Exhibit 1
[______________] Shares
THE XXXXXXXXXX CORPORATION
Class A Common Stock
UNDERWRITING AGREEMENT
Philadelphia, Pennsylvania
[___________ ___, 1999]
XXXXXX XXXXXXXXXX XXXXX INC.
FIRST SECURITY VAN XXXXXX
XXXXXX SCHIFF & CO., INC.
As Representatives of the Several
Underwriters Named in Schedule I Hereto
c/o Janney Xxxxxxxxxx Xxxxx Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Dear Ladies and Gentlemen:
The Xxxxxxxxxx Corporation, a Delaware corporation (the "Company"),
proposes to sell to Xxxxxx Xxxxxxxxxx Xxxxx Inc., First Security Xxx Xxxxxx and
Xxxxxx Xxxxxx & Co., Inc. (the "Representatives") and the several other
underwriters named in Schedule I hereto (collectively with the Representatives,
the "Underwriters") _____________ shares of the Company's Class A common stock
("Class A Shares"). The Class A Shares to be sold to the Underwriters by the
Company are hereinafter referred to as the "Firm Shares." The respective amounts
of the Firm Shares to be so purchased by the several Underwriters are set forth
opposite their names in Schedule I hereto. The Firm Shares shall be offered to
the public at an initial public offering price of $______ per Firm Share (the
"Offering Price").
In addition, in order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may purchase for the Underwriters' own accounts,
ratably in proportion to the amounts set forth opposite their respective names
in Schedule I hereto, up to __________ additional Class A Shares from the
Company (such additional Class A Shares are referred to herein as the "Optional
Shares"). If any Optional Shares are purchased, the Optional Shares shall be
purchased for offering to the
public at the Offering Price and in accordance with the terms and conditions set
forth herein. The Firm Shares and the Optional Shares are referred to
collectively herein as the "Shares."
In October 1998, XX Xxxxxxxxxx, L.P. (the "Partnership") transferred all
of its assets and liabilities to the Company in exchange for 100 shares of the
Company's Class B common stock ("Class B Shares"). Immediately prior to the
completion of the sale of the Firm Shares, the Company will issue an additional
_____ Class B Shares to the Partnership for nominal consideration. The
transactions described in this paragraph (collectively, the "Reorganization")
have been or will be made pursuant to the terms of certain contribution,
transfer, assignment, assumption and exchange agreements (collectively, the
"Reorganization Agreements") between the Company and the Partnership.
The Company has entered into the Asset Purchase Agreements and Stock
Purchase Agreement identified on Exhibit A hereto (the "Acquisition Agreements")
with each of Diversified Apparel Group, Ltd. ("DAG"), Global Sourcing Network,
Ltd. ("Global"), Components by Xxxx XxXxx, Inc. ("Components"), Windsong, Inc.
("Windsong") and each of their stockholders (collectively, with Components, DAG,
Global and Windsong, the "Sellers") to purchase substantially all of the assets
of DAG, Components and Windsong and all of the outstanding shares of capital
stock of Global prior to or simultaneous with the closing of the sale of the
Firm Shares (the "Acquisitions"). Global and the business and operations of each
of DAG, Components and Windsong are hereinafter collectively referred to as the
"Acquired Businesses." For the purposes of this Agreement, unless indicated
otherwise, references to the Subsidiaries (as defined below) shall include the
Acquired Businesses.
The Company, intending to be legally bound, hereby confirms its agreement
with the Underwriters as follows:
1. Representations and Warranties.
(a) Representations and Warranties of the Company. The Company, and
each of its subsidiaries (the "Subsidiaries") jointly and severally represent
and warrant to, and agree with, the several Underwriters that:
(i) The Company has prepared, in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Regulations") of the Securities and Exchange
Commission (the "SEC") under the Act, and has filed with the SEC a registration
statement on Form S-1 (File No. 333-74439) and one or more amendments thereto
for the primary purpose of registering the Shares under the Act. Copies of such
registration statement and any amendments thereto, and all forms of the related
prospectus contained therein, have been delivered to the Representatives; any
preliminary prospectus included in a Registration Statement or filed with the
SEC pursuant to Rule 424(a) of the Regulations is hereinafter called a
"Preliminary Prospectus." The various parts of such registration statement,
including all exhibits thereto and the information (if any) contained in the
form of final prospectus filed with the SEC pursuant to Rule 424(b) of the
Regulations in accordance with Section 5(a) of this Agreement and deemed by
virtue
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of Rule 424 of the Regulations to be part of the registration statement at the
time it was declared effective, each as amended at the time the registration
statement became effective, are hereinafter collectively called the "Original
Registration Statement." Any registration statement filed with the Commission
pursuant to Rule 462(b) under the Act (including the Registration Statement and
any Preliminary Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective) is hereinafter referred to as a "Rule
462(b) Registration Statement." The term "Registration Statement" includes both
the Original Registration Statement and any Rule 462(b) Registration Statement.
The final prospectus in the form included in the Registration Statement or first
filed with the SEC pursuant to Rule 424(b) of the Regulations and any amendments
or supplements thereto are hereinafter called the "Prospectus."
(ii) The Registration Statement has become effective under the
Act and the SEC has not issued any stop order suspending the effectiveness of
the Registration Statement or preventing or suspending the use of the
Preliminary Prospectus, nor has the SEC instituted or threatened to institute
proceedings with respect to such an order. No stop order suspending the sale of
the Shares in any jurisdiction designated by the Representatives as provided for
in Section 5(f) hereof has been issued, and no proceedings for that purpose have
been instituted or threatened. The Company has complied in all material respects
with all requests of the SEC, or requests of which the Company has been advised
of any state securities commission in a state designated by the Representatives
as provided for in Section 5(f) hereof, for additional information to be
included in the Registration Statement, any Preliminary Prospectus or the
Prospectus unless such request has been waived. Each Preliminary Prospectus
conformed to all the requirements of the Act and the Regulations as of its date
in all material respects and did not as of its date contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except the foregoing
shall not apply to statements in or omissions from any Preliminary Prospectus in
reliance upon and in conformity with information supplied to the Company in
writing by or on behalf of any Underwriter through the Representatives expressly
for use therein. The Registration Statement, on the date on which it is declared
effective by the SEC (the "Effective Date") and when any post-effective
amendment thereof shall become effective, and the Prospectus, at the time it is
filed with the SEC pursuant to Rule 424(b) and on the Closing Date (as defined
in Section 3 hereof) and any Option Closing Date (as defined in Section 4(b)
hereof), will conform in all material respects to all the requirements of the
Act and the Regulations, and will not, on any of such dates, include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
except that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing by
or on behalf of any Underwriter through the Representatives expressly 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 (a) the
Company has filed a Rule 462(b) Registration Statement in compliance with and
that is effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (b) the Company has given irrevocable
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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 promulgated under the Act or the Commission has received payment of such
filing fee.
(iv) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with all
necessary corporate power and authority, and all required licenses, permits,
clearances, certifications, registrations, approvals, consents and franchises,
to own or lease and operate its properties and to conduct its business as
described in the Prospectus, and to execute, deliver and perform this Agreement.
Each of the Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with all necessary corporate power and authority, and all
required licenses, permits, clearances, certifications, registrations,
approvals, consents and franchises, to own or lease and operate its properties
and to conduct its business as described in the Prospectus.
(v) The outstanding shares of capital stock or other evidence
of ownership of the Subsidiaries have been duly authorized and validly issued
and are 100% owned by the Company, in all cases free and clear of all liens,
encumbrances and security interests. There are no outstanding options,
obligations to issue or other rights to convert or exchange any obligations into
shares of capital stock or ownership interests in the Subsidiaries. Except as
provided in the corporation law of the respective jurisdictions of incorporation
of the Subsidiaries or as set forth in the Prospectus, there are no restrictions
of any kind which prevent the payment of dividends by any of the Subsidiaries.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes its legal, valid and binding
obligation, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by equitable principles or by the
application of bankruptcy, insolvency or other similar laws, now or hereafter in
effect, relating to or affecting creditors' rights generally, and except as
rights to indemnity and contribution hereunder may be limited by applicable
securities laws.
(vii) The Reorganization Agreements have been duly authorized,
executed and delivered by the Company and the Partnership and are the valid and
binding obligations of the Company and the Partnership, enforceable against the
Company and the Partnership in accordance with their respective terms, except as
such enforceability may be limited by equitable principles or by the application
of bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally. The Reorganization has been consummated
on the terms and conditions set forth in the Prospectus and in accordance with
the terms and provisions of the Reorganization Agreements.
