1
EXHIBIT 1.1
2,650,000 SHARES
COMMON STOCK
($.01 PAR VALUE)
UNDERWRITING AGREEMENT
_________________, 1997
X.X. Xxxxxxx & Sons, Inc.
Equitable Securities Corporation
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, XxxxxXxxx Corporation, a Maryland corporation (the
"Company") hereby addresses you as the representatives (the "Representatives")
of each of the persons, firms and corporations listed on Schedule I hereto
(collectively, the "Underwriters") and hereby confirms its agreement with the
several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell
to the Underwriters 2,650,000 shares of its Common Stock, par value $.01 per
share (such 2,650,000 shares of Common Stock are herein referred to as the
"Firm Shares"). Solely for the purpose of covering over-allotments in the sale
of the Firm Shares, the Company further proposes to grant to the Underwriters
the right to purchase up to an additional 397,500 (the "Option Shares"), as
provided in Section 3 of this Agreement. The Firm Shares and the Option Shares
are herein sometimes referred to as the "Shares" and are more fully described
in the Prospectus hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM 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 such Underwriter agrees, severally and not jointly, (a)
to purchase from the Company at a purchase price of $___ per share, the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto and (b) to purchase from the Company any additional number of Option
Shares which such Underwriter may become obligated to purchase pursuant to
Section 3 hereof.
The Company will deliver definitive certificates for the Firm Shares
at the office of X.X. Xxxxxxx & Sons, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
("Xxxxxxx' Office"), or such other place as you and the Company may mutually
agree upon, for the accounts of the Underwriters against payment to the Company
of the purchase price for the Firm Shares sold by it to the several
Underwriters by wire transfer of same-day funds payable to the order of the
Company and delivered to Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000,
or at such other place
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as may be agreed upon between you and the Company (the "Place of Closing"), at
10:00 a.m., St. Louis time, on _____________, 1997, or at such other time and
date not later than five full business days thereafter as you and the Company
may agree, such time and date of payment and delivery being herein called the
"Closing Date."
The certificates for the Firm Shares so to be delivered will be made
available to you for inspection at Xxxxxxx' Office (or such other place as you
and the Company may mutually agree upon) at least one full business day prior
to the Closing Date and will be in such names and denominations as you may
request at least two full business days prior to the Closing Date.
It is understood that an Underwriter, individually, may (but shall not
be obligated to) make payment on behalf of the other Underwriters whose checks
shall not have been received prior to the Closing Date for Shares to be
purchased by such Underwriter. Any such payment by an Underwriter shall not
relieve the other Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Shares to
the public upon the terms and conditions set forth in the Registration
Statement hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. The Company
hereby grants options to the Underwriters to purchase from it up to 397,500
Option Shares on the same terms and conditions as the Firm Shares; provided,
however, that such options may be exercised only for the purpose of covering
any over-allotments which may be made by them in the sale of the Firm Shares.
No Option Shares shall be sold or delivered unless the Firm Shares previously
have been, or simultaneously are, sold and delivered.
The options are exercisable on behalf of the several Underwriters by
you, as Representative, at any time, and from time to time, before the
expiration of 30 days from the date of this Agreement, for the purchase of all
or part of the Option Shares covered thereby, by notice given by you to the
Company in the manner provided in Section 12 hereof, setting forth the number
of Option Shares as to which the Underwriters are exercising the options, and
the date of delivery of said Option Shares, which date shall not be more than
five business days after such notice unless otherwise agreed to by the parties.
You may terminate the options at any time, as to any unexercised portion
thereof, by giving written notice to the Company to such effect.
You, as Representatives, shall make such allocation of the Option
Shares among the Underwriters as may be required to eliminate purchases of
fractional Shares.
Delivery of the Option Shares with respect to which the options shall
have been exercised shall be made to or upon your order at Xxxxxxx' Office (or
at such other place as you and the Company may mutually agree upon), against
payment by you of the per share purchase price to the Company by wire transfer
of same-day funds. Such payment and delivery shall be made at 10:00 a.m., St.
Louis time, on the date designated in the notice given by you as above provided
for, unless some other date and time are agreed upon, which date and time of
payment and delivery are called the "Option Closing Date." The certificates
for the Option Shares so to be
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delivered will be made available to you for inspection at Xxxxxxx' Office at
least one full business day prior to the Option Closing Date and will be in
such names and denominations as you may request at least two full business days
prior to the Option Closing Date. On the Option Closing Date, the Company
shall provide the Underwriters such representations, warranties, opinions and
covenants with respect to the Option Shares as are required to be delivered on
the Closing Date with respect to the Firm Shares.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
(a) The Company represents and warrants to and agrees with each
Underwriter that:
(i) A registration statement (Registration No. 333-_____)
on Form S-1 with respect to the Shares, including a preliminary
prospectus, and such amendments to such registration statement as may
have been required to the date of this Agreement, has been prepared by
the Company pursuant to and in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the Rules and
Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed
with the Commission under the Act. Copies of such registration
statement, including any amendments thereto, each related preliminary
prospectus (meeting the requirements of Rule 430 or 430A of the Rules
and Regulations) contained therein, the exhibits, financial statements
and schedules have heretofore been delivered by the Company to you.
If such registration statement has not become effective under the Act,
a further amendment to such registration statement, including a form
of final prospectus, necessary to permit such registration statement
to become effective will be filed promptly by the Company with the
Commission. If such registration statement has become effective under
the Act, a final prospectus containing information permitted to be
omitted at the time of effectiveness by Rule 430A of the Rules and
Regulations will be filed promptly by the Company with the Commission
in accordance with Rule 424(b) of the Rules and Regulations. The term
"Registration Statement" as used herein means the registration
statement as amended at the time it becomes or became effective under
the Act (the "Effective Date"), including financial statements and all
exhibits and, if applicable, the information deemed to be included by
Rule 430A of the Rules and Regulations. The term "Prospectus" as used
herein means (i) the prospectus as first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, (ii) if no
such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date or (iii) if a Term Sheet
or Abbreviated Term Sheet (as such terms are defined in Rule 434(b)
and 434(c), respectively, of the Rules and Regulations) is filed with
the Commission pursuant to Rule 424(b)(7) of the Rules and
Regulations, the Term Sheet or Abbreviated Term Sheet and the last
Preliminary Prospectus filed with the Commission prior to the time the
Registration Statement became effective, taken together. The term
"Preliminary Prospectus" as used herein shall mean a preliminary
prospectus as contemplated by Rule 430 or 430A of the Rules and
Regulations included at any time in the Registration Statement.
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(ii) The Commission has not issued, and is not to the
knowledge of the Company threatening to issue, an order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus nor
instituted proceedings for that purpose. Each Preliminary Prospectus
at its date of issue, the Registration Statement and the Prospectus
and any amendments or supplements thereto conform or will conform, as
the case may be, in all material respects to the requirements of, the
Act and the Rules and Regulations. Neither the Registration Statement
nor any amendment thereto, as of the applicable effective date, and
neither the Prospectus nor any supplement thereto contains or will
contain, as the case may be, any untrue statement of a material fact
or omits or will omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representation or
warranty as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of the
Underwriters specifically for use in the preparation thereof.
(iii) The filing of the Registration Statement and the
execution and delivery of this Agreement have been duly authorized by
the Board of Directors of the Company; this Agreement constitutes a
valid and legally binding obligation of the Company enforceable in
accordance with its terms (except to the extent the enforceability of
the indemnification and contribution provisions of Section 7 hereof
may be limited by public policy considerations as expressed in the Act
as construed by courts of competent jurisdiction, and except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors' rights
generally and by general principles of equity); the issue and sale of
the Shares by the Company and the performance of this Agreement and
the consummation of the transactions herein contemplated will not
result in a violation of the Company's articles of incorporation or
bylaws or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or its subsidiaries under, any
statute, or under any indenture, mortgage, deed of trust, note, loan
agreement, sale and leaseback arrangement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which they are bound or to which any of the properties or assets
of the Company or its subsidiaries is subject, or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or its subsidiaries or their properties,
except to such extent as does not materially adversely affect the
business of the Company and its subsidiaries taken as a whole; no
consent, approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is required for
the consummation of the transactions herein contemplated, except such
as may be required by the National Association of Securities Dealers,
Inc. (the "NASD") or under the Act or Rules and Regulations or any
state securities laws.
(iv) Except as described in the Prospectus, neither the
Company nor any of its subsidiaries has sustained since the date of
the latest audited financial statements included
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in the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree. Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, the Company and its
subsidiaries taken as a whole have not incurred any material
liabilities or material obligations, direct or contingent, other than
in the ordinary course of business, or entered into any material
transactions not in the ordinary course of business, and there has not
been any material change in the capital stock or long-term debt of the
Company and its subsidiaries taken as a whole or any material adverse
change in the condition (financial or other), net worth, business,
affairs, management, prospects or results of operations of the Company
and its subsidiaries taken as a whole. The Company and its
subsidiaries have filed all necessary federal, state and foreign
income and franchise tax returns and paid all taxes shown as due
thereon; all tax liabilities are adequately provided for on the books
of the Company and its subsidiaries except to such extent as would not
materially adversely affect the business of the Company and its
subsidiaries taken as a whole; the Company and its subsidiaries have
made all necessary payroll tax payments and are current and up-to-date
as of the date of this Agreement; and the Company and its subsidiaries
have no knowledge of any tax proceeding or action pending or
threatened against the Company or its subsidiaries which might
materially adversely affect their business or property.
(v) Except as described in the Prospectus, there is not
now pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or
its subsidiaries is a party before or by any court or public,
regulatory or governmental agency or body which might be expected to
result (individually or in the aggregate) in any material adverse
change in the condition (financial or other), business or prospects of
the Company and its subsidiaries taken as a whole, or might be
expected to materially and adversely affect (individually or in the
aggregate) the properties or assets thereof; and there are no
contracts or documents of the Company or its subsidiaries which would
be required to be filed as exhibits to the Registration Statement by
the Act or by the Rules and Regulations which have not been filed as
exhibits to the Registration Statement.
