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EXHIBIT 1.1
DATED MAY ___, 1997
ITEQ, INC.
5,050,000 SHARES
COMMON STOCK
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UNDERWRITING
AGREEMENT
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ITEQ, INC.
5,050,000 SHARES
PLUS AN OPTION TO PURCHASE UP TO
757,500 ADDITIONAL SHARES TO COVER OVER-ALLOTMENTS
COMMON STOCK
UNDERWRITING AGREEMENT
May ___, 1997
DEUTSCHE XXXXXX XXXXXXXX INC.
EVEREN SECURITIES, INC.
XXXXXXX XXXXXX XXXXX
As Representatives of the several Underwriters
c/o Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
ITEQ, Inc., a Delaware corporation (the "Company"), and the
persons and entity named in Schedule 2 hereto (the "Selling Stockholders")
hereby confirm their agreement with the several underwriters named in Schedule
1 hereto (the "Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth
below. If you are the only Underwriters, all references herein to the
Representatives shall be deemed to be references to the Underwriters.
Section 1. Underwriting. Subject to the terms and conditions contained
herein:
(a) The Company proposes to issue and sell 4,300,000
shares of common stock, par value $0.001 per share (the "Common Stock"), of the
Company, and the Selling Stockholders propose to sell an aggregate of 750,000
shares of Common Stock (said shares to be issued and sold by the Company and
shares to be sold by the Selling Stockholders collectively, the "Firm Shares")
to the several Underwriters. The Company also proposes to issue and sell not
more than 757,500
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additional shares of Common Stock (the "Option Shares" and, together with the
Firm Shares, the "Shares") to the several Underwriters if requested by the
Representatives as provided in Section 2(b) hereof.
(b) Upon your authorization of the release of the Firm
Shares, the Underwriters propose to make a public offering (the "Offering") of
the Firm Shares upon the terms set forth in the Prospectus (as defined below)
as soon after the Registration Statement (as defined below) and this Agreement
have become effective as in the Representatives' sole judgment is advisable. As
used in this Agreement, the term "Original Registration Statement" means the
registration statement (File No. 333-23245) initially filed with the Securities
and Exchange Commission (the "Commission") relating to the Shares, as amended
at the time when it was or is declared effective, including all financial
schedules and exhibits thereto and including any information omitted therefrom
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"Securities Act"), and included in the Prospectus; the term "Rule 462(b)
Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Securities Act (including the
Registration Statement and any Preliminary Prospectus (as defined below) or
Prospectus incorporated therein at the time such Registration Statement becomes
effective); the term "Registration Statement" includes both the Original
Registration Statement and any Rule 462(b) Registration Statement; the term
"Preliminary Prospectus" means each prospectus subject to completion filed with
the Original Registration Statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Original Registration
Statement or any amendment thereto at the time it was or is declared
effective); the term "Prospectus" means:
(i) if the Company relies on Rule 434 under the
Securities Act, the Term Sheet (as defined below)
relating to the Shares that is first filed pursuant
to Rule 424(b)(7) under the Securities Act, together
with the Preliminary Prospectus identified therein
that such Term Sheet supplements;
(ii) if the Company does not rely on Rule 434
under the Securities Act, the prospectus first filed
with the Commission pursuant to Rule 424(b) under the
Securities Act;
(iii) if the Company does not rely on Rule 434
under the Securities Act and if no prospectus is
required to be filed pursuant to Rule 424(b) under
the Securities Act, the prospectus included in the
Registration Statement; or
(iv) for purposes of the representations and
warranties contained in Section 5 hereof, if the
Prospectus is not in existence, the most recent
Preliminary Prospectus;
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and the term "Term Sheet" means any term sheet that satisfies the
requirements of Rule 434 under the Securities Act. Any reference
herein to the "date" of a Prospectus that includes a Term Sheet shall
mean the date of such Term Sheet.
Section 2. Purchase and Closing.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell, and the
Selling Stockholders propose to sell, to each of the Underwriters, and each of
the Underwriters, severally and not jointly, agrees to purchase from the
Company and the Selling Stockholders, at a purchase price of $___ per Share
(the "Purchase Price"), the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule 1 hereto. Firm Shares shall be registered by
Xxxxxx Trust and Savings Bank in the name of the nominee of the Depository
Trust Company ("DTC"), Cede & Co. ("Cede & Co."), and credited to the accounts
of such of its participants as the Representatives shall request, upon notice
to the Company and the Selling Stockholders at least 48 hours prior to the
First Closing Date (as defined below), with any transfer taxes payable in
connection with the transfer of the Firm Shares to the Underwriters duly paid,
against payment by or on behalf of the Underwriters to the account of the
Company and the Selling Stockholders of the aggregate Purchase Price therefor
by wire transfer in immediately available funds. The Company and the Selling
Stockholders will make the certificate or certificates for the Firm Shares
available for checking and packaging by the Representatives at the offices in
New York, New York of the Company's transfer agent or registrar or of the
Representatives at least 24 hours prior to the First Closing Date. Delivery or
registry of and payment for the Firm Shares shall be made at the offices of
Xxxxxxx & Xxxxx L.L.P., 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 at 9:30
A.M., New York City time, on May , 1997, or at such other place, time or
date as the Representatives, the Company and the Selling Stockholders may agree
upon. Such time and date of delivery against payment are herein referred to as
the "First Closing Date", and the implementation of all the actions described
in this Section 2(a) is herein referred to as the "First Closing".
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as contemplated by
the Prospectus, the Company hereby grants to the several Underwriters an option
to purchase, severally and not jointly, the Option Shares. The purchase price
to be paid for any Option Shares shall be the same as the Purchase Price for
the Firm Shares set forth above in paragraph (a) of this Section 2. The option
granted hereby may be exercised as to all or any part of the Option Shares from
time to time within thirty days after the date of the Prospectus (or, if such
30th day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange and the Nasdaq Stock Market's
National Market (the "Nasdaq National Market") is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Shares prior to the exercise of such option. The Representatives may from time
to time exercise the option granted hereby by giving notice in
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writing or by telephone (confirmed in writing) to the Company setting forth the
aggregate number of Option Shares as to which the several Underwriters are then
exercising the option and the date and time for delivery or registry of and
payment for such Option Shares. Any such date of delivery or registry shall be
determined by the Representatives but shall not be earlier than two business
days or later than five business days after such exercise of the option and, in
any event, shall not be earlier than the First Closing Date. The time and date
set forth in such notice, or such other time or date as the Representatives,
the Company and the Selling Stockholders may agree upon or as the
Representatives may determine pursuant to Section 2(a) hereof, is herein called
an "Option Closing Date" with respect to such Option Shares, and the
implementation of all the actions described in this Section 2(b) is herein
referred to as the "Option Closing". As used in this Agreement, the term
"Closing Date" means either the First Closing Date or any Option Closing Date,
as applicable, and the term "Closing" means either the First Closing or any
Option Closing, as applicable. If the option is exercised as to all or any
portion of the Option Shares, then either one or more certificates in
definitive form for such Option Shares shall be delivered or, if such Option
Shares are to be held through DTC, such Option Shares shall be registered and
credited, on the related Option Closing Date in the same manner, and upon the
same terms and conditions, set forth in paragraph (a) of this Section 2, except
that reference therein to the Firm Shares and the First Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option Shares and
Option Closing Date, respectively. Upon exercise of the option as provided
herein, the Company shall become obligated to sell to each of the several
Underwriters, and, on the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions herein
set forth, each of the Underwriters (severally and not jointly) shall become
obligated to purchase from the Company, the same percentage of the total number
of the Option Shares as to which the several Underwriters are then exercising
the option as such Underwriter is obligated to purchase of the aggregate number
of Firm Shares, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
(c) The Company and the Selling Stockholders hereby
acknowledge that the payment of monies pursuant to Section 2(a) hereof (a
"Payment") by or on behalf of the Underwriters of the aggregate Purchase Price
for any Shares does not constitute closing of a purchase and sale of the
Shares. Only execution and delivery, by facsimile or otherwise, of a receipt
for Shares by the Underwriters indicates completion of the closing of a
purchase of the Shares from the Company and the Selling Stockholders.
Furthermore, in the event that the Underwriters make a Payment to the Company
and the Selling Stockholders prior to the completion of the closing of a
purchase of Shares, the Company and the Selling Stockholders hereby acknowledge
that until the Underwriters execute and deliver such receipt for the Shares,
the Company and the Selling Stockholders will not be entitled to the Payment
and shall return the Payment to the Underwriters as soon as practicable (by
wire transfer of same-day funds) upon demand. In the event that the closing of
a purchase of Shares is not completed and the Payment is not returned by the
Company and the Selling Stockholders to the Underwriters on the same day the
Payment was received by the Company and the Selling Stockholders, the Company
and the Selling Stockholders agree to pay to
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the Underwriters in respect of each day the Payment is not returned by them, in
same-day funds, interest on the amount of such Payment in an amount
representing the Underwriters' cost of financing as reasonably determined by
the Representatives, pro rata in proportion to the percentage of such Payment
received by each.
(d) It is understood that any of you, individually and
not as one of the Representatives, may (but shall not be obligated to) make
Payment on behalf of any Underwriter or Underwriters for any of the Shares to
be purchased by such Underwriter or Underwriters. No such Payment shall
relieve such Underwriter or Underwriters from any of its or their obligations
hereunder.
Section 3. Covenants.