(viii) Each Acquisition Agreement has been duly authorized,
executed and delivered by the Company and the applicable Sellers and are the
valid and binding obligations of the Company and such Sellers, enforceable
against the Company and such Sellers in accordance with its terms, except as
such enforceability may be limited by equitable principles or by the application
of bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights
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generally. Each Acquisition has been consummated on the terms and conditions set
forth in the Prospectus and in accordance with the terms and provisions of the
applicable Acquisition Agreement.
(ix) The execution, delivery and performance of this Agreement
by the Company does not and will not, with or without the giving of notice or
the lapse of time, or both, (a) conflict with any term or provision of the
Company's and each of the Subsidiaries' Certificates of Incorporation or Bylaws,
or similar governing instruments, (b) result in a breach of, constitute a
default under, result in the termination or modification of, result in the
creation or imposition of any lien, security interest, charge or encumbrance
upon any of the assets of the Company or any of the Subsidiaries, or require any
payment by the Company or any of the Subsidiaries, or impose any liability on
the Company or any of the Subsidiaries pursuant to, any contract, indenture,
mortgage, deed of trust, commitment or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which any of the
Company's or any of the Subsidiaries' assets are bound or affected, (c) assuming
compliance with Blue Sky laws and regulations applicable to the offer and sale
of the Shares, violate any law, rule, regulation, judgment, order or decree of
any government or governmental agency, instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries or any
of the Company's or any of its Subsidiaries' properties or business or (d)
result in a breach, termination or lapse of the Company's or any of its
Subsidiaries' power and authority to own or lease and operate its assets and
properties and conduct its business as described in the Prospectus.
(x) At the date or dates indicated in the Prospectus, the
Company had the duly authorized and outstanding capital stock set forth in the
Prospectus; and on the Effective Date, the Closing Date and any Option Closing
Date, there were and will be no options or warrants for the purchase of, other
outstanding rights to purchase, agreements or obligations to issue or agreements
or other rights to convert or exchange any obligation or security into, capital
stock of the Company or securities convertible into or exchangeable for capital
stock of the Company, except as described in the Prospectus.
(xi) The capital stock of the Company conforms with the
description thereof contained in the Prospectus.
(xii) The currently outstanding shares of the Company's and
the Subsidiaries' capital stock have been duly authorized and are validly
issued, fully paid and non-assessable, and none of such outstanding shares of
the Company's or Subsidiaries' capital stock has been issued in violation of any
preemptive rights of any security holder of the Company or the Subsidiaries. The
holders of the outstanding shares of the Company's and the Subsidiaries' capital
stock are not subject to personal liability solely by reason of being such
holders. The offers and sales of the outstanding shares of the Company's and the
Subsidiaries' capital stock, whether described in the Registration Statement or
otherwise, were made in conformity with applicable federal, state and foreign
securities laws.
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(xiii) When the Shares have been duly delivered against
payment therefor as contemplated by this Agreement, the Shares will be validly
issued, fully paid and non-assessable, and the holders thereof will not be
subject to personal liability solely by reason of being such holders. The
certificates representing the Shares are in proper legal form under, and conform
in all respects to the requirements of, the Delaware General Corporation Law, as
amended. Neither the filing of the Registration Statement nor the offering or
sale of Shares as contemplated by this Agreement gives any security holder of
the Company any rights for or relating to the registration of any Class A Shares
or any other capital stock of the Company, except such as have been satisfied or
waived.
(xiv) No consent, approval, authorization, order,
registration, license or permit of, or filing or registration with, any court,
government, governmental agency, instrumentality or other regulatory body or
official is required for the valid and legal execution, delivery and performance
by the Company of this Agreement and the consummation of the transactions
contemplated hereby and described in the Prospectus, except such as may be
required for the registration of the Shares under the Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and for compliance with
the applicable state securities or Blue Sky laws.
(xv) The Class A Shares (including the Shares) have been
approved for inclusion, subject only to official notice of issuance, in the
Nasdaq National Market.
(xvi) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of or references to contracts,
agreements or other documents, are accurate in all material respects and present
or summarize fairly, in all material respects, the information required to be
disclosed under the Act and/or the Regulations, and there are no contracts,
agreements or other documents required to be described or referred to in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement under the Act or the Regulations that have not been so
described, referred to or filed, as required.
(xvii) No relationship, direct or indirect, exists between or
among the Company or any of the Subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, which is required by the Act to be described in
the Registration Statement and the Prospectus and which is not so described.
(xviii) The pro forma combined financial statements of the
Company and the historical financial statements of the Company, the Partnership
and each Seller (including, in each case, the notes thereto) filed as part of
any Preliminary Prospectus, the Prospectus and the Registration Statement
present fairly, in all material respects, the pro forma combined or historical
financial position, as the case may be, of the Company, the Partnership and such
Sellers, as the case may be, as of the respective dates thereof, and the results
of their operations, their stockholders' equity and their cash flows for the
periods indicated therein, all in conformity with generally accepted accounting
principles consistently applied. The supporting notes and schedules included in
the Registration Statement fairly state in all material respects the information
required to be stated therein in relation to the financial statements taken as a
whole. The financial information included
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in the Prospectus under the caption "Prospectus Summary" and "Selected
Historical Consolidated Financial Data" presents fairly the information shown
therein and has been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement. The unaudited pro
forma financial information included in the Registration Statement complies as
to form in all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X under the Act and the pro forma adjustments have
been properly applied to the historical amounts in the compilation of this
information.
(xix) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
expressly stated therein or expressly contemplated thereby, there has not been
(a) any material adverse change (including, whether or not insured against, any
material loss or damage to any material assets), or development which could
reasonably be expected to involve a prospective material adverse change, in the
general affairs, properties, assets, management, condition (financial or
otherwise), results of operations, stockholders' equity, business or prospects
of either the Company or the Subsidiaries taken as a whole, (b) any material
adverse change, loss, reduction, termination or non-renewal of any contract to
which the Company or any Subsidiary is a party, (c) any transaction entered into
by the Company or any Subsidiary not in the ordinary course of its business that
is material to the Company and the Subsidiaries taken as a whole, (d) any
dividend or distribution of any kind declared, paid or made by the Company or
any Subsidiary on its capital stock, (e) any liabilities or obligations, direct
or indirect, incurred by the Company or any Subsidiary that are material to the
Company and the Subsidiaries taken as a whole, (f) any change in the
capitalization or stock ownership of the Company or any Subsidiary or (g) any
change in the indebtedness of the Company or any Subsidiary that is material to
the Company and the Subsidiaries taken as a whole. Neither the Company nor any
Subsidiary has any contingent liabilities or obligations that are material to
the Company and the Subsidiaries taken as a whole and that are not disclosed in
the Prospectus.
(xx) The Company has not distributed and will not distribute
any offering material in connection with the offering and sale of the Shares
other than the Registration Statement, a Preliminary Prospectus, the Prospectus
and other material, if any, permitted by the Act and the Regulations. Neither
the Company nor any of its officers, directors or affiliates has taken nor shall
the Company take any action designed to, or that might be reasonably expected to
cause or result in, stabilization or manipulation of the price of the Shares.
(xxi) The Company, the Partnership and each Subsidiary have
filed with the appropriate federal, state and local governmental agencies, and
all foreign countries and political subdivisions thereof, all tax returns that
are required to be filed or have duly obtained extensions of time for the filing
thereof and have paid all taxes shown on such returns or otherwise due and all
material assessments received by it to the extent that the same have become due.
Neither the Company, the Partnership nor any Subsidiary has executed or filed
with any taxing authority, foreign or domestic, any agreement extending the
period for assessment or collection of any income or other tax or is a party to
any pending action or proceeding by any foreign or domestic governmental
agencies for the assessment or collection of taxes, and no claims for assessment
or collection of taxes have been asserted against the Company, the Partnership
or any Subsidiary that might materially
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adversely affect the general affairs, assets, properties, condition (financial
or otherwise), results of operations, stockholders' equity, business or
prospects of the Company and the Subsidiaries, taken as a whole.
(xxii) To the best knowledge of the Company, Ernst & Young
LLP, Xxxxxxxx X. Xxxxxxx & Co., P.A., Xxxxxxxx & Xxxxxx, LLP and Weissbarth,
Xxxxxx & Xxxxxxxxxx LLP, each of which has given its reports on certain
financial statements included as part of the Registration Statement, are firms
of independent certified public accountants as required by the Act and the
Regulations.
