dealers or international distributors that would reasonably be expected to
result in a Material Adverse Effect.
(m) Except as described in the Prospectus or as would not
have a Material Adverse Effect, each of the Company and its subsidiaries owns
or possesses adequate rights to use all material patents, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names
and copyrights described or referred to in the Prospectus as owned or used by
it or which are necessary to conduct its businesses as described in the
Registration Statement and the Prospectus; the expiration of any patents,
patent rights, trademarks, service marks, or copyrights would not have a
Material Adverse Effect; neither the Company nor any of its subsidiaries has
received any notice of, or the Company has any knowledge of, any infringement
of or conflict with asserted rights of the Company or any of its subsidiaries
by others with respect to any patent, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names or copyrights; and
neither the Company nor any of its subsidiaries has received any notice of,
or the Company has any knowledge of, any infringement of or conflict with
valid rights of others with respect to any patent, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names or copyrights
which, singly or in the aggregate, would or could reasonably be expected to
have a Material Adverse Effect.
(n) The Common Stock has been approved for quotation on
the Nasdaq National Market, subject to official notice of issuance.
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(o) The Company has been advised concerning the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and has in the past conducted, and intends in the
future, to conduct its affairs in such a manner as to ensure that it will not
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and regulations.
(p) The Company has not distributed and will not
distribute prior to the later of (i) the Closing Date, or any date on which
Option Shares are to be purchased, as the case may be, and (ii) the
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
Preliminary Prospectuses, the Prospectus, the Registration Statement and
other materials, if any, permitted by the Act.
(q) Neither the Company nor any of its subsidiaries has
since the date of its acquisition, or to the Company's Knowledge, has at any
time during the last five (5) years (i) made any unlawful contribution to any
candidate for foreign office or failed to disclose fully any contribution in
violation of law or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public
or quasi-public duties, other than payments required or permitted by the laws
of the United States or any jurisdiction thereof or by the laws of Canada or
any province or jurisdiction thereof.
(r) The Company has not taken and will not take, directly
or indirectly, any action resulting in a violation of Rule 102 of Regulation
M under the Exchange Act or designed to, or that might reasonably be expected
to, cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares.
(s) Each officer and director of the Company, and each of
certain other beneficial owners of Common Stock named in Schedule B hereto
have agreed in writing that such person will not, for a period of 180 days
from the date that the Registration Statement is declared effective by the
Commission (the "Lock-up Period"), offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
13
(collectively, a "Disposition") any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, the
"Securities") now owned or hereafter acquired directly by such person or with
respect to which such person has or hereafter acquires the power of
disposition, other than (i) as a bona fide gift or gifts, provided the donee
or donees thereof agree in writing to be bound by this restriction, (ii) the
exercise of stock options or (iii) with the prior written consent of
BancAmerica Xxxxxxxxx Xxxxxxxx. The persons listed on Schedule B hereto agree
that the foregoing restriction precludes the holder of the Securities from
engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a Disposition of Securities
during the Lock-up Period, even if such Securities would be disposed of by
someone other than such holder. Such prohibited hedging or other transactions
would include, without limitation, any short sale (whether or not against the
box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from
Securities. Furthermore, such person has also agreed and consented to the
entry of stop transfer instructions with the Company's transfer agent against
the transfer of the Securities held by such person except in compliance with
this restriction. The Company has provided to counsel for the Underwriters
true, accurate and complete copies of all of the agreements pursuant to which
certain of its officers and directors and certain of its stockholders have
agreed to such or similar restrictions (the "Lock-up Agreements") presently
in effect or effected hereby. The Company hereby represents and warrants that
it will not release any of its officers or directors or other stockholders
from any Lock-up Agreements currently existing or hereafter effected without
the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx.
(t) Except as set forth in the Registration Statement and
the Prospectus, (i) the Company and its subsidiaries are in compliance in
material respects with all material rules, laws and regulations relating to
the use, treatment, storage and disposal of toxic substances and protection
of health or the environment ("Environmental Laws") which are applicable to
their businesses, except where such noncompliance would not have a
14
Material Adverse Effect, (ii) neither the Company nor any of its subsidiaries
has received notice from any governmental authority or third party of an
asserted claim under Environmental Laws, which claim would have a Material
Adverse Effect or is required to be disclosed in the Registration Statement
and the Prospectus, (iii)to the Knowledge of the Company, neither the Company
nor any of its subsidiaries will be required to make during the foreseeable
future material capital expenditures to comply with Environmental Laws as
currently in effect and (iv) no property which is owned, leased or occupied
by the Company or any of its subsidiaries has been designated as a Superfund
site pursuant to the Comprehensive Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. section 9601, et seq.), or otherwise designated
as a contaminated site under applicable state or local law.
(u) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) material transactions are executed in accordance with
management's general or specific authorizations, (ii) material 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 and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(v) There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of the members of the families of
any of them required to be disclosed in the Registration Statement and
Prospectus, except as disclosed in the Registration Statement and the
Prospectus.
(w) The Company has entered into the Distribution
Agreement, the Tax Allocation Agreement, the Employee Benefits Agreement, and
the Tax Indemnification Agreement (all as defined in the Registration
Statement and the Prospectus), and such agreements constitute valid and
binding agreements of the Company, enforceable in accordance with their
terms, except as rights to indemnification
15
thereunder may be limited by applicable law and except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles. The descriptions of such
agreements contained in the Prospectus accurately summarize the material
terms of such agreements.
3. Purchase Sale and Delivery of Shares. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters,
and each of the Underwriters agrees, acting severally and not jointly, to
purchase from the Company at a purchase price of $______ per share, the Firm
Shares. The obligation of each of the Underwriters to the Company shall be to
purchase from the Company that number of Firm Shares which is set forth
opposite the name of such Underwriter in Schedule A hereto (subject to
adjustment as provided in Section 10).