(vi) The Company has duly and validly authorized capital
stock as described in the Prospectus; all outstanding shares of Common
Stock of the Company and the Shares conform, or when issued will
conform, to the description thereof in the Registration Statement and
the Prospectus and have been, or, when issued and paid for will be,
duly authorized, validly issued, fully paid and nonassessable; and the
issuance of the Shares to be purchased from the Company hereunder is
not subject to preemptive rights.
(vii) The Company and its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the states or other jurisdictions in which they are
incorporated, with full power and authority (corporate and other) to
own, lease and operate their properties and conduct their businesses
as described in the Registration Statement; the Company and its
subsidiaries are duly qualified to do
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business as foreign corporations in good standing in each state or
other jurisdiction in which their ownership or leasing of property or
conduct of business legally requires such qualification, except where
the failure to be so qualified would not have a material adverse
effect on the ability of the Company and its subsidiaries to conduct
its or their business as described in the Registration Statement; and
the outstanding shares of capital stock of the Company's subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company free and clear of any
mortgage, pledge, lien, encumbrance, charge or adverse claim and are
not the subject of any agreement or understanding with any person; no
options, warrants or other rights to purchase, agreement or other
obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in the subsidiaries are
outstanding.
(viii) Xxxxx Xxxxxxxx LLC, the accounting firm which has
certified the financial statements filed with the Commission as a part
of the Registration Statement, is an independent public accounting
firm within the meaning of the Act and the Rules and Regulations.
(ix) The consolidated financial statements and schedules
of the Company, including the notes thereto, filed with and as a part
of the Registration Statement, are accurate in all material respects
and present fairly the consolidated financial position of the Company
and its subsidiaries as of the respective dates thereof and the
consolidated results of operations and statements of cash flow for the
respective periods covered thereby, all in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved except as otherwise disclosed in the
Prospectus. The selected financial data included in the Registration
Statement and Prospectus present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements in the Registration Statement and Prospectus.
(x) Neither the Company nor any subsidiary is in default
with respect to any contract or agreement to which it is a party;
provided that this representation shall not apply to defaults which in
the aggregate are not materially adverse to the condition, financial
or other, or the business or prospects of the Company and its
subsidiaries taken as a whole.
(xi) Neither the Company nor any subsidiary is in
violation of any other laws, ordinances or governmental rules or
regulations to which it is subject, and neither the Company nor any
subsidiary has failed to obtain any other license, permit, franchise,
easement, consent, or other governmental authorization necessary to
the ownership, leasing and operation of its properties or to the
conduct of its business, which violation or failure would materially
adversely affect the business, operations, affairs, properties,
prospects, profits or condition (financial or other) of the Company
and its subsidiaries taken as a whole. Neither the Company nor any
subsidiary has, at any time during the past five years, (A) made any
unlawful contributions to any candidate for any political
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office, or failed fully to disclose any contribution in violation of
law, or (B) made any payment to any state, federal or foreign
government official, or other person charged with similar public or
quasi-public duty (other than payment required or permitted by
applicable law).
(xii) Except as described in the Prospectus, the Company
and its subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent licenses, trademarks, service marks
and trade names necessary to conduct the business now operated by
them, and neither the Company nor any subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any patents, patent licenses, trademarks, service
marks or trade names which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a material
adverse effect on the conduct of the business, operations, financial
condition or income of the Company and its subsidiaries taken as a
whole.
(xiii) The Company and its subsidiaries have good and
marketable title to all property owned by them, free and clear of all
liens, encumbrances, restrictions and defects except such as are
described in the Registration Statement or do not interfere with the
use made and proposed to be made of such property; and any property
held under lease or sublease by the Company or its subsidiaries is
held under valid, subsisting and enforceable leases or subleases with
such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries, and neither the Company nor any subsidiary has any
notice or knowledge of any material claim of any sort which has been,
or may be, asserted by anyone adverse to the Company's or any
subsidiary's rights as lessee or sublessee under any lease or sublease
described above, or affecting or questioning the Company's or any of
its subsidiary's rights to the continued possession of the leased or
subleased premises under any such lease or sublease in conflict with
the terms thereof.
(xiv) Except as described in the Prospectus, to the
knowledge of the Company, there is no factual basis for any action,
suit or other proceeding involving the Company or its subsidiaries or
any of their material assets for any failure of the Company or any of
its subsidiaries, or any predecessor thereof, to comply with any
requirements of federal, state or local regulation relating to air,
water, solid waste management, hazardous or toxic substances, or the
protection of health or the environment. Except as described in the
Prospectus, none of the property owned or leased by the Company or any
of its subsidiaries is, to the knowledge of the Company, contaminated
with any waste or hazardous substances, and neither the Company nor
any of its subsidiaries may be deemed an "owner or operator" of a
"facility" or "vessel" which owns, possesses, transports, generates or
disposes of a "hazardous substance" as those terms are defined in
Section 9601 of the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.
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(xv) No labor disturbance exists with the employees of the
Company or its subsidiaries or, to the knowledge of the Company, is
imminent which would have a material adverse effect on the Company and
its subsidiaries taken as a whole.
(xvi) The Company has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of the Company's Common Stock, and the Company is not aware of
any such action taken or to be taken by affiliates of the Company.
(xvii) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
5. ADDITIONAL COVENANTS. The Company covenants and agrees with
the several Underwriters that:
(a) If the Registration Statement is not effective under the Act,
the Company will use its best efforts to cause the Registration Statement to
become effective as promptly as possible, and it will notify you, promptly
after it shall receive notice thereof, of the time when the Registration
Statement has become effective. The Company (i) will prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations, if
required, a Prospectus containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations or otherwise or a Term Sheet or Abbreviated Term Sheet,
as applicable; (ii) will not file any amendment to the Registration Statement
or supplement to the Prospectus of which the Underwriters shall not previously
have been advised and furnished with a copy or to which the Underwriters shall
have reasonably objected in writing or which is not in compliance with the
Rules and Regulations; and (iii) will promptly notify you after it shall have
received notice thereof of the time when any amendment to the Registration
Statement becomes effective or when any supplement to the Prospectus has been
filed.
(b) The Company will advise the Underwriters promptly, after it
shall receive notice or obtain knowledge thereof, of any request of the
Commission for amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution or threatening of
any proceedings for that purpose, and the Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if
issued.
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(c) The Company will cooperate with the Underwriters and their
counsel in endeavoring to qualify the Shares for sale under the securities laws
of such jurisdictions as they may have designated and will make such
applications, file such documents, and furnish such information as may be
necessary for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to
file such a consent or to subject itself to taxation as doing business in any
jurisdiction where it is not now so taxed. The Company will, from time to
time, file such statements, reports, and other documents, as are or may be
required to continue such qualifications in effect for so long a period as the
Underwriters may reasonably request.
(d) The Company will deliver to, or upon the order of, the
Underwriters, without charge from time to time, as many copies of any
Preliminary Prospectus as they may reasonably request. The Company will
deliver to, or upon the order of, the Underwriters without charge as many
copies of the Prospectus, or as it thereafter may be amended or supplemented,
as they may from time to time reasonably request. The Company consents to the
use of such Prospectus by the Underwriters and by all dealers to whom the
Shares may be sold, both in connection with the offering or sale of the Shares
and for such other purposes and for such period of time thereafter as the
Prospectus is required by law to be delivered in connection with the offering
or sale of the Shares. The Company will deliver to the Underwriters at or
before the Closing Date two signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Underwriters such number of copies of the Registration Statement, without
exhibits, and of all amendments thereto, as they may reasonably request.
(e) If, during the period in which a prospectus is required by law
to be delivered by an Underwriter or dealer, any event shall occur as a result
of which, in the judgment of the Company or in your judgment or in the opinion
of counsel for the Underwriters, it becomes necessary to amend or supplement
the Prospectus in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law.
(f) The Company will make generally available to its shareholders
and will file as an exhibit in a report pursuant to the Securities and Exchange
Act of 1934, as amended (the "1934 Act"), as soon as it is practicable to do
so, but in any event not later than 15 months after the effective date of the
Registration Statement, an earnings statement in reasonable detail, covering a
period of at least 12 consecutive months beginning after the effective date of
the Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise the Underwriters in writing when such statement has
been so made available.
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(g) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives at their principal executive offices a
reasonable number of copies of annual reports, quarterly reports, current
reports and copies of all other documents, reports and information furnished by
the Company to its shareholders or filed with any securities exchange pursuant
to the requirements of such exchange or with the Commission pursuant to the Act
or the 1934 Act. The Company will deliver to the Representatives similar
reports with respect to any significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the Company's
financial statements. Any report, document or other information required to be
furnished under this paragraph (g) shall be furnished as soon as practicable
after such report, document or information becomes available.
(h) The Company will apply the proceeds from the sale of the
Shares as set forth in the description under "Use of Proceeds" in the
Prospectus, which description complies in all respects with the requirements of
Item 504 of Regulation S-K.
(i) The Company will supply you with copies of all correspondence
to and from, and all documents issued to and by, the Commission in connection
with the registration of the Shares under the Act.
(j) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Company will furnish to you, as soon as they have been
prepared, copies of any unaudited interim consolidated financial statements of
the Company and its subsidiaries for any periods subsequent to the periods
covered by the financial statements appearing in the Registration Statement and
the Prospectus.
(k) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Company will not issue any press releases or other
communications directly or indirectly and will hold no press conferences with
respect to the Company or any of its subsidiaries, the financial condition,
results of operations, business, properties, assets or liabilities of the
Company or any of its subsidiaries, or the offering of the Shares, without your
prior written consent.
(l) The Company will use its best efforts to obtain approval for,
and maintain the quotation of the Shares on, the National Association of
Securities Dealers, Inc. Automated Quotation/National Market System (the
"Nasdaq/NMS").