(xxiii) Neither the Company nor any Subsidiary is in violation
of or in default under any of the terms or provisions of (a) its Certificate of
Incorporation or Bylaws or similar governing instruments, or (b) any indenture,
mortgage, deed of trust, contract, commitment or other agreement or instrument
to which it is a party or by which it or any of its properties is bound or
affected, (c) any law, rule, regulation, judgment, order or decree of any
government or governmental agency, instrumentality or court, domestic or
foreign, having jurisdiction over it or any of its properties or business or (d)
any license, permit, clearance, certification, registration, approval, consent
or franchise referred to in Section 1(a)(iii) hereof, where, with respect to
clauses (b), (c) and (d) of this Section 1(a)(xxi), such violation or default
could reasonably be expected to have a material adverse effect on the general
affairs, properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole.
(xxiv) There are no claims, actions, suits, protests,
proceedings, arbitrations, investigations or inquiries pending before, or
threatened or to the Company's knowledge contemplated by, any governmental
agency, instrumentality, court or tribunal, domestic or foreign, or before any
private arbitration tribunal to which the Company, the Partnership or any
Subsidiary is a party, that could reasonably be expected to affect the validity
of any of the outstanding Class A Shares, or that, if determined adversely to
the Company, the Partnership or any Subsidiary, would, in any case or in the
aggregate, result in any material adverse change in the general affairs,
properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole; nor, to the Company's knowledge, is there any reasonable basis
for any such claim, action, suit, protest, proceeding, arbitration,
investigation or inquiry. There are no outstanding orders, judgments or decrees
of any court, governmental agency, instrumentality or other tribunal enjoining
the Company or any Subsidiary from, or requiring the Company or any Subsidiary
to take or refrain from taking, any action, or to which the Company or any
Subsidiary, their properties, assets or business are bound or subject.
(xxv) The Company and the Subsidiaries own, or possess
adequate rights to use, all patents, patent applications, trademarks, trade
names, service marks, licenses, inventions, copyrights, know-how, trade secrets,
confidential information, processes and formulations and other proprietary
information necessary for, used in or proposed to be used in the conduct of
their business as described in the Prospectus. The Company and the Subsidiaries
have not infringed upon, are not
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infringing upon and have not received any notice of conflict with, the asserted
intellectual property or other rights of others and the Company knows of no
reasonable basis for any notice or claim of such infringement or conflict.
(xxvi) The Company and each Subsidiary have good and
marketable title to all property described in the Prospectus as being owned by
them, free and clear of all liens, security interests, charges or encumbrances,
except such as are described or referred to in the Prospectus or such as do not
materially affect the value of such property and do not interfere in any
material respect with the use made, or proposed to be made, of such property by
the Company or the Subsidiary. The Company and each Subsidiary have adequately
insured their property against loss or damage by fire or other casualty and
maintain, in amounts reasonably believed by them to be adequate, insurance
against such other risks as they deem appropriate. All real and personal
property leased by the Company or any Subsidiary, as described or referred to in
the Prospectus, is held by the Company or such Subsidiary under valid leases.
All of the facilities of the Company and each Subsidiary (the "Premises"), and
all operations conducted thereon, are now and, since the Company or any
Subsidiary began to use such Premises, always have been and, to the knowledge of
the Company, prior to when the Company or any Subsidiary began to use such
Premises, always had been, in compliance with all, foreign or domestic, federal,
state and local statutes or ordinances, regulations and rules concerning or
relating to industrial hygiene and the protection of health and the environment
(collectively, "the Governmental Laws"), except to the extent that any failure
to be in such compliance would not materially adversely affect the general
affairs, properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole. There are no conditions on, about, beneath or arising from the
Premises that might give rise to liability, the imposition of a statutory lien
or require a "Response," "Removal" or "Remedial Action," as defined herein,
under any of the Governmental Laws, and that would materially adversely affect
the general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company and the
Subsidiaries taken as a whole. Neither the Company nor any Subsidiary has
received notice, and the Company does not have knowledge, of any claim, demand,
investigation, regulatory action, suit or other action instituted or threatened
against the Company or any Subsidiary or any portion of the Premises relating to
any of the Governmental Laws. Neither the Company nor any Subsidiary has
received any notice of material violation, citation, complaint, order,
directive, request for information or response thereto, notice letter, demand
letter or compliance schedule to or from any governmental or regulatory agency,
foreign or domestic, arising out of or in connection with "hazardous substances"
(as defined by applicable Governmental Laws) on, about, beneath, arising from or
generated at the Premises. As used in this subsection, the terms "Response,"
"Removal" and "Remedial Action" shall have the respective meanings assigned to
such terms under Sections 101(23)-101(25) of the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act, 42 U.S.C. 9601(23)-9601(25).
(xxvii) The Company and each Subsidiary maintain a system of
internal accounting controls sufficient to provide reasonable assurances that:
(a) transactions are executed in accordance with management's general or
specific authorization; (b) transactions are recorded as necessary in order to
permit preparation of financial statements in accordance with generally
9
accepted accounting principles and statutory accounting practices and to
maintain accountability for assets; (c) access to assets is permitted only in
accordance with management's general or specific authorization and (d) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxviii) Each contract or other instrument (however
characterized or described) to which the Company or any Subsidiary is a party or
by which any of their properties or business is bound or affected and which is
material to the conduct of the Company's business as described in the Prospectus
has been duly and validly executed by the Company or such Subsidiary, and, to
the knowledge of the Company, by the other parties thereto. Each such contract
or other instrument is in full force and effect and is enforceable against the
parties thereto in accordance with its terms, and the Company and the
Subsidiaries are not, and to the knowledge of the Company, no other party is, in
material default thereunder, and no event has occurred that, with the lapse of
time or the giving of notice, or both, would constitute a material default under
any such contract or other instrument. All necessary consents under such
contracts or other instruments to disclosure in the Prospectus with respect
thereto have been obtained.
(xxix) Except for such plans that are expressly disclosed in
the Prospectus, the Company and the Subsidiaries do not have any employee
benefit plan, profit sharing plan, employee pension benefit plan or employee
welfare benefit plan or deferred compensation arrangements ("Plans") that are
subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations thereunder ("ERISA"). All Plans
that are subject to ERISA are in compliance with ERISA, in all material
respects, and, to the extent required by the Internal Revenue Code of 1986, as
amended (the "Code"), in compliance with the Code in all material respects.
Neither the Company nor any Subsidiary has or ever had any employee pension
benefit plan that is subject to Part 3 of Subtitle B of Title I of ERISA or any
defined benefit plan or multi-employer plan. The Company has not maintained
retired life and retired health insurance plans that are employee welfare
benefit plans providing for continuing benefit or coverage for any employee or
any beneficiary of any employee after such employee's termination of employment,
except as required by Section 4980B of the Code. No fiduciary or other party in
interest with respect to any of the Plans has caused any of such Plans to engage
in a prohibited transaction as defined in Section 406 of ERISA. As used in this
subsection, the terms "defined benefit plan," "employee benefit plan," "employee
pension benefit plan," "employee welfare benefit plan," "fiduciary" and
"multi-employer plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
(xxx) Neither the Company, the Partnership nor any Subsidiary
has experienced any work stoppages or labor disputes in the past. No labor
dispute presently exists with the employees of the Company or any Subsidiary,
and no such labor dispute is threatened. The Company has no knowledge of any
existing or threatened labor disturbance by the employees of any of the
principal suppliers, contractors or customers of the Company or its Subsidiaries
that would materially adversely affect the general affairs, properties,
condition (financial or otherwise), results of operations, stockholders' equity,
business or prospects of the Company and the Subsidiaries taken as a whole.
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(xxxi) The Company, the Partnership and the Subsidiaries have
complied with all provisions of Section 517.075, Florida Statutes (Chapter
92-198, Laws of Florida) relating to doing business with the Government of Cuba
or with any person or affiliate located in Cuba;
(xxxii) Neither the Company, the Partnership nor any
Subsidiary has incurred any liability for any finder's fees or similar payments
in connection with the transactions contemplated herein.
(xxxiii) Each of the Company and the Subsidiaries currently
intends to conduct its affairs in such a manner as to ensure that it will not be
an "investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), and the rules and regulations thereunder.