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 shall be made
against payment of the purchase price therefor by the several Underwriters by
wire transfer of immediately available funds to the Company. Such delivery
and payment shall take place at the Washington, D.C. office of Xxxxxx, Xxxxxx
& Xxxxxxxxx (or at such other place as may be agreed upon among the
Representatives, the Company and the Attorneys), at 9:00 A.M. (EDST time) on
the fourth (4th) full business day following the date of this Agreement or at
such other time and date not later than seven (7) full business days
following the first day that Shares are traded as the Representatives, the
Company and the Attorneys may determine (or at such time and date to which
payment and delivery shall have been postponed pursuant to Section 10
hereof), such time and date of payment and delivery being herein called the
"Closing Date"; provided, however, that if the Company has not made available
to the Representatives copies of the Prospectus within the time provided in
Section 4(d) hereof, the Representatives may, in their sole discretion,
postpone the Closing Date until no later than two (2) full business days
following delivery of copies of the Prospectus to the Representatives. The
certificates for the Firm Shares to be so delivered will be made available to
you at such office or such other location, including, without limitation, in
New York City, as you may reasonably request for checking at least
16
one (1) full business day prior to the Closing Date and will be in such names
and denominations as you may request, such request to be made at least two
(2) full business days prior to the Closing Date. If the Representatives so
elect, delivery of the Firm Shares may be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by the
Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
to) make payment of the purchase price on behalf of any Underwriter or
Underwriters whose check or checks shall not have been received by you prior
to the Closing Date for the Firm Shares to be purchased by such Underwriter
or Underwriters. Any such payment by you shall not relieve any such
Underwriter or Underwriters of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the several
Underwriters intend to make an initial public offering (as such term is
described in Section 11 hereof) of the Firm Shares at an initial public
offering price of $_____ per share. After the initial public offering, the
several Underwriters may, in their discretion, vary the public offering price.
The information set forth in the last paragraph on the front cover
page, the two bold legends on the bottom of the inside front cover and under
the caption "Underwriting" (insofar as such information relates to the
Underwriters) in any Preliminary Prospectus and in the Prospectus constitutes
the only information furnished by the Underwriters to the Company for
inclusion in any Preliminary Prospectus, the Prospectus or the Registration
Statement, and you, on behalf of the respective Underwriters, represent and
warrant to the Company that the statements made therein do not include any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
4. Further Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the
time and date that this Agreement is executed and
17
delivered by the parties hereto, to become effective as promptly as possible;
the Company will use its best efforts to cause any abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations as may be
required subsequent to the date the Registration Statement is declared
effective to become effective as promptly as possible; the Company will
notify you, promptly after it shall receive notice thereof, of the time when
the Registration Statement, any subsequent amendment to the Registration
Statement or any abbreviated registration statement has become effective or
any supplement to the Prospectus has been filed; if the Company omitted
information from the Registration Statement at the time it was originally
declared effective in reliance upon Rule 43OA(a) of the Rules and
Regulations, the Company will provide evidence satisfactory to you that the
Prospectus contains such information and has been filed, within the time
period prescribed, with the Commission pursuant to subparagraph (1) or (4) of
Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to such Registration Statement as originally declared effective
which is declared effective by the Commission; if the Company files a term
sheet pursuant to Rule 434 of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus and the term sheet
meeting the requirements of Rule 434(b) or (c), as applicable, of the Rules
and Regulations, have been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (7) of Rule 424(b) of the Rules and
Regulations; if for any reason the filing of the final form of the Prospectus
is required under Rule 424(b)(3) of the Rules and Regulations, it will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed; it will notify you promptly of any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus
or for additional information; promptly upon your request, it will prepare
and file with the Commission any amendments or supplements to the
Registration Statement or the Prospectus which, in the reasonable opinion of
Winston & Xxxxxx, counsel for the several Underwriters ("Underwriters'
Counsel"), may be necessary or advisable in connection with the distribution
of the Shares by the Underwriters; it will promptly prepare and file with the
Commission, and promptly notify you of the filing of, any amendments or
supplements to the Registration Statement or the Prospectus which may be
necessary to correct any statements or omissions, if, at any time when a
prospectus relating to the Shares
18
is required to be delivered under the Act, any event shall have occurred as a
result of which the Prospectus or any other Prospectus relating to the Shares
as then in effect would include any 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 under which they were made, not misleading; in
case any Underwriter is required to deliver a prospectus nine (9) months or
more after the effective date of the Registration Statement in connection
with the sale of the Shares, it will prepare promptly upon request, but at
the expense of such Underwriter, such amendment or amendments to the
Registration Statement and such prospectus or prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act; and it will file no amendment or supplement to the Registration
Statement or the Prospectus which shall not previously have been submitted to
you a reasonable time prior to the proposed filing thereof or to which you
shall reasonably object in writing, subject, however, to compliance with the
Act and the Rules and Regulations, the Exchange Act and the rules and
regulations of the Commission thereunder and the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or of
the initiation or threat of any proceeding for that purpose; and it will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order
should be issued.
(c) The Company will use its best efforts to qualify the Shares for
offering and sale under the securities laws of such jurisdictions as you may
reasonably designate and to continue such qualifications in effect for so
long as may be required for purposes of the distribution of the Shares,
except that the Company shall not be required in connection therewith or as a
condition thereof to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction in which it is not
otherwise required to be so qualified or to so execute a general consent to
service of process or to take any action which would subject it to taxation
in such state or jurisdiction solely on account of registration of the
Shares. In each jurisdiction in which the Shares shall have been qualified as
19
above provided, the Company will make and file such statements and reports in
each year as are or may be required by the laws of such jurisdiction.
(d) The Company will furnish to you, as soon as available,
and, in the case of the Prospectus and any term sheet or abbreviated term
sheet under Rule 434, in no event later than the first (1st) full business
day following the first (1st) day that Shares are traded, copies of the
Registration Statement (three of which will be signed and which will include
all exhibits), each Preliminary Prospectus, the Prospectus and any amendments
or supplements to such documents, including any prospectus prepared to permit
compliance with Section 10(a)(3) of the Act, all in such quantities as you
may from time to time reasonably request. Notwithstanding the foregoing, if
BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several Underwriters, shall
agree to the utilization of Rule 434 of the Rules and Regulations, the
Company shall provide to you copies of a Preliminary Prospectus updated in
all respects through the date specified by you in such quantities as you may
from time to time reasonably request.
(e) The Company will make generally available to its
securityholders as soon as practicable, but in any event not later than the
45th day following the end of the fiscal quarter first occurring after the
first anniversary of the effective date of the Registration Statement, an
earnings statement (which will be in reasonable detail but need not be
audited) complying with the provisions of Section 11(a) of the Act and
covering a twelve (12) month period beginning after the effective date of the
Registration Statement.
