1
EXHIBIT 1.1
2,700,000 Shares
TALX Corporation
Common Stock
UNDERWRITING AGREEMENT
August , 2001
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CIBC World Markets Corp.
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Xxxxxx X. Xxxxx & Co. Incorporated
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx, Xxxxxxxx & Company, Incorporated
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TALX Corporation, a Missouri corporation (the "Company"), and the
shareholder of the Company listed on Schedule II hereto (the "Selling
Shareholder"), propose, subject to the terms and conditions contained herein, to
sell to you (the "Underwriters"), an aggregate of 2,700,000 shares (the "Firm
Shares") of the Company's Common Stock, $0.01 par value (the "Common Stock"). Of
the 2,700,000 Firm Shares, 2,500,000 are to be issued and sold by the Company
and 200,000 are to be sold by the Selling Shareholder. The respective numbers of
the Firm Shares to be purchased by each of the several Underwriters are set
forth opposite their names on Schedule I hereto. The Company and the Selling
Shareholder are sometimes referred to herein collectively as the "Sellers." In
addition, the Company and the Selling Shareholder propose to grant to the
Underwriters an option to purchase up to an additional 405,000 shares (the
"Option Shares") of Common Stock for the purpose of covering over-allotments in
connection with the sale of the Firm Shares. Of the Option Shares, up to 375,000
are being offered by the Company and up to 30,000 are being offered by the
Selling Shareholder. The Firm Shares and the Option Shares are together called
the "Shares."
1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
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(a) Each of the Sellers agrees, severally and not jointly, to sell to
the Underwriters, at a price of $_____ per share (the "Initial Price"), the
number of Firm Shares set forth opposite the name of such Seller on
Schedule II to this Agreement, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Sellers, at the Initial
Price, the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule I to this Agreement, subject to adjustment in
accordance with Section 11 hereof. The number of Firm Shares to be
purchased by each Underwriter from each Seller shall be in the same
proportion (adjusted by the Underwriters to eliminate fractions) as the
number of Firm Shares to be purchased hereunder by each Underwriter bears
to the total number of Firm Shares being purchased hereunder.
(b) Each of the Sellers grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares
offered by such Seller at the Initial Price. To the extent that the
Underwriters exercise the option to purchase fewer than the total number of
Option Shares offered hereunder, the Underwriters shall purchase Option
Shares from the Company and the Selling Shareholder in the same proportion
that the number of Option Shares offered by such Seller bears to the total
number of Option Shares offered by such Seller. The number of Option Shares
to be purchased by each Underwriter from each such Seller shall be in the
same proportion (adjusted by the Underwriters to eliminate fractions) of
the total number of Option Shares to be purchased by the Underwriters as
such Underwriter is purchasing of the Firm Shares. The Underwriters' option
to purchase Option Shares may be exercised only to cover over-allotments in
the sales of the Firm Shares by the Underwriters and may be exercised in
whole or in part at any time at least two full business days before the
Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each case
upon written, facsimile or telegraphic notice, or verbal or telephonic
notice confirmed by written, facsimile or telegraphic notice, by the
Underwriters to the Company and the Custodian (as defined herein) no later
than 12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date or at least two business days before the Option Shares
Closing Date (as defined below), as the case may be, setting forth the
number of Option Shares to be purchased and the time and date (if other
than the Firm Shares Closing Date) of such purchase.
2. Delivery and Payment. Payment of the purchase price for, and
delivery of certificates for, the Firm Shares shall be made at the offices of
CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at 10:00 a.m., New York City time, on the fourth business day following the date
of this Agreement or at such time on such other date, not later than ten (10)
business days after the date of this Agreement, as shall be agreed upon by the
Company and the Underwriters (such time and date of delivery and payment are
called the "Firm Shares Closing Date").
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In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price, and delivery of
the certificates, for such Option Shares shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Underwriters and
the Company, on each date of delivery as specified in the notice from the
Underwriters to the Company (such time and date of delivery and payment are
called the "Option Shares Closing Date"). The Firm Shares Closing Date and the
Option Shares Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
Payment shall be made to the Company and the Selling Shareholder by
wire transfer of immediately available funds or by certified or official bank
check or checks payable in New York Clearing House (same day) funds drawn to the
order of the Company and to the Selling Shareholder for the shares purchased
from the Selling Shareholder, against delivery of the respective certificates to
the Underwriters for the respective accounts of the Underwriters of certificates
for the Shares to be purchased by them.
Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Underwriters shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be delivered by or on behalf of the Company to the
Underwriters through the facilities of the Depository Trust Company ("DTC") for
the account of such Underwriter. The Company will cause the certificates
representing the Shares to be made available for checking and packaging, at such
place as is designated by the Underwriters, on the full business day before the
Firm Shares Closing Date (or the Option Shares Closing Date in the case of the
Option Shares).
3. Registration Statement and Prospectus; Public Offering. The Company
has prepared and filed in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission") a Registration Statement (as hereinafter defined)
on Form S-3 (No. 333-63690), including a preliminary prospectus relating to the
Shares, and such amendments thereof as may have been required to the date of
this Agreement. Copies of such Registration Statement (including all amendments
thereof) and of the related Preliminary Prospectus (as hereinafter defined) have
heretofore been delivered by the Company to you. The term "Preliminary
Prospectus" means any preliminary prospectus (as described in Rule 430 of the
Rules) included at any time as a part of the Registration Statement or filed
with the Commission by the Company with the consent of the Underwriters pursuant
to Rule 424(a) of the Rules. The term "Registration Statement" as used in this
Agreement means the initial registration statement (including all exhibits,
financial schedules and information deemed to be a part of the Registration
Statement through incorporation by reference or otherwise), as amended at the
time and on the date it becomes effective (the "Effective Date") including the
information (if any) deemed to be part thereof at the time of effectiveness
pursuant to Rule 430A of the Rules. If the Company has filed an abbreviated
registration statement to register additional Shares pursuant to Rule 462(b)
under the Rules (the "462(b) Registration Statement") then any reference herein
to the Registration Statement shall also be deemed to include such 462(b)
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Registration Statement. The term "Prospectus" as used in this Agreement means
the prospectus in the form included in the Registration Statement at the time of
effectiveness or, if Rule 430A of the Rules is relied on, the term Prospectus
shall also include the final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules. Reference made herein to any Preliminary Prospectus or
to the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus or the Prospectus,
as the case may be, and any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
any document filed under the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after the date of such Preliminary Prospectus or
the Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be.