(xxxiv) There is no document or contract of a character
required to be described in the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required; no
statement, representation, warranty or covenant made by the Company or any
Subsidiary in this Agreement or in any certificate or document required by this
Agreement to be delivered to the Representatives is, was when made, or as of the
Closing Date or any Option Closing Date will be, inaccurate, untrue or incorrect
in any material respect. No transaction has occurred or is proposed between or
among the Company and any of its officers, directors or stockholders or any
affiliate of any such officer, director or stockholder that is required to be
described in and is not described in the Registration Statement and the
Prospectus.
(xxxv) None of the Company, the Partnership any Subsidiary or
any officer, director, employee, agent or other person acting on behalf of the
Company, the Partnership or such Subsidiary has, directly or indirectly, given
or agreed to give any money, property or similar benefit or consideration to any
customer or supplier (including any employee or agent of any customer or
supplier) or official or employee of any agency or instrumentality of any
government (foreign or domestic) or political party or candidate for office
(foreign or domestic) or any other person who was, is or in the future may be in
a position to affect the general affairs, properties, condition (financial or
otherwise), results of operations, stockholders' equity, business or prospects
of the Company and the Subsidiaries taken as a whole or any actual or proposed
business transaction of the Company or the Subsidiaries that (a) could subject
the Company, the Partnership, such Subsidiary or an executive officer of any of
them to any liability (including, but not limited to, the payment of monetary
damages) or penalty in any civil, criminal or governmental action or proceeding,
foreign or domestic, which would have a material adverse effect on the general
affairs, properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company or the Subsidiaries
taken as a whole or (b) violates any law, rule or regulation, foreign or
domestic, to which the Company, the Partnership or the Subsidiaries are subject,
which violation if proven would have a material adverse effect on the general
affairs, properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole.
11
(xxxvi) Neither the Company nor the Partnership has declared,
paid or accrued any dividends or distributions to stockholders or partners since
its inception, except as described or referred to in the Prospectus and will not
hereafter declare, pay or, except as described in the Prospectus, accrue any
such dividends or distributions prior to the Closing Date.
(xxxvii) Except as described on Schedule II attached hereto,
none of the stockholders of the Company is affiliated with any member of the
National Association of Securities Dealers, Inc. (the "NASD").
Any certificate signed by any officer of the Company or any Subsidiary in
such capacity and delivered to the Representatives or to counsel for the
Underwriters pursuant to this Agreement shall be deemed a representation and
warranty by the Company or such Subsidiary to the several Underwriters as to the
matters covered thereby.
2. Purchase and Sale of Firm Shares. On the basis of the representations,
warranties, covenants and agreements contained herein, but subject to the terms
and conditions set forth herein, the Company shall sell to the several
Underwriters at the Offering Price, less the Underwriting Discounts and
Commissions in the amount of $_____ per Share, the respective amounts of the
Firm Shares set forth opposite their names on Schedule I hereto, and the
Underwriters, severally and not jointly, shall purchase from the Company on a
firm commitment basis, at the Offering Price, less the Underwriting Discounts
and Commissions in the amount of $____ per Share, the respective amounts of the
Firm Shares set forth opposite their names on Schedule I hereto. In making this
Agreement, each Underwriter is contracting severally, and not jointly, and
except as provided in Sections 4 and 11 hereof, the agreement of each
Underwriter is to purchase only that number of shares specified with respect to
that Underwriter in Schedule I hereto. The Underwriters shall offer the Shares
to the public as set forth in the Prospectus.
3. Payment and Delivery. Payment for the Firm Shares shall be made
by certified or official bank check payable to the order of the Company, in New
York Clearing House funds at the offices of Xxxxxx Xxxxxxxxxx Xxxxx Inc., 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place as shall be
agreed upon by the Company and the Representatives, or in immediately available
funds wired to such accounts as the Company may specify (with all costs and
expenses incurred by the Underwriters in connection with such settlement in
immediately available funds, including, but not limited to, interest or cost of
funds and expenses, to be borne by the Company), against delivery of the Firm
Shares to the Representatives at the offices of Xxxxxx Xxxxxxxxxx Xxxxx Inc.,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place as shall be
agreed upon by the Company and the Representatives, for the respective accounts
of the Underwriters. Such payment and delivery will be made at 10:00 AM.,
Philadelphia, Pennsylvania time, on ________, 1999. Such time and date are
referred to herein as the "Closing Date." The certificates representing the Firm
Shares to be sold and delivered will be in such denominations and registered in
such names as the Representatives request not less than two full business days
prior to the Closing Date, and will be made available to the Representatives for
inspection, checking and packaging at the New York correspondent office of the
Company's transfer agent not less than one full business day prior to the
Closing Date.
12
4. Option to Purchase Optional Shares.
(a) For the purposes of covering any over-allotments in connection
with the distribution and sale of the Firm Shares as contemplated by the
Prospectus, subject to the terms and conditions herein set forth, the several
Underwriters are hereby granted an option by the Company to purchase all or any
part of the Optional Shares from the Company (the "Over-allotment Option"). The
purchase price to be paid for the Optional Shares shall be the Offering Price
less the Underwriting Discounts and Commissions shown on the cover page of the
Prospectus. The Over- allotment Option granted hereby may be exercised by the
Representatives on behalf of the several Underwriters as to all or any part of
the Optional Shares at any time and from time to time within 30 days after the
date of the Prospectus. No Underwriter shall be under any obligation to purchase
any Optional Shares prior to an exercise of the Over-allotment Option.
(b) The Over-allotment Option granted hereby may be exercised by the
Representatives on behalf of the several Underwriters by giving notice to the
Company by a letter sent by registered or certified mail, postage prepaid,
telex, telegraph, telegram or facsimile (such notice to be effective when
received), addressed as provided in Section 13 hereof, setting forth the number
of Optional Shares to be purchased, the date and time for delivery of and
payment for the Optional Shares and stating that the Optional Shares referred to
therein are to be used for the purpose of covering over-allotments in connection
with the distribution and sale of the Firm Shares. If such notice is given prior
to the Closing Date, the date set forth therein for such delivery and payment
shall be the Closing Date. If such notice is given on or after the Closing Date,
the date set forth therein for such delivery and payment shall be a date
selected by the Representatives that is within three full business days after
the exercise of the Over-allotment Option. The date and time set forth in such a
notice is referred to herein as an "Option Closing Date," and a closing held
pursuant to such a notice is referred to herein as an "Option Closing." Upon
each exercise of the Over-allotment Option, and on the basis of the
representations, warranties, covenants and agreements herein contained, and
subject to the terms and conditions herein set forth, the several Underwriters
shall become severally, but not jointly, obligated to purchase from the Company
the number of Optional Shares specified in each notice of exercise of the
Over-allotment Option.
(c) The number of Optional Shares to be sold to each Underwriter
pursuant to each exercise of the Over-allotment Option shall be the number that
bears the same ratio to the aggregate number of Optional Shares being purchased
through such Over-allotment Option exercise as the number of Firm Shares
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of all Firm Shares. Notwithstanding the foregoing, the number of Optional
Shares purchased and sold pursuant to each exercise of the Over-allotment Option
shall be subject to such adjustment as the Representatives may approve to
eliminate fractional shares and subject to the provisions for the allocation of
Optional Shares purchased for the purpose of covering over-allotments set forth
in the agreement entered into by and among the Underwriters in connection
herewith (the "Agreement Among Underwriters").
13
(d) Payment for the Optional Shares shall be made to the Company by
certified or official bank check payable to the order of the Company in New York
Clearing House funds, at the offices of Xxxxxx Xxxxxxxxxx Xxxxx Inc., 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place as shall be
agreed upon by the Company and the Representatives, or in immediately available
funds wired to such account as the Company may specify (with all costs and
expenses incurred by the Underwriters in connection with such settlement in
immediately available funds, including, but not limited to, interest or cost of
funds and expenses, to be borne by the Company), against delivery of the
Optional Shares to the Representatives at the offices of Xxxxxx Xxxxxxxxxx Xxxxx
Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place as
shall be agreed upon by the Company and the Representatives, for the respective
accounts of the Underwriters. The certificates representing the Optional Shares
to be issued and delivered will be in such denominations and registered in such
names as the Representatives request not less than two full business days prior
to the Option Closing Date, and will be made available to the Representatives
for inspection, checking and packaging at the New York correspondent office of
the Company's transfer agent not less than one full business day prior to the
Option Closing Date.