(f) During a period of five (5) years after the date
hereof, the Company will furnish to its stockholders as soon as practicable
after the end of each respective period, annual reports (including financial
statements audited by independent certified public accountants) and such
unaudited quarterly reports of operations for each of the first three
quarters of the fiscal year as may be required by applicable law or the rules
of NASDAQ/NMS to be sent to stockholders, and will furnish to you and the
other several Underwriters hereunder, upon request (i) concurrently with
furnishing such reports to its stockholders, statements of operations of the
Company for each of the first three (3) quarters in the form furnished to the
Company's stockholders,
20
(ii) concurrently with furnishing to its stockholders, a balance sheet of the
Company as of the end of such fiscal year, together with statements of
operations, stockholders' equity and cash flows of the Company for such
fiscal year, accompanied by a copy of the certificate or report thereon of
independent certified public accountants, (iii) as soon as they are
available, copies of all reports (financial or other) mailed to stockholders,
(iv) as soon as they are available, copies of all reports and financial
statements furnished to or filed with the Commission, any securities exchange
or the NASD, (v) every material press release and every material news item or
article in respect of the Company or its affairs which was generally released
to stockholders or prepared by the Company or any of its subsidiaries and
(vi) any additional material information of a public nature concerning the
Company or any of its subsidiaries or their businesses which you may
reasonably request. During such five (5) year period, if the Company shall
have active subsidiaries, the foregoing financial statements shall be on a
consolidated or combined basis to the extent that the accounts of the Company
and its subsidiaries are consolidated or combined and shall be accompanied by
similar financial statements for any significant subsidiary which is not so
consolidated or combined.
(g) The Company will apply the net proceeds from the sale
of the Shares being sold by it in the manner set forth under the caption "Use
of Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Stock.
(i) The Company will use its best efforts to comply with
all criteria to have its Common Stock listed on the NASDAQ National Market or
any other national securities exchange on which the Common Stock is then
listed.
(j) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on their respective parts to be performed
hereunder or to fulfill any condition of the Underwriters' obligations
hereunder, or if the Company shall terminate this Agreement pursuant to
Section 11(a) hereof, or if
21
the Underwriters shall terminate this Agreement pursuant to Section 11(b)(i),
the Company shall reimburse the several Underwriters for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of
Underwriters' Counsel) incurred by the Underwriters in investigating or
preparing to market or marketing the Shares.
(k) If at any time during the 90-day period after the
Registration Statement becomes 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 of the Common Stock has been or is likely to be
materially adversely affected (regardless of whether such rumor, publication
or event necessitates a supplement to or amendment of the Prospectus), the
Company will, after written notice from you advising the Company to the
effect set forth above, forthwith 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) Except as disclosed in the Prospectus and the
financial statements of the Company, and the related notes thereto, included
in the Prospectus, during the Lock-up Period, the Company will not, without
the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx, effect the
Disposition of, directly or indirectly, any Securities other than (i) the
sale of Firm Shares and Option Shares,(ii) the Company's granting of options
with respect to, and the issuance and registration of shares of Common Stock
by the Company in an amount equal to 30% of the issued and outstanding common
stock of the Company following the Workflow Distribution (as hereafter
defined), without regard to this Offering in connection with, the Stock
Option Plan, (iii) the distribution of its Securities to stockholders of U.S.
Office Products Company pursuant to the Registration Statement on Form S-1
(File No. 333-46535) (the "Workflow Distribution"), (iv) the issuance of
securities in connection with acquisitions.
(m) The Company will file Form SR in conformity with the
requirements of the Act and the Rules and Regulations.
22
5. Expenses.
(a) The Company agrees with each of the Underwriters that:
(i) The Company will pay and bear all costs and expenses
in connection with the preparation, printing and filing of the Registration
Statement (including financial statements, schedules and exhibits),
Preliminary Prospectuses and the Prospectus, and any amendments or
supplements thereto; the printing of this Agreement, the Agreement Among
Underwriters, the Selected Dealers Agreement, the Preliminary Blue Sky Survey
and any Supplemental Blue Sky Survey, the Underwriters' Questionnaire and
Power of Attorney, other than the fees and expenses of Underwriters counsel
and any instruments related to any of the foregoing; the issuance and
delivery of the Shares hereunder to the several Underwriters, including
transfer taxes, if any, the cost of all certificates representing the Shares
and transfer agent's and registrar's fees; the fees and disbursements of
counsel for the Company; all fees and other charges of the Company's
independent certified public accountants; the cost of furnishing to the
several Underwriters copies of the Registration Statement (including
appropriate exhibits), Preliminary Prospectus and the Prospectus, and any
amendments or supplements to any of the foregoing; NASD filing fees and the
cost of qualifying the Shares under the laws of such jurisdictions as you may
designate (including filing fees and fees and disbursements of Underwriters'
Counsel in connection with such NASD filings and Blue Sky qualifications);
and all other expenses directly incurred by the Company in connection with
the performance of its obligations hereunder;
(ii) In addition to its other obligations under Section
8(a) hereof, the Company agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
described in Section 8(a) hereof, it will reimburse the Underwriters on a
monthly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Company's obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the
23
extent that any such interim reimbursement payment is so held to have been
improper, the Underwriters shall promptly return such payment to the Company
together with interest, compounded daily, determined on the basis of the
prime rate (or other commercial lending rate for borrowers of the highest
credit standing) listed from time to time in The Wall Street Journal which
represents the base rate on corporate loans posted by a substantial majority
of the nation's 30 largest banks (the "Prime Rate"). Any such interim
reimbursement payments which are not made to the Underwriters within 30 days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request; and
(b) In addition to their other obligations under Section
8(b) hereof, the Underwriters, acting severally and not jointly, agree that,
as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding described in Section 8(b) hereof,
they will reimburse the Company on a monthly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the Underwriters' obligation to reimburse the Company
for such expenses and the possibility that such payments might later be held
to have been improper by a court of competent jurisdiction. To the extent
that any such interim reimbursement payment is so held to have been improper,
the Company shall promptly return such payment to the Underwriters together
with interest, compounded daily, determined on the basis of the Prime Rate.
Any such interim reimbursement payments which are not made to the Company
within 30 days of a request for reimbursement shall bear interest at the
Prime Rate from the date of such request.
(c) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections
5(a)(ii) and 5(b) hereof, including the amounts of any requested
reimbursement payments, the method of determining such amounts and the basis
on which such amounts shall be apportioned among the reimbursing parties,
shall be settled by arbitration conducted under the provisions of the
Constitution and Rules of the Board of Governors of the New York Stock
Exchange, Inc. or pursuant to the Code of Arbitration Procedure of the NASD.
Any such arbitration must be commenced by service of a written
24
demand for arbitration or a written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the operation of
the interim reimbursement provisions contained in Sections 5(a)(ii) and 5(b)
and will not resolve the ultimate propriety or enforceability of the
obligation to indemnify for expenses which is created by the provisions of
Sections 8(a) and 8(b) hereof or the obligation to contribute to expenses
which is created by the provisions of Section 8(d) hereof.
6. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein
shall be subject to the accuracy, as of the date hereof and the Closing Date
and any later date on which Option Shares are to be purchased, as the case
may be, of the representations and warranties of the Company herein, to the
performance by the Company of their respective obligations hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective
not later than 2:00 P.M., San Francisco time, on the date following the date
of this Agreement, or such later date as shall be consented to in writing by
you; and no stop order suspending the effectiveness thereof shall have been
issued and no proceedings for that purpose shall have been initiated or, to
the knowledge of the Company or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of Underwriters'
Counsel.