(a) The Company covenants and agrees with the several
Underwriters that:
(i) The Company will:
(x) use its 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. If required, the
Company will file the Prospectus or any Term
Sheet that constitutes a part thereof and any
amendment or supplement thereto with the
Commission in the manner and within the time
period required by Rules 434 and 424(b) under
the Securities Act. During any time when a
prospectus relating to the Shares is required
to be delivered under the Securities Act, the
Company (I) will comply with all requirements
imposed upon it by the Securities Act and the
rules and regulations of the Commission
thereunder to the extent necessary to permit
the continuance of sales of or dealings in
the Shares in accordance with the provisions
hereof and of the Prospectus, as then amended
or supplemented, and (II) will not file with
the Commission the Prospectus, Term Sheet,
any amendment or supplement to such
Prospectus or Term Sheet, any amendment to
the Registration Statement (including the
amendment referred to in the second sentence
of Section 5(a)(i) hereof), any Rule 462(b)
Registration Statement or any amendment or
supplement to any of the documents
incorporated or deemed to be incorporated by
reference in the Registration Statement and
the Prospectus (the "Incorporated Documents")
unless the Representatives previously have
been advised of, and furnished with a copy
within a reasonable period of time prior to,
the proposed filing and the Representatives
shall have
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given their consent to such filing. The
Company will prepare and file with the
Commission, in accordance with the rules and
regulations of the Commission, promptly upon
request by the Representatives or counsel for
the Underwriters, any amendments to the
Registration Statement or amendments or
supplements to the Prospectus or any of the
Incorporated Documents that may be necessary
or advisable in connection with the
distribution of the Shares by the several
Underwriters. The Company will advise the
Representatives, promptly after receiving
notice thereof, of the time when the
Registration Statement or any amendment
thereto has been filed or declared effective
or the Prospectus or Term Sheet or any
amendment or supplement thereto has been
filed and will provide evidence satisfactory
to the Representatives of each such filing or
effectiveness.
(y) without charge, provide (I) to the
Representatives and to counsel for the
Underwriters, an executed and a conformed
copy of the Original Registration Statement
and each amendment thereto or any Rule 462(b)
Registration Statement (in each case
including exhibits thereto and the
Incorporated Documents), (II) to each other
Underwriter, a conformed copy of the Original
Registration Statement and each amendment
thereto or any Rule 462(b) Registration
Statement (in each case without exhibits
thereto), and (III) so long as a prospectus
relating to the Shares is required to be
delivered under the Securities Act, as many
copies of each Preliminary Prospectus or the
Prospectus or any amendment or supplement
thereto as the Representatives may reasonably
request. Without limiting the application of
clause (III) of the preceding sentence, the
Company, not later than (A) 9:00 A.M., New
York City time, on the business day following
the date of determination of the public
offering price, if such determination
occurred at or prior to 12:00 noon, New York
City time, on such date or (B) 6:00 P.M., New
York City time, on the business day following
the date of determination of the public
offering price, if such determination
occurred after 12:00 noon, New York City
time, on such date, will deliver to the
Underwriters, without charge, as many copies
of the Prospectus and any amendment or
supplement thereto as the Representatives may
reasonably request for purposes of confirming
orders that are expected to settle on the
First Closing Date.
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(z) advise the Representatives, promptly
after receiving notice or obtaining knowledge
thereof, of (I) the issuance by the
Commission of any stop order suspending the
effectiveness of the Original Registration
Statement or any amendment thereto or any
Rule 462(b) Registration Statement or any
order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto, (II) the
suspension of the qualification of the Shares
for offering or sale in any jurisdiction,
(III) the institution, threatening or
contemplation of any proceeding for any such
purpose, or (IV) any request made by the
Commission for amending the Original
Registration Statement or any Rule 462(b)
Registration Statement, for amending or
supplementing the Prospectus or for
additional information. The Company will use
its best efforts to prevent the issuance of
any such stop order and, if any such stop
order is issued, to obtain the withdrawal
thereof as promptly as possible.
(ii) The Company will arrange for the
qualification of the Shares for offering and sale in
each jurisdiction as the Representatives shall
designate including, but not limited to, pursuant to
applicable state securities ("Blue Sky") laws of
certain states of the United States of America or
other U.S. jurisdictions, and the Company shall
maintain such qualifications in effect for so long as
may be necessary in order to complete the placement
of the Shares; provided, however, that the Company
shall not be obliged to file any general consent to
service of process or to qualify as a foreign
corporation or as a securities dealer in any
jurisdiction or to subject itself to taxation in
respect of doing business in any jurisdiction in
which it is not otherwise so subject.
(iii) If, at any time prior to the final date when
a prospectus relating to the Shares is required to be
delivered under the Securities Act, 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 in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading, or if for any other reason it
shall be necessary at any time to amend or supplement
the Registration Statement or the Prospectus to
comply with the Securities Act or the rules or
regulations of the Commission thereunder or
applicable law, the Company will promptly notify the
Representatives thereof and will promptly, at its own
expense, but subject to the second sentence of
Section 3(a)(i)(x) hereof: (x) prepare and file with
the Commission an amendment or supplement to the
Registration Statement or Prospectus which will
correct such statement or omission or effect such
compliance; and (y) supply any
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amended or supplemented Prospectus to the
Underwriters in such quantities as the Underwriters
may reasonably request.
(iv) The Company will make generally available to
the Company's securityholders and to the
Representatives as soon as practicable an earnings
statement that satisfies the provisions of Section
11(a) of the Securities Act, including Rule 158
thereunder.
(v) The Company will apply the net proceeds from
the sale of the Shares as set forth under "Use of
Proceeds" in the Prospectus.
(vi) The Company will not, and will not allow any
subsidiary to, publicly announce any intention to,
and will not itself, and will not allow any
subsidiary to, without the prior written consent of
the Representatives, on behalf of the Underwriters,
(x) offer, pledge, sell, offer to sell, contract to
sell, sell any option or contract to purchase,
purchase any option to sell, grant any option, right
or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into, or
exercisable or exchangeable for, Common Stock, or (y)
enter into any swap or other agreement that
transfers, in whole or in part, any of the economic
consequences of ownership of the shares of Common
Stock or securities convertible into, or exercisable
or exchangeable for, shares of Common Stock (whether
any such transaction described in clause (x) or (y)
above is to be settled by delivery of shares of
Common Stock or such other securities, in cash or
otherwise), for a period beginning from the date
hereof and continuing to and including the date 120
days after the date hereof, except pursuant to this
Agreement and other than with respect to (x) shares
of Common Stock to be issued upon the exercise of
warrants to purchase shares of Common Stock which are
outstanding on the date hereof and disclosed in the
Prospectus, (y) shares of Common Stock (or any
securities convertible into or exchangeable for
shares of Common Stock) issued pursuant to any
employee benefit plans, qualified stock option plans
or other employee compensation plans which are
disclosed in the Prospectus and (z) shares of Common
Stock issued in a private transaction involving the
acquisition of or merger with another company (it
being understood that the Company shall not issue
shares of Common Stock for cash to be used to finance
such acquisition or merger).
(vii) Neither the Company nor any of its
affiliates, nor any person acting on behalf of any of
them will, directly or indirectly, (x) take any
action designed to cause or to result in, or that has
constituted or which might
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reasonably be expected to constitute, the
stabilization or manipulation of the price of any
security of the Company to facilitate the sale or
resale of the Shares or (y) (I) sell, bid for,
purchase, or pay anyone any compensation for
soliciting purchases of, the Shares or (II) pay or
agree to pay to any person any compensation for
soliciting another to purchase any other securities
of the Company.
(viii) The Company will obtain the agreements
described in Section 7(i) hereof prior to the First
Closing Date.
(ix) If at any time during the 25-day period after
the Registration Statement becomes effective or
during the period prior to any Closing Date, any
rumor, publication or event relating to or affecting
the Company shall occur as a result of which in the
Representatives' sole judgment the market price of
the Shares has been or is likely to be materially
affected (regardless of whether such rumor,
publication or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after
notice from the Representatives advising the Company
to the effect set forth above, forthwith prepare,
consult with the Representatives concerning the
substance of, and disseminate a press release or
other public statement reasonably satisfactory to the
Representatives, responding to or commenting on such
rumor, publication or event.
(x) If the Company elects to rely on Rule 462(b),
the Company shall both file the Rule 462(b)
Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable
fees in accordance with Rule 111 promulgated under
the Securities Act by the earlier of (x) 10:00 P.M.
New York City time on the date of this Agreement and
(y) the time confirmations are sent or given, as
specified by Rule 462(b)(2) under the Securities Act.
(xi) The Company will cause the Shares to be duly
included for quotation on the Nasdaq National Market
prior to the First Closing Date. The Company will
ensure that the Shares remain included for quotation
on the Nasdaq National Market following the First
Closing Date.
(xii) During the period when a prospectus relating
to the Shares is required to be delivered under the
Securities Act, the Company shall file all documents
required to be filed with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), within
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the time period required by the Exchange Act and the
regulations of the Commission under the Exchange Act.
(xiii) The Company will comply with all the
provisions of any undertakings contained in the
Registration Statement.
(b) Each Selling Stockholder agrees that:
(i) It will not, and no person acting on behalf
of such Selling Stockholder will, directly or
indirectly, (x) take any action designed to cause or
to result in, or that has constituted or which might
reasonably be expected to constitute, the
stabilization or manipulation of the price of any
security of the Company to facilitate the sale or
resale of the Shares or (y) (I) sell, bid for,
purchase, or pay anyone any compensation for
soliciting purchases of, the Shares or (II) pay or
agree to pay to any person any compensation for
soliciting another to purchase any other securities
of the Company (except for the sale of Shares by the
Selling Stockholders under this Agreement).