5. Certain Covenants and Agreements of the Company. The Company covenants
and agrees with the several Underwriters as follows:
(a) If Rule 430A of the Regulations is employed, the Company will
timely file the Prospectus pursuant to and in compliance with Rule 424(b) of the
Regulations and will advise the Representatives of the time and manner of such
filing.
(b) The Company will not file or publish any amendment or supplement
to the Registration Statement, Preliminary Prospectus or Prospectus, including a
Rule 462(b) Registration Statement, at any time before the completion of the
distribution of the Shares by the Underwriters that is not (i) in compliance
with the Regulations and (ii) approved by the Representatives (such approval not
to be unreasonably withheld or delayed).
(c) The Company will advise the Representatives immediately, and
confirm such advice in writing, (i) when any post-effective amendment to the
Registration Statement, including a Rule 462(b) Registration Statement, is filed
with the SEC, (ii) of the receipt of any comments from the SEC concerning the
Registration Statement (and provide copies of any such comments to the
Representatives), (iii) when any post-effective amendment to the Registration
Statement becomes effective, or when any supplement to the Prospectus, any
amended Prospectus or a Rule 462(b) Registration Statement has been filed, (iv)
of any request of the SEC for amendment or supplementation of the Registration
Statement or Prospectus or for additional information, (v) during the period
when the Prospectus is required to be delivered under the Act and Regulations,
of the happening of any event as a result of which the Registration Statement or
the Prospectus would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading,
(vi) during the period noted in (v) above, of the need to amend the Registration
Statement or supplement the Prospectus to comply with the Act, (vii) of the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, and (viii)
14
of the suspension of the qualification of any of the Shares for offering or sale
in any jurisdiction in which the Underwriters intend to make such offers or
sales, or of the initiation or threatening of any proceedings for any of such
purposes known to the Company. The Company will use its best efforts to prevent
the issuance of any such stop order or of any order preventing or suspending
such use and, if any such order is issued, to obtain as soon as possible the
lifting thereof.
(d) The Company has delivered to the Representatives, without
charge, copies of each Preliminary Prospectus. The Company will deliver to the
Representatives, without charge, from time to time during the period when
delivery of the Prospectus is required under the Act, such number of copies of
the Prospectus (as supplemented or amended) as the Representatives may
reasonably request. The Company hereby consents to the use of such copies of the
Preliminary Prospectus and the Prospectus for purposes permitted by the Act, the
Regulations and the securities or Blue Sky laws of the states in which the
Shares are offered by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer. The Company has
furnished or will furnish to the Representatives (i) five original signed copies
of the Registration Statement as originally filed and of all amendments and
supplements thereto (including any Rule 462(b) Registration Statement), whether
filed before or after the Effective Date, (ii) five copies of all exhibits filed
therewith and (iii) five signed copies of all consents and certificates of
experts, and will deliver to the Representatives such number of conformed copies
of the Registration Statement, including financial statements and exhibits, and
all amendments and supplements thereto, as the Representatives may reasonably
request.
(e) The Company will comply with the Act, the Regulations, the
Exchange Act and the rules and regulations thereunder so as to permit the
continuance of sales of and dealings in the Shares for as long as may be
necessary to complete the distribution of the Shares as contemplated hereby.
(f) The Company will furnish such information as may be required and
otherwise cooperate in the registration or qualification of the Shares, or
exemption therefrom, for offering and sale by the several Underwriters and by
dealers under the securities or Blue Sky laws of such jurisdictions in which the
Representatives determine to offer the Shares, after consultation with the
Company, and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided, however, that no such qualification shall be required in any
jurisdiction where, solely as a result thereof, the Company would be subject to
taxation or qualification as a foreign corporation doing business in such
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject. The Company will, from time to time, prepare and file such statements
and reports as are or may be required to continue such qualification in effect
for so long a period as is required under the laws of such jurisdictions for
such offering and sale.
(g) Subject to subsection 5(b) hereof, in case of any event, at any
time within the period during which, in the opinion of counsel for the
Underwriters, a prospectus is required to be
15
delivered under the Act and Regulations, as a result of which any Preliminary
Prospectus or the Prospectus, as then amended or supplemented, would contain an
untrue statement of a material fact, or omit to state any material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, if it is necessary at any time
to amend any Preliminary Prospectus or the Prospectus to comply with the Act and
Regulations or any applicable securities or Blue Sky laws, the Company promptly
will prepare and file with the SEC, and any applicable state securities
commission, an amendment, supplement or document that will correct such
statement or omission or effect such compliance and will furnish to the several
Underwriters such number of copies of such amendment(s), supplement(s) or
document(s) (in form and substance satisfactory to the Representatives and
counsel for the Underwriters) as the Representatives may reasonably request. For
purposes of this subsection (g), the Company will provide such information to
the Representatives, the Underwriters' counsel and counsel to the Company as
shall be necessary to enable such persons to consult with the Company with
respect to the need to amend or supplement the Registration Statement,
Preliminary Prospectus or Prospectus or file any document, and shall furnish to
the Representatives and the Underwriters' counsel such further information as
each may from time to time reasonably request.
(h) The Company will make generally available to its security
holders not later than 45 days after the end of the period covered thereby, an
earnings statement of the Company (which need not be audited) that shall comply
with Section 11(a) of the Act and cover a period of at least 12 consecutive
months beginning not later than the first day of the Company's fiscal quarter
next following the Effective Date.
(i) For a period of five years following the Effective Date, the
Company will furnish to the Representatives copies of all materials furnished by
the Company to its Stockholders and all public reports and all reports and
financial statements furnished by the Company to the SEC pursuant to the
Exchange Act or any rule or regulation of the SEC thereunder.
(j) During the course of the distribution of the Shares, the Company
will not take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Class A Shares.
(k) The Company has caused each person listed on Schedule III hereto
to execute an agreement (a "Lock-up Agreement"). The Company has delivered such
Lock-up Agreements to Xxxxxx Xxxxxxxxxx Xxxxx Inc. prior to the date of this
Agreement. Appropriate stop transfer instructions will be issued by the Company
to the Company's transfer agent for the Class A Shares.
(l) The Company will not engage in any transaction with affiliates
(as defined in the Regulations) without the prior approval of a majority of the
members of its Board of Directors who do not have an interest in such
transaction other than in their capacity as directors of the Company.
(m) For a period of ___ days after the Effective Date, the Company
will not, without the prior written consent of Xxxxxx Xxxxxxxxxx Xxxxx Inc.
offer, sell, contract to sell or otherwise dispose of any Class A Shares or any
securities convertible into or exercisable for any
16
Class A Shares or, except for up to ___________ Class A Shares pursuant to the
Company's 1999 Stock Option Plan (subject to the agreement of each holder
thereof that, until after the ___ day after the Effective Date, such holder will
not, without the prior written consent of Xxxxxx Xxxxxxxxxx Xxxxx Inc., directly
or indirectly offer to sell, sell, contract to sell or otherwise transfer or
dispose of any of such Class A Shares), grant options to purchase any Class A
Shares.
(n) The Company will use all reasonable efforts to maintain the
qualification or listing of the Class A Shares (including, without limitation,
the Shares) on the Nasdaq National Market.
(o) The Company will maintain Directors and Officers liability
insurance in amounts, and key man life insurance covering such individuals and
in amounts, reasonably determined by the Company's Board of Directors to be
appropriate to the Company's circumstances and consistent with the amounts set
forth in the Prospectus.
(p) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay, or give irrevocable instructions for the payment of,
the applicable fees in accordance with Rule 111 promulgated under the Act by the
earlier of (A) 10:00 p.m. Philadelphia time on the date of this Agreement and
(B) the time confirmations are sent or given, as specified by Rule 462(b)(2).