The Company and the Selling Shareholder understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Underwriters deem advisable. The Company and the Selling
Shareholder hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied, and on
the date of the Prospectus, the date any post-effective amendment to the
Registration Statement becomes effective, the date any supplement or
amendment to the Prospectus is filed with the Commission and each Closing
Date, the Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) will comply, in all material respects, with
the applicable provisions of the Securities Act and the Rules and the
Exchange Act and the rules and regulations of the Commission thereunder.
The Registration Statement did not, as of the Effective Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and on the Effective Date and the other dates
referred to above neither the Registration Statement nor the Prospectus,
nor any amendment thereof or supplement thereto, will contain any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. When any related preliminary prospectus was first
filed with the Commission (whether filed as part of the Registration
Statement or any amendment thereto or pursuant to Rule 424(a) of the Rules)
and when any amendment thereof or supplement thereto was first filed with
the Commission, such preliminary prospectus as amended or supplemented
complied in all material respects with the applicable provisions of the
Securities Act and the Rules and did not contain any untrue statement of a
material fact or omit to state any
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material fact required to be stated therein or necessary in order to make
the statements therein not misleading. If applicable, each Preliminary
Prospectus and the Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T. Notwithstanding the
foregoing, none of the representations and warranties in this paragraph
4(a) shall apply to statements in, or omissions from, the Registration
Statement or the Prospectus made in reliance upon, and in conformity with,
information herein or otherwise furnished in writing by the Underwriters
for use in the Registration Statement or the Prospectus. With respect to
the preceding sentence, the Company acknowledges that the only information
furnished in writing by Underwriters for use in the Registration Statement
or the Prospectus is the statements contained in the table under the second
paragraph and in the fourth, tenth, eleventh, twelfth (with respect to the
absence of representations by the underwriters), and thirteenth (with
respect to the expectation of the underwriters) paragraphs under the
caption "Underwriting" in the Prospectus.
(b) The Registration Statement is effective under the Securities Act
and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are threatened under the Securities Act. Any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424(b) of the
Rules has been or will be made in the manner and within the time period
required by such Rule 424(b).
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus, at the time they became effective or were
filed with the Commission as the case may be, complied in all material
respects with the requirements of the Securities Act or the Exchange Act,
as applicable, and, when read together and with the other information in
the Registration Statement and the Prospectus, do not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading
and any further documents so filed and incorporated by reference in the
Registration Statement and the Prospectus, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein.
(d) The financial statements of the Company (including all notes and
schedules thereto) included or incorporated by reference in the
Registration Statement and Prospectus present fairly in all material
respects the financial position, the results of operations, the statements
of cash flows and the statements of shareholders' equity and the other
information purported to be shown therein of the Company at the
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respective dates and for the respective periods to which they apply; and
such financial statements and related schedules and notes have been
prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of the results for such periods have been
made. The summary and selected financial data included in the Prospectus
present fairly in all material respects the information shown therein as at
the respective dates and for the respective periods specified and the
summary and selected financial data have been presented on a basis
consistent with the consolidated financial statements so set forth in the
Prospectus and other financial information.
(e) KPMG LLP, whose reports are filed with the Commission as a part of
the Registration Statement, are and, during the periods covered by their
reports, were independent public accountants as required by the Securities
Act and the Rules.
(f) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Missouri. The Company's
sole subsidiary, Ti3 (the "Subsidiary"), is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas.
Each of the Company and the Subsidiary is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction in which
the nature of the business conducted by it or location of the assets or
properties owned, leased or licensed by it requires such qualification,
except for such jurisdictions where the failure to so qualify would not
have a material adverse effect on the assets or properties, business,
results of operations or financial condition of the Company or the
Subsidiary, as applicable (a "Material Adverse Effect"). The Company does
not own, lease or license any material asset or property or conduct any
material business outside the United States of America. Each of the Company
and the Subsidiary has all requisite corporate power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory bodies
or any other person or entity (collectively, the "Permits"), to own, lease
and license its respective assets and properties and conduct its respective
business, all of which are valid and in full force and effect, as described
in the Registration Statement and the Prospectus, except where the lack of
such Permits, individually or in the aggregate, would not have a Material
Adverse Effect. Each of the Company and the Subsidiary has fulfilled and
performed in all material respects all of its respective material
obligations with respect to such Permits and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Company thereunder. Except as may be required under the
Securities Act and state and foreign Blue Sky laws, no other Permits are
required to enter into, deliver and perform this Agreement and to issue and
sell the Shares.
(g) Each of the Company and the Subsidiary owns or possesses adequate
and enforceable rights to use all of its respective trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other
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similar rights and proprietary knowledge (collectively, "Intangibles")
described in the Prospectus as being owned by it necessary for the conduct
of its business, except to the extent that the failure of the Company to
own or possess such right would not have a Material Adverse Effect. Neither
the Company nor the Subsidiary has received any notice of, or is not aware
of, any infringement of or conflict with asserted rights of others with
respect to any Intangibles, except as described in the Registration
Statement and the Prospectus [and except for any infringements and
conflicts as would not have a Material Adverse Effect].
(h) Each of the Company and the Subsidiary has good and marketable
title in fee simple to all items of real property and good and marketable
title to all personal property described in the Prospectuses as being owned
by it. Any real property and buildings described in the Prospectuses as
being held under lease by the Company or the Subsidiary is held by it under
valid, existing and enforceable leases, free and clear of all liens,
encumbrances, claims, security interests and defects, except such as are
described in the Registration Statement and the Prospectus or would not
have a Material Adverse Effect.
(i) There are no litigation or governmental proceedings to which the
Company or the Subsidiary is subject or which is pending or, to the
knowledge of the Company, threatened, against the Company or the
Subsidiary, which, individually or in the aggregate, would be reasonably
expected to have a Material Adverse Effect, affect the consummation of this
Agreement or which is required to be disclosed in the Registration
Statement and the Prospectus that is not so disclosed.