(m) For a period of 180 days from the Effective Date, the Company
will not, and will use its best efforts to cause its directors and officers to
not, directly or indirectly sell, contract to sell or otherwise dispose of any
shares of the Company's Common Stock, any securities exchangeable for Common
Stock or any other rights to acquire such shares without your prior written
consent, except for the Shares sold hereunder and except for sales of shares of
Common Stock to the Company's employees pursuant to the exercise of options
under the Company's stock option plan.
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(n) The Company and its subsidiaries will maintain and keep
accurate books and records reflecting their assets and maintain internal
accounting controls which provide reasonable assurance that (1) transactions
are executed in accordance with management's authorization, (2) transactions
are recorded as necessary to permit the preparation of the Company's
consolidated financial statements and to maintain accountability for the assets
of the Company and its subsidiaries, (3) access to the assets of the Company
and its subsidiaries is permitted only in accordance with management's
authorization, and (4) the recorded accounts of the assets of the Company and
its subsidiaries are compared with existing assets at reasonable intervals.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase and pay for the Shares, as provided
herein, shall be subject to the accuracy in all material respects, as of the
date hereof and as of the Closing Date (and, if applicable, the Option Closing
Date), of the representations and warranties of the Company contained herein,
to the performance in all material respects by the Company of its covenants and
obligations hereunder, and to the following additional conditions:
(a) All filings required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made. No stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, shall have been
issued and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Company or any Underwriter, threatened or contemplated 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 the Underwriters.
(b) No Underwriter shall have disclosed in writing to the Company
on or prior to the Closing Date (and, if applicable, the Option Closing Date),
that the Registration Statement or Prospectus or any amendment or supplement
thereto contains an untrue statement of fact which, in the opinion of counsel
to the Underwriters, is material, or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing
Date), you shall have received:
(i) the opinion of Xxxxxx & Xxxxxxx LLP, counsel for the
Company, addressed to you and dated the Closing Date (and, if applicable, the
Option Closing Date), to the effect that:
(A) The Company and its subsidiaries are duly
qualified to do business as foreign corporations in good standing in
each state or other jurisdiction in which their ownership or leasing
of property or conduct of business legally requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the ability of the Company and its
subsidiaries to conduct its or their business as described in the
Registration Statement; and the outstanding shares of capital stock of
the Company's subsidiaries, to the knowledge of such counsel, are
owned by the Company free and clear of any mortgage, pledge, lien,
encumbrance, charge or adverse
12
claim and are not the subject of any agreement or understanding with
any person; to the knowledge of such counsel, no options, warrants or
other rights to purchase, agreement or other obligations to issue or
other rights to convert any obligations into shares of capital stock
or ownership interests in the subsidiaries are outstanding.
(B) To the knowledge of such counsel, the
shareholders of the Company have no preemptive rights with respect to
the issuance of the Shares (other than under Maryland law or under the
Company's Certificate of Incorporation or By-Laws, as to which such
counsel need express no opinion.)
(C) Such counsel has been advised by the staff of
the Commission that the Registration Statement has become effective
under the Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act.
(D) The Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue date, comply as to form in all material
respects to the requirements of the Act and the applicable rules and
regulations (except that such counsel need express no opinion as to
the financial statements or other financial data).
(E) The descriptions in the Registration
Statement and Prospectus of contracts and other documents filed as
exhibits to the Registration Statement are accurate summaries and
fairly present the information disclosed therein in all material
respects.
(F) No authorization, approval, consent, order,
registration or qualification of or with of any court or governmental
body, authority or agency is required with respect to the Company in
connection with the transactions contemplated by this Agreement,
except such as may be required under the Act or the Rules and
Regulations or as may be required by the NASD or under state
securities laws in connection with the purchase and distribution of
the Shares by the Underwriters.
(G) The filing of the Registration Statement has
been duly authorized by the Board of Directors of the Company. This
Agreement has been duly authorized, executed and delivered by the
Company. The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a violation of the
Company's articles of incorporation or bylaws or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company and
its subsidiaries under, any statute, or under any indenture, mortgage,
deed of trust, note, loan agreement, sale and leaseback arrangement,
or any other agreement or instrument known to such counsel after due
inquiry to which the Company or any of its subsidiaries is a party or
by which they are bound or to which any of the properties or assets of
the Company or its subsidiaries are subject, or any order, rule or
regulation
13
known to such counsel after due inquiry of any court or governmental
agency or body having jurisdiction over the Company or its
subsidiaries or their properties, except, in the case of any such
violation, breach, default, creation or imposition, to such extent as
does not materially adversely affect the business of the Company and
its subsidiaries taken as a whole.
(H) To the knowledge of such counsel after due
inquiry, (i) there are no material (individually, or in the aggregate)
legal, governmental or regulatory proceedings pending or threatened to
which the Company or any subsidiary is a party or of which the
business or properties of the Company or any subsidiary is the subject
which are not disclosed in the Registration Statement and Prospectus;
(ii) there are no contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which are not
described or filed as required; and (iii) there are no statutes or
regulations required to be described in the Registration Statement or
Prospectus which are not described as required.
(I) To the knowledge of such counsel after due
inquiry, the Company and each of its subsidiaries hold all licenses,
certificates, permits and approvals from all state, federal and other
regulatory authorities, and have satisfied in all material respects
the requirements imposed by regulatory bodies, administrative agencies
or other governmental bodies, agencies or officials, that are required
for the Company and its subsidiaries lawfully to own, lease and
operate its properties and conduct its business as described in the
Prospectus, and, to the knowledge of such counsel after due inquiry,
each of the Company and its subsidiaries is conducting its business in
compliance in all material respects with all of the laws, rules and
regulations of each jurisdiction in which it conducts its business.
(J) The statements made in the Registration
Statement under the captions "Dividend Policy", "Capitalization",
"Management", "Certain Transactions" and "Shares Eligible for Future
Sale", to the extent that they constitute summaries of documents
referred to therein or matters of law or legal conclusions, have been
reviewed by such counsel and are accurate summaries and fairly present
the information disclosed therein.
(K) The Company is not an "investment company" or
a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
Such counsel shall confirm that, although such counsel cannot
guarantee the accuracy, completeness or fairness of any statements in
the Registration Statement, in the course of its duties in connection
with the preparation of the Registration Statement and Prospectus,
nothing came to such counsel's attention that would lead them to
believe that either the Registration Statement or Prospectus or any
amendment or supplement thereto (other than the financial statements
or other financial data as to which such counsel need
14
express no opinion) contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering the foregoing opinion, such counsel may rely,
provided that the opinion shall state that you and they are entitled
to so rely, (1) as to matters involving laws of any jurisdiction other
than the State of __________ or the United States, upon opinions
addressed to the Underwriters of other counsel satisfactory to them
and to Xxxx and Xxxx LLP, counsel to the Underwriters, and (2) as to
all matters of fact, upon certificates and written statements of the
executive officers of, and accountants for, the Company.
(ii) the opinion of Piper & Marbury L.L.P., special Maryland
counsel for the Company, addressed to you and dated the Closing Date (and, if
applicable, the Option Closing Date), to the effect that:
(A) The Company and its subsidiaries have been
duly incorporated and are validly existing as corporations in good
standing under the laws of the State of Maryland, the state in which
each is incorporated, with full power and authority (corporate and
other) to own, lease and operate their properties and conduct their
business as described in the Registration Statement; and the
outstanding shares of capital stock of the Company's subsidiaries have
been duly authorized and validly issued, are fully paid and
nonassessable.
(B) The Company has duly and validly authorized
capital stock as set forth under the heading "Capitalization" in the
Prospectus; all outstanding shares of Common Stock of the Company and
the Shares conform to the description thereof in the Prospectus under
the heading "Description of Capital Stock", and the outstanding shares
of Common Stock have been duly authorized and are validly issued,
fully paid and non-assessable; the Shares to be sold by the Company
have been duly authorized and, when delivered and paid for in
accordance with this Agreement, will be validly issued, fully paid and
non-assessable, and the shareholders of the Company have no preemptive
rights with respect to the issuance of the Shares under Maryland law
or under the Company's Certificate of Incorporation or By-Laws.
(C) The statements made in the Registration
Statement under the captions "Description of Capital Stock" and "Part
II--Item 14--Indemnification of Directors and Officers", to the extent
that they constitute summaries of documents referred to therein or
matters of law or legal conclusions, have been reviewed by such
counsel and are accurate summaries and fairly present the information
disclosed therein.
(d) You shall have received on the Closing Date (and, if
applicable, the Option Closing Date), from Xxxx and Xxxx LLP, counsel to the
several Underwriters, such opinion or opinions, dated the Closing Date (and, if
applicable, the Option Closing Date) with respect to the incorporation of the
Company, the validity of the Shares, the Registration Statement, the
15
Prospectus and other related matters as you may reasonably require; the Company
shall have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass on such matters.
(e) You shall have received at or prior to the Closing Date from
Xxxx and Xxxx LLP a memorandum or memoranda, in form and substance satisfactory
to you, with respect to the qualification for offering and sale by the
Underwriters of the Shares under state securities or Blue Sky laws of such
jurisdictions as the Underwriters may have designated to the Company.
(f) On the business day immediately preceding the date of this
Agreement and on the Closing Date (and, if applicable, the Option Closing
Date), you shall have received from Xxxxx Xxxxxxxx LLC, a letter or letters,
dated the date of this Agreement and the Closing Date (and, if applicable, the
Option Closing Date), respectively, in form and substance satisfactory to you,
confirming that they are independent public accountants with respect to the
Company within the meaning of the Act and the published Rules and Regulations,
and the answer to Item 509 of Regulation S-K set forth in the Registration
Statement is correct insofar as it relates to them, and stating to the effect
set forth in Schedule II hereto.