(ii) It will not, and will not allow any
subsidiary to, publicly announce any intention to,
and will not itself, and will not allow any
subsidiary to, without the prior written consent of
the Representatives on behalf of the Underwriters,
(x) offer, pledge, sell, offer to sell, contract to
sell, sell any option or contract to purchase,
purchase any option to sell, grant any option, right
or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any of the shares
of Common Stock or any securities convertible into,
or exercisable or exchangeable for, Common Stock, or
(y) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic
consequences of ownership of the shares of Common
Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common
Stock (whether any such transaction described in
clause (x) or (y) above is to be settled by delivery
of shares of Common Stock or such other securities,
in cash or otherwise), in each case, beneficially
owned (within the meaning of Rule 13d-3 under the
Exchange Act) or otherwise controlled by such person
on the date hereof or hereafter acquired, for a
period beginning from the date hereof and continuing
to and including the date 180 days after the date
hereof.
Section 4. Expenses.
(a) The Company shall bear and pay all costs and expenses
incurred incident to the performance of its obligations under this Agreement,
whether or not the transactions
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contemplated herein are consummated or this Agreement is terminated pursuant to
Section 9 hereof, including: (i) fees and expenses of preparation, issuance and
delivery of this Agreement to the Underwriters; (ii) the fees and expenses of
its counsel, accountants and any other experts or advisors retained by the
Company; (iii) the costs of delivering and distributing the Powers of Attorney
(as defined below) and the Custody Agreements (as defined below) and the fees
and expenses of the Custodian (as defined below) (and any other
Attorney-in-Fact (as defined below)); (iv) fees and expenses incurred in
connection with the registration of the Shares under the Securities Act and the
preparation and filing of the Registration Statement, the Prospectus and all
amendments and supplements thereto; (v) the printing and distribution of the
Prospectus and any Preliminary Prospectus and the printing and production of
all other documents connected with the Offering (including this Agreement and
any other related agreements); (vi) expenses related to the qualification of
the Shares under the state securities or Blue Sky laws, including filing fees
and the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of any Blue Sky memoranda;
(vii) the filing fees and expenses, if any, incurred with respect to any filing
with the National Association of Securities Dealers, Inc., including the fees
and disbursements of counsel for the Underwriters in connection therewith;
(viii) all expenses arising from the quoting of the Shares on the Nasdaq
National Market; (ix) all arrangements relating to the preparation, issuance
and delivery to the Underwriters of any certificates evidencing the Shares,
including transfers agent's and registrar's fees; and (x) the costs and
expenses of the "roadshow" and any other meetings with prospective investors in
the Shares (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters). The Company shall
reimburse the Representatives, for the account of the Underwriters, for all of
the reasonable out-of-pocket expenses (excluding fees and expenses of their
counsel) incurred by the Underwriters in connection with the Offering, not to
exceed $200,000.
(b) The Selling Stockholders shall bear and pay all costs
and expenses incurred incident to the performance of their respective
obligations under this Agreement, whether or not the transactions contemplated
herein are consummated or this Agreement is terminated pursuant to Section 9
hereof, including: (i) any stamp duties, capital duties and stock transfer
taxes, if any, payable upon the sale of the Shares of such Selling Stockholders
to the Underwriters and (ii) the fees and disbursements of their respective
counsel, accountants and other advisors.
Section 5. Representations and Warranties.
(a) As a condition of the obligation of the Underwriters
to underwrite and pay for the Shares, the Company represents and warrants to,
and agrees with, each of the several Underwriters as follows:
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Registration Statement and Prospectus
(i) The Company meets the requirements for use of
Form S-2 under the Securities Act. The Original Registration
Statement, including the Preliminary Prospectus, has been
filed by the Company with the Commission under the Securities
Act, and one or more amendments to such Registration Statement
may have been so filed. After the execution of this
Agreement, the Company will file with the Commission either
(x) if such Registration Statement, as it may have been
amended, has been declared by the Commission to be effective
under the Securities Act, either (I) if the Company relies on
Rule 434 under the Securities Act, a Term Sheet relating to
the Shares that shall identify the Preliminary Prospectus that
it supplements containing such information as is required or
permitted by Rules 434, 430A and 424(b) under the Securities
Act or (II) if the Company does not rely on Rule 434 under the
Securities Act, a prospectus in the form most recently
included in an amendment to such Registration Statement (or,
if no such amendment shall have been filed, in such
Registration Statement), with such changes or insertions as
are required by Rule 430A under the Securities Act or
permitted by Rule 424(b) under the Securities Act, and in the
case of either clause (I) or (II) of this sentence, as have
been provided to and approved by the Representatives prior to
the execution of this Agreement, or (y) if such Registration
Statement, as it may have been amended, has not been declared
by the Commission to be effective under the Securities Act, an
amendment to such Registration Statement, including a form of
prospectus, a copy of which amendment has been furnished to
and approved by the Representatives prior to the execution of
this Agreement. The Company may also file a Rule 462(b)
Registration Statement with the Commission for the purpose of
registering certain additional Shares, which registration
shall be effective upon filing with the Commission.
(ii) The Commission has not issued any order
preventing or suspending the use of any Preliminary
Prospectus. When any Preliminary Prospectus was filed with
the Commission, it (x) contained all statements required to be
stated therein in accordance with, and complied in all
material respects with the requirements of, the Securities Act
and the rules and regulations of the Commission thereunder and
(y) did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration
Statement or any amendment thereto was or is declared
effective, it (I) contained or will contain all statements
required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements
of, the Securities Act and the rules and regulations of the
Commission thereunder and (II) did not or will 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 to
make the statements therein not misleading. When the
Prospectus or any Term Sheet that is a part thereof or any
amendment or supplement to the Prospectus is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or
such amendment or supplement is not required to be so filed,
when the Registration Statement or the amendment thereto
containing the Prospectus or such amendment or supplement to
the Prospectus was or is declared effective) and on the
Closing Date, the Prospectus, as amended or supplemented at
any such time, (A) contained or will contain all statements
required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements
of, the Securities Act and the rules and regulations of the
Commission thereunder and (B) did not or will not include any
untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading. The foregoing provisions of this
paragraph (ii) do not apply to statements or omissions made in
any Preliminary Prospectus, the Registration Statement or any
amendment thereto or the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with
written information furnished to the Company by any
Underwriter through the Representatives specifically for use
therein.
(iii) If the Company has elected to rely on Rule
462(b) and the Rule 462(b) Registration Statement has not been
declared effective, (x) the Company will file a Rule 462(b)
Registration Statement in compliance with, and that is
effective upon filing pursuant to, Rule 462(b) and (y) the
Company has given irrevocable instructions for transmission of
the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule
111 under the Securities Act, or the Commission has received
payment of such filing fee.
(iv) If the Company has elected to rely on Rule
434 under the Securities Act, the Prospectus is not
"materially different", as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the
time of its effectiveness or an effective post-effective
amendment thereto (including such information that is
permitted to be omitted pursuant to Rule 430A under the
Securities Act);
(v) The Company and the Selling Stockholders have
not distributed and, prior to the later of (x) any Closing
Date and (y) the completion of the distribution of the Shares,
will not distribute any offering material in connection with
the Offering other than the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto.
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(vi) Subsequent to the respective dates as of
which information is given in the Registration Statement and
the Prospectus, (x) the Company and its subsidiaries, taken as
a whole, have not incurred any material liability or
obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business;
(y) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and
(z) there has not been any material change in the capital
stock, short- term or long-term debt of the Company and its
subsidiaries, taken as a whole, except in each case as
described in or contemplated by the Prospectus.
(vii) Each of the Incorporated Documents heretofore
filed with the Commission, when it was filed (or, if any
amendment with respect to that Incorporated Document has been
filed, when that amendment was filed), conformed in all
material respects with the requirements of the Exchange Act;
each further Incorporated Document filed with the Commission
will, when it is filed, conform in all material respects with
the requirements of the Exchange Act; none of the Incorporated
Documents, when filed with the Commission (or, if an amendment
with respect to that Incorporated Document has been filed,
when that amendment was filed), contained any untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; and no further
Incorporated Document filed with the Commission will, when it
is filed, contain any 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.
The Shares
(viii) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus.
All of the issued shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all
applicable federal and state securities laws and were not
issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase such securities.
The Shares have been duly authorized by all necessary
corporate action of the Company and, after payment therefor in
accordance herewith, will be validly issued, fully paid and
nonassessable at the Closing Date. No holders of outstanding
shares of capital stock of the Company are entitled as such to
any preemptive or other rights to subscribe for any of the
Shares, and no holder of securities of the Company has any
right which has not been fully exercised or waived to require
the Company to register the offer or sale of
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any securities owned by such holder under the Securities Act
in the Offering contemplated by this Agreement.
(ix) Except as disclosed in the Prospectus or the
Incorporated Documents, there are no outstanding (x)
securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital
stock of the Company or any such subsidiary, (y) warrants,
rights or options to subscribe for or purchase from the
Company or any such subsidiary any such capital stock or any
such convertible or exchangeable securities or obligations, or
(z) obligations of the Company or any such subsidiary to issue
any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants,
rights or options.
(x) Except for the shares of capital stock of
each of the subsidiaries owned by the Company and such
subsidiaries, neither the Company nor any such subsidiary owns
any shares of stock or any other equity securities of any
corporation or has any equity interest in any firm,
partnership, association or other entity, except as described
in or contemplated by the Prospectus.