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of the Registration Statement and
the Prospectus, and the registration, authorization, issue, sale and delivery
of the Shares, shall have been reasonably satisfactory to Underwriters'
Counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section 6.
25
(c) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, or any later date on which Option
Shares are to be purchased, as the case may be, there shall not have been any
change in the condition (financial or otherwise), earnings, operations or
business of the Company and its subsidiaries considered as one enterprise
from that set forth in the Registration Statement or the Prospectus, which,
in your reasonable judgment, is material and adverse and that makes it, in
your reasonable judgment, impracticable or inadvisable to proceed with the
public offering of the Shares as contemplated by the Prospectus.
(d) (i) You shall have received on the Closing Date and on
any later date on which Option Shares are to be purchased, as the case may
be, the following opinion of counsel for the Company as to the Company and
all United States subsidiaries, Xxxxxx, Xxxxxx & Xxxxxxxxx, and of Canadian
counsel as to opinions (A), (B), (C), (D), (E), (G), (O), (P), (Q), (R)
below, for all Canadian subsidiaries, each dated the Closing Date or such
later date on which Option Shares are to be purchased addressed to the
Underwriters and with reproduced copies or signed counterparts thereof for
each of the Underwriters, to the effect that:
(A) Each of the Company and its subsidiaries organized
as a corporation has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation;
(B) Each subsidiary organized as a limited liability
company has been duly organized and is in good standing under the
laws of its jurisdiction of organization;
(C) Each of the Company and its subsidiaries organized
as a corporation has the corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus;
(D) Each subsidiary organized as a limited liability
companion has the power and authority to own, lease and operate its
properties and to conduct its business as now conducted as described
in the Prospectus;
26
(E) Each of the Company and its subsidiaries is duly
qualified to do business as a foreign corporation and is in good
standing in each state specified on Schedule C hereto. To such
counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
the subsidiaries;
(F) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under the
caption "Capitalization" as of the dates stated therein, the issued
and outstanding shares of capital stock of the Company have been duly
and validly issued and are fully paid and nonassessable, and, to such
counsel's knowledge, will not have been issued in violation of or
subject to any preemptive right, co-sale right, registration right,
right of first refusal or other similar right (other than such
preemptive rights or other rights to subscribe for or purchase
securities as were fully complied with or expressly waived or with
respect to the violation of which the right to make a claim is barred
by the applicable statute of limitations);
(G) All issued and outstanding shares of capital stock
of each subsidiary of the Company organized as a corporation have been
duly authorized and validly issued and are fully paid and
nonassessable, and, to such counsel's knowledge, have not been issued
in violation of or subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar right
and are owned by the Company free and, except pursuant to the BT
Credit Facility or as described in the Prospectus clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest
(other than such preemptive rights or other rights to subscribe for or
purchase securities as were fully complied with or expressly waived or
with respect to the violation of which the right to make a claim is
barred by the applicable statute of limitations);
(H) The Firm Shares or the Option Shares, as the case
may be, to be issued by the Company pursuant to the terms of this
Agreement have been duly authorized and, upon issuance and delivery
against payment therefor in accordance with the terms hereof, will
be duly and validly issued and fully paid and nonassessable, and,
to such counsel's
27
Knowledge, will not have been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first
refusal or other similar right (other than such preemptive rights or
other rights to subscribe for or purchase securities as were fully
complied with or expressly waived or with respect to the violation of
which the right to make a claim is barred by the applicable statute of
limitations);
(I) The Company has the corporate power and authority
to enter this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder;
(J) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been
duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of the Company, enforceable in accordance with its
terms, except insofar as indemnification provisions may be limited by
applicable law or public policy, and except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally or
by general equitable principles;
(K) The Commission has advised the Company that the
Registration Statement has become effective under the Act and, to such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are currently pending or overtly
threatened under the Act;
(L) The information in the Prospectus under the
captions "Description of Capital Stock", "Risk Factors Potential
Liability for Taxes Related to the Distributions", "Risk
Factors - Possible Limitations on Issuances of Common Stock", and "The
Spin-Offs from U.S. Office Products", to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such counsel
and is a fair summary of such matters and conclusions in all material
respects; and the form of certificates evidencing the Common
28
Stock and filed as exhibits to the Registration Statement
comply with Delaware law;
(M) The descriptions in the Registration Statement and
the Prospectus of the charter and bylaws of the Company and of
statutes are accurate and fairly present the information required
to be presented by the Act and the applicable Rules and Regulations;
the descriptions of the Distribution Agreement, the Tax Allocation
Agreement, the Employee Benefits Agreement, and the Tax
Indemnification Agreement in the Registration Statement and the
Prospectus accurately summarize in all material respects the material
terms of such agreements;
(N) To such counsel's knowledge, there are no
agreements, contracts, leases or documents to which the Company
is a party of a character required to be described or referred to in
the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which are not described or
referred to therein or filed as required;
(O) The performance of this Agreement and the
consummation of the transactions herein contemplated (other than
performance of the Company's indemnification and contribution
obligations hereunder, concerning which no opinion need be expressed)
will not (a) result in any violation of the Company's charter or bylaws
or (b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a
default under, any material bond, debenture, note or other evidence of
indebtedness, or any material lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or
instrument known to such counsel to which the Company is a party or by
which its properties are bound, (c) any applicable statute, rule or
regulation known to such counsel or, (d) to such counsel's knowledge,
any order, writ or decree of any court, government or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or over any of their properties or operations; provided,
however, that no opinion need be rendered concerning state securities
laws, Canadian securities laws, Blue Sky laws or the rules and
regulations of NASD;
29
(P) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries
or over any of their properties or operations is necessary in
connection with the consummation by the Company of the transactions
herein contemplated, except such as have been obtained under the Act
or the Exchange Act or such as may be required under state or other
securities or Blue Sky laws or the NASD in connection with the purchase
and the distribution of the Shares by the Underwriters;
(Q) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company or
any of its subsidiaries of a character required to be disclosed in the
Registration Statement or the Prospectus by the Act or the Rules and
Regulations or by the Exchange Act or the applicable rules and
regulations of the Commission thereunder, other than those described
therein;
(R) To such counsel's knowledge, neither the Company
nor any of its subsidiaries is presently (a) in material violation of
its respective charter or bylaws in the case of corporations or
certificate of organization or operating agreement in the case of
limited liability companies or (b) in material breach of any
applicable statute, rule or regulation known to such counsel or, to
such counsel's knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or over any of their properties or operations,
except in the case of clause (b) for such breach which individually or
in the aggregate would not have a Material Adverse Effect;
(S) To such counsel's knowledge, except as described
in the Prospectus, no holders of shares of Common Stock or other
securities of the Company have registration rights with respect
to securities of the Company and, except as set forth in the
Registration Statement and the Prospectus, all holders of securities of
the Company having rights known to such counsel to registration of such
shares of Common Stock or other securities, because of the filing of
the Registration Statement by the Company have, with respect to the
offering
30
contemplated thereby, waived such rights or such rights have expired by
reason of lapse of time following notification of the Company's intent
to file the Registration Statement or have included securities in the
Registration Statement pursuant to the exercise of and in full
satisfaction of such rights; and
(T) For U.S. federal income tax purposes, the Workflow
Distribution (as defined in the Registration Statement and Prospectus)
will qualify as a tax-free spin-off under Section 355 of the Internal
Revenue Code (the "Code") and will be taxable under Section 355(e) of
the Code.