(g) Except as contemplated in the Prospectus, (i) neither the
Company nor any of its subsidiaries shall have sustained since the date of the
latest audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree; and (ii) subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries shall have incurred
any liability or obligation, direct or contingent, or entered into
transactions, and there shall not have been any change in the capital stock or
long-term debt of the Company and its subsidiaries or any change in the
condition (financial or other), net worth, business, affairs, management,
prospects or results of operations of the Company or its subsidiaries, the
effect of which, in any such case described in clause (i) or (ii), is in your
judgment so material or adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being delivered
on such Closing Date (and, if applicable, the Option Closing Date) on the terms
and in the manner contemplated in the Prospectus.
(h) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or the establishing on such
exchanges by the Commission or by such exchanges of minimum or maximum prices
which are not in force and effect on the date hereof; (ii) a general moratorium
on commercial banking activities declared by either federal or state
authorities; (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this clause (iii) in your
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares in the manner contemplated in the
Prospectus; (iv) any calamity or crisis, change in national, international or
world affairs, act of God, change in the international or domestic markets, or
change in the existing financial,
16
political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in this clause (iv) makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Shares in the manner contemplated in the Prospectus; or (v) the enactment,
publication, decree, or other promulgation of any federal or state statute,
regulation, rule, or order of any court or other governmental authority, or the
taking of any action by any federal, state or local government or agency in
respect of fiscal or monetary affairs, if the effect of any such event
specified in this clause (v) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
in the manner contemplated in the Prospectus.
(i) You shall have received certificates, dated the Closing Date
(and, if applicable, the Option Closing Date) and signed by the President and
the Chief Financial Officer of the Company stating that (i) they have carefully
examined the Registration Statement and the Prospectus as amended or
supplemented and nothing has come to their attention that would lead them to
believe that either the Registration Statement or the Prospectus, or any
amendment or supplement thereto as of their respective effective or issue
dates, contained, and the Prospectus as amended or supplemented at such Closing
Date, contains any untrue statement of a material fact, or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and, that (ii) all representations and warranties made herein
by the Company are true and correct in all material respects at such Closing
Date, with the same effect as if made on and as of such Closing Date, and all
agreements herein to be performed by the Company on or prior to such Closing
Date have been duly performed in all material respects.
(j) The Company shall have furnished to you at the Closing Date
(and, if applicable, the Option Closing Date) such other certificates as you
may have reasonably requested as to the accuracy, on and as of such Closing
Date, of the representations and warranties of the Company herein and as to the
performance by the Company of its obligations hereunder.
(k) The Shares shall have been approved for trading upon official
notice of issuance on the Nasdaq/NMS.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Xxxx and Xxxx LLP, counsel for the several Underwriters. The
Company will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you may request.
If any of the conditions specified above in this Section 6 shall not
have been satisfied at or prior to the Closing Date (and, if applicable, the
Option Closing Date) or waived by you in writing, this Agreement may be
terminated by you on notice to the Company.
7. INDEMNIFICATION. (a) The Company will indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject, under the Act or otherwise, insofar as such
17
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or in any
blue sky application or other document executed by the Company or based on any
information furnished in writing by the Company, filed in any jurisdiction in
order to qualify any or all of the Shares under the securities laws thereof
("Blue Sky Application"), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and will reimburse each Underwriter
and each such controlling person for any legal or other expenses reasonably
incurred by such Underwriter or such controlling person 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 or liability 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 such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by you or by any Underwriter through you, specifically for use in the
preparation thereof; and provided, further, that if any Preliminary Prospectus
or the Prospectus contained any alleged untrue statement or allegedly omitted
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading and such statement or omission shall
have been corrected in a revised Preliminary Prospectus or in the Prospectus or
in an amended or supplemented Prospectus, the Company shall not be liable to
any Underwriter or controlling person under this subsection (a) with respect to
such alleged untrue statement or alleged omission to the extent that any such
loss, claim, damage or liability of such Underwriter or controlling person
results from the fact that such Underwriter sold Shares to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, such revised Preliminary Prospectus or Prospectus or amended or
supplemented Prospectus. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration
Statement and, each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director, officer or controlling
person may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, any amendment or supplement thereto, or any Blue Sky Application or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by any such
18
Underwriter specifically for use in the preparation thereof; and will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement shall be in addition to any liabilities which the Underwriters may
otherwise have.
(c) Any party which proposes to assert the right to be indemnified
under this Section 7 shall, within ten days after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim is to be made against an indemnifying party under this Section 7,
notify each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served, but the omission so to
notify such indemnifying party of any such action, suit or proceeding shall not
relieve such indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 7. In case any such
action, suit or proceeding shall be brought against any indemnified party and
it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party, similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its own counsel in any such
action, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the employment of counsel by such indemnified
party at the expense of the indemnifying party has been authorized by the
indemnifying party, (ii) the indemnified party shall have been advised by such
counsel in a written opinion that there may be a conflict of interest between
the indemnifying party and the indemnified party in the conduct of the defense,
or certain aspects of the defense, of such action (in which case the
indemnifying party shall not have the right to direct the defense of such
action with respect to those matters or aspects of the defense on which a
conflict exists or may exist on behalf of the indemnified party) or (iii) the
indemnifying party shall not in fact have employed counsel to assume the
defense of such action, in any of which events such fees and expenses to the
extent applicable shall be borne by the indemnifying party. An indemnifying
party shall not be liable for any settlement of any action or claim effected
without its consent. Each indemnified party, as a condition of such indemnity,
shall cooperate in good faith with the indemnifying party in the defense of any
such action or claim.
(d) If the indemnification provided for in this Section 7 is for
any reason, other than pursuant to the terms thereof, 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 to appeal)
to be unavailable to an indemnified party under subsections (a) or (b) above in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate
19
to reflect the relative benefits received by the Company and the Underwriters
from the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault, as applicable, of the Company
and the Underwriters in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as other relevant equitable considerations. The relative
benefits received by, as applicable, the Company and the Underwriters shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by such Underwriter. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company contained in
Sections 7 and 11 herein or in certificates delivered pursuant hereto, and the
agreements of the Underwriters contained in Section 7 hereof, shall remain
operative and in full force and effect regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
Underwriter or any controlling person, the Company or any of its officers,
directors or any controlling persons, and shall survive delivery of the Shares
to the Underwriters hereunder.
9. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter shall
default in its obligation to purchase the Shares which it has agreed to
purchase hereunder, you may in your discretion arrange for you or another party
or other parties to purchase such Shares on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Shares, then the Company shall be entitled to
a further period of thirty-six hours within which to procure another party or
parties reasonably satisfactory to you to purchase such Shares on such terms.
In the event that, within the respective prescribed periods,
20
you notify the Company that you have so arranged for the purchase of such
Shares, or the Company notifies you that they have so arranged for the purchase
of such Shares, you or the Company shall have the right to postpone the Closing
Date for a period of not more than seven days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments to the Registration Statement or the Prospectus
which in your opinion may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any persons substituted under this Section
9 with like effect as if such person had originally been a party to this
Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters made by you or the
Company as provided in subsection (a) above, the aggregate number of Shares
which remains unpurchased does not exceed one tenth of the total Shares to be
sold on the Closing Date, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the Shares which such Underwriter agreed
to purchase hereunder and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares which
such Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters made by you or the
Company as provided in subsection (a) above, the number of Shares which remains
unpurchased exceeds one tenth of the total Shares to be sold on the Closing
Date, or if the Company shall not exercise the right described in subsection
(b) above to require the non-defaulting Underwriters to purchase Shares of the
defaulting Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company except for the expenses to be borne by the Company and the
Underwriters as provided in Section 11 hereof and the indemnity and
contribution agreements in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. EFFECTIVE DATE AND TERMINATION. (a) This Agreement shall
become effective at 1:00 p.m., St. Louis time, on the first business day
following the effective date of the Registration Statement, or at such earlier
time after the effective date of the Registration Statement as you in your
discretion shall first release the Shares for offering to the public; provided,
however, that the provisions of Section 7 and 11 shall at all times be
effective. For the purposes of this Section 10(a), the Shares shall be deemed
to have been released to the public upon release by you of the publication of a
newspaper advertisement relating to the Shares or upon release of telegrams,
facsimile transmissions or letters offering the Shares for sale to securities
dealers, whichever shall first occur.
(b) This Agreement may be terminated by you at any time before it
becomes effective in accordance with Section 10(a) by notice to the Company;
provided, however, that the provisions of this Section 10 and of Section 7 and
Section 11 hereof shall at all times be
21
effective. In the event of any termination of this Agreement pursuant to
Section 9 or this Section 10(b) hereof, the Company shall not then be under any
liability to any Underwriter except as provided in Section 7 or Section 11
hereof.
(c) This Agreement may be terminated by you at any time at or
prior to the Closing Date by notice to the Company if any condition specified
in Section 6 hereof shall not have been satisfied on or prior to the Closing
Date. Any such termination shall be without liability of any party to any
other party except as provided in Sections 7 and 11 hereof.
(d) This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option
Shares, if any condition specified in Section 6 hereof shall not have been
satisfied at or prior to the Option Closing Date or as provided in Section 9 of
this Agreement.
If you terminate this Agreement as provided in Sections 10(b), 10(c)
or 10(d), you shall notify the Company by telephone or telegram, confirmed by
letter.