Listing
(xi) All of the Shares have been duly authorized
and accepted for quotation on the Nasdaq National Market,
subject to official notice of issuance.
Market manipulation
(xii) Neither the Company nor any of its
affiliates, nor any person acting on behalf of any of them
has, directly or indirectly, (x) taken any action designed to
cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares, or (y) since the
filing of the Original Registration Statement (I) sold, bid
for, purchased, or paid anyone any compensation for soliciting
purchases of, the Shares or (II) paid or agreed to pay to any
person any compensation for soliciting another to purchase any
other securities of the Company.
Corporate power and authority
(xiii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
law of its jurisdiction of incorporation with full power and
authority to own, lease and operate its properties and assets
and
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conduct its business as described in the Prospectus, is duly
qualified to transact business and is in good standing in each
jurisdiction in which its ownership, leasing or operation of
its properties or assets or the conduct of its business
requires such qualification, except where the failure to be so
qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a
whole, and has full power and authority to execute and perform
its obligations under this Agreement; each subsidiary of the
Company is a corporation duly incorporated and validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation and is duly qualified to
transact business and is in good standing in each jurisdiction
in which its ownership, leasing or operation of its properties
or assets or the conduct of its business requires such
qualification, except where the failure to be so qualified
does not amount to a material liability or disability to the
Company and its subsidiaries, taken as a whole, and each has
full power and authority to own, lease and operate its
properties and assets and conduct its business as described in
the Registration Statement and the Prospectus; all of the
issued and outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and are fully
paid and nonassessable and are owned beneficially by the
Company free and clear of any security interests, liens,
encumbrances, equities or claims.
(xiv) The execution and delivery of this Agreement
and the issue and sale of the Shares have been duly authorized
by all necessary corporate action of the Company, and this
Agreement has been duly executed and delivered by the Company
and is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(xv) The issuance, offering and sale of the Shares
to the Underwriters by the Company pursuant to this Agreement,
the compliance by the Company with the other provisions of
this Agreement and the consummation of the other transactions
herein contemplated do not (x) require the consent, approval,
authorization, registration or qualification of or with any
governmental authority, except such as have been obtained or
made or such as may be required by the state securities or
Blue Sky laws of the various states of the United States of
America or other U.S. jurisdictions in connection with the
offer and sale of the Shares by the Underwriters, or (y)
conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease or other agreement
or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries
or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of its
subsidiaries, or any statute or any judgment, decree, order,
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rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any
of its subsidiaries.
(xvi) The Company is not, and will conduct its
operations in a manner so that it continues not to be, an
"investment company" and, after giving effect to the Offering
and the application of the proceeds therefrom, will not be an
"investment company", as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
Title, licenses and consents
(xvii) The Company and each of its subsidiaries have
good and marketable title in fee simple to all items of real
property and marketable title to all personal property owned
by each of them, in each case free and clear of any security
interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect
the value of such property and do not interfere with the use
made or proposed to be made of such property by the Company or
such subsidiary, and any real property and buildings held
under lease by the Company or any such subsidiary are held
under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the
use made or proposed to be made of such property and buildings
by the Company or such subsidiary, in each case except as
described in or contemplated by the Prospectus.
(xviii) The Company and its subsidiaries own or
possess, or can acquire on reasonable terms, all material
patents, patent applications, trademarks, service marks, trade
names, licenses, know-how, copyrights, trade secrets and
proprietary or other confidential information necessary to
operate the business now operated by them, and neither the
Company nor any such subsidiary has received any notice of
infringement of or conflict with asserted rights of any third
party with respect to any of the foregoing which, singly or in
the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a materially adverse effect on
or constitute a materially adverse change in, or constitute a
development involving a prospective materially adverse effect
on or change in, the condition (financial or otherwise),
earnings, properties, business affairs or business prospects,
stockholders' equity, net worth or results of operations of
the Company or any of its subsidiaries, taken as a whole,
except as described in or contemplated by the Prospectus.
(xix) The Company and its subsidiaries possess all
consents, licenses, certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses.
The Company and its subsidiaries are in compliance with the
terms and conditions of all
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such consents, licenses, certificates, authorizations and
permits, except where the failure so to comply would not,
singly or in the aggregate, have a materially adverse effect
on the condition (financial or otherwise), earnings,
properties, business affairs or business prospects, net worth
or results of operations of the Company or any of its
subsidiaries, taken as a whole. Neither the Company nor any
such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such
consent, license, certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a materially adverse
effect on or constitute a materially adverse change in, or
constitute a development involving a prospective materially
adverse effect on or change in, the condition (financial or
otherwise), earnings, properties, business affairs or business
prospects, net worth or results of operations of the Company
or any of its subsidiaries, taken as a whole.
Financial statements
(xx) Each of Xxxxxx Xxxxxxxx L.L.P. and KPMG Peat
Marwick LLP, who have certified certain financial statements
of the Company and its consolidated subsidiaries and delivered
their reports with respect to the audited consolidated
financial statements and schedules included in the
Registration Statement and the Prospectus, are independent
public accountants as required by the Securities Act and the
applicable rules and regulations thereunder.
(xxi) The consolidated financial statements and
schedules of the Company and its consolidated subsidiaries
included in the Registration Statement and the Prospectus were
prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied throughout the
periods involved (except as otherwise noted therein) and they
present fairly the financial condition of the Company as at
the dates at which they were prepared and the results of
operations of the Company in respect of the periods for which
they were prepared. The selected financial data and the
summary financial information included in the Prospectus have
been compiled on a basis consistent with that of the audited
and unaudited historical financial statements and pro forma
financial statements from which they have been derived. The
pro forma financial statements and the related notes thereto
included in the Registration Statement and the Prospectus
present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements
(including the applicable accounting requirements of Rule
11-02 of Regulation S-X of the Commission) and have been
properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are, in the
judgment of the Company, reasonable and
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the adjustments used therein are, in the judgment of the
Company, appropriate to give effect to the transactions and
circumstances referred to therein.
Internal Accounting Controls
(xxii) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (w) transactions are
executed in accordance with management's general or specific
authorizations; (x) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability; (y) access to
assets is permitted only in accordance with management's
general or specific authorization; and (z) the recorded
accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with
respect to any differences.
Litigation
(xxiii) No legal or governmental proceedings are
pending or threatened to which the Company or any of its
subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the
Prospectus and are not described therein.
Exhibits
(xxiv) There are no statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
therein or filed as required.
Dividends and Distributions
(xxv) No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends
to the Company, making any other distribution on such
subsidiary's capital stock, repaying to the Company any loans
or advances to such subsidiary from the Company or
transferring any of such subsidiary's property or assets to
the Company or any other subsidiary of the Company, and the
Company is not currently prohibited, directly or indirectly,
from paying any dividends, making any other distribution on
its capital stock, in each case except as described in or
contemplated by the Prospectus.
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Taxes
(xxvi) The Company has filed all foreign, federal,
state and local tax returns that are required to be filed or
has requested extensions thereof (except in any case in which
the failure so to file would not have a materially adverse
effect on the Company and its subsidiaries, taken as a whole)
and all such returns are true, correct and complete in all
material respects. The Company has paid all taxes required to
be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as described in
or contemplated by the Prospectus.
Insurance
(xxvii) The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are
engaged; neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for; and
neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not
materially and adversely affect the condition (financial or
otherwise), earnings, properties, business affairs or business
prospects, net worth or results of operations of the Company
or any of its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
Pension and Labor
(xxviii) The Company is in compliance in all material
respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to
incur liability under (x) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (y)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is
so qualified in all
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material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such
qualification.
(xxix) No labor dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or
imminent that could have a materially adverse effect on or
constitute a materially adverse change in, or constitute a
development involving a prospective materially adverse effect
on or change in, the condition (financial or otherwise),
properties, management, earnings, business affairs or business
prospects, net worth or results of operations of the Company
or any of its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
Environmental
(xxx) Except as described in the Registration
Statement and except as would not, singly or in the
aggregate, have a materially adverse effect on or constitute a
materially adverse change in, or constitute a development
involving a prospective materially adverse effect on or change
in, the condition (financial or otherwise), earnings,
properties, business affairs or business prospects, net worth
or results of operations of the Company or any of its
subsidiaries, taken as a whole, (w) neither the Company nor
any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial
or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (x)
the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their
requirements, (y) there are no pending or threatened
administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any
of its subsidiaries and (z) there are no events or
circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body
or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any
Environmental Laws.
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Other Agreements
(xxxi) 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 of any indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective
properties is bound.
Absence of Materially Adverse Change
(xxxii) Subsequent to the respective dates as of
which information is given in the Registration Statement and
the Prospectus, neither the Company nor any of its
subsidiaries has sustained any material loss or interference
with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal
or governmental proceeding, and there has been no materially
adverse change (including, without limitation, a change in
management or control), or development involving a prospective
materially adverse change, in the condition (financial or
otherwise), management, earnings, property, business affairs
or business prospects, stockholders' equity, net worth or
results of operations of the Company or any of its
subsidiaries, taken as a whole, other than as described in or
contemplated by the Prospectus (exclusive of any amendments or
supplements thereto). Except as otherwise stated in the
Registration Statement and the Prospectus, there have been no
transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company or
any of its subsidiaries, taken as a whole.