(j) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as described
therein, (i) there has not been any material adverse change with regard to
the assets or properties, business, results of operations or financial
condition of the Company; (ii) neither the Company nor the Subsidiary has
sustained any loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or any court or legislative or other governmental action,
order or decree which would have a Material Adverse Effect; and (iii) since
the date of the latest balance sheet included or incorporated by reference
in the Registration Statement and the Prospectus, except as reflected
therein, neither the Company nor the Subsidiary has (1) issued any
securities or incurred any liability or obligation, direct or contingent,
for borrowed money, except securities issued pursuant to employee stock
option or stock purchase plans or such liabilities or obligations incurred
in the ordinary course of business, (2) entered into any transaction not in
the ordinary course of business or (3) declared or paid any dividend or
made any distribution on any shares of its stock, except for regular
quarterly cash dividends, or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares of its stock.
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(k) There is no document, contract or other agreement of a character
required to be described in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which is not described
or filed as required by the Securities Act or Rules. Each description of a
contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all material respects the terms of the
underlying document, contract or agreement so described. Each agreement
described in the Registration Statement and Prospectus or listed in the
Exhibits to the Registration Statement or incorporated by reference is in
full force and effect (unless otherwise so described) and is valid and
enforceable by and against the Company or the Subsidiary, as the case may
be, in accordance with its terms. Neither the Company nor the Subsidiary,
if the Subsidiary is a party, nor to the Company's knowledge, any other
party is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or in the
aggregate, would have a Material Adverse Effect. No default exists, and no
event has occurred which with notice or lapse of time or both would
constitute a default, in the due performance and observance of any term,
covenant or condition, by the Company or the Subsidiary, if the Subsidiary
is a party thereto, of any other agreement or instrument to which the
Company or the Subsidiary is a party or by which the Company, the
Subsidiary or their properties or business may be bound or affected, which
default or event, individually or in the aggregate, would have a Material
Adverse Effect.
(l) Neither the Company nor the Subsidiary is in violation of any term
or provision of its respective charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation, individually or in the aggregate,
would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the issuance and sale by the Company
of the Shares) will give rise to a right to terminate or accelerate the due
date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under, or
require any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or assets
of the Company or the Subsidiary pursuant to the terms of, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or the Subsidiary is a party or by which it either the Company or
the Subsidiary or any of their properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or the Subsidiary or violate any
provision of the charter or by-laws of the Company or the Subsidiary,
except for such consents or waivers which have already been obtained and
are in full force and effect and except for such rights to terminate or
accelerate, conflicts, breaches, defaults, requirements for
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consent or waiver, liens, charges, encumbrances, franchises, licenses,
permits, judgments, decrees, orders, statutes, rules, regulations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect.
(n) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the issued
and outstanding shares of Common Stock have been duly and validly issued
and are fully paid and nonassessable. There are no statutory preemptive or
other similar rights to subscribe for or to purchase or acquire any shares
of Common Stock of the Company or the Subsidiary or any such rights
pursuant to its Articles of Incorporation or by-laws or any agreement or
instrument to or by which the Company or the Subsidiary is a party or
bound. The Shares, when issued and sold pursuant to this Agreement, will be
duly and validly issued, fully paid and nonassessable and none of them will
be issued in violation of any preemptive or other similar right. Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and
there is no commitment, plan or arrangement to issue, any share of stock of
the Company or the Subsidiary or any security convertible into, or
exercisable or exchangeable for, such stock. The Common Stock and the
Shares conform in all material respects to all statements in relation
thereto contained in the Registration Statement and the Prospectus. All
outstanding shares of capital stock of the Subsidiary have been duly
authorized and validly issued, and are fully paid and nonassessable and are
owned directly by the Company or by another wholly-owned subsidiary of the
Company free and clear of any security interests, liens, encumbrances,
equities or claims, other than those described in the Prospectus.
(o) No holder of any security of the Company has the unwaived right to
have any security owned by such holder included in the Registration
Statement. Each director and executive officer of the Company has delivered
to the Underwriters his or its enforceable written lock-up agreement in the
form attached as Annex I to this Agreement ("Lock-Up Agreement").
(p) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares by the Company. This
Agreement has been duly and validly authorized, executed and delivered by
the Company and constitutes and will constitute the legal, valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles.
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(q) Neither the Company nor the Subsidiary is involved in any labor
dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a Material Adverse Effect. The Company
is not aware of any threatened or pending litigation between the Company or
the Subsidiary and any of its executive officers which, if adversely
determined, would have a Material Adverse Effect and has no reason to
believe that such officers will not remain in the employment of the
Company.
(r) No transaction has occurred between or among the Company and any of
its officers or directors or five percent shareholders or any affiliate or
affiliates of any such officer or director or five percent shareholders
that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(s) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of any of the Shares.
(t) The Company and the Subsidiary have filed all Federal, state, local
and foreign tax returns which are required to be filed through the date
hereof, which returns are true and correct in all material respects or has
received extensions thereof, and has paid all taxes shown on such returns
and all assessments received by it to the extent that the same are material
and have become due. There are no tax audits or investigations pending,
which if adversely determined would have a Material Adverse Effect; nor are
there any material proposed additional tax assessments against the Company
and the Subsidiary.
(u) The Shares have been approved for listing, subject to notice of
issuance, on the National Association of Securities Dealers Automated
Quotation ("Nasdaq") National Market System, subject to official notice of
issuance.
(v) The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the
Exchange Act or the quotation of the Common Stock on the Nasdaq National
Market, nor has the Company received any notification that the Commission
or the Nasdaq National Market is contemplating terminating such
registration or quotation.
(w) The books, records and accounts of the Company and the Subsidiary
accurately and fairly reflect, in all material respects, the respective
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and the Subsidiary. Each of the Company and the
Subsidiary maintains a system of internal accounting controls sufficient to
provide reasonable assurances, in all material respects, that (i)
transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of
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financial statements in accordance with generally accepted accounting
principles and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(x) The Company and the Subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or the Company's or its
subsidiaries' respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and each of its
subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and neither the Company nor the
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect. Neither
the Company nor the Subsidiary has been denied any insurance coverage which
it has sought or for which it has applied.
(y) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state or foreign securities or Blue Sky laws) has been obtained
or made and is in full force and effect.