11. COSTS AND EXPENSES. The Company will bear and pay the costs
and expenses incident to the registration of the Shares and public offering
thereof, including, without limitation, (a) the fees and expenses of the
Company's accountants and the fees and expenses of counsel for the Company, (b)
the preparation, printing, filing, delivery and shipping of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto (except as otherwise expressly provided in Section 5(d)
hereof) and the printing, delivery and shipping of this Agreement, the
Agreement Among Underwriters, the Selected Dealer Agreement, Underwriters'
Questionnaires and Powers of Attorney and Blue Sky Memoranda, (c) the
furnishing of copies of such documents (except as otherwise expressly provided
in Section 5(d) hereof) to the Underwriters, (d) the registration or
qualification of the Shares for offering and sale under the securities laws of
the various states, including the reasonable fees and disbursements of
Underwriters' counsel relating to such registration or qualification, (e) the
fees payable to the NASD and the Commission in connection with their review of
the proposed offering of the Shares, (f) all printing and engraving costs
related to preparation of the certificates for the Shares, including transfer
agent and registrar fees, (g) all initial transfer taxes, if any, (h) all fees
and expenses relating to the authorization of the Shares for trading on
Nasdaq/NMS, (i) all travel expenses, including air fare and accommodation
expenses, of representatives of the Company in connection with the offering of
the Shares and (j) all of the other costs and expenses incident to the
performance by the Company of the registration and offering of the Shares;
provided, however, that the Underwriters will bear and pay the fees and
expenses of the Underwriters' counsel (other than the fees and disbursements
relating to the registration or qualification of the Shares for offering and
sale under the securities laws of the various states), the Underwriters'
out-of-pocket expenses, and any advertising costs and expenses incurred by the
Underwriters incident to the public offering of the Shares;
If this Agreement is terminated by you in accordance with the
provisions of Section 10(c), the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel to the Underwriters.
22
12. NOTICES. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Syndicate, facsimile number (314)
289-7387, or if sent to the Company shall be mailed, delivered, sent by
facsimile transmission, or telegraphed and confirmed to the Company at 0000
Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxx,
facsimile number (000) 000-0000. Notice to any Underwriter pursuant to Section
7 shall be mailed, delivered, sent by facsimile transmission, or telegraphed
and confirmed to such Underwriter's address as it appears in the Underwriters'
Questionnaire furnished in connection with the offering of the Shares or as
otherwise furnished to the Company.
13. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Company and their respective successors
and assigns. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, corporation or other entity, other than
the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 7, any legal
or equitable right, remedy or claim under or in respect of this Agreement or
any provision 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 successors and assigns and
said controlling persons and said officers and directors, and for the benefit
of no other person, corporation or other 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, the Company shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of the
Underwriters, made or given by you on behalf of the Underwriters, as if the
same shall have been made or given in writing by the Underwriters.
14. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
15. PRONOUNS. Whenever a pronoun of any gender or number is used
herein, it shall, where appropriate, be deemed to include any other gender and
number.
16. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Missouri.
23
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company and the Underwriters.
XXXXXXXXX CORPORATION
By:
-------------------------------
Name:
Title:
Accepted in St. Louis,
Missouri as of the date
first above written, on
behalf of ourselves and each
of the several Underwriters
named in Schedule I hereto.
X.X. XXXXXXX & SONS, INC.
EQUITABLE SECURITIES CORPORATION
By: X.X. XXXXXXX & SONS, INC.
By:
-------------------------------
Name:
Title:
24
SCHEDULE I
Name Number of Shares
X.X. Xxxxxxx & Sons, Inc.
Equitable Securities Corporation
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
--------------------- -----
Total
-----
25
SCHEDULE II
Pursuant to Section 6(g) of the Underwriting Agreement, Xxxxx Xxxxxxxx
LLC shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of the Act
and the applicable Rules and Regulations thereunder.
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the applicable Rules and Regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited consolidated interim financial statements, selected financial data,
pro forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the Representative of the
Underwriters (the "Representative").
(iii) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, performing the procedures specified by the AICPA for a
review of interim financial information as discussed in SAS No. 71, Interim
Financial Information, on the latest available interim financial statements of
the Company and its subsidiaries, inspection of the minute books of the Company
and its subsidiaries since the date of the latest audited financial statements
included in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) any material modifications should be made to the
unaudited statements of consolidated income, statements of
consolidated financial position and statements of consolidated cash
flows included in the Prospectus for them to be in conformity with
generally accepted accounting principles, or the unaudited statements
of consolidated income, statements of consolidated financial position
and statements of consolidated cash flows included in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published Rules and
Regulations thereunder.
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the
26
unaudited consolidated financial statements from which such
data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Prospectus.
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus.
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements.
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated working capital, net current assets or net assets or
other items specified by the Representative, or any changes in any
items specified by the Representative, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter.
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or any other
changes in any other items specified by the Representative, in
each case as compared with the comparable period of the
preceding year and with any other period of corresponding
length specified by the Representative, except in each case
for changes, decreases or increases which the Prospectus
discloses have occurred or may occur or which are described in
such letter.
(iv) In addition to the audit referred to in their
report(s) included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraph (iii)
above, they have carried out certain specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representative, which are derived from the general accounting records of the
Company and its subsidiaries for the periods covered by their reports and any
interim or other periods since the latest period covered by their reports,
which appear in the Prospectus, or in Part II of, or in exhibits and schedules
to,
27
the Registration Statement specified by the Representative, and have compared
certain of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found them to
be in agreement.
28
2,650,000 SHARES
COMMON STOCK
($.01 PAR VALUE)
AGREEMENT AMONG UNDERWRITERS
____________________, 1997
X.X. Xxxxxxx & Sons, Inc.
Equitable Securities Corporation
As Representatives of the Several Underwriters
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
1. UNDERWRITING AGREEMENT. We understand that XxxxxXxxx
Corporation, a Maryland corporation (the "Company") proposes to enter into an
underwriting agreement in substantially the form attached (the "Underwriting
Agreement") with you and other prospective underwriters (including us)
(collectively, the "Underwriters") providing for the several purchase by the
Underwriters from the Company of 2,650,000 shares of its Common Stock, $.01 par
value, upon the terms stated in the Underwriting Agreement (such 2,650,000
shares of Common Stock are herein referred to as the "Firm Shares"), in which
we will agree in accordance with the terms thereof to purchase the number of
Firm Shares set forth opposite our name in Schedule I thereto. In addition,
the Company proposes to grant to the Underwriters, upon the terms stated in the
Underwriting Agreement, the right to purchase up to an additional 397,500
shares of Common Stock (the "Option Shares"), identical to the Firm Shares, for
the sole purpose of covering over-allotments in the sale of the Firm Shares.
We will agree in accordance with the terms of the Underwriting Agreement to
purchase our proportionate share of the Option Shares which you determine to be
purchased. The Firm Shares and the Option Shares are collectively referred to
herein as the "Shares."
2. REGISTRATION STATEMENT AND PROSPECTUS. The Shares are more
particularly described in a registration statement (Registration No. 333-___)
filed with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"). Amendments to such
registration statement have been or are being filed, or a form of prospectus is
being filed pursuant to Rule 424(b) and Rule 430A under the Act, or a Term
Sheet or Abbreviated Term Sheet is being filed pursuant to Rule 424(b)(7) under
the Act, in which, with our consent hereby confirmed, we have been named as one
of the Underwriters of the Shares. A copy of the registration statement as
filed and a copy of each amendment as filed (excluding exhibits) have
heretofore been delivered to us. We confirm that we have examined the
registration statement, including amendments thereto, relating to the Shares,
as filed with the Commission, that we are willing to accept the
responsibilities of an Underwriter under the Act in
29
respect of the registration statement, and we are willing to proceed with a
public offering of the Shares in the manner contemplated therein. The
registration statement and the related prospectus may be further amended, but
no such amendment or change shall release or affect our obligations hereunder
or under the Underwriting Agreement. As used herein, the terms "Registration
Statement," "Prospectus," "Preliminary Prospectus," "Term Sheet" and
"Abbreviated Term Sheet" shall have the same meanings as specified in the
Underwriting Agreement.
3. AUTHORITY OF X.X. XXXXXXX & SONS, INC. AND EQUITABLE
SECURITIES CORPORATION. We hereby authorize X.X. Xxxxxxx & Sons, Inc. and
Equitable Securities Corporation, acting on our behalf, as our representatives
(a) to complete, execute, and deliver the Underwriting Agreement, to determine
the public offering price of the Shares and the underwriting discount with
respect thereto and to make such variations, if any, as in your judgment are
appropriate and are not material, provided that the respective amount of Shares
set forth opposite our name in Schedule I thereto shall not be increased
without our consent, except as provided herein or in the Underwriting
Agreement, (b) to waive performance or satisfaction by the Company of
obligations or conditions included in the Underwriting Agreement if in your
judgment such waiver will not have a material adverse effect upon the interests
of the Underwriters, and (c) to take such actions as in your discretion may be
necessary or advisable to carry out the Underwriting Agreement, this Agreement,
and the transactions for the accounts of the several Underwriters contemplated
thereby and hereby. We also authorize you to determine all matters relating to
the public advertisement of the Shares.
4. PUBLIC OFFERING. We authorize you, with respect to any Shares
which we so agree to purchase, to reserve for sale, and on our behalf to sell,
to dealers selected by you (including you or any of the other Underwriters,
such dealers so selected being hereinafter called "Selected Dealers") and to
others all or part of our Shares as you may determine. Reservations for sales
to persons other than Selected Dealers shall be as nearly as practicable in
proportion to the respective underwriting obligations of the Underwriters,
unless you agree to a smaller proportion at the request of an Underwriter.
Reservations for sales to Selected Dealers need not be in such proportion. All
sales of reserved Shares shall be as nearly as practicable in proportion to the
respective reservations as calculated from day to day.
In your discretion, from time to time, you may add to the reserved
Shares any Shares retained by us remaining unsold, and you may upon our request
release to us any of our Shares reserved but not sold. Any Shares so released
shall not thereafter be deemed to have been reserved. Upon termination of this
Agreement, or prior thereto at your discretion, you shall deliver to our
account any of our Shares reserved but not sold and delivered, except that if
the aggregate of all reserved but unsold and undelivered Shares is less than
265,000 Shares, you are authorized to sell such Shares for the accounts of the
several Underwriters at such price or prices as you may determine.