(xxxiii) No receiver or liquidator (or similar
person) has been appointed in respect of the Company or any
subsidiary of the Company or in respect of any part of the
assets of the Company or any subsidiary of the Company; no
resolution, order of any court, regulatory body, governmental
body or otherwise, or petition or application for an order,
has been passed, made or presented for the winding up of the
Company or any subsidiary of the Company or for the protection
of the Company or any such subsidiary from its creditors; and
the Company has not, and no subsidiary of the Company has,
stopped or suspended payments of its debts, become unable to
pay its debts or otherwise become insolvent.
(b) As a further condition of the obligation of the
Underwriters to underwrite and pay for the Shares, each Selling Stockholder
represents and warrants to, and agrees with, each of the several Underwriters
that:
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(i) Such Selling Stockholder has full power
(corporate and other) to enter into this Agreement and to
sell, assign, transfer and deliver to the Underwriters the
Shares to be sold by such Selling Stockholder hereunder in
accordance with the terms of this Agreement; the execution and
delivery of this Agreement have been duly authorized by all
necessary corporate action of such Selling Stockholder in the
case of a Selling Stockholder that is a corporation; and this
Agreement has been duly executed and delivered by such Selling
Stockholder.
(ii) Such Selling Stockholder has duly executed
and delivered a power of attorney and custody agreement (with
respect to such Selling Stockholder, the "Power-of-Attorney"
and the "Custody Agreement", respectively), each in the form
heretofore delivered to the Representatives, appointing an
attorney-in-fact (the "Attorney-in-Fact") with authority to
execute, deliver and perform this Agreement on behalf of such
Selling Stockholder and appointing Xxxxxx Trust and Savings
Bank, as custodian thereunder (the "Custodian"). Certificates
in negotiable form, endorsed in blank or accompanied by blank
stock powers duly executed, with signatures appropriately
guaranteed, representing the Shares to be sold by such Selling
Stockholder hereunder have been deposited with the Custodian
pursuant to the Custody Agreement for the purpose of delivery
pursuant to this Agreement. Such Selling Stockholder has full
power (corporate and other) to enter into the Custody
Agreement and the Power-of-Attorney and to perform its
obligations under the Custody Agreement. The execution and
delivery of the Custody Agreement and the Power-of-Attorney
have been duly authorized by all necessary corporate action of
such Selling Stockholder in the case of a Selling Stockholder
that is a corporation; the Custody Agreement and the
Power-of-Attorney have been duly executed and delivered by
such Selling Stockholder and, assuming due authorization,
execution and delivery by the Custodian, are the legal, valid,
binding and enforceable instruments of such Selling
Stockholder. Such Selling Stockholder agrees that each of the
Shares represented by the certificates on deposit with the
Custodian is subject to the interests of the Underwriters
hereunder, that the arrangements made for such custody, the
appointment of the Attorney-in-Fact and the right, power and
authority of the Attorney-in-Fact to execute and deliver this
Agreement, to agree on the price at which the Shares
(including such Selling Stockholder's Shares) are to be sold
to the Underwriters, and to carry out the terms of this
Agreement, are to that extent irrevocable and that the
obligations of such Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or the
Custody Agreement, by any act of such Selling Stockholder, by
operation of law or otherwise, whether in the case of any
individual Selling Stockholder by the death or incapacity of
such Selling Stockholder, in the case of a trust or estate by
the death of the trustee or trustees or the executor or
executors or the termination of such trust or estate, or in
the case of a corporate or partnership Selling Stockholder by
its liquidation or dissolution or by
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the occurrence of any other event. If any individual Selling
Stockholder, trustee or executor should die or become
incapacitated or any such trust should be terminated, or if
any corporate or partnership Selling Stockholder shall
liquidate or dissolve, or if any other event should occur,
before the delivery of such Shares hereunder, the certificates
for such Shares deposited with the Custodian shall be
delivered by the Custodian in accordance with the respective
terms and conditions of this Agreement as if such death,
incapacity, termination, liquidation or dissolution or other
event had not occurred, regardless of whether or not the
Custodian or the Attorney-in-Fact shall have received notice
thereof.
(iii) Such Selling Stockholder is the lawful owner
of the Shares to be sold by such Selling Stockholder hereunder
and upon sale and delivery of, and payment for, such Shares,
as provided herein, such Selling Stockholder will convey good
and marketable title to such Shares, free and clear of any
security interests, liens, encumbrances, equities, claims or
other defects.
(iv) Neither such Selling Stockholder nor any
person acting on behalf of it has, directly or indirectly, (x)
taken any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale
of the Shares or (y) since the filing of the Original
Registration Statement (I) sold, bid for, purchased, or paid
anyone any compensation for soliciting purchases of, the
Shares or (II) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other
securities of the Company (except for the sale of Shares by
the Selling Stockholders under this Agreement).
(v) To the extent that any statements or
omissions are made in the Prospectus or any Term Sheet that is
a part thereof or any amendment or supplement to the
Prospectus (or, if the Prospectus or such amendment or
supplement is not required to be filed, the Original
Registration Statement or the amendment thereto containing the
Prospectus or such amendment or supplement to the Prospectus)
in reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder
specifically for use therein, such Prospectus or Term Sheet or
amendment or supplement to the Prospectus (or, if the
Prospectus or such amendment or supplement is not required to
be filed, the Original Registration Statement or the amendment
thereto containing the Prospectus or such amendment or
supplement to the Prospectus) (x) contained or will contain
all statements required to be stated therein in accordance
with, and complied or will comply in all material respects
with the requirements of, the Securities Act and the rules and
regulations of the Commission thereunder and (y) did not or
will not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
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statements therein, in the light of the circumstances under
which they were made, not misleading. Such Selling
Stockholder has reviewed the Prospectus and the Registration
Statement, and the information regarding such Selling
Stockholder set forth therein under the caption "Principal and
Selling Stockholders" is complete and accurate.
(vi) The sale by such Selling Stockholder of
Shares pursuant hereto is not prompted by any adverse
information concerning the Company or its subsidiaries that is
not set forth in the Registration Statement or the Prospectus.
(vii) The sale of the Shares to the Underwriters by
such Selling Stockholder pursuant to this Agreement, the
compliance by such Selling Stockholder with the other
provisions of this Agreement, the Custody Agreement and the
consummation of the other transactions herein contemplated do
not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the
registration statement filed with respect to the Shares (as
amended) is not effective under the Securities Act as of the
time of execution hereof, such as may be required (and shall
be obtained as provided in this Agreement) under the
Securities Act, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute
a default under any indenture, mortgage, deed of trust, lease
or other agreement or instrument to which such Selling
Stockholder or any of its subsidiaries is a party or by which
such Selling Stockholder or any of its subsidiaries or any of
such Selling Stockholder's properties are bound, or the
charter documents or by-laws of such Selling Stockholder or
any of its subsidiaries or any statute or any judgment,
decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to such
Selling Stockholder or any of its subsidiaries.
(viii) Such Selling Stockholder has not distributed,
and prior to the later of (x) any Closing Date and (y) the
completion of the distribution of the Shares, will not
distribute any offering material in connection with the
Offering other than the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto.
(c) The above representations and warranties shall be
deemed to be repeated at each Closing, and all references therein to the Shares
and the Closing Date shall be deemed to refer to the Firm Shares or the Option
Shares and the First Closing Date or the applicable Option Closing Date, each
as applicable.
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Section 6. Indemnity.
(a) The Company 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, against any and all losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon:
(i) any untrue statement or alleged untrue
statement made by the Company or such Selling
Stockholder in Section 5 hereof,
(ii) any untrue statement or alleged untrue
statement of any material fact contained in the
Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or
(iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto a material fact
required to be stated therein or necessary to make
the statements therein not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other costs or expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and
provided further, that the Company will not be liable to any Underwriter or any
person controlling such Underwriter with respect to any such untrue statement
or omission made in any Preliminary Prospectus that is corrected in the
Prospectus (or any amendment or supplement thereto) if the person asserting any
such loss, claim, damage or liability purchased Shares from such Underwriter
but was not sent or given a copy of the Prospectus (as amended or supplemented)
in any case where such delivery of the Prospectus (as amended or supplemented)
was required by the Securities Act, unless such failure to deliver the
Prospectus (as amended or supplemented) was a result of noncompliance by the
Company with Section 3(a) hereof. The indemnity provided for in this Section 6
shall be in addition to any liability which the Company may otherwise have.
The Company will not, without the prior written consent of the Representatives,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such
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Representatives or any person who controls any such Representatives is a party
to such claim, action, suit or proceeding), unless such settlement, compromise
or consent includes an unconditional release of all of the Underwriters and
such controlling persons from all liability arising out of such claim, action,
suit or proceeding.