(z) To the best of the knowledge of the Company, there are no
affiliations with the NASD among the Company's officers, directors or any
five percent or greater shareholder of the Company, except as set forth in
the Registration Statement or otherwise disclosed in writing to the
Underwriters.
(aa) (i) Each of the Company and the Subsidiary is in compliance in all
material respects with all rules, laws and regulation relating to the use,
treatment, storage and disposal of toxic substances and protection of
health or the environment ("Environmental Law") which are applicable to its
business; (ii) neither the Company nor the Subsidiary has received any
notice from any governmental authority or third party of an asserted claim
under Environmental Laws; and (iii) no property which is or has been owned,
leased or occupied by the Company or the Subsidiary has been designated as
a Superfund site pursuant to the Comprehensive Environmental Response,
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Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601,
et. seq.) ("CERCLA") or otherwise designated as a contaminated site under
applicable state or local law. Neither the Company nor the Subsidiary has
been named as a "potentially responsible party" under CERCLA.
(bb) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of proceeds thereof as described in
the Prospectus, will not be an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(cc) The Company, the Subsidiary or any other person associated with or
acting on behalf of the Company or the Subsidiary, including, without
limitation, any director, officer, agent or employee of the Company or the
Subsidiary has not, directly or indirectly, while acting on behalf of the
Company or the Subsidiary (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
other unlawful payment.
5. Representations and Warranties of the Selling Shareholder. The
Selling Shareholder hereby represents and warrants to the Company and each
Underwriter as follows:
(a) The Selling Shareholder has caused certificates for the number of
Shares to be sold by the Selling Shareholder hereunder to be delivered to
the Company (in such capacity, the "Custodian"), endorsed in blank or with
blank stock powers duly executed, with a signature appropriately
guaranteed, such certificates to be held in custody by the Custodian for
delivery, pursuant to the provisions of this Agreement and an agreement
dated on or about the date hereof between the Custodian and the Selling
Shareholder (the "Custody Agreement").
(b) The Selling Shareholder has granted an irrevocable power of
attorney (the "Power of Attorney") to the Company and Xxxxx Xxxxx, on
behalf of the Selling Shareholder, to execute and deliver this Agreement
and any other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the shares to be sold by
the Selling Shareholder pursuant hereto.
(c) This Agreement, the Custody Agreement, the Power of Attorney and
the Lock-Up Agreement have each been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder and, assuming due
authorization, execution and delivery by the other parties hereto, each
constitutes the valid and legally binding agreement of the Selling
Shareholder, enforceable against the Selling Shareholder in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the
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enforcement of creditors' rights generally and by general equitable
principals.
(d) The execution and delivery by the Selling Shareholder of this
Agreement and the performance by the Selling Shareholder of its obligations
under this Agreement (i) will not contravene any provision of applicable
law, statute, rule or regulation or any agreement or other instrument
binding upon the Selling Shareholder or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the Selling
Shareholder, (ii) does not require on the part of the Selling Shareholder
any consent, approval, authorization or order of or registration or filing
with any court or governmental agency or body having jurisdiction over it,
except such as may be required by the Blue Sky laws of the various states
or other jurisdiction in connection with the offer and sale of the Shares
which have been or will be effected in accordance with this Agreement, and
(iii) will not result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Selling Shareholder pursuant
to the terms of any agreement or instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder may be bound or
to which any of the property or assets of the Selling Shareholder is
subject.
(e) The Selling Shareholder has, and on each Closing Date on which
Shares to be sold by the Selling Shareholder pursuant to this Agreement
will have, valid and marketable title to the Shares to be sold by the
Selling Shareholder on such Closing Date, free and clear of any lien,
claim, security interest or other encumbrance, including, without
limitation, any restriction on transfer, except as otherwise described in
the Registration Statement and Prospectus.
(f) The Selling Shareholder has, and on each Closing Date on which
Shares to be sold by the Selling Shareholder pursuant to this Agreement
will have, full legal right, power and authorization, and any approval
required by law, to sell, assign, transfer and deliver the Shares to be
sold by the Selling Shareholder on such Closing Date in the manner provided
by this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by the
Selling Shareholder on any Closing Date pursuant to this Agreement, the
several Underwriters will receive valid and marketable title to such Shares
free and clear of any lien, claim, security interest or other encumbrance.
(h) All information relating to the Selling Shareholder furnished in
writing by the Selling Shareholder expressly for use in the Registration
Statement and Prospectus is, and on each Closing Date on which Shares to be
sold by the Selling Shareholder pursuant to this Agreement will be, true,
correct, and complete, and does not, and on each Closing Date will not,
contain any untrue statement of a material fact or omit to state any
material fact necessary to make such information not misleading.
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(i) The Selling Shareholder has reviewed the Registration Statement and
Prospectus and, although the Selling Shareholder has not independently
verified the accuracy or completeness of all the information contained
therein, nothing has come to the attention of the Selling Shareholder that
would lead the Selling Shareholder to believe that (i) on the Effective
Date, the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein in order to make the statements made therein not misleading and
(ii) on the Effective Date, the Prospectus contained and, on each Closing
Date contains, no untrue statement of a material fact or omitted or omits
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
misleading.
(j) The sale of Shares by the Selling Shareholder pursuant to this
Agreement is not prompted by the Selling Shareholder's knowledge of any
material information concerning the Company or the Subsidiary which is not
set forth in the Prospectus.
(k) The Selling Shareholder has not taken and will not take, directly
or indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(l) The Selling Shareholder has no actual knowledge that any
representation or warranty of the Company set forth in Section 4 above is
untrue or inaccurate in any material respect.
(m) The representations and warranties of the Selling Shareholder in
the Custody Agreement are, and on each Closing Date on which Shares to be
sold by the Selling Shareholder pursuant to this Agreement will be, true
and correct.
6. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become effective
shall have been received by the Underwriters and the Prospectus shall have
been timely filed with the Commission in accordance with Section 7(a) of
this Agreement.
(b) No order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Commission and the Underwriters. If the Company has
elected to rely upon Rule 430A, Rule 430A information previously omitted
from the effective
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Registration Statement pursuant to Rule 430A shall have been transmitted to
the Commission for filing pursuant to Rule 424(b) within the prescribed
time period and the Company shall have provided evidence satisfactory to
the Underwriters of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A.