Sales of reserved Shares shall be made to Selected Dealers at the
public offering price less the Selected Dealers' Concession pursuant to the
Selected Dealer Agreement in substantially the form attached hereto, and to
others at the public offering price. Underwriters and Selected Dealers may
reallow a concession to other dealers as set forth in the Selected Dealer
Agreement.
30
After advice from you that the Shares are released for sale to the
public, we will offer to the public in conformity with the terms of the
offering set forth in the Prospectus such of our Shares as you advise us are
not reserved. We authorize you after the Shares are released for sale to the
public, in your discretion, to change the public offering price of the Shares
and the concession, and to buy Shares for our account from Selected Dealers at
the public offering price less such amount not in excess of the Selected
Dealers' Concession as you may determine.
Sales of Shares between Underwriters may be made with your prior
consent, or as you deem advisable for blue sky purposes.
We agree that we will not sell to any accounts over which we exercise
discretionary authority any Shares which we have agreed to purchase under the
Underwriting Agreement.
5. ADDITIONAL PROVISIONS REGARDING SALES. You may, in your
discretion, charge our account with an amount equal to the Selected Dealers'
Concession in respect of each Share purchased under the Underwriting Agreement
by you and not sold by you for our account (and each Share which you believe
has been substituted therefor) which may be delivered against a purchase
contract made by you for our account prior to the later of (a) the termination
of all of the provisions referred to in Section 10 hereof or (b) the covering
by you of any short position created by you for our account, or in lieu of such
charge, require us to repurchase on demand at the total cost thereof (including
commissions), plus transfer taxes, any such Share so delivered.
6. PAYMENT AND DELIVERY. At or before 9:00 a.m., New York City
time, on the Closing Date (as defined in the Underwriting Agreement) and on
each Option Closing Date (as defined in the Underwriting Agreement), we will
deliver to you at your office at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, a
certified or bank cashiers' check payable to your order, in clearing house
funds, in the amount equal to the initial offering price set forth in the
Prospectus less the Selected Dealers' Concession in respect of the number of
Firm Shares or Option Shares, as the case may be, to be purchased by us
pursuant to the Underwriting Agreement. We authorize you for our account to
make payment of the purchase price for the Shares to be purchased by us against
delivery to you of such Shares, and the difference between such price and the
amount of our check delivered to you therefor shall be credited to our account.
Unless we notify you at least two full business days prior to such Closing Date
to make other arrangements, you may, in your discretion, advise the Company to
prepare our certificates in our name. If you have not received our funds as
requested, you may in your discretion make such payment on our behalf, in which
event we will reimburse you promptly. Any such payment by you shall not
relieve us from any of our obligations hereunder or under the Underwriting
Agreement.
We authorize you for our account to accept delivery of our Shares from
the Company and to hold such of our Shares as you have reserved for sale to
Selected Dealers and others and to deliver such Shares against such sales. You
will deliver to us our unreserved Shares as promptly as practicable.
Notwithstanding the foregoing provisions of this Section 6, if you so
notify us, payment for and delivery of our Shares may be made through the
facilities of The Depository Trust
31
Company, if we are a member, unless we have otherwise notified you prior to a
date to be specified by you, or, if we are not a member, settlement may be made
through a correspondent who is a member pursuant to instructions we may send to
you prior to such specified date.
As promptly as practicable after you receive payment for reserved
Shares sold for our account, you will remit to us the purchase price paid by us
for such Shares and credit or debit our account with the difference between the
sale price and such purchase price.
7. AUTHORITY TO BORROW. In connection with the transactions
contemplated in the Underwriting Agreement or this Agreement, we authorize you,
in your discretion, to advance your own funds for our account, charging current
interest rates, to arrange loans for our account and in connection therewith to
execute and deliver any notes or other instruments and hold or pledge as
security any of our Shares or any Common Stock of the Company purchased for our
account. Any lender may rely upon your instructions in all matters relating to
any such loan.
Any of our Shares and any Common Stock of the Company purchased for
our account held by you may from time to time be delivered to us for carrying
purposes, and any such securities will be delivered to you upon demand.
8. STABILIZATION AND OTHER MATTERS. We authorize you in your
discretion to make purchases and sales of the Common Stock of the Company for
our account in the open market or otherwise, for long or short account, on such
terms as you deem advisable and in arranging sales to over-allot. If you have
purchased Common Stock for stabilizing purposes prior to the execution of this
Agreement, such purchases shall be treated as having been made pursuant to the
foregoing authorization. We also authorize you, either before or after the
termination of the offering provisions of this Agreement, to cover any short
position incurred pursuant to this Section on such terms as you deem advisable.
All such purchases and sales and over-allotments shall be made for the accounts
of the several Underwriters as nearly as practicable in proportion to their
respective underwriting obligations. Our net commitment under this Section
(excluding any commitment incurred under the Underwriting Agreement upon
exercise of the right to purchase Option Shares) shall not, at the end of any
business day, exceed 15% of our maximum underwriting obligation. We will on
your demand take up and pay for at cost any Common Stock so purchased or sold
or over-allotted for our account, and, if any other Underwriter defaults in its
corresponding obligation, we will assume our proportionate share of such
obligation without relieving the defaulting Underwriter from liability. We
will be obligated in respect of purchases and sales made for our account
hereunder whether or not any proposed purchase of the Shares from the Company
is consummated. The existence of this provision is no assurance that the price
of the Shares will be stabilized or that, if stabilizing is commenced, it may
not be discontinued at any time.
We agree to advise you, from time to time upon your request, during
the term of this Agreement, of the number of Shares retained by us remaining
unsold, and will, upon your request, sell to you for the accounts of one or
more of the several Underwriters such number of such Shares as you may
designate at such prices, not less than the net price to Selected Dealers nor
more than the public offering price, as you may determine.
32
If you effect any stabilizing purchase pursuant to this Section 8, you
will notify us promptly of the date and time when the first stabilizing
purchase was effected and the date and time when stabilizing was terminated.
You will retain such information as is required to be retained by you as
"Manager" pursuant to Rule 17a-2 under the Securities Exchange Act of 1934, as
amended (the "1934 Act"). We agree that we will not effect any stabilizing
purchases without your express authorization, and, if any purchases are
effected, we agree to furnish to you not later than three business days
following the date upon which stabilization was commenced such information as
is required under Rule 17a-2(d).
With respect to the Underwriting Agreement, you are also authorized in
your discretion (a) to exercise the option therein as to all or any part of the
Option Shares, and to terminate such option in whole or in part prior to its
expiration, (b) to postpone the Closing Date and the Option Closing Date
referred to in the Underwriting Agreement, and any other time or date specified
therein, (c) to exercise any right of cancellation or termination, (d) to
arrange for the purchase by other persons (including yourselves or any other
Underwriter) of any Shares not taken up by any defaulting Underwriter, and (e)
to consent to such other changes in the Underwriting Agreement as in your
judgment do not materially adversely affect the substance of our rights and
obligations thereunder.
We further agree that (a) prior to the termination of this Agreement
we will not, directly or indirectly, bid for or purchase any Shares for our own
account, except as provided in this Agreement and in the Underwriting
Agreement, and (b) prior to the completion (as defined in Rule 10b-6 under the
0000 Xxx) of our participation in this distribution, we will otherwise comply
with Rule 10b-6.
9. ALLOCATION OF EXPENSES AND SETTLEMENT. We authorize you to
charge our account with (a) all transfer taxes on Shares purchased by us
pursuant to the Underwriting Agreement and sold by you for our account, (b)
Selected Dealers' Concessions in connection with the purchase, marketing and
sale of the Shares for our account, and (c) our proportionate share (based upon
our underwriting obligation) of all other expenses incurred by you under this
Agreement and in connection with the purchase, carrying, sale and distribution
of the Shares. Your determination of the amount and allocation of such
expenses shall be conclusive. In the event of the default of any Underwriter
in carrying out its obligations hereunder, the expenses chargeable to such
Underwriter pursuant to this Agreement and not paid by it, as well as any
additional losses or expenses arising from such default, may be proportionately
charged by you against the other Underwriters not so defaulting (including such
other persons who purchase Shares upon a default by an Underwriter pursuant to
Section 11 hereof), without, however, relieving such defaulting Underwriter
from its liability therefor.
As soon as practicable after termination of this Agreement, the
accounts hereunder will be settled, but you may reserve from distribution such
amount as you deem necessary to cover possible additional expenses. You may at
any time make partial distributions of credit balances or call for payment of
debit balances. Any of our funds in your hands may be held with your general
funds without accountability for interest. Notwithstanding the termination of
this Agreement or any settlement, we will pay (a) our proportionate share
(based on our underwriting
33
obligation) of all expenses and liabilities which may be incurred by or for the
accounts of the Underwriters, including any liability based on the claim that
the Underwriters constitute an association, unincorporated business or other
separate entity, and of any expenses incurred by you or any other Underwriter
with your approval in contesting any such claim or liability, and (b) any
transfer taxes paid after such settlement on account of any sale or transfer
for our account.
10. TERMINATION. The offering provisions of this Agreement shall
terminate 30 days from the date hereof unless extended by you. You may extend
said provisions for a period or periods not exceeding an additional 30 days in
the aggregate, provided that the Selected Dealer Agreements, if any, are
similarly extended. Whether extended or not, said provisions may be terminated
in whole or in part by notice from you.
11. DEFAULT BY UNDERWRITERS. Default by one or more Underwriters
in respect of their obligations hereunder or under the Underwriting Agreement
shall not release us from any of our obligations or in any way affect the
liability of any defaulting Underwriter to the other Underwriters for damages
resulting from such default. In case of such default by one or more
Underwriters, you are authorized to increase, pro rata with other
non-defaulting Underwriters, the number of Shares which we shall be obligated
to purchase pursuant to the Underwriting Agreement, provided that the aggregate
amount of all such increases for our account shall not exceed our pro rata
share of 265,000 Shares; and you are further authorized to arrange, but shall
not be obligated to arrange, for the purchase by other persons, who may include
yourselves or other Underwriters, of all or a portion of any aggregate amount
not taken up. In the event any such arrangements are made, the respective
numbers of Shares to be purchased by the non-defaulting Underwriters and by any
such other persons shall be taken as the basis for the underwriting obligations
under this Agreement.