6. Payment of Fees and Expenses.
(a) Whether or not the transactions contemplated by this Agreement
are consummated and regardless of the reason this Agreement is terminated, the
Company will pay or cause to be paid, and bear or cause to be borne, all costs
and expenses incident to the performance of the obligations of the Company under
this Agreement, including: (i) the fees and expenses of the accountants and
counsel for the Company incurred in the preparation of the Registration
Statement and any post-effective amendments (including any Rule 462(b)
Registration Statement) thereto (including financial statements and exhibits),
Preliminary Prospectuses and the Prospectus and any amendments or supplements
thereto, (ii) printing and mailing expenses associated with the Registration
Statement and any post-effective amendments thereto, Preliminary Prospectus, the
Prospectus, this Agreement, the Agreement Among Underwriters, the Underwriters'
Questionnaire submitted to each of the Underwriters by Xxxxxx Xxxxxxxxxx Xxxxx
Inc. in connection herewith, the power of attorney executed by each of the
Underwriters in favor of Xxxxxx Xxxxxxxxxx Xxxxx Inc. in connection herewith,
the Selected Dealer Agreement and related documents and the preliminary Blue Sky
memorandum relating to the offering prepared by Klehr, Harrison, Xxxxxx,
Branzburg & Xxxxxx LLP, counsel to the Underwriters (collectively with any
supplement thereto, the "Preliminary Blue Sky Memorandum"), (iii) the costs
incident to the authentication, issuance, sale and delivery of the Shares to the
Underwriters, (iv) the fees, expenses and all other costs of qualifying the
Shares for sale under the securities or Blue Sky laws of those states in which
the Shares are to be offered or sold, including, without limitation, the
reasonable fees and expenses of Underwriters' counsel and such local counsel as
may have been reasonably required and retained for such purpose, (v) the fees,
expenses and other costs of, or incident to, securing any review or approvals by
or from the XXXX,
00
including the reasonable fees and expenses of the Underwriters' counsel, (vi)
the filing fees of the SEC, (vii) the cost of furnishing to the Underwriters
copies of the Registration Statement, Preliminary Prospectuses and Prospectuses
as herein provided, (viii) the Company's travel expenses in connection with
meetings with the brokerage community and institutional investors, (ix) the
costs and expenses associated with settlement in same day funds (including, but
not limited to, interest or cost of funds expenses), if desired by the Company,
(x) any fees or costs payable to the Nasdaq Stock Market, Inc. as a result of
the offering, (xi) the cost of printing certificates for the Shares; (xii) the
cost and charges of the Company's transfer agents, (xiii) the costs of
advertising the offering, including, without limitation, with respect to the
placement of "tombstone" advertisements in publications selected by the
Representatives, and (xiv) all other costs and expenses reasonably incident to
the performance of the Company's obligations hereunder that are not otherwise
specifically provided for in this Section 6(a); provided, however, that the
Underwriters shall be responsible for their out-of-pocket expenses, including
those associated with meetings with the brokerage community and institutional
investors, other than the Company's travel expenses, and the fees and expenses
of their counsel for other than Blue Sky and NASD representation.
(b) The Company shall pay as due any state registration,
qualification and filing fees and any accountable out-of-pocket disbursements in
connection with such registration, qualification or filing in the states in
which the Representatives determine to offer or sell the Shares.
(c) At the Closing, the Company will pay to Xxxxxx Xxxxxxxxxx Xxxxx
Inc. a financial advisory fee in the amount of $100,000.
7. Conditions to Underwriters' Obligations. The obligation of each
Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 4 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy and fulfillment of the
representations and warranties of the Company, to the performance by the Company
of its covenants and obligations hereunder, and to the following additional
conditions:
(a) If required by Rule 430A of the Regulations, the Prospectus
shall have been filed with the SEC pursuant to Rule 424(b) of the Regulations
within the applicable time period prescribed for such filing by the Regulations;
on or prior to the Closing Date or any Option Closing Date, as the case may be,
no stop order or other order preventing or suspending the effectiveness of the
Registration Statement or the sale of any of the Shares shall have been issued
under the Act or any state securities law and no proceedings for that purpose
shall have been initiated or shall be pending or, to the Representatives'
knowledge or the knowledge of the Company, shall be contemplated by the SEC or
by any authority in any jurisdiction designated by the Representatives pursuant
to Section 5(f) hereof; and any request on the part of the SEC for additional
information shall have been complied with to the reasonable satisfaction of
counsel for the Underwriters.
(b) 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 earlier of (i) 11:00 a.m.,
18
Philadelphia time, on the date on which the Rule 462(b) Registration Statement
has been filed with the Commission and (ii) the time confirmations are sent or
given as specified by Rule 462(b)(2).
(c) All corporate proceedings and other matters incident to the
authorization, form and validity of this Agreement, the Shares and the form of
the Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby, shall be
satisfactory in all material respects to counsel to the Underwriters. The
Reorganization and each Acquisition shall have been consummated as described in
the Registration Statement and in accordance with the provisions of the
Reorganization Agreements and applicable Acquisition Agreement, respectively.
The Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters. The
Representatives shall have received from the Underwriters' counsel, Klehr,
Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP, an opinion, dated as of the Closing
Date and any Option Closing Date, as the case may be, and addressed to the
Representatives individually and as the Representatives of the several
Underwriters, which opinion shall be satisfactory in all respects to the
Representatives.
(d) The NASD shall have indicated that it has no objection to the
underwriting arrangements pertaining to the sale of any of the Shares.
(e) The Representatives shall have received a copy of an executed
Lock-up Agreement from each person listed on Schedule III hereto.
(f) The Representatives shall have received at or prior to the
Closing Date from the Underwriters' counsel a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Shares under the securities or
Blue Sky laws of such jurisdictions designated by the Representatives pursuant
to Section 5(f) hereof.
(g) On the Closing Date and any Option Closing Date, there shall
have been delivered to the Representatives signed opinions of Xxxxxxx, Xxxxxxxx
& Kotel, a Professional Corporation, counsel for the Company, dated as of each
such date and addressed to the Representatives individually and as the
Representatives of the several Underwriters to the effect set forth in Exhibit B
hereto or as is otherwise reasonably satisfactory to the Representatives.
(h) At the Closing Date and any Option Closing Date: (i) the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated therein in accordance with the Act and
the Regulations and in all material respects shall conform to the requirements
of the Act and the Regulations, and neither the Registration Statement nor any
post-effective amendment thereto nor the Prospectus and any amendments or
supplements thereto shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) since the respective dates as
of which information is given in the Registration Statement and any
post-effective amendment thereto and the Prospectus and any amendments or
supplements thereto, except as otherwise stated therein, there
19
shall have been no material adverse change in the properties, condition
(financial or otherwise), results of operations, stockholders' equity, business,
prospects or management of the Company and the Subsidiaries, taken as a whole,
from that set forth therein, whether or not arising in the ordinary course of
business, other than as referred to in the Registration Statement or Prospectus
(iii) since the respective dates as of which information is given in the
Registration Statement and the Prospectus or any amendment or supplement
thereto, there shall have been no event or transaction, contract or agreement
entered into by the Company or any of the Subsidiaries, other than in the
ordinary course of business and as set forth in the Registration Statement or
Prospectus, that has not been, but would be required to be, set forth in the
Registration Statement or Prospectus, (iv) since the respective dates as of
which information is given in the Registration Statement and any post-effective
amendment thereto and the Prospectus and any amendments or supplements thereto,
there shall have been no material adverse change, loss, reduction, termination
or non-renewal of any contract to which the Company or any Subsidiary is a party
and (v) no action, suit or proceeding at law or in equity, domestic or foreign,
shall be pending or threatened against the Company or any Subsidiary that would
be required to be set forth in the Prospectus, other than as set forth therein,
and no proceedings shall be pending or threatened against or directly affecting
the Company or any Subsidiary before or by any federal, state or other
commission, board or administrative agency, domestic or foreign, wherein an
unfavorable decision, ruling or finding would materially adversely affect the
properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company or the Subsidiaries
other than as set forth in the Prospectus.
(i) The Representatives shall have received at the Closing Date and
any Option Closing Date certificates of the Company executed by the Chief
Executive Officer and the Chief Financial Officer of the Company in their
capacities as such dated as of the date of the Closing Date or Option Closing
Date, as the case may be, and addressed to the Representatives, individually and
as the Representatives of the several Underwriters, to the effect that (i) the
signers of the certificate have read this Agreement and the representations and
warranties of the Company in this Agreement are true and correct in all material
respects, as if made at and as of the Closing Date or the Option Closing Date,
as the case may be, and the Company has complied in all material respects with
all the agreements, fulfilled in all material respects all the covenants and
satisfied all the conditions on its part to be performed, fulfilled or satisfied
at or prior to the Closing Date or the Option Closing Date, as the case may be,
and (ii) the signers of the certificate have examined the Registration Statement
and the Prospectus and any amendments or supplements thereto and that the
conditions set forth in Section 7(g) of this Agreement have been satisfied.