(b) Each Selling Stockholder, severally and not jointly,
agrees to indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Registration Statement, each Underwriter and each
person, if any, who controls the Company or 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 or liabilities, joint or several, to which
the Company, any such director, officer, such Underwriter or any such
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue
statement of any material fact contained in the
Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or
(ii) the omission or the alleged omission to state
in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto a material
fact required to be stated or necessary to make the
statements therein not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other costs or expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that such
Selling Stockholder will be liable in any such case to the extent, but only to
the extent, that any untrue statement or alleged untrue statement or omission
or alleged omission in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto
was made in reliance upon and in conformity with written information furnished
to the Company by such Selling Stockholder specifically for use therein; and
provided further, that the Selling Stockholders will not be liable to any
Underwriter or any person controlling such Underwriter with respect to any such
untrue statement or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or supplement thereto) if the
person asserting any such loss, claim, damage or liability purchased Shares
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) in any case where such delivery of the Prospectus (as
amended or supplemented) was required by the Securities Act, unless such
failure to deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 3(a) hereof. The indemnity provided
for in this
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Section 6 shall be in addition to any liability which the Selling Stockholders
may otherwise have. The Selling Stockholders will not, without the prior
written consent of the Representatives, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Representatives or any person who controls any such
Representatives is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of all
of the Underwriters and such controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(c) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, each Selling Stockholder and
each person, if any, who controls the Company or such Selling Stockholder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director or officer of the Company, such Selling
Stockholder or any such controlling person of the Company or such Selling
Stockholder may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and, subject to the limitation
set forth immediately preceding this clause, will reimburse, as incurred, any
legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person or such Selling Stockholder or
controlling person of such Selling Stockholder in connection with investigating
or defending any such loss, claim, damage, liability or any action in respect
thereof. The remedies provided for in this Section 6 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a), (b), or (c) of this Section
6, such person (for purposes of this paragraph (d), the "indemnified party")
shall, promptly after receipt by such party of notice of the commencement of
such action, notify the person against whom such indemnity may be sought (for
purposes of this paragraph (d), the "indemnifying party"), but the omission so
to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 6. In
case any such action is brought against any indemnified party, and it notifies
the indemnifying
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party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or
parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense of any such action and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 6 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated in writing by the Representatives in
the case of paragraph (a) or (b) of this Section 6, representing the
indemnified parties under such paragraph (a) or (b) who are parties to such
action or actions), or (ii) the indemnifying party does not promptly retain
counsel satisfactory to the indemnified party, or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. All fees and expenses reimbursed pursuant
to this paragraph (d) shall be reimbursed as they are incurred. After such
notice from the indemnifying party to such indemnified party, the indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 6 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party on the other from the Offering or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant
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equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total proceeds from the
Offering (before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Selling Stockholders and the Underwriters
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (e). Notwithstanding any other provision of this paragraph
(e), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Shares purchased by
such Underwriter under this Agreement, less the aggregate amount of any damages
that such Underwriter has otherwise been required to pay in respect of the same
or any substantially similar claim, and 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. The Underwriters' obligations to contribute
hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Deutsche Xxxxxx Xxxxxxxx Inc. Master
Agreement Among Underwriters. For purposes of this paragraph (e), each person,
if any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement and each person,
if any, who controls the Company or any Selling Stockholder within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company or such Selling
Stockholder, as the case may be.
Section 7. Conditions Precedent. The obligations of the several
Underwriters to purchase and pay for the Shares shall be subject, in the
Representatives' sole discretion, to the accuracy of the representations and
warranties of the Company and the Selling Stockholders contained herein as of
the date hereof and as of each Closing Date, as if made on and as of each
Closing Date, to the accuracy of the statements of the Company's officers and
the Selling Stockholders made pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their respective
covenants and agreements hereunder and to the following additional conditions:
(a) (i) If the Original Registration Statement or any
amendment thereto filed prior to the First Closing Date has not been declared
effective as of the time of execution hereof, the
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Original Registration Statement or such amendment shall have been declared
effective not later than 6:00 P.M. New York City time on the date of
determination of the public offering price, if such determination occurred at
or prior to 4:30 P.M. New York City time on such date, or 12:00 Noon New York
City time on the business day following the day on which the public offering
price was determined, if such determination occurred after 4:30 P.M. New York
City time on such date, and (ii) if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have been declared
effective not later than the time confirmations are sent or given as specified
by Rule 462(b)(2), or such later time and date as shall have been consented to
by the Representatives; if required, the Prospectus or any Term Sheet that
constitutes a part thereof and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period
required by Rules 434 and 424(b) under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto shall have been issued, and no proceedings for that purpose shall have
been instituted or threatened or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission; and the Company shall
have complied with any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise).
(b) The Representatives shall have received a legal
opinion from Xxxxxx & Xxxxxx, L.L.P., counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Registration Statement is effective under
the Securities Act; any required filing of the
Prospectus, or any Term Sheet that constitutes a part
thereof, pursuant to Rules 434 and 424(b) has been
made in the manner and within the time period
required by Rules 434 and 424(b); and no stop order
suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued
and, to the best knowledge of such counsel, no
proceedings for that purpose are pending or
threatened by the Commission;
(ii) the Original Registration Statement and each
amendment thereto, any Rule 462(b) Registration
Statement, the Prospectus and each of the
Incorporated Documents (in each case, other than the
financial statements and other financial information
contained therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the applicable requirements of the
Securities Act and the rules and regulations of the
Commission thereunder;
(iii) such counsel has no reason to believe that
(in each case, other than the financial statements
and other financial information contained therein, as
to which such counsel need express no opinion) (x)
the Registration Statement, as of its effective date,
contained any untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to
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make the statements therein not misleading or (y) the
Prospectus, as of its date or the date of such
opinion, included or includes any 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, not misleading;
(iv) if the Company elects to rely on Rule 434
under the Securities Act, the Prospectus is not
"materially different", as such term is used in Rule
434, from the prospectus included in the Registration
Statement at the time of its effectiveness or an
effective post-effective amendment thereto (including
such information that is permitted to be omitted
pursuant to Rule 430A under the Securities Act);
(v) the Company has an authorized, issued and
outstanding capitalization as set forth in the
Prospectus; all of the issued shares of capital stock
of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, have
been issued in compliance with all applicable federal
and state securities laws and were not issued in
violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities;
the Shares have been duly authorized by all necessary
corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued,
fully paid and nonassessable; no holders of
outstanding shares of capital stock of the Company
are entitled as such to any preemptive or other
rights to subscribe for any of the Shares; and no
holder of securities of the Company has any right
which has not been fully exercised or waived to
require the Company to register the offer or sale of
any securities owned by such holder under the
Securities Act in the Offering contemplated by this
Agreement;
(vi) all of the Shares have been duly authorized
and accepted for quotation on the Nasdaq National
Market, subject to official notice of issuance;
(vii) the Company and each of its subsidiaries have
been duly organized and are validly existing as
corporations in good standing under the laws of their
respective jurisdictions of incorporation and are
duly qualified to transact business as foreign
corporations and are in good standing under the laws
of all other jurisdictions where the ownership,
leasing or operation of their respective properties
or assets or the conduct of their respective
businesses requires such qualification, except where
the failure to be so qualified does not amount to a
material liability or disability to the Company and
its subsidiaries, taken as a whole; the Company and
each of its
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subsidiaries have full power and authority to own,
lease and operate their respective properties and
assets and conduct their respective businesses as
described in the Registration Statement and the
Prospectus, and the Company has corporate power to
enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it;
all of the issued and outstanding shares of capital
stock of each of the Company's subsidiaries have been
duly authorized and validly issued, are fully paid
and nonassessable and are owned beneficially by the
Company free and clear of any perfected security
interests or, to the best knowledge of such counsel,
any other security interests, liens, encumbrances,
equities or claims;
(viii) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus,
insofar as such statements purport to summarize
certain provisions of the capital stock of the
Company, provide a fair summary of such provisions;
and the statements set forth under the heading
"Description of Capital Stock" and Item 15 of Part II
of the Registration Statement in the Prospectus,
insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred
to therein, have been reviewed by such counsel and
fairly present the information called for with
respect to such legal matters, documents and
proceedings in all material respects as required by
the Securities Act and the rules and regulations
thereunder;
(ix) the execution and delivery of this Agreement
have been duly authorized by all necessary corporate
action of the Company and this Agreement has been
duly executed and delivered by the Company;
(x) the issuance, offering and sale of the Shares
to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the
other provisions of this Agreement and the
consummation of the other transactions herein
contemplated do not (x) require the consent,
approval, authorization, registration or
qualification of or with any governmental authority,
except such as have been obtained or made (and
specified in such opinion) or such as may be required
by the securities or Blue Sky laws of the various
states of the United States of America and other U.S.
jurisdictions in connection with the offer and sale
of the Shares by the Underwriters, or (y) conflict
with or result in a breach or violation of any of the
terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, lease
or other agreement or instrument, known to such
counsel, to which the Company or any of its
subsidiaries is a party or by which the Company or
any of its subsidiaries or any of their respective
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properties are bound, or the charter documents or
by-laws of the Company or any of its subsidiaries, or
any statute or any judgment, decree, order, rule or
regulation of any court or other governmental
authority or any arbitrator known to such counsel and
applicable to the Company or its subsidiaries;
(xi) the Company is not an "investment company"
and, after giving effect to the Offering and the
application of the proceeds therefrom, will not be an
"investment company", as such term is defined in the
1940 Act; and
(xii) such counsel does not know of any legal or
governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a
party or to which the property of the Company or any
of its subsidiaries is subject that are required to
be described in the Registration Statement or the
Prospectus and are not described therein or any
statutes, regulations, contracts or other documents
that are required to be described in the Registration
Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not
described therein or filed as required.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at the
date of such opinion. The opinions of issuer's counsel described herein shall
be rendered to the Underwriters at the request of the Company and shall so
state therein.
(c) The Representatives shall have received a legal
opinion from Xxxxxx & Xxxxxx, L.L.P., counsel for Xxxx X. Xxxxxxx and Xxxxxx X.