In addition to their opinions set forth above, Xxxxxx, Xxxxxx &
Xxxxxxxxx shall include in its opinion the following statements. Because the
primary purpose of its engagement was not to establish factual matters and
because of the wholly or partially nonlegal character of many determinations
involved in the preparation of the Registration Statement and the Prospectus,
it is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except to the extent expressly set
forth above) and makes no representation that it has independently checked,
investigated or verified the accuracy, completeness or fairness of such
statements (except as aforesaid). However, it met with and participated in
conferences with representatives of the Company, representatives of the
Underwriters, Underwriters' Counsel and representatives of the independent
accountants for the Company, during which the contents of the Registration
Statement and the Prospectus and related matters were discussed. Based on its
participation in the above-mentioned conferences, its review of the documents
described above, and relying as to materiality upon the opinions and
statements of officers of the Company, it advises the Underwriters that
nothing has come to its attention that causes it to believe that the
Registration Statement (other than the financial statements and notes thereto
and supporting schedules and other financial and statistical data derived
therefrom, set forth therein or omitted therefrom, as to which no advice is
given), at the time it was declared effective by the Commission, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (other than the financial
31
statements and notes thereto and supporting schedules and other financial and
statistical data derived therefrom, set forth therein or omitted therefrom,
as to which no advice is given), as of the date of the Prospectus, included
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States of America or the State of
Delaware upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, and of government
officials, in which case their opinion is to state that they are so relying
and that they have no knowledge of any material misstatement or inaccuracy in
any such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
(e) You shall have received on the Closing Date and on any
later date on which Option Shares are to be purchased, as the case may be, an
opinion of Winston & Xxxxxx, in form and substance satisfactory to you, with
respect to the sufficiency of all such corporate proceedings and other legal
matters relating to this Agreement and the transactions contemplated hereby
as you may reasonably require, and the Company shall have furnished to such
counsel such documents as they may have requested for the purpose of enabling
them to pass upon such matters.
(f) (i) You shall have received on the Closing Date and on
any later date on which Option Shares are to be purchased, as the case may
be, a letter from Price Waterhouse LLP addressed to the Company and the
Underwriters, dated the Closing Date or such later date on which Option
Shares are to be purchased, as the case may be, confirming that they are
independent certified public accountants with respect to the Company within
the meaning of the Act and the applicable published Rules and Regulations and
based upon the procedures described in such letter delivered to you
concurrently with the execution of this Agreement (hereinafter called the
"Original Letter"), but carried out to a date not more than five (5) business
days prior to the Closing Date or such later date on which Option Shares are
to be purchased, as the case may
32
be, (i) confirming, to the extent true, that the statements and conclusions
set forth in the Original Letter are accurate as of the Closing Date or such
later date on which Option Shares are to be purchased, as the case may be,
and (ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter which are necessary to reflect
any changes in the facts described in the Original Letter since the date of
such letter, or to reflect the availability of more recent financial
statements, data or information. The letter shall not disclose any change in
the condition (financial or otherwise), earnings, operations or business of
the Company and its subsidiaries considered as one enterprise from that set
forth in the Registration Statement or the Prospectus, which, in your
reasonable judgment, is material and adverse and that makes it, in your
reasonable judgment, impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Prospectus. The Original Letter
from Price Waterhouse LLP shall be addressed to or for the use of the
Underwriters in form and substance satisfactory to the Underwriters and shall
(i) represent, to the extent true, that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations, (ii) set forth their opinion with
respect to their examination of the consolidated balance sheet of the Company
as of April 30, 1996, and April 26, 1997 and the related consolidated
statements of income, stockholders' equity and cash flows for the fiscal year
ended December 31, 1995, the four months ended April 30, 1996, and the fiscal
year ended April 26, 1997, (iii) state that Price Waterhouse LLP has
performed the procedures set forth in Statement on Auditing Standards No. 71
("SAS 71") for a review of interim financial information and provide the
report of Price Waterhouse LLP described in SAS 71 on the financial
statements for the nine month period ended January 24, 1998 (the "Nine Month
Period Financial Statements"), (iv) state that in the course of such review,
nothing came to their attention that leads them to believe that any material
modifications need to be made to any of the Nine Month Period Financial
Statements in order for them to be in compliance with generally accepted
accounting principles consistently applied across the period presented and
(v) address other matters agreed upon by Price Waterhouse LLP and you.
(ii) You shall have received on the date hereof a letter
from each of the accounting firms that has examined
33
certain of the financial statements that are filed with the Commission as a
part of the Registration Statement and are included in the Prospectus
addressed to the Company and the Underwriters, dated the date hereof,
confirming that (i) they are independent certified public accountants with
respect to the applicable subsidiary of the Company within the meaning of the
Act and the applicable published Rules and Regulations and (ii) the financial
statements audited by such independent certified public accountants and
included in the Registration Statement and the Prospectus comply as to form
in all material respects with the applicable accounting requirements of the
Act and the applicable published Rules and Regulations.