(j) At the time this Agreement is executed and at the Closing Date
and any Option Closing Date the Representatives shall have received letters
addressed to the Representatives individually and as the Representatives of the
several Underwriters, and in form and substance satisfactory to the
Representatives in all respects (including the non-material nature of the
changes or decreases, if any, referred to in clause (iii) below) from each of
Ernst & Young LLP, Xxxxxxxx X. Xxxxxxx & Co. P.A., Xxxxxxxx & Xxxxxx, LLP and
Weissbarth, Xxxxxx & Xxxxxxxxxx LLP, dated as of the date of this Agreement, the
Closing Date or the Option Closing Date, as the case may be:
20
(i) confirming that they are independent certified public
accountants within the meaning of the Act and the Regulations;
(ii) stating that, in their opinion, the consolidated
financial statements, schedules and notes of the entities audited by them and
included in the Registration Statement comply in form in all material respects
with the applicable accounting requirements of the Act and the Regulations;
(iii) stating that, on the basis of specified procedures,
which included, to the extent applicable, the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information, as described in SAS No. 71, Interim Financial Information
(with respect to the latest unaudited consolidated financial statements of the
entity audited by them), a reading of the latest available unaudited interim
consolidated financial statements of the entity audited by them (with an
indication of the date of the latest available unaudited interim financial
statements), a reading of the minutes of the meetings of the stockholders and
the Board of Directors of such entity and its subsidiaries, and audit and
compensation committees of such Boards, if any, and inquiries to certain
officers and other employees of such entities and their subsidiaries responsible
for operational, financial and accounting matters and other specified procedures
and inquiries, nothing has come to their attention that would cause them to
believe that (A) the unaudited consolidated financial statements of such entity
included in the Registration Statement, (1) do not comply in form in all
material respects with the applicable accounting requirements of the Act and the
Regulations, or (2) any material modifications should be made to such unaudited
financial statements for them to be in conformity with generally accepted
accounting principles; (B) at the date of the latest available unaudited interim
consolidated financial statements of such entity and a specified date not more
than five business days prior to the date of such letter, there was any change
in the capital stock or debt of such entity or any decrease in net current
assets, total assets or stockholders' equity of such entity as compared with the
amounts shown in the December 31, 1998 balance sheet of such entity included in
the Registration Statement, or that for the periods from January 1, 1999 to the
date of the latest available unaudited financial statements of such entity and
to a specified date not more than five days prior to the date of the letter,
there were any decreases, as compared to the corresponding periods in the prior
year, in revenues, gross profit, operating income or total or per share amounts
of net earnings, except in all instances for changes, decreases or increases
which the Registration Statement discloses have occurred or may occur and except
for such other changes, decreases or increases which the Representatives shall
in their sole discretion accept; or (C) the unaudited pro forma combined
financial statements included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X under the Act and that the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
those statements; and
(iv) stating that they have compared specific dollar amounts,
numbers of shares and other numerical data and financial information set forth
in the Registration Statement that have been specified by the Representatives
prior to the date of this Agreement, to the extent that such information is
derived from the accounting records subject to the internal control structure,
policies
21
and procedures of the accounting systems of the entities audited by them, or has
been derived directly from such accounting records by analysis or comparison or
has been derived from other records and analysis maintained or prepared by such
entity with the results obtained from the application of readings, inquiries and
other appropriate procedures (which procedures do not constitute an audit in
accordance with generally accepted auditing standards) set forth in the letter,
and found them to be in agreement.
(k) There shall have been duly tendered to the Representatives for
the respective accounts of the Underwriters certificates representing all of the
Shares to be purchased by the Underwriters on the Closing Date or any Option
Closing Date, as the case may be.
(l) At the Closing Date and any Option Closing Date, the
Representatives shall have been furnished such additional documents, information
and certificates as they shall have reasonably requested.
(m) The issuance and sale of the Shares shall be legally permitted
under applicable Blue Sky or state securities laws so long as such sales are
made in accordance with the Preliminary Blue Sky Memorandum.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Representatives and Underwriters' counsel. The Company shall
furnish the Representatives with such conformed copies of such opinions,
certificates, letters and other documents as they shall reasonably request. If
any condition to the Underwriters' obligations hereunder to be fulfilled prior
to or at the Closing Date or any Option Closing Date, as the case may be, is not
fulfilled, the Representatives may, on behalf of the several Underwriters,
terminate this Agreement with respect to the Closing Date or such Option Closing
Date, as applicable, or, if they so elect, waive any such conditions which have
not been fulfilled or extend the time for their fulfillment. Any such
termination shall be without liability of the Underwriters to the Company.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
and each person, if any, who controls each Underwriter within the meaning of the
Act, against any and all loss, liability, claim, damage and expense whatsoever,
including, but not limited to, any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever or in connection with any
investigation or inquiry of, or action or proceeding that may be brought
against, the respective indemnified parties, arising out of or based upon any
breach of the Company's representations and warranties made in this Agreement
and any untrue statements or alleged untrue statements of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, any application or other document (in this Section 8 collectively
called "application") executed by the Company and based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify all or any part of the Shares under the securities laws thereof or filed
with the SEC or the
22
NASD, or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing indemnity:
(x) shall not apply to statements in or omissions from any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
application or in any communication to the SEC, as the case may be, made in
reliance upon and in conformity with information supplied to the Company in
writing by or on behalf of any Underwriter through the Representatives expressly
for use therein; and
(y) with respect to any Preliminary Prospectus, shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages, liabilities or expenses purchased the Shares if, at or
prior to the written confirmation of the sale of such Shares, a copy of an
amended Preliminary Prospectus or the Prospectus (or the Prospectus as amended
or supplemented) was delivered to such Underwriter but was not sent, or
delivered to such person and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the amended
Preliminary Prospectus or Prospectus (or the Prospectus as amended or
supplemented). This indemnity agreement will be in addition to any liability the
Company may otherwise have.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of the
Act to the same extent as the foregoing indemnities from the Company to the
several Underwriters as set forth in Section 8(a) hereof, but only with respect
to any loss, liability, claim, damage or expense resulting from statements or
omissions, or alleged statements or omissions, if any, made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any application
or in any communication to the SEC, as the case may be, made in reliance upon
and in conformity with information supplied to the Company in writing by or on
behalf of any Underwriter through the Representatives expressly for use therein.
This indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) If any action, inquiry, investigation or proceeding is brought
against any person in respect of which indemnity may be sought pursuant to any
of the two preceding paragraphs, such person (hereinafter called the
"indemnified party") shall, promptly after notification of, or receipt of
service of process for, such action, inquiry, investigation or proceeding,
notify in writing the party or parties against whom indemnification is to be
sought (hereinafter called the "indemnifying party") of the institution of such
action, inquiry, investigation or proceeding and the indemnifying party, upon
the request of the indemnified party, shall assume the defense of such action,
inquiry, investigation or proceeding, including the employment of counsel
(reasonably satisfactory to such indemnified party) and payment of expenses. No
indemnification provided for in this Section 8 shall be available to any
indemnified party who shall fail to give such notice if the indemnifying party
does not otherwise have knowledge of such action, inquiry, investigation or
proceeding, to the extent that such indemnifying party has been materially
prejudiced by the failure
23
to give such notice, but the omission to so notify the indemnifying party shall
not relieve the indemnifying party otherwise than under this Section 8. Such
indemnified party or controlling person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless the employment of such
counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such action. If such indemnified party or parties
shall have been advised by counsel that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties or that there may be legal defenses available to such indemnified party
or parties different from or in addition to those available to the indemnifying
party or parties, the indemnified party or parties shall be entitled to select
counsel (such counsel, "Separate Counsel") to conduct the defense to the extent
determined by such counsel to be necessary to protect the interests of the
indemnified party or parties and the reasonable fees and expenses of such
Separate Counsel shall be borne by the indemnifying party; provided, however,
that if the indemnified parties engage more than one Separate Counsel, then the
indemnifying party's liability with respect to such Separate Counsel shall be
limited, in the aggregate, to an amount equal to the highest amount of
reasonable fees and expenses charged or incurred by a single Separate Counsel,
which amount shall be divided among the indemnified parties on a pro rata basis
in accordance with the relative amounts of reasonable fees and expenses of their
respective Separate Counsel. Expenses covered by the indemnification in this
Section 8 shall be paid by the indemnifying party as they are incurred by the
indemnified party. Anything in this Section 8 to the contrary notwithstanding,
the indemnifying party shall not be liable for any settlement of any such claim
effected without its prior written consent.