Xxxxxxx as Selling Stockholders, dated the Closing Date, to the effect that:
(i) each such Selling Stockholder has full power
to enter into this Agreement, the Custody Agreement
and the Power-of-Attorney and to sell, assign,
transfer and deliver the Shares being sold by such
Selling Stockholder hereunder in the manner provided
in this Agreement and to perform its obligations
under the Custody Agreement; this Agreement, the
Custody Agreement and the Power-of-Attorney have been
duly executed and delivered by each such Selling
Stockholder; assuming due authorization, execution
and delivery by the Custodian, the Custody Agreement
and the Power-of-Attorney are the legal, valid,
binding and enforceable instruments of each such
Selling Stockholder, subject to applicable
bankruptcy, insolvency and
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similar laws affecting creditors' rights generally
and subject, as to enforceability, to general
principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law);
(ii) the delivery by each such Selling Stockholder
to the several Underwriters of certificates for the
Shares being sold hereunder by such Selling
Stockholder against payment therefor as provided
herein, will convey good and marketable title to such
Shares to the several Underwriters, free and clear of
all security interests, liens, encumbrances,
equities, claims or other defects;
(iii) the sale of the Shares to the Underwriters by
each such Selling Stockholder pursuant to this
Agreement, the compliance by each such Selling
Stockholder with the other provisions of this
Agreement and the Custody Agreement and the
consummation of the other transactions herein
contemplated do not (x) require the consent,
approval, authorization, registration or
qualification of or with any governmental authority,
except such as have been obtained and such as may be
required under state securities or blue sky laws, or
(y) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute
a default under any indenture, mortgage, deed of
trust, lease or other agreement or instrument to
which such Selling Stockholder is a party or by which
such Selling Stockholder or any of such Selling
Stockholder's properties are bound, or any statute or
any judgment, decree, order, rule or regulation of
any court or other governmental authority or any
arbitrator applicable to such Selling Stockholder.
References to the Registration Statement and the Prospectus in
this paragraph (c) shall include any amendment or supplement thereto at the
date of such opinion.
(d) The Representatives shall have received a legal
opinion from ___________________________________
________________________________, counsel for Pennsylvania Merchant Group, Ltd.
as Selling Stockholder, dated the Closing Date, to the effect that:
(i) such Selling Stockholder has full power
(corporate and other) to enter into this Agreement,
the Custody Agreement and the Power-of-Attorney and
to sell, assign, transfer and deliver the Shares
being sold by such Selling Stockholder hereunder in
the manner provided in this Agreement and to perform
its obligations under the Custody Agreement; the
execution and delivery of this Agreement, the Custody
Agreement and the Power-of-Attorney have been duly
authorized by all necessary corporate action of each
Selling Stockholder; this Agreement, the Custody
Agreement and the Power-
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of-Attorney have been duly executed and delivered by
such Selling Stockholder; assuming due authorization,
execution and delivery by the Custodian, the Custody
Agreement and the Power-of- Attorney are the legal,
valid, binding and enforceable instruments of such
Selling Stockholder, subject to applicable
bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to
enforceability, to general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law);
(ii) the delivery by such Selling Stockholder to
the several Underwriters of certificates for the
Shares being sold hereunder by such Selling
Stockholder against payment therefor as provided
herein, will convey good and marketable title to such
Shares to the several Underwriters, free and clear of
all security interests, liens, encumbrances,
equities, claims or other defects;
(iii) the sale of the Shares to the Underwriters by
such Selling Stockholder pursuant to this Agreement,
the compliance by such Selling Stockholder with the
other provisions of this Agreement and the Custody
Agreement and the consummation of the other
transactions herein contemplated do not (x) require
the consent, approval, authorization, registration or
qualification of or with any governmental authority,
except such as have been obtained and such as may be
required under state securities or blue sky laws, or
(y) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute
a default under any indenture, mortgage, deed of
trust, lease or other agreement or instrument to
which such Selling Stockholder or any of its
subsidiaries is a party or by which such Selling
Stockholder or any of its subsidiaries or any of such
Selling Stockholder's properties are bound, or the
charter documents or by-laws of such Selling
Stockholder or any of its subsidiaries or any statute
or any judgment, decree, order, rule or regulation of
any court or other governmental authority or any
arbitrator applicable to such Selling Stockholder or
any of its subsidiaries.
In rendering such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of such Selling Stockholder and public officials.
References to the Registration Statement and the Prospectus in
this paragraph (d) shall include any amendment or supplement thereto at the
date of such opinion.
(e) The Representatives shall have received a legal
opinion from Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, dated the
Closing Date, covering the issuance and sale
-36-
38
of the Shares, the Registration Statement and the Prospectus, and such other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters.
(f) The Representatives shall have received from Xxxxxx
Xxxxxxxx LLP a letter or letters dated, respectively, the date hereof and the
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) they are independent accountants with respect
to the Company and its consolidated subsidiaries
within the meaning of the Securities Act and the
applicable rules and regulations thereunder;
(ii) in their opinion, the consolidated financial
statements and schedules audited by them and included
and incorporated by reference in the Registration
Statement and the Prospectus comply in form in all
material respects with the applicable accounting
requirements of the Securities Act and the related
published rules and regulations;
(iii) on the basis of a reading of the unaudited
amounts for revenues, gross profit, operating profit
and total and per share amounts of net earnings for
the three month period ended March 31, 1997 and of
the unaudited consolidated financial statements of
the Company and its consolidated subsidiaries for the
periods from which such amounts are derived, carrying
out certain specified procedures (which do not
constitute an examination made in accordance with
generally accepted auditing standards) that would not
necessarily reveal matters of significance with
respect to the comments set forth in this paragraph
(iii), a reading of the minute books of the
stockholders, the board of directors and any
committees thereof of the Company and each of its
consolidated subsidiaries, and inquiries of certain
officials of the Company and its consolidated
subsidiaries who have responsibility for financial
and accounting matters, nothing came to their
attention that caused them to believe that:
(x) the unaudited amounts for revenues,
operating profit and total and per share
amounts of net earnings included in the
Registration Statement and the Prospectus do
not agree with the amounts set forth in any
unaudited consolidated financial statements
for those same periods or were not determined
on a basis substantially consistent with that
of the corresponding amounts in the audited
consolidated
-37-
39
financial statements included in the
Registration Statement and the Prospectus; and
(y) at a specific date not more than
five business days prior to the date of such
letter, there were any changes in the capital
stock or long-term debt of the Company and
its consolidated subsidiaries or any
decreases in net current assets or
stockholders' equity of the Company and its
consolidated subsidiaries, in each case
compared with amounts shown on the December
31, 1996 consolidated balance sheet included
in the Registration Statement and the
Prospectus, or for the period from January 1,
1997 to such specified date there were any
decreases, as compared with the corresponding
period in the preceding year, in revenues,
earnings before income taxes or total or per
share amounts of net earnings of the Company
and its consolidated subsidiaries, except in
all instances for changes, decreases or
increases set forth in such letter.
(iv) they have carried out certain specified
procedures, not constituting an audit, with respect
to certain amounts, percentages and financial
information that are derived from the general
accounting records of the Company and its
consolidated subsidiaries and are included in the
Registration Statement and the Prospectus, and have
compared such amounts, percentages and financial
information with such records of the Company and its
consolidated subsidiaries and with information
derived from such records and have found them to be
in agreement, excluding any questions of legal
interpretation; and
(v) on the basis of a reading of the unaudited
pro forma consolidated condensed financial statements
included in the Registration Statement and the
Prospectus, carrying out certain specified procedures
that would not necessarily reveal matters of
significance with respect to the comments set forth
in this paragraph (v), inquiries of certain officials
of the Company and its consolidated subsidiaries who
have responsibility for financial and accounting
matters and proving the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts in the unaudited pro forma
consolidated condensed financial statements, nothing
came to their attention that caused them to believe
that the unaudited pro forma consolidated condensed
financial statements do not comply in form in all
material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly
applied to the historical amounts in the compilation
of such statements.
-38-
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In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (I) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (II) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Shares as contemplated by the Registration Statement, as amended as of the
date hereof. References to the Registration Statement and the Prospectus in
this paragraph (e) with respect to either letter referred to above shall
include any amendment or supplement thereto at the date of such letter.
(g) The Company shall have furnished or caused to be
furnished to the Underwriters at the Closing a certificate of its President,
its Chief Financial Officer, and its Senior Vice-President and Treasurer
satisfactory to the Underwriters to the effect that:
(i) the representations and warranties of the
Company in this Agreement are true and correct as if
made on and as of the Closing Date; the Registration
Statement, as amended as of the Closing Date, does
not include any untrue statement of a material fact
or omit to state any material fact necessary to make
the statements therein not misleading, and the
Prospectus, as amended or supplemented as of the
Closing Date, does not include any untrue statement
of a material fact or omit to state any material fact
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading; and the Company has performed
all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement or any amendment thereto
has been issued, and no proceedings for that purpose
have been instituted or threatened or, to the best of
the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of
which information is given in the Registration
Statement and the Prospectus, neither the Company nor
any of its subsidiaries has sustained any material
loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any
materially adverse change (including, without
limitation, a change in management or control), or
development involving a prospective materially
adverse change, in the condition (financial or
otherwise), management, earnings, properties,
business affairs or business prospects, stockholders'
-39-
41
equity, net worth or results of operations of the
Company or any of its subsidiaries, except in each
case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement
thereto).
(h) The Representatives shall have received from each
Selling Stockholder a certificate, signed by such Selling Stockholder, dated
the Closing Date, to the effect that:
(i) the representations and warranties of such
Selling Stockholder in this Agreement are true and
correct as if made on and as of the Closing Date;
(ii) the Registration Statement, as amended as of
the Closing Date, does not include any untrue
statement of a material fact or omit to state any
material fact necessary to make the statements
therein not misleading, and the Prospectus, as
amended or supplemented as of the Closing Date, does
not include any untrue statement of a material fact
or omit to state any material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not
misleading; and
(iii) such Selling Stockholder has performed all
covenants and agreements on its part to be performed
or satisfied at or prior to the Closing Date.