(g) You shall have received on the Closing Date and on any
later date on which Option Shares are to be purchased, as the case may be, a
certificate of the Company, dated the Closing Date or such later date on
which Option Shares are to be purchased, as the case may be, signed by the
Chief Executive Officer and Chief Financial Officer of the Company, to the
effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company
in this Agreement are true and correct, as if made on and as of the
Closing Date or any later date on which Option Shares are to be
purchased, as the case may be, 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 or any later
date on which Option Shares are to be purchased, as the case may be;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and, to the Knowledge of the
Company, no proceedings for that purpose have been instituted or are
pending or threatened under the Act;
(iii) When the Registration Statement became effective
and at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Prospectus, and any
amendments or supplements thereto, contained all material information
required to be included therein by the Act and the Rules
34
and Regulations and in all material respects conformed to
the requirements of the Act and the Rules and
Regulations, the Registration Statement, and any
amendment or supplement thereto, did not and does not
include any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading,
the Prospectus, and any amendment or supplement thereto,
did not and does not include any 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 under which they were made, not misleading,
and, since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amended or supplemented Prospectus which has
not been so set forth; and
(iv) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus and except as described in the Prospectus, there has
not been (a) any material adverse change in the condition (financial
or otherwise), earnings, operations or business of the Company and its
subsidiaries considered as one enterprise, (b) any transaction that
is material to the Company and its subsidiaries considered as one
enterprise, except transactions entered in the ordinary course of
business, (c) any obligation, direct or contingent, that is material
to the Company and its subsidiaries that would have a Material
Adverse Effect, except obligations incurred in the ordinary course of
business, (d) any change in the capital stock or outstanding
indebtedness of the Company or any of its subsidiaries, (e) any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any of its subsidiaries or (f) any
loss or damage (whether or not insured) to the property of the
Company or any of its subsidiaries which has been sustained or will
have been sustained which has a Material Adverse Effect.
(h) The Company shall have obtained and delivered to you
an agreement from each officer and director of the Company, and each of other
certain beneficial owners of Securities named in
35
Schedule B hereto in writing prior to the date hereof that such person will
not, during the Lock-up Period, effect the Disposition of any Securities now
owned or hereafter acquired directly by such person or with respect to which
such person has or hereafter acquires the power of disposition, other than
(i) as a bona fide gift or gifts, provided the donee or donees thereof agree
in writing to be bound by this restriction, (ii) the exercise of stock
options or (iii) with the prior written consent of BancAmerica Xxxxxxxxx
Xxxxxxxx. The foregoing restriction shall have been expressly agreed to
preclude the holder of the Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result
in a Disposition of Securities during the Lock-up Period, even if such
Securities would be disposed of by someone other than the such holder. Such
prohibited hedging or other transactions would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale or
grant of any right (including, without limitation, any put or call option)
with respect to any Securities or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from Securities. Furthermore, such person will
have also agreed and consented to the entry of stop transfer instructions
with the Company's transfer agent against the transfer of the Securities held
by such person except in compliance with this restriction.
(i) You shall have received from U.S. Office Products
Company ("USOP") a certificate to the effect that the self-tender offer by
USOP to its shareholders has been completed and certifying the number of
shares of USOP common stock purchased pursuant to the tender offer and the
number of shares of USOP common stock issued and outstanding immediately
after the completion of the tender offer transaction.
(j) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request (including
certificates of officers of the Company) as to the accuracy of the
representations and warranties of the Company herein, as to the performance
by the Company of their respective obligations hereunder and as to the other
conditions concurrent and precedent to the obligations of the Underwriters
hereunder.
36
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably
satisfactory to Underwriters' Counsel. The Company will furnish you with such
number of conformed copies of such opinions, certificates, letters and
documents as you shall reasonably request.
7. Option Shares.
On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company hereby grants to the several Underwriters, for the purpose of
covering over-allotments in connection with the distribution and sale of the
Firm Shares only, a nontransferable option to purchase up to 375,000 Company
Option Shares at the purchase price per share for the Firm Shares set forth
in Section 3 hereof. Such option may be exercised by the Representatives on
behalf of the several Underwriters on one (1) or more occasions in whole or
in part during the period of 30 days after the date on which the Firm Shares
are initially offered to the public, by giving written notice to the Company.
The number of Option Shares to be purchased by each Underwriter upon the
exercise of such option shall be the same proportion of the total number of
Option Shares to be purchased by the several Underwriters pursuant to the
exercise of such option as the number of Firm Shares purchased by such
Underwriter (set forth in Schedule A hereto) bears to the total number of
Firm Shares purchased by the several Underwriters (set forth in Schedule A
hereto), adjusted by the Representatives in such manner as to avoid
fractional shares.
Delivery of definitive certificates for the Option Shares to be
purchased by the several Underwriters pursuant to the exercise of the option
granted by this Section 7 shall be made against payment of the purchase price
therefor by the several Underwriters by wire transfer of immediately
available funds to the Company with regard to the Option Shares. Such
delivery and payment shall take place at the Washington, D.C. office of
Xxxxxx, Xxxxxx & Xxxxxxxxx (or at such other place as may be agreed upon
among the Representatives and the Company) (i) on the Closing Date, if
written notice of the exercise of such option is received by the Company at
least two (2) full business days prior to the Closing Date or (ii) on a later
date which shall not be later than the third (3rd) full business day
following the date the Company
37
receives written notice of the exercise of such option, if such notice is
received by the Company less than two (2) full business days prior to the
Closing Date.
The certificates for the Option Shares to be so delivered will be
made available to you at such office or such other location, including,
without limitation, in New York City, as you may reasonably request for
checking at least one (1) full business day prior to the date of payment and
delivery and will be in such names and denominations as you may request, such
request to be made at least two (2) full business days prior to such date of
payment and delivery. If the Representatives so elect, delivery of the Option
Shares may be made by credit through full fast transfer to the accounts at
The Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
to) make payment of the purchase price on behalf of any Underwriter or
Underwriters whose check or checks shall not have been received by you prior
to the date of payment and delivery for the Option Shares to be purchased by
such Underwriter or Underwriters. Any such payment by you shall not relieve
any such Underwriter or Underwriters of any of its or their obligations
hereunder.