12. POSITION OF X.X. XXXXXXX & SONS, INC. AND EQUITABLE SECURITIES
CORPORATION. Except as otherwise specifically provided in this Agreement, you
shall have full authority to take such action as you may deem advisable in
respect of all matters pertaining to the Underwriting Agreement and this
Agreement and in connection with the purchase, carrying, sale, and distribution
of the Shares (including authority to terminate the Underwriting Agreement as
provided therein). You shall be under no liability to us for or in respect of
the value of the Shares or the validity or the form thereof, the Registration
Statement, any Preliminary Prospectus, the Prospectus, the Underwriting
Agreement, or other instruments executed by the Company or others; or for or in
respect of the issuance, transfer, or delivery of the Shares; or for the
performance by the Company or others of any agreement on its or their part; nor
shall you be liable under any of the provisions hereof or for any matters
connected herewith, except for your own want of good faith, for obligations
expressly assumed by you in this Agreement and for any liabilities imposed upon
you by the Act. No obligations on your part shall be implied or inferred
herefrom. Authority with respect to matters to be determined by you, or by you
and the Company, pursuant to the Underwriting Agreement, shall survive the
termination of this Agreement.
In taking all actions hereunder, except in the performance of your own
obligations hereunder and under the Underwriting Agreement, you shall act only
as the representative of each of the Underwriters. The commitments and
liabilities of each of the several Underwriters
34
are several in accordance with their respective purchase obligations and are
not joint or joint and several. Nothing contained herein shall constitute the
Underwriters partners or render any of them liable to make payments otherwise
than as herein provided. If for federal income tax purposes the Underwriters
should be deemed to constitute a partnership, then each Underwriter elects to
be excluded from the application of Subchapter K, Chapter 1, Subtitle A, of the
Internal Revenue Code of 1986, as amended, and agrees not to take any position
inconsistent with such election. Each Underwriter authorizes X.X. Xxxxxxx &
Sons, Inc., in its discretion, on behalf of such Underwriter, to execute such
evidence of such election as may be required by the Internal Revenue Service.
13. COMPENSATION TO X.X. XXXXXXX & SONS, INC. AND EQUITABLE
SECURITIES CORPORATION. As compensation for your services in connection with
the purchase of the Shares and the management of the public offering of the
Shares, we agree to pay you and authorize you to charge our account with an
amount equal to $____ per share of the Shares which we have agreed to purchase
pursuant to the Underwriting Agreement.
14. INDEMNIFICATION AND FUTURE CLAIMS. Each Underwriter,
including you, agrees to indemnify, hold harmless and reimburse each other
Underwriter and each person, if any, who controls any other Underwriter within
the meaning of Section 15 of the Act, and any successor of any other
Underwriter, to the extent that, and upon the terms upon which, each
Underwriter will be obligated pursuant to the Underwriting Agreement to
indemnify, hold harmless and reimburse the Company, its directors, officers,
and controlling persons therein specified.
In the event that at any time any person other than an Underwriter
asserts a claim against one or more of the Underwriters or against you as
representatives of the Underwriters arising out of an alleged untrue statement
or omission in the Registration Statement (or any amendment thereto) or in any
Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto) or relating to any transaction contemplated by this Agreement, we
authorize you to make such investigation, to retain such counsel for the
Underwriters and to take such action in the defense of such claim as you may
deem necessary or advisable. You may settle such claim with the approval of a
majority in interest (based upon underwriting obligations) of the Underwriters.
We will pay our proportionate share (based upon our underwriting obligation) of
all expenses incurred by you (including the fees and expenses of counsel for
the Underwriters) in investigating and defending against such claim and our
proportionate share of the aggregate liability incurred by all underwriters in
respect of such claim (after deducting any contribution or indemnification
obtained pursuant to the Underwriting Agreement, or otherwise, from persons
other than Underwriters), whether such liability is the result of a judgment
against one or more of the Underwriters or the result of any such settlement.
There shall be credited against any amount paid or payable by us pursuant to
this paragraph any loss, damage, liability or expense which is incurred by us
as a result of any such claim asserted against us, and if such loss, claim,
damage, liability, or expense is incurred by us as a result of any such claim
against us, and if such loss, claim, damage, liability, or expense is incurred
by us subsequent to any payment by us pursuant to this paragraph, appropriate
provision shall be made to effect such credit, by refund or otherwise. Any
Underwriter may retain separate counsel at its own expense. A claim against or
liability incurred by a person who controls an Underwriter shall be deemed to
have been made
35
against or incurred by such Underwriter. In the event of default by any
Underwriter in respect of its obligations under this Section, the
non-defaulting Underwriters shall be obligated to pay the full amount thereof
in the proportions that their respective underwriting obligations bear to the
underwriting obligations of all non-defaulting Underwriters, without relieving
such defaulting Underwriter of its liability hereunder. Our agreements
contained in this Section will remain in full force and effect regardless of
any investigation made by or on behalf of such other Underwriter or controlling
person and will survive the delivery of and payment for the Shares and the
termination of this Agreement and the similar agreements entered into with the
other Underwriters.
15. BLUE SKY AND OTHER MATTERS. You will not have any
responsibility with respect to the right of any Underwriter or other person to
sell the Shares in any jurisdiction notwithstanding any information you may
furnish in that connection. We authorize you to file a New York Further State
Notice, if required, and to make and carry out on our behalf any agreements
which you may deem necessary in order to procure registration or qualification
of any of the Shares in any jurisdiction, and we will at your request make such
payments, and furnish to you such information, as you may deem required by
reason of any such agreements.
We authorize you to file on behalf of the several Underwriters with
the National Association of Securities Dealers, Inc. (the "NASD") such
documents and information, if any, which are available or have been furnished
to you for filing pursuant to the applicable rules, statements, and
interpretations of the NASD.
16. TITLE TO SHARES. The Shares purchased by the respective
Underwriters shall remain the property of such Underwriters until sold and no
title to any such Shares shall in any event pass to you by virtue of any of the
provisions of this Agreement.
17. CAPITAL REQUIREMENTS. We confirm that the incurrence by us of
our obligations under this Agreement and under the Underwriting Agreement will
not place us in violation of Rule 15c3-1 under the 1934 Act or of any
applicable rules relating to capital requirements of any securities exchange or
association to which we are subject.
18. LIABILITY FOR FUTURE CLAIMS. Neither any statement by you of
any credit or debit balance in our account nor any reservation from
distribution to cover possible additional expenses relating to the Shares will
constitute any representation by you as to the existence or nonexistence of
possible unforeseen expenses or liabilities of or charges against the several
Underwriters. Notwithstanding the distribution of any net credit balance to
us, we will be and remain liable for, and will pay on demand, (a) our
proportionate share (based upon our underwriting obligation) of all expenses
and liabilities which may be incurred by or for the accounts of the
Underwriters, including any liability which may be incurred by the Underwriters
or any of them based on the claim that the Underwriters constitute an
association, unincorporated business, partnership, or any separate entity, and
(b) any transfer taxes paid after such settlement on account of any sale or
transfer for our account.
36
19. ACKNOWLEDGMENT OF REGISTRATION STATEMENT, ETC. We hereby
confirm that we have examined the Registration Statement (including any
amendments or supplements thereto) and Prospectus relating to the Shares filed
with the Commission, that we are willing to accept the responsibilities of an
underwriter thereunder and that we are willing to proceed as therein
contemplated. We confirm that we have authorized you to advise the Company on
our behalf (a) as to the statements to be included in any Preliminary
Prospectus and in the Prospectus (including any supplement thereto) relating to
the Shares, insofar as they relate to us, and (b) that there is no information
about us required to be stated in said Registration Statement or said
Preliminary Prospectus or the Prospectus (including any supplement thereto)
other than as set forth in the Underwriters' Questionnaire previously delivered
by us to you and the Company. We understand that the aforementioned documents
are subject to further change and that we will be supplied with copies of any
amendment or amendments to the Registration Statement and of any amended
Prospectus promptly, if and when received by you, but the making of such
changes and amendments will not release us or affect our obligations hereunder
or under the Underwriting Agreement.
20. NOTICES AND GOVERNING LAW. Any notice from you to us shall be
mailed, telephoned, or telegraphed to us at our address as set forth in the
Underwriters' Questionnaire. Any notice from us to you shall be deemed to have
been duly given if mailed, telephoned or telegraphed to you at Xxx Xxxxx
Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Syndicate. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Missouri.
21. OTHER PROVISIONS. We represent that we are actually engaged
in the investment banking or securities business and that we are a member in
good standing of the NASD or, if we are not such a member, that we are a
foreign dealer not eligible for membership in the NASD and that we will not
offer or sell any Shares in, or to persons who are nationals or residents of,
the United States of America. In making sales of Shares, if we are such a
member, we agree to comply with all applicable rules of the NASD, including,
without limitation, the Interpretation of Rule 2110 of the NASD's Rules of
Conduct with respect to Free-Riding and Withholding (IM-2110-1) and Rule 2740
of such Rules, or if we are a foreign dealer, we agree to comply with such
Interpretation and Rules 2730, 2740 and 2750 of such Rules as though we were
such a member, and with Rule 2420 as that Rule applies to a non-member broker
or dealer in a foreign country. We confirm that you have heretofore delivered
to us such number of copies of the Prospectus as have been reasonably requested
by us, and we further confirm that we have complied and will comply with Rule
15c2-8 under the 1934 Act concerning delivery of each Preliminary Prospectus
and the Prospectus, and that we will furnish to persons who receive a
confirmation of sale (i) a copy of the Prospectus filed pursuant to Rule 424(b)
or Rule 424(c) under the Act or (ii) if a Term Sheet or Abbreviated Term Sheet
is used, a copy of the Term Sheet or Abbreviated Term Sheet and the last
Preliminary Prospectus filed with the Commission prior to the time the
Registration Statement became effective. We are aware of our statutory
responsibilities under the Act, and you are authorized on our behalf to so
advise the Commission.