(c) The representations and warranties of the Company and the Selling
Shareholder contained in this Agreement and in the certificates delivered
pursuant to Section 6(d) shall be true and correct when made and on and as
of each Closing Date as if made on such date. The Company and the Selling
Shareholder shall have performed in all material respects all covenants and
agreements and satisfied in all material respects all the conditions
contained in this Agreement required to be performed or satisfied by them
at or before such Closing Date.
(d) The Underwriters shall have received on each Closing Date a
certificate, addressed to the Underwriters and dated such Closing Date, of
the chief executive and the chief financial officer or chief accounting
officer of the Company to the effect that (i) the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that the representations and warranties
of the Company in this Agreement are true and correct on and as of such
Closing Date with the same effect as if made on such Closing Date and the
Company has performed in all material respects all covenants and agreements
and satisfied in all material respects all conditions contained in this
Agreement required to be performed or satisfied by it at or prior to such
Closing Date, and (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their knowledge,
no proceedings for that purpose have been instituted or are pending under
the Securities Act.
(e) The Underwriters shall have received on each Closing Date a
certificate, addressed to the Underwriters and dated such Closing Date,
from the Selling Shareholder that is selling Shares on such Closing Date,
to the effect that the Selling Shareholder has carefully examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Selling Shareholder in this Agreement
are true and correct on and as of such Closing Date with the same effect as
if made on such Closing Date and the Selling Shareholder has performed in
all material respects all covenants and agreements and satisfied in all
material respects all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date.
(f) The Underwriters shall have received, at the time this Agreement is
executed and on each Closing Date a signed letter from KPMG LLP addressed
to the Underwriters and dated, respectively, the date of this Agreement and
each such Closing Date, in form and substance reasonably satisfactory to
the Underwriters containing
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statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus.
(g) The Underwriters shall have received on each Closing Date from
Xxxxx Xxxx LLP, counsel for the Company, an opinion, addressed to the
Underwriters and dated such Closing Date, as to the matters set forth in
Annex II hereto.
(h) The Underwriters shall have received on each Closing Date from
Xxxxxx and Xxxxx, LLP, special Texas counsel for the Company, an opinion,
addressed to the Underwriters and dated such Closing Date, as to the
matters set forth in Annex III hereto.
(i) The Underwriters shall have received on the each Closing Date from
counsel for the Selling Shareholder an opinion, addressed to the
Underwriters and dated such Closing Date, as to the matters set forth in
Annex IV hereto.
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(j) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Underwriters and their counsel,
and the Underwriters shall have received from Xxxxxxx Xxxx LLP a favorable
opinion, addressed to the Underwriters and dated such Closing Date, with
respect to the Shares, the Registration Statement and the Prospectus, and
such other related matters as the Underwriters may reasonably request, and
the Company shall have furnished to Xxxxxxx Xxxx LLP such documents as they
may reasonably request for the purpose of enabling them to pass upon such
matters.
(k) The Underwriters shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section 4(o).
(l) The Company and the Selling Shareholder shall have furnished or
caused to be furnished to the Underwriters such further certificates or
documents as the Underwriters shall have reasonably requested.
7. Covenants of the Company and the Selling Shareholder.
(a) The Company covenants and agrees as follows:
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(i) The Company will use its reasonable best efforts to cause the
Registration Statement, if not effective at the time of execution of
this Agreement, and any amendments thereto, to become effective as
promptly as possible. The Company shall prepare the Prospectus in a
form approved by the Underwriters, which approval shall not be
unreasonably withheld or delayed, and file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the Commission's
close of business on the second business day following the execution
and delivery of this Agreement, or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the Underwriters in
writing (i) when any amendment to the Registration Statement shall have
become effective, (ii) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for any
additional information, (iii) of the prevention or suspension of the
use of any preliminary prospectus or the Prospectus or of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose and (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company shall not
file any amendment of the Registration Statement or supplement to the
Prospectus or any document incorporated by reference in the
Registration Statement unless the Company has furnished the
Underwriters a copy for its review prior to filing and shall not file
any such proposed amendment or supplement to which the Underwriters
reasonably object. The Company shall use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any
event occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (ii) of this Section 7(a), an amendment or
supplement which shall correct such statement or omission or an
amendment which shall effect such compliance.
(iv) The Company shall make generally available to its security
holders and to the Underwriters as soon as practicable, but not later
than 45 days after the end of the 12-month period beginning at the end
of the fiscal quarter of the Company during which the Effective Date
occurs (or 90 days if
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such 12-month period coincides with the Company's fiscal year), an
earnings statement (which need not be audited) of the Company, covering
such 12-month period, which shall satisfy the provisions of Section
11(a) of the Securities Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Underwriters and counsel for
the Underwriters, without charge, original or photocopied signed copies
of the Registration Statement (including all exhibits thereto and
amendments thereof) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and all amendments
thereof and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Securities Act or the Rules, as many
copies of any Preliminary Prospectus and the Prospectus and any
amendments thereof and supplements thereto as the Underwriters may
reasonably request. If applicable, the copies of the Registration
Statement and Prospectus and each amendment and supplement thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(vi) The Company shall cooperate with the Underwriters and their
counsel in endeavoring to qualify the Shares for offer and sale in
connection with the offering under the laws of such U.S. jurisdictions
as the Underwriters may designate and such other jurisdictions as the
Company and the Underwriters may mutually agree and shall maintain such
qualifications in effect so long as required for the distribution of
the Shares; provided, however, that the Company shall not be required
in connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing
business in any jurisdiction.
(vii) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act and the Rules or the
Exchange Act, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 if the Exchange Act within
the time periods required by the Exchange Act and the regulations
promulgated thereunder.
(viii) Without the prior written consent of CIBC World Markets
Corp., for a period of 90 days after the date of this Agreement, the
Company shall not issue or sell (other than on Form S-8 or on any
successor form), or otherwise dispose of, directly or indirectly, any
equity securities of the Company (or any securities convertible into,
exercisable for or exchangeable for equity securities of the Company),
except for the issuance of the Shares pursuant to the Registration
Statement, the award of options or issuance of shares pursuant to the
Company's existing stock option plans or stock purchase plans as
described
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in the Registration Statement and the Prospectus, the issuance of
shares to holders of options or warrants outstanding as of the date
hereof upon exercise of such securities, and the issuance of shares or
options in connection with a private acquisition of assets or property
in which each acquiror of such shares or options agrees to be bound by
restrictions no more favorable to such acquiror than those contained in
Section 7(c)(iii) of this Agreement.