(i) The Representatives shall have received from each of
the Selling Stockholders, from each person who is a director or officer of the
Company and from International Mezzanine Capital, B.V., First Commerce
Corporation and Xxxxxxx Xxxxxx Xxxxx an agreement dated on or before the date
of this Agreement to the effect that such person will not publicly announce any
intention to and will not, without the prior written consent of the
Representatives on behalf of the Underwriters, (i) offer, pledge, sell, offer
to sell, contract to sell, sell any option or contract to purchase, purchase
any option to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any of the shares of
Common Stock or any securities convertible into, or exercisable or exchangeable
for, Common Stock, or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership
of the shares of Common Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock (whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of shares of Common Stock or such other securities, in cash or otherwise), in
each case, beneficially owned (within the meaning of Rule 13d-3 under the
Exchange Act) or otherwise controlled by such person on the date hereof or
hereafter acquired, for a period beginning from the date hereof and continuing
to and including the date 180 days after the date hereof with respect to the
Selling Stockholders and 120 days after the date hereof with respect to such
other persons executing such agreements.
-40-
42
(j) Prior to the commencement of the Offering, the
Company shall have made an application for the quotation of the Shares on the
Nasdaq National Market and the Shares shall have been included for trading on
the Nasdaq National Market, subject to official notice of issuance.
(k) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating organization", as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act.
(l) On or before the Closing Date, the Representatives
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company and the Selling Stockholders.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are satisfactory in all material respects to the Representatives and counsel
for the Underwriters. The Company and the Selling Stockholders shall furnish
to the Representatives such conformed copies of such opinions, certificates,
letters and documents in such quantities as the Representatives and counsel for
the Underwriters shall reasonably request.
The respective obligations of the several Underwriters to
purchase and pay for any Shares shall be subject, in their discretion, to each
of the foregoing conditions to purchase the Shares, except that all references
therein to the Shares and the Closing Date shall be deemed to refer to the Firm
Shares or the Option Shares and the First Closing Date or the related Option
Closing Date, each as applicable.
Section 8. Default of Underwriters. If, at any Closing, any one or more
of the Underwriters shall fail or refuse to purchase Shares that it has or they
have agreed to purchase hereunder on such date, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is ten percent or less of the aggregate number of the
Shares to be purchased on such date, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Shares by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the First Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in the proportions
that the number of Firm Shares set forth opposite their respective names in
Schedule 1 hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Representatives may specify, to purchase the Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date. If, at the First Closing, any
-41-
43
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and
the aggregate number of Firm Shares with respect to which such default occurs
is more than ten per cent of the aggregate number of Firm Shares to be
purchased, and arrangements satisfactory to the Representatives, the Company
and the Selling Stockholders for the purchase of such Firm Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the Company or any
Selling Stockholder. In any such case either the Representatives or the
Company shall have the right to postpone the Closing, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, at any Option Closing, any Underwriter or
Underwriters shall fail or refuse to purchase Option Shares, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase Option Shares or (ii) purchase not less than the number of Option
Shares that such non- defaulting Underwriters would have been obligated to
purchase in the absence of such default. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8. Any action taken under this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
Section 9. Termination. This Agreement shall be subject to termination
in the sole discretion of the Representatives by notice to the Company and the
Selling Stockholders given prior to any Closing Date in the event that the
Company or any Selling Stockholder shall have failed, refused or been unable to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder at or prior thereto or, if at or prior to any Closing
Date, (a) trading in securities generally on the New York Stock Exchange or the
Nasdaq National Market shall have been suspended or materially limited or
minimum or maximum prices shall have been established by or on, as the case may
be, the Commission or the New York Stock Exchange or the Nasdaq National
Market; (b) trading of any securities of the Company shall have been suspended
on any exchange or in any over-the-counter market; (c) a general moratorium on
commercial banking activities shall have been declared by either Federal or New
York State authorities; (d) there shall have occurred (i) an outbreak or
escalation of hostilities between the United States and any foreign power, (ii)
an outbreak or escalation of any other insurrection or armed conflict involving
the United States, or (iii) any other calamity or crisis or materially adverse
change in general economic, political or financial conditions having an effect
on the U.S. financial markets that, in the sole judgment of the
Representatives, makes it impractical or inadvisable to proceed with the public
offering or the delivery of the Shares as contemplated by the Registration
Statement, as amended as of the date hereof; or (e) the Company or any of its
subsidiaries shall have, in the sole judgment of the Representatives, sustained
any material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, or there shall have been any materially adverse change
(including, without limitation, a change in management or control), or
constitute a development involving a prospective materially adverse change, in
the condition (financial or otherwise), management, earnings, properties,
business affairs or business
-42-
44
prospects, stockholders' equity, net worth or results of operations of the
Company or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or supplement
thereto). Termination of this Agreement pursuant to this Section 9 shall be
without liability of any party to any other party except for the liability of
the Company in relation to expenses as provided in Sections 4 and 10 hereof,
the liability of the Selling Stockholders in relation to expenses as provided
in Sections 4 and 10 hereof, the indemnity provided in Section 6 hereof and any
liability arising before or in relation to such termination.
Section 10. Reimbursement of Expenses. If the sale of the Shares provided
for herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied or because of any
termination pursuant to Section 9 hereof (other than by reason of a default by
any of the Underwriters), the Company shall reimburse the Underwriters,
severally upon demand, for all out-of-pocket expenses (including fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Shares. If the Company is required
to make any payments to the Underwriters under this Section 10 because of any
Selling Stockholder's refusal, inability or failure to satisfy any condition to
the obligations of the Underwriters set forth in Section 7 hereof, such
defaulting Selling Stockholder, pro rata in proportion to the percentage of
Shares to be sold by each, shall reimburse the Company on demand for all
amounts so paid.
Section 11. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Section 5(a)(ii) and Section 6 hereof. The Underwriters confirm
that such statements (to such extent) are correct.
Section 12. Notices. In all dealings hereunder, you shall act on behalf
of each of the Underwriters, and the parties hereto shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representatives. Any notice or notification
in any form to be given under this Agreement may be delivered in person or sent
by telex, facsimile or telephone (subject in the case of a communication by
telephone to confirmation by telex or facsimile) addressed to:
in the case of the Company:
ITEQ, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
-43-
45
in the case of the Underwriters:
Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile:
Attention:
In the case of the Selling Stockholders, any such notice shall be addressed to
the Selling Stockholders at the addresses set forth in Schedule 2 hereto. Any
notice under this Section 12 shall take effect, in the case of delivery, at the
time of delivery and, in the case of telex or facsimile, at the time of
dispatch.
Section 13. Miscellaneous.
(a) Time shall be of the essence of this Agreement.
(b) The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect, the meaning or
interpretation of this Agreement.
(c) For purposes of this Agreement, (a) "business day"
means any day on which the New York Stock Exchange is open for trading, and (b)
"subsidiary" has the meaning set forth in Rule 405 under the Securities Act.
(d) This Agreement may be executed in any number of
counterparts, all of which, taken together, shall constitute one and the same
Agreement and any party may enter into this Agreement by executing a
counterpart.
(e) This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, the Selling
Stockholders and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person, except that (i) the indemnities of the
Company and the Selling Stockholders contained in Section 6 hereof shall also
be for the benefit of any person or persons who control any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and (ii) the indemnities of the Underwriters contained in Section 6 hereof
shall also be for the benefit of the directors of the Company, the officers of
the Company who have signed the Registration Statement, each Selling
Stockholder and any person or persons who control the
-44-
46
Company or such Selling Stockholder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act. No purchaser of Shares from
any Underwriter shall be deemed a successor because of such purchase.
(f) The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, the Selling Stockholders and the several Underwriters set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Selling Stockholders, any Underwriter or any controlling person
referred to in Section 6 hereof and (ii) delivery of and payment for the
Shares. The respective agreements, covenants, indemnities and other statements
set forth in Sections 4, 6 and 10 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
Section 14. Severability. It is the desire and intent of the parties that
the provisions of this Agreement be enforced to the fullest extent permissible
under the law and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, in the event that any provision of this
Agreement would be held in any jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 15. Governing Law. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
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If the foregoing is in accordance with your understanding,
please sign and return to us ten counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in the Deutsche Xxxxxx Xxxxxxxx Inc. Master Agreement Among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Very truly yours,
ITEQ, Inc.
By:
-------------------------
Name:
-----------------------
Title:
----------------------
Selling Stockholders:
-----------------------------
Xxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx
Pennsylvania Merchant
Group, Ltd.
By:
------------------------
Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
DEUTSCHE XXXXXX XXXXXXXX
EVEREN SECURITIES, INC.
XXXXXXX XXXXXX XXXXX
By: DEUTSCHE XXXXXX XXXXXXXX
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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For itself and on behalf of the Representatives.
-47-
49
SCHEDULE 1
The Underwriters
Underwriter Underwriting commitment
----------- -----------------------
Deutsche Xxxxxx Xxxxxxxx Inc. . . . . . . . . . . . . . . . . . . . . . .
EVEREN Securities, Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxxxx Xxxxxx Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . .
-----------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,050,000
S-1
50
SCHEDULE 2
The Selling Stockholders
Number of Shares
Selling Stockholders To be Sold
-------------------- ----------
Xxxx X. Xxxxxxx 300,000
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxxx 400,000
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Pennsylvania Merchant Group, Ltd. 50,000
0 Xxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750,000
S-2