Upon exercise of any option provided for in Section 7(a) hereof, the
obligations of the several Underwriters to purchase such Option Shares will
be subject (as of the date hereof and as of the date of payment and delivery
for such Option Shares) to the accuracy of and compliance with the
representations, warranties and agreements of the Company herein, to the
accuracy of the statements of the Company and officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, to the conditions set forth in Section 6 hereof, and
to the condition that all proceedings taken at or prior to the payment date
in connection with the sale and transfer of such Option Shares shall be
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, and you shall have been furnished with all such documents,
certificates and opinions as you may reasonably request in order to evidence
the accuracy and completeness of any of the representations, warranties or
statements, the performance of any of the covenants or
38
agreements of the Company or the satisfaction of any of the conditions herein
contained.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject (including, without
limitation, in its capacity as an Underwriter or as a "qualified independent
underwriter" pursuant to Rule 2720 of the NASD Conduct Rules), under the Act,
the Exchange Act or otherwise, specifically including, but not limited to,
losses, claims, damages or liabilities (or actions in respect thereof)
arising out of or based upon (i) any breach of any representation, warranty,
agreement or covenant of the Company herein contained, (ii) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any untrue statement or alleged untrue statement of any material fact
contained in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each Underwriter for any legal
or other expenses reasonably incurred by it in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, such Preliminary
Prospectus or the Prospectus, or any such amendment or supplement thereto, in
reliance upon, and in conformity with, written information relating to any
Underwriter furnished to the Company by such Underwriter, directly or through
you, specifically for use in the preparation thereof and, provided further,
that the indemnity agreement provided in this Section 8(a) with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any losses, claims, damages, liabilities or
actions based upon any
39
untrue statement or alleged untrue statement of material fact or omission or
alleged omission to state therein a material fact purchased Shares, if a copy
of the Preliminary Prospectus or Prospectus in which such untrue statement or
alleged untrue statement or omission or alleged omission was corrected had
not been sent or given to such person within the time required by the Act and
the Rules and Regulations, unless such failure is the result of noncompliance
by the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each person,
if any, who controls any Underwriter within the meaning of the Act or the
Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company against any losses, claims, damages
or liabilities, joint or several, to which the Company may become subject
under the Act or otherwise, specifically including, but not limited to,
losses, claims, damages or liabilities (or actions in respect thereof)
arising out of or based upon (i) any breach of any representation, warranty,
agreement or covenant of such Underwriter herein contained, (ii) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any untrue statement or alleged untrue statement of any material fact
contained in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in the case of
subparagraphs (ii) and (iii) of this Section 8(b) 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 such Underwriter, directly or
through you, specifically for use in the preparation thereof, and agrees to
reimburse the Company for any legal or other expenses reasonably incurred by
the Company in
40
connection with investigating or defending any such loss, claim, damage,
liability or action.
The indemnity agreement in this Section 8(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer
of the Company who signed the Registration Statement and each director of the
Company, and each person, if any, who controls the Company within the meaning
of the Act or the Exchange Act. This indemnity agreement shall be in addition
to any liabilities which each Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under this Section 8. In case any
such action is brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it shall elect by
written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, which approval will not be unreasonably withheld, the indemnifying
party will not be liable to such indemnified party under this Section 8 for
any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof unless (i) the indemnified
41
party shall have employed separate counsel in accordance with the proviso to
the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Section
8(a) or 8(b) hereof who are parties to such action), (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. In no event shall any indemnifying party
be liable in respect of any amounts paid in settlement of any action unless
the indemnifying party shall have approved the terms of such settlement;
provided that such consent shall not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnification could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on all claims that are the
subject matter of such proceeding.
(d) In order to provide for just and equitable
contribution in any action in which a claim for indemnification is made
pursuant to this Section 8 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the
fact that this Section 8 provides for indemnification in such case, all the
parties hereto shall contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject in such proportion so that the
Underwriters, acting severally and not jointly, are responsible pro rata for
the portion represented by the percentage that the underwriting discount
bears to the initial public offering price, and the Company is responsible
for the remaining portion, provided, however, that (i) no Underwriter shall
be required to contribute any amount in excess of the amount by which the
underwriting discount applicable to the Shares purchased by such Underwriter
exceeds the amount of damages which such Underwriter has otherwise
42
required to pay and (ii) no person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 8(d) shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each person, if any, who controls any Underwriter or the Company within
the meaning of the Act or the Exchange Act and each officer of the Company
who signed the Registration Statement and each director of the Company. This
subparagraph (d) shall not be operative as to any Underwriter to the extent
that the Company or each person who controls the Company and each officer of
the Company who signed the Registration Statement and each director of the
Company has received indemnity under this Section 8.
(e) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel
during the negotiations regarding the provisions hereof, including, without
limitation, the provisions of this Section 8, and are fully informed
regarding said provisions. They further acknowledge that the provisions of
this Section 8 fairly allocate the risks in light of the ability of the
parties to investigate the Company and its business in order to assure that
adequate disclosure is made in the Registration Statement and the Prospectus
as required by the Act and the Exchange Act. The parties hereto are hereby
advised that federal or state public policy, as interpreted by courts in
certain jurisdictions, may be contrary to certain of the provisions of this
Section 8, and the parties hereto hereby expressly waive and relinquish any
right or ability to assert such public policy as a defense to a claim under
this Section 8 and hereby further agree not to attempt to assert any such
defense.
9. Representations, Warranties, Covenants and Agreements to Survive
Delivery. All representations, warranties, covenants and agreements of the
Company and the Underwriters herein or in certificates delivered pursuant
hereto, and the indemnity and contribution agreements contained in Section 8
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter within the meaning of the Act or the Exchange
Act, or by or on behalf of the Company, or any of its officers, directors or
controlling persons within the meaning of
43
the Act or the Exchange Act, and shall survive the delivery of the Shares to
the several Underwriters hereunder or termination of this Agreement.
10. Substitution of Underwriters. If any Underwriter or Underwriters
shall fail to take up and pay for the number of Firm Shares agreed by such
Underwriter or Underwriters to be purchased hereunder upon tender of such
Firm Shares in accordance with the terms hereof, and if the aggregate number
of Firm Shares which such defaulting Underwriter or Underwriters so agreed
but failed to purchase does not exceed 10% of the Firm Shares, the remaining
Underwriters shall be obligated, severally in proportion to their respective
commitments hereunder, to take up and pay for the Firm Shares of such
defaulting Underwriter or Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters
agreed but failed to take up and pay for exceeds 10% of the Firm Shares, the
remaining Underwriters shall have the right, but shall not be obligated, to
take up and pay for (in such proportions as may be agreed upon among them)
the Firm Shares which the defaulting Underwriter or Underwriters so agreed
but failed to purchase. If such remaining Underwriters do not, at the Closing
Date, take up and pay for the Firm Shares which the defaulting Underwriter or
Underwriters so agreed but failed to purchase, the Closing Date shall be
postponed for 24 hours to allow the several Underwriters the privilege of
substituting within 24 hours (including non-business hours) another
underwriter or underwriters (which may include any nondefaulting Underwriter)
reasonably satisfactory to the Company. If no such underwriter or
underwriters shall have been substituted as aforesaid by such postponed
Closing Date, the Closing Date may, at the option of the Company, be
postponed for a further 24 hours, if necessary, to allow the Company the
privilege of finding another underwriter or underwriters, reasonably
satisfactory to you, to purchase the Firm Shares which the defaulting
Underwriter or Underwriters so agreed but failed to purchase. If it shall be
arranged for the remaining Underwriters or substituted underwriter or
underwriters to take up the Firm Shares of the defaulting Underwriter or
Underwriters as provided in this Section 10, (i) the Company shall have the
right to postpone the time of delivery for a period of not more than seven
(7) full business days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the
44
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement, supplements to
the Prospectus or other such documents which may thereby be made necessary,
and (ii) the respective number of Firm Shares to be purchased by the
remaining Underwriters and substituted underwriter or underwriters shall be
taken as the basis of their underwriting obligation. If the remaining
Underwriters shall not take up and pay for all such Firm Shares so agreed to
be purchased by the defaulting Underwriter or Underwriters or substitute
another underwriter or underwriters as aforesaid and the Company shall not
find or shall not elect to seek another underwriter or underwriters for such
Firm Shares as aforesaid, then this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section 10, the Company shall not be liable to
any Underwriter (except as provided in Sections 5 and 8 hereof) nor shall any
Underwriter (other than an Underwriter who shall have failed, other than for
some reason permitted under this Agreement, to purchase the number of Firm
Shares agreed by such Underwriter to be purchased hereunder, which
Underwriter shall remain liable to the Company and the other Underwriters for
damages, if any, resulting from such default) be liable to the Company
(except to the extent provided in Sections 5 and 8 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 10.