(ix) On or before completion of this offering, the Company shall
make all filings required under applicable securities laws and by the
Nasdaq National Market.
(x) Prior to the Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company, the condition, financial
or otherwise, or the earnings, business affairs or business prospects
of any of them, or the offering of the Shares without the prior written
consent of the CIBC World Markets Corp. (or, in the case of marketing
press releases of the type issued in the ordinary course of the
Company's business, without the prior written or oral consent of CIBC
World Markets Corp.), which consent shall not be unreasonably withheld
or delayed, unless in the judgment of the Company and its counsel, and
after notification to the Underwriters, such press release or
communication is required by law.
(xi) The Company will apply the net proceeds from the offering of
the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Underwriters, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement including all
exhibits thereto, each Preliminary Prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus and any
document incorporated by reference therein, and the filing and distribution of
this Agreement; (ii) the preparation and delivery of certificates for the Shares
to the Underwriters; (iii) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the various
jurisdictions referred to in Section 7(a)(vi), including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration and qualification and the preparation, distribution and shipment of
preliminary and supplementary Blue Sky memoranda; (iv) the furnishing (including
costs of shipping and mailing) to the Underwriters of copies of each preliminary
prospectus, the Prospectus and all amendments or supplements to the Prospectus,
and of the several documents required by this Section to be so furnished, as may
be reasonably requested for use in connection with the offering and
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sale of the Shares by the Underwriters or by dealers to whom Shares may be sold;
(v) the filing fees of the NASD in connection with its review of the terms of
the public offering and reasonable fees and disbursements of counsel for the
Underwriters in connection with such review; (vi) approval of the Shares for
listing on the Nasdaq National Market; and (vii) all transfer taxes, if any,
with respect to the sale and delivery of the Shares by the Company to the
Underwriters; provided that the Company's obligation to pay the fees and
disbursements of counsel to the Underwriters pursuant to clauses (iii) and (v)
above shall not exceed $10,000 in the aggregate. Subject to the provisions of
Section 10, the Underwriters agree to pay, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, all costs
and expenses incident to the performance of the obligations of the Underwriters
under this Agreement not payable by the Company pursuant to the preceding
sentence, including, without limitation, the fees and disbursements of counsel
for the Underwriters.
(c) The Selling Shareholder covenants and agrees with the Company that:
(i) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of
1986, as amended, the Selling Shareholder shall deliver to you on or
prior to the Firm Shares Closing Date a properly completed and executed
United States Treasury Department Form W-9 (or other applicable
statement specified by Treasury Department regulations in lieu
thereof).
(ii) The Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in the stabilization
or manipulation of the price of the shares of Stock of the Company to
facilitate the sale or resale of any of the Shares.
8. Indemnification.
(a) The Company agrees, jointly and severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all losses, claims, damages
and liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Securities Act,
the Exchange Act or other Federal or state law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto, or in any Blue Sky application or other information or
other documents executed by the Company filed in
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any state or other jurisdiction to qualify any or all of the Shares under
the securities laws thereof (any such application, document or information
being hereinafter referred to as a "Blue Sky Application") or arise out of
or are based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) in whole or in part upon any breach
of the representations and warranties set forth in Section 4 hereof, or
(iii) in whole or in part upon any failure of the Company to perform any of
its obligations hereunder or under law; provided, however, that such
indemnity shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) on account of any losses, claims, damages or
liabilities arising from the sale of the Shares to any person by such
Underwriter if such untrue statement or omission or alleged untrue
statement or omission was made in such Preliminary Prospectus, the
Registration Statement or the Prospectus, or such amendment or supplement
thereto, or in any Blue Sky Application in reliance upon and in conformity
with information furnished in writing to the Company by the Underwriters or
Selling Shareholder, as the case may be, specifically for use therein;
provided, further, that the foregoing indemnity agreement with respect to
any Preliminary Prospectus shall not inure to the benefit of any
Underwriter that failed to deliver a Prospectus (as then amended or
supplemented, provided by the Company to the several Underwriters in the
requested quantity and on a timely basis to permit proper delivery on or
prior to the applicable Closing Date) to the person asserting any losses,
claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, if such material misstatement
or omission or alleged material misstatement or omission was cured in such
Prospectus and such Prospectus was required by law to have been delivered
at or prior to the written confirmation of sale to such person. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) The Selling Shareholder agrees to indemnify and hold harmless each
Underwriter, and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
to each Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon (i) any untrue statement or
omission or alleged untrue statement or omission which was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment thereof or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company by the
Selling Shareholder specifically for use therein, (ii) in whole or in part
upon any breach of the representations and warranties of the Selling
Shareholder set forth in Section 5 hereof, and (iii) in whole or in part
upon any failure of the Selling Shareholder to perform any of its
obligations hereunder; provided, however, that the aggregate obligation of
the Selling Shareholder to indemnify each Underwriter (including any
controlling person thereof) shall be
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limited to an amount equal to the net proceeds received by the Selling
Shareholder from such Underwriter from the sale of the Shares hereunder;
provided that the foregoing indemnity agreement with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter
that failed to deliver a Prospectus (as then amended or supplemented,
provided by the Company to the several Underwriters in the requested
quantity and on a timely basis to permit proper delivery on or prior to the
applicable Closing Date) to the person asserting any losses, claims,
damages and liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or
omission or alleged material misstatement or omission was cured in such
Prospectus and such Prospectus was required by law to have been delivered
at or prior to the written confirmation of sale to such person.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Shareholder and each person, if
any, who controls the Company or the Selling Shareholder within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, each
director of the Company, and each officer of the Company who signs the
Registration Statement, to the same extent as the foregoing indemnity from
the Company and the Selling Shareholder to each Underwriter, but only
insofar as such losses, claims, damages or liabilities arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission which was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment thereof or supplement
thereto, contained in the portions of such documents that are referred to
in the last sentence of Section 4(a) hereof.