37
22. COUNTERPARTS. This Agreement may be signed in any number of
counterparts which, taken together, shall constitute one and the same
instrument, and you may confirm the execution of such counterparts by facsimile
signature.
-----------------------------
As Attorney-in-Fact for each of the several Underwriters named in
Schedule I to the Underwriting Agreement
38
Confirmed as of the date first above written.
X.X. Xxxxxxx & Sons, Inc.
As Representative of the Several Underwriters
By:
---------------------------
Name:
Title:
Equitable Securities Corporation
As Representative of the Several
Underwriters
By:
----------------------------
Name:
Title:
39
XXXXXXXXX CORPORATION
2,650,000 SHARES
COMMON STOCK
($.01 PAR VALUE)
SELECTED DEALER AGREEMENT
__________________, 1997
Underwriters represented by us have severally agreed to purchase from
the above-named company ("Company") the above shares of Common Stock
("Shares"). The Shares are described in the enclosed Prospectus, the receipt
of which you hereby acknowledge.
1. OFFERING TO SELECTED DEALERS. The several Underwriters,
acting through us, are severally offering part of the Shares for sale to
certain dealers ("Selected Dealers"), as principals, subject to the terms and
conditions stated herein and in the Prospectus, at the public offering price
per Share set forth in the Prospectus, less the per Share concession set forth
in the Prospectus (such concession hereinafter referred to as the "Selected
Dealers' Concession"). Sales of Shares to you pursuant to such offering will
be evidenced by our written confirmation and will be on such terms and
conditions set forth therein and in the Prospectus. In purchasing Shares, you
will rely upon no statement whatsoever, written or oral, other than statements
in the Prospectus.
2. REOFFERING BY SELECTED DEALERS. We are advising you by
telegram of the method and terms of the offering. Acceptances of any reserved
Shares received at the office of X.X. Xxxxxxx & Sons, Inc., Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, after the time specified therefor in the
telegram and any order for additional Shares will be subject to rejection in
whole or in part. Subscription books may be closed by us at any time in our
discretion without notice and the right is reserved to reject any subscription
in whole or in part, but notification of allotments against and rejections of
subscriptions will be made as promptly as practicable.
We are advising you in such telegram of the release by us of the
Shares being sold by the Underwriters for public offering and of the public
offering price of the Shares. Upon receipt of such advice, the Shares
thereafter purchased by you hereunder are to be offered by you to the public at
the public offering price, subject to the terms thereof. You agree that in
selling Shares purchased hereunder you will comply with the applicable
requirements of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended. Except as herein otherwise provided, Shares
shall not be offered or sold by you below the public offering price before the
termination of this Agreement, except that a concession from such public
offering price of not in excess of the per Share amount set forth in the
Prospectus may be allowed to dealers who are actually engaged in the investment
banking or securities business, who execute
40
the written agreement prescribed by Rule 2740(c) of the Rules of Conduct of the
National Association of Securities Dealers, Inc. ("NASD") and who are members
in good standing of the NASD or foreign dealers, not eligible for membership in
the NASD, who represent to you that they will promptly reoffer the Shares at
the public offering price and will abide by the conditions with respect to
foreign brokers and dealers set forth in the first paragraph of Section 4
hereof.
It is assumed that Shares sold by you will be effectively placed for
investment. If we contract for or purchase in the open market or otherwise for
the account of any Underwriter any Shares sold to you and not effectively
placed for investment, we may charge you the Selected Dealers' Concession
originally allowed you on the Shares so repurchased, and you agree to pay such
amount to us on demand. Shares so delivered to you against any such repurchase
need not be the identical Shares originally purchased by you.
You will advise us upon request of Shares purchased by you remaining
unsold, and we shall have the right to repurchase such unsold Shares on demand
at the public offering price less all or part of the Selected Dealers'
Concession.
3. PAYMENT AND DELIVERY. Payment for Shares purchased by you
shall be made by you on such dates and at such places as we advise you, by
certified or bank cashiers' check payable to the order of X.X. Xxxxxxx & Sons,
Inc. in such clearing house funds as we advise, against delivery of such
Shares. Delivery instructions must be in our hands at the office of X.X.
Xxxxxxx & Sons, Inc., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx, 00000,
at such time as we request. Notwithstanding such provisions, if we so notify
you, payment for and delivery of Shares purchased by you hereunder may be made
through the facilities of the Depository Trust Company, if you are a member,
unless you have otherwise notified us prior to the date specified in our
telegram to you, or, if you are not a member, settlement may be made through a
correspondent who is a member pursuant to instructions which you will send to
us prior to such specified date.
The above payment shall be made at the public offering price, or if we
so advise you, at a net price equal to the public offering price less the
Selected Dealers' Concession. If payment is made by you at the public offering
price, the Selected Dealers' Concession payable to you hereunder shall be paid
promptly after the termination of this Agreement (or on such earlier date as we
may determine), except that such Concession may be withheld and cancelled, at
our discretion, as to Shares which we have repurchased as set forth in the
third paragraph of Section 2 hereof.
4. POSITION OF SELECTED DEALERS AND UNDERWRITERS. You represent
that you are actually engaged in the investment banking or securities business
and that you are a member in good standing of the NASD or that you are a
foreign dealer, not eligible for membership in the NASD, which agrees not to
offer or sell any Shares in, or to persons who are nationals or residents of,
the United States of America. In making sales of Shares, if you are such a
member, you agree to comply with all applicable rules of the NASD, including,
without limitation, the Interpretation of Rule 2110 of the NASD's Rules of
Conduct with respect to Free-Riding and Withholding (IM-2110-1) and Rule 2740
of such Rules, or, if you are a foreign dealer, you agree
41
to comply with such Interpretation and Rules 2730, 2740 and 2750 of such Rules
as though you were such a member, and with Rule 2420 as that Rule applies to a
non-member broker or dealer in a foreign country. You also confirm that you
have complied and will comply with the prospectus delivery requirements of Rule
15c2-8 under the Securities Exchange Act of 1934, as amended, in accordance
with your prior undertaking to do so, and that you will furnish to persons who
receive a confirmation of sale a copy of the Prospectus.
You are not authorized to give any information or make any
representations other than as contained in the Prospectus, or to act as agent
for any Underwriter or us. Nothing shall constitute the Selected Dealers an
association, unincorporated business or other separate entity or partners with
the several Underwriters, with us, or with each other, but you shall be liable
for your proportionate share of any tax, liability or expense based on any
claim to the contrary. Neither we nor any Underwriter shall be under any
liability to you, except for obligations expressly assumed by us in this
Agreement, and no obligations on our part shall be implied or inferred
herefrom.
5. BLUE SKY MATTERS. We will not have any responsibility with
respect to the right of any dealer to sell the Shares in any jurisdiction,
notwithstanding any information we may furnish in that connection. We have
filed a New York Further State Notice, if required.
6. NOTICES. All communications from you to us shall be addressed
to X.X. Xxxxxxx & Sons, Inc., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx
00000, Attention: Syndicate. Any notice from us to you shall be delivered,
mailed or telegraphed to you at the address to which this letter is mailed.
7. TERMINATION. This Agreement shall terminate 30 days after the
date hereof unless extended by us for a period or periods not exceeding an
additional 30 days in the aggregate, and, whether extended or not, may be
terminated by us at any time. Such termination shall not affect your
obligation to pay for any Shares purchased by you or any of the provisions of
Section 4 hereof.
Please confirm your agreement hereto by signing the duplicate copy of
this Agreement enclosed herewith and returning it to us at the address in
Section 6 above.
X.X. Xxxxxxx & Sons, Inc.
By:
-----------------------
Authorized Signatory
Equitable Securities Corporation
By:
-----------------------
Authorized Signatory
42
_______________, 1997
X.X. Xxxxxxx & Sons, Inc.
Equitable Securities Corporation
as Representatives of the Several Underwriters
Xxx Xxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
We hereby confirm our order for Common Stock, $.01 par value, of
XxxxxXxxx Corporation (the "Shares") for such number of Shares specified in our
order and under the terms and conditions contained in your written confirmation
of our purchase and the foregoing Agreement.
We hereby confirm our agreement to all the terms and conditions stated
in the foregoing Agreement. We acknowledge receipt of the Prospectus relating
to the above Shares and we further state that in entering this order we have
relied upon the Prospectus and no other statement whatsoever, written or oral.
We confirm that we are actually engaged in the investment banking or securities
business and are a member in good standing of the NASD or that we are a foreign
dealer, not eligible for membership in the NASD, which agrees not to offer or
sell any Shares in, or to persons who are nationals or residents of, the United
States of America. We agree that in making sales of Shares, if we are such a
member, we will comply with all applicable rules of the NASD, including,
without limitation, the Interpretation of Rule 2110 of the NASD's Rules of
Conduct with respect to Free-Riding and Withholding (IM-2110-1) and Rule 2740
of such Rules, or, if we are a foreign dealer, we will comply with such
Interpretation and Rules 2730, 2740 and 2750 of such Rules as though we were
such a member, and with Rule 2420 as that Rule applies to a non-member broker
or dealer in a foreign country. Further, we confirm that we have complied and
will comply with the prospectus delivery requirements of Rule 15c2-8 under the
Securities Exchange Act of 1934, as amended, and that we will furnish to
persons who receive a confirmation of sale a copy of the Prospectus.
-----------------------------------
(Please print or type name of firm)
By:
-------------------------------
(Authorized Representative)
Dated: , 1997
-----------------