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the earlier
of (i) 6:30 A.M., San Francisco time, on the first full business day
following the effective date of the Registration Statement, or (ii) the time
of the initial public offering of any of the Shares by the Underwriters after
the Registration Statement becomes effective. The time of the initial public
offering shall mean the time of the release by you, for publication, of the
first newspaper advertisement relating to the Shares, or the time at which
the Shares are first generally offered by the Underwriters to the public by
letter, telephone, telegram or telecopy, whichever shall first occur. By
giving notice as set forth in Section 12 hereof before the time this
Agreement becomes effective, you, as
45
Representatives of the several Underwriters, or the Company, may prevent this
Agreement from becoming effective without liability of any party to any other
party, except as provided in Sections 4(j) (to the extent Section 4(j) by its
terms applies), 5 and 8 hereof.
(b) You, as Representatives of the several Underwriters,
shall have the right to terminate this Agreement by giving notice as
hereinafter specified at any time on or prior to the Closing Date or on or
prior to any later date on which Option Shares are to be purchased, as the
case may be, (i) if the Company shall have failed, refused or been unable to
perform any agreement on its part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled
is not fulfilled, including, without limitation, any change in the condition
(financial or otherwise), earnings, operations or business of the Company and
its subsidiaries considered as one enterprise from that set forth in the
Registration Statement or the Prospectus, which, in your reasonable judgment,
is material and adverse, (ii) if additional material governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices
shall have been generally established on the New York Stock Exchange or on
the American Stock Exchange or in the over the counter market by the NASD, or
trading in securities generally shall have been suspended on either such
exchange or in the over the counter market by the NASD, or if a banking
moratorium shall have been declared by federal, New York or California
authorities, (iii) if the Company shall have sustained a loss by strike,
fire, flood, earthquake, accident or other calamity of such character as to
interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured, (iv)
if there shall have been a material adverse change in the general political
or economic conditions or financial markets as in your reasonable judgment
makes it inadvisable or impracticable to proceed with the offering, sale and
delivery of the Shares or (v) if there shall have been an outbreak or
escalation of hostilities or of any other insurrection or armed conflict or
the declaration by the United States of America of a national emergency
which, in the reasonable opinion of the Representatives, makes it
impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Prospectus. In the event of termination
pursuant to subparagraph (i) above, the Company shall remain obligated to pay
costs and
46
expenses pursuant to Sections 4(j), 5 and 8 hereof. Any termination pursuant
to any of subparagraphs (ii) through (v) above shall be without liability of
any party to any other party except as provided in Sections 5 and 8 hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 11, you shall promptly
notify the Company by telephone, telecopy or telegram, in each case confirmed
by letter. If the Company shall elect to prevent this Agreement from becoming
effective, the Company shall promptly notify you by telephone, telecopy or
telegram, in each case, confirmed by letter.
12. Notices. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to
you shall be mailed, delivered, telegraphed (and confirmed by letter) or
telecopied (and confirmed by letter) to you c/o BancAmerica Xxxxxxxxx
Xxxxxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
telecopier number (000) 000-0000, Attention: General Counsel; if sent to the
Company, such notice shall be mailed, delivered, telegraphed (and confirmed
by letter) or telecopied (and confirmed by letter) to Workflow Management,
Inc., 000 Xxxxx Xxxx Xxx, Xxxx Xxxxx Xxxxxxx 00000, Attention: Chief
Executive Officer, with a copy to Xxxxxx X. Xxxxxx, Esq., Xxxxxx, Xxxxxx &
Xxxxxxxxx, 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, telecopier number
(000) 000-0000, and Xxx X. Xxxxx, XX, Esq., Xxxxxxx & Xxxxxxx, Xxx Xxxxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, telecopier number (000) 000-0000.
13. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters and the Company and their respective
executors, administrators, successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person or entity, other than the parties hereto and their respective
executors, administrators, successors and assigns, and the controlling
persons within the meaning of the Act or the Exchange Act, officers and
directors referred to in Section 8 hereof, any legal or equitable right,
remedy or claim in respect of this Agreement or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective executors, administrators, successors and assigns
and said controlling persons
47
and said officers and directors, and for the benefit of no other person or
entity. No purchaser of any of the Shares from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
In all dealings with the Company under this Agreement, you shall act
on behalf of each of the several Underwriters, and the Company shall be
entitled to act and rely upon any statement, request, notice or agreement
made or given by you jointly or by BancAmerica Xxxxxxxxx Xxxxxxxx on behalf
of you.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York.
15. Counterparts. This Agreement may be signed in several
counterparts, each of which will constitute an original.
[signature page follows]
48
If the foregoing correctly sets forth the understanding among the
Company and the several Underwriters, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among the Company and the several Underwriters.
Very truly yours,
WORKFLOW MANAGEMENT, INC.
By:
----------------------------
Xxxxxx X. X'Xxxxxxxx
Chairman of the Board
and Chief Executive Officer
Accepted as of the date
first above written:
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXX XXXXXXX XXXX XXXXXX
XXXXX BROTHERS & CO., INC.
On their behalf and on behalf of each
of the several Underwriters named in
Schedule A hereto:
By BANCAMERICA XXXXXXXXX XXXXXXXX
By:
----------------------------
Authorized Signatory
49
SCHEDULE A
Number of
Firm Shares
To Be
Underwriters Purchased
------------ -------------
BancAmerica Xxxxxxxxx Xxxxxxxx ...............
Xxxxxx Xxxxxxx Xxxx Xxxxxx ...................
Sands Brothers & Co., Inc. ...................
Total ........................................
SCHEDULE B
Name
-------
Xxxxxx X. X'Xxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx, Xx.
Xxx X. Xxxxx XX
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
F. Xxxxx Xxxxxx
SCHEDULE C