(d) Any party that proposes to assert the right to be indemnified under
this Section will, promptly 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 or parties under this Section,
notify each such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 8(a), 8(b) or 8(c) shall be
available to any party who shall fail to give notice as provided in this
Section 8(d) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by
the failure to give such notice but the omission so to notify such
indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party otherwise
than under this Section. 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
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after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except as
provided below and except for the 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
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 has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which
are different from or in addition to those available to the indemnifying
party (in which case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the indemnified party) or
(iii) the indemnifying parties shall not have employed counsel to assume
the defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action,
suit, proceeding or claim effected without its written consent, which
consent shall not be unreasonably withheld or delayed.
(e) The indemnity and contribution obligations, if any, of the Company
and the Selling Shareholder, as well as their respective other agreements,
covenants, representations and warranties to each other, under any
registration rights provisions or agreements shall remain in full force and
effect.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8(a), 8(b) or 8(c) is due in accordance with its terms but for any
reason is held to be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a), 8(b) or 8(c) (other than due to failure to
give timely notice), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholder on the
one hand and the Underwriters on the other from the offering of the Shares or,
if such allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 8 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Selling Shareholder on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Shareholder and the Underwriters shall be deemed to be in the same
proportion as (x) the total
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proceeds from the offering (net of underwriting discounts but before deducting
expenses) received by the Company or Selling Shareholder, as set forth in (or,
in the case of a particular Selling Shareholder, determined by reference to) the
table on the cover page of the Prospectus, bear to (y) the underwriting
discounts received by the Underwriters, as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company and the Selling
Shareholder or the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company and the Selling Shareholder or
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder, and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 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. Notwithstanding
the provisions of this Section 9, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder; (ii) the Company shall be liable and
responsible for any amount in excess of such underwriting discount; and (iii) in
no case shall the Selling Shareholder be liable and responsible for any amount
in excess of the aggregate net proceeds of the sale of Shares received by the
Selling Shareholder; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company or the Selling Shareholder within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i) and (ii) in the immediately preceding sentence of this
Section 9. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
otherwise than under this Section. No party shall be liable for contribution
with respect to any action, suit, proceeding or claim settled without its
written consent. The Underwriter's obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
10. Termination. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Underwriters by notifying the
Company and the Selling Shareholder at any time
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(a) in the sole discretion of the Underwriters at or before any Closing
Date: (i) if on or prior to such date, any domestic or international event
or act or occurrence has materially disrupted, or in the opinion of the
Underwriters will in the future materially disrupt, the securities markets;
(ii) if there has occurred any new outbreak or material escalation of
hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the
judgment of the Underwriters, inadvisable to proceed with the offering;
(iii) if there shall be such a material adverse change in general
financial, political or economic conditions or the effect of international
conditions on the financial markets in the United States is such as to make
it, in the judgment of the Underwriters, inadvisable or impracticable to
market the Shares; (iv) if trading in the Shares has been suspended by the
Commission or trading generally on the New York Stock Exchange, Inc., on
the American Stock Exchange, Inc. or the Nasdaq National Market has been
suspended or limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any
other governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or Federal authority; or (vi) if, in the
judgment of the Underwriters, there has occurred a Material Adverse Effect,
or
(b) at or before any Closing Date, that any of the conditions specified
in Section 6 shall not have been fulfilled when and as required by this
Agreement.
If this Agreement is terminated pursuant to any of its provisions,
neither the Company nor any the Selling Shareholder shall be under any liability
to any Underwriter, and no Underwriter shall be under any liability to the
Company, except that (y) if this Agreement is terminated by the Underwriters
because of any failure, refusal or inability on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, the
Company will reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees and disbursements of their counsel) incurred by
them in connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder and (z) no Underwriter
who shall have failed or refused to purchase the Shares agreed to be purchased
by it under this Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement, shall be
relieved of liability to the Company, the Selling Shareholder or to the other
Underwriters for damages occasioned by its failure or refusal.
11. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 10) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Underwriters may find one or more substitute underwriters to
purchase such Shares or make such other arrangements as they may deem advisable
or one or more of the remaining Underwriters may agree to purchase such Shares
in such proportions as may be approved by them, in each case upon the terms set
forth in this Agreement. If no such arrangements have been made by the close of
business on the business day following such Closing Date,
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(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date, then
each of the nondefaulting Underwriters shall be obligated to purchase such
Shares on the terms herein set forth in proportion to their respective
obligations hereunder; provided, that in no event shall the maximum number
of Shares that any Underwriter has agreed to purchase pursuant to Section 1
be increased pursuant to this Section 11 by more than one-ninth of such
number of Shares without the written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then the
Company shall be entitled to one additional business day within which it
may, but is not obligated to, find one or more substitute underwriters
reasonably satisfactory to the Underwriters to purchase such Shares upon
the terms set forth in this Agreement.
In any such case, either the Underwriters or the Company shall have the
right to postpone the applicable Closing Date for a period of not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or Prospectus)
may be effected by the Underwriters and the Company. If the number of Shares to
be purchased on such Closing Date by such defaulting Underwriter or Underwriters
shall exceed 10% of the Shares that all the Underwriters are obligated to
purchase on such Closing Date, and none of the nondefaulting Underwriters or the
Company shall make arrangements pursuant to this Section within the period
stated for the purchase of the Shares that the defaulting Underwriters agreed to
purchase, this Agreement shall terminate with respect to the Shares to be
purchased on such Closing Date without liability on the part of any
nondefaulting Underwriter to the Company or the Selling Shareholder and without
liability on the part of the Company, except in both cases as provided in
Sections 7(b), 8, 9 and 10. The provisions of this Section shall not in any way
affect the liability of any defaulting Underwriter to the Company or the
nondefaulting Underwriters arising out of such default. A substitute underwriter
hereunder shall become an Underwriter for all purposes of this Agreement.
12. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, of
the Selling Shareholder and of the Underwriters set forth in or made pursuant to
this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or the
Selling Shareholder or any of the officers, directors or controlling persons
referred to in Sections 8 and 9 hereof, and shall survive delivery of and
payment for the Shares. The provisions of Sections 7(b), 8, 9 and 10 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Shareholder and their respective
successors and assigns, and, to the
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extent expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company or the Selling Shareholder, and directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Shares from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone if subsequently confirmed in writing, (a) if to the
Underwriters, c/o CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, with a copy to Xxxxxxx
Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention Xxxx X.
Xxxxxxxxxxxx, Esq. and (b) if to the Company, to its agent for service as such
agent's address appears on the cover page of the Registration Statement with a
copy to Xxxxx Xxxx LLP, 000 Xxxxx Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000,
Attention: R. Xxxxxxx Xxxx, and (c) if to the Selling Shareholder to the Selling
Shareholder as the address set forth below the Selling Shareholder's name on
Schedule II to this Agreement, with a copy to such counsel as has delivered to
the Underwriters on behalf of such Selling Shareholder the opinion required
pursuant to Section 6(i) of this Agreement.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, applicable to agreements made and to be fully
performed therein.
This Agreement constitutes the full and entire understanding and
agreement among the parties hereto with regard to the subjects hereof and
supersedes all other agreements relating to the subject matter hereof.
[remainder of page intentionally left blank]
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This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
TALX CORPORATION
By:
-------------------------------------
Name:
Title:
XXXXXXX X. XXXXXXXX
By:
-------------------------------------
Name:
Attorney-in-fact
Confirmed:
CIBC WORLD MARKETS CORP.
XXXXX, XXXXXXXX & XXXX, INC.
XXXXXX X. XXXXX & CO. INCORPORATED
X.X. XXXXXXX & SONS, INC.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
By CIBC WORLD MARKETS CORP.
By
-------------------------------------
Name:
Title:
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SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
---- --------------
CIBC World Markets Corp.
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Xxxxxx X. Xxxxx & Co.
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx, Xxxxxxxx & Company Incorporated
--------------
Total: 2,700,000
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SCHEDULE II
Number of Number of
Firm Shares Option Shares
Sellers to Be Sold to Be Sold
------- ----------- -------------
TALX Corporation 2,500,000 375,000
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxx 200,000 30,000
Xx. Xxxxx, XX 00000 ---------- ---------
Total: 2,700,000 Total: 405,000
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ANNEX I
FORM OF LOCK-UP AGREEMENT
_________, 2001
CIBC World Markets Corp.
As Representative of the Several Underwriters
c/o CIBC World Markets Corp.
CIBC World Markets Tower
World Financial Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Public Offering of Common Stock of
TALX Corporation
Gentlemen:
The undersigned, a holder of common stock ("Common Stock") or rights to
acquire Common Stock, of
TALX Corporation, a Missouri corporation (the
"Company"), understands that the Company intends to file a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") in or about June 2001 for the
registration of shares of Common Stock (the "Offering"), including shares to be
issued and sold by the Company. The undersigned further understands that you are
contemplating entering into an
Underwriting Agreement with the Company in
connection with the Offering.
In recognition of the benefit that such an Offering will confer upon the
undersigned as a shareholder and/or an officer and/or a director of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to induce the Company, you and the
other Underwriters to enter into the
Underwriting Agreement and to proceed with
the Offering, the undersigned agrees, for the benefit of the Company, you and
the other Underwriters, that should the Offering be effected the undersigned
will not, directly or indirectly, without your prior written consent, make any
offer, sale, assignment, transfer, encumbrance, contract to sell, grant of an
option to purchase or other disposition of any Common Stock beneficially owned
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) by the undersigned on the date hereof or hereafter acquired for a
period of 90 days subsequent to the date of the
Underwriting Agreement, other
than Common Stock to be sold in the Offering or transferred as a gift or gifts
(provided that any donee thereof agrees in writing to be bound by the terms
hereof).
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Notwithstanding the foregoing, if the undersigned is an individual, he or
she may transfer any such shares of Common Stock beneficially owned by the
undersigned either during his or her lifetime or on death by will or intestacy
to his or her immediate family or to a trust the beneficiaries of which are
exclusively the undersigned and/or a member or members of his or her immediate
family; provided, however, that prior to any such transfer each transferee shall
execute an agreement pursuant to which such transferee shall agree to receive
and hold such shares of Common Stock subject to the provisions hereof, and shall
agree that there shall be no further transfer except in accordance with the
provisions hereof. For purposes of this paragraph, "immediate family" shall mean
spouse, parent, stepparent, grandparent, mother-in-law, father-in-law,
daughter-in-law, brother-in law, child, stepchild, grandchild, brother, sister,
aunt, uncle, niece or nephew of the transferor and shall include adoptive
relationships.
Notwithstanding the foregoing, you and the other Underwriters acknowledge
that, if the undersigned has, prior to the date hereof, pledged, encumbered,
contracted to sell or otherwise agreed to dispose of shares of Common Stock,
nothing in this Agreement shall be deemed to prohibit the undersigned from
disposing of shares of Common Stock pursuant to the terms of any such
pre-existing legal obligation; provided that, in the event that any public
disclosure is made by or on behalf of the undersigned in connection with the
consummation of any such transaction, the undersigned shall cause such
disclosure to include the date on which the undersigned entered into the
obligation pursuant to which such disposition was made. Additionally, the
undersigned agrees to notify you concurrently upon public disclosure of any such
disposition.
Further, the undersigned may exercise any options to purchase such shares
of Common Stock, provided, in any such case, that the shares of Common Stock
issued upon exercise shall remain subject to this Agreement.
The undersigned hereby waives any rights of the undersigned to sell shares
of Common Stock or any other security issued by the Company pursuant to the
Registration Statement, and acknowledges and agrees that for a period of 90 days
from the effective date of the Registration Statement the undersigned has no
right to require the Company to register under the Securities Act of 1933 such
Common Stock or other securities issued by the Company and beneficially owned by
the undersigned.
The undersigned, whether or not participating in the Offering, confirms
that he, she or it understands that the Underwriters and the Company will rely
upon the representations set forth in this agreement in proceeding with the
Offering. The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns. The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company and its transfer agent against the transfer of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock
beneficially owned by the undersigned except in compliance with this agreement.
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In the event that the
Underwriting Agreement has not been entered into on
or before September 30, 2001, this Agreement shall be void and of no further
effect.
Very truly yours,
If an individual:
-----------------------------------------
Name:
If on behalf of a corporation,
partnership, limited liability
company, trust or other entity:
-----------------------------------------
[Name of entity]
By:
-------------------------------------
Name:
Title:
Dated:
----------------
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