(d) If the indemnification provided for in this Section 8 is
unavailable to, or insufficient to hold harmless an indemnified party under
Sections 8(a) or (b) hereof in respect of any losses, liabilities, claims,
damages or expenses (or actions, inquiries, investigations or proceedings in
respect thereof) referred to therein, except by reason of the provisos set forth
in Section 8(a) hereof or the failure to give notice as required in Section 8(c)
hereof (provided that the indemnifying party does not have knowledge of the
action, inquiry, investigation or proceeding and to the extent such party has
been materially prejudiced by the failure to give such notice), then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, liabilities, claims or reasonable expenses (or
actions, inquiries, investigations or proceedings in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
24
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue 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 on the one hand
or the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, liabilities,
claims, damages or reasonable expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), (i) the
provisions of the Agreement Among Underwriters shall govern contribution among
Underwriters, (ii) no Underwriter (except as provided in the Agreement Among
Underwriters) shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, and (iii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8(d) to
contribute are several in proportion to their individual underwriting
obligations and not joint.
9. Representations and Agreements to Survive Delivery. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date and any Option Closing Date; and such
representations, warranties and agreements of the Underwriters and the Company,
including, without limitation, the indemnity and contribution agreements
contained in Section 8 hereof and the agreements contained in Sections 6, 9, 10
and 13 hereof, shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any Underwriter or any controlling
person, and shall survive delivery of the Shares and termination of this
Agreement, whether before or after the Closing Date or any Option Closing Date.
10. Effective Date of This Agreement and Termination Hereof.
(a) This Agreement shall become effective at 10:00 a.m.,
Philadelphia, Pennsylvania time, on the first business day following the
Effective Date or at the time of the public offering by the Underwriters of the
Shares, whichever is earlier, except that the provisions of Sections 6, 8, 9, 10
and 13 hereof shall be effective upon execution hereof. The time of the public
offering, for the purpose of this Section 10, shall mean the time when any of
the Shares are first released by the Underwriters for offering by dealers. The
Representatives may prevent the provisions of this Agreement (other than those
contained in Sections 6, 8, 9, 10 and 13) hereof from becoming effective without
liability of any party to any other party, except as noted below, by giving
25
the notice indicated in Section 10(c) hereof before the time the other
provisions of this Agreement become effective.
(b) The Representatives shall have the right to terminate this
Agreement at any time prior to the Closing Date as provided in Sections 7 and 11
hereof or if any of the following have occurred:
(i) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material adverse
change or any development involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the Company or its
Subsidiaries, or the earnings, business affairs, management or business
prospects of the Company or its Subsidiaries, whether or not arising in the
ordinary course of business, that would, in the Representatives' sole judgment,
make the offering or delivery of the Shares impractical or inadvisable;
(ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic, political or financial
market conditions if the effect on the financial markets of the United States of
such outbreak, calamity, crisis or change would, in the Representatives' sole
judgment, make the offering or delivery of the Shares impractical or
inadvisable;
(iii) suspension of trading generally in securities on the New
York Stock Exchange, the American Stock Exchange, the Nasdaq Stock Market or the
over-the-counter market or limitation on prices (other than limitations on hours
or numbers of days of trading) for securities or the promulgation of any federal
or state statute, regulation, rule or order of any court or other governmental
authority that in the Representatives' sole opinion materially and adversely
affects trading on such exchange or the over-the-counter market;
(iv) declaration of a banking moratorium by either federal or
Pennsylvania state authorities;
(v) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that in the
Representatives' sole opinion has a material adverse effect on the securities
markets in the United States; or
(vi) trading in any securities of the Company shall have been
suspended or halted by the Nasdaq Stock Market or the Commission.
(c) If the Representatives elect to prevent this Agreement from
becoming effective or to terminate this Agreement as provided in this Section
10, the Representatives shall notify the Company thereof promptly by telephone,
telex, telegraph, telegram or facsimile, confirmed by letter.
11. Default by an Underwriter.
26
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Optional Shares hereunder, and if the Firm
Shares or Optional Shares with respect to which such default relates do not
exceed the aggregate of 10% of the number of Firm Shares or Optional Shares, as
the case may be, that all Underwriters have agreed to purchase hereunder, then
such Firm Shares or Optional Shares to which the default relates shall be
purchased severally by the non-defaulting Underwriters in proportion to their
respective commitments hereunder.
(b) If such default relates to more than 10% of the Firm Shares or
Optional Shares, as the case may be, the Representatives may, in their
discretion, arrange for another party or parties (including a non-defaulting
Underwriter) to purchase such Firm Shares or Optional Shares to which such
default relates, on the terms contained herein. In the event that the
Representatives do not arrange for the purchase of the Firm Shares or Optional
Shares to which a default relates as provided in this Section 11, this Agreement
may be terminated by the Representatives or by the Company without liability on
the part of the several Underwriters (except as provided in Section 8 hereof) or
the Company (except as provided in Sections 6 and 8 hereof), but nothing herein
shall relieve a defaulting Underwriter of its liability, if any, to the other
several Underwriters and to the Company for damages occasioned by its default
hereunder.
(c) If the Firm Shares or Optional Shares to which the default
relates are to be purchased by the non-defaulting Underwriters, or are to be
purchased by another party or parties as aforesaid, the Representatives or the
Company shall have the right to postpone the Closing Date or any Option Closing
Date, as the case may be, for a reasonable period but not in any event exceeding
seven days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment to the
Registration Statement or supplement to the Prospectus that in the opinion of
counsel for the Underwriters may thereby be made necessary. The terms
"Underwriters" and "Underwriter" as used in this Agreement shall include any
party substituted under this Section 11 with like effect as if it had originally
been a party to this Agreement with respect to such Firm Shares and/or Optional
Shares.
12. Information Furnished by Underwriters. The statements under the
caption "Underwriting" (except for the second, third and fourth to last
paragraphs thereunder) in any Preliminary Prospectus and the Prospectus
constitute the only written information furnished by or on behalf of any
Underwriter referred to in Sections 1(a)(ii) and 8 hereof.
13. Notice. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to any Underwriter,
shall be mailed, delivered, telexed, telegrammed, telegraphed or telecopied and
confirmed to such Underwriter, c/o Janney Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx X. Xxxxxx, with
a copy to Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Esquire; and if
sent to the Company, shall be mailed, delivered, telexed, telegrammed,
telegraphed or telecopied and confirmed
27
to The Xxxxxxxxxx Corporation, 0000 Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxxxx, Xx., with a copy to Xxxxxxx, Xxxxxxxx & Kotel,
a Professional Corporation, 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: L. Xxxxx Xxxxxxxx, Jr., Esquire.
14. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, the Company and the controlling
persons, directors and officers thereof, and their respective successors,
assigns, heirs and legal representatives, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
terms "successors" and "assigns" shall not include any purchaser of the Shares
merely because of such purchase.
In all dealings with the Company under this Agreement, the Representatives
shall act on behalf of each of the several Underwriters, and the Company shall
be entitled to act and rely upon any statement, request, notice or agreement
made or given by the Representatives jointly or by Xxxxxx Xxxxxxxxxx Xxxxx Inc.
on behalf of the Representatives.
15. Definition of Business Day. For purposes of this Agreement, "business
day" means any day on which the Nasdaq National Market is opened for trading.
16. Counterparts. This Agreement may be executed in one or more
counterparts and by facsimile signatures and all such counterparts and facsimile
signatures will constitute one and the same instrument.
17. Construction. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
agreements made and performed entirely within such Commonwealth. All references
herein to the knowledge of the Company shall be deemed to include the knowledge
of each of the Subsidiaries.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
28
If the foregoing correctly sets forth your understanding of our agreement,
please sign and return to the Company the enclosed duplicate hereof, whereupon
it will become a binding agreement in accordance with its terms.
Very truly yours,
THE XXXXXXXXXX CORPORATION
By:
----------------------------
Xxxxxxx X. Xxxxxxxxxx, Xx.
President and Chief
Executive Officer
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXX XXXXXXXXXX XXXXX INC.
FIRST SECURITY VAN XXXXXX
XXXXXX SCHIFF & CO., INC.
As Representatives of the Several
Underwriters named in Schedule I hereto
By: XXXXXX XXXXXXXXXX XXXXX INC.
By:
------------------------------------
Authorized Representative
SCHEDULE I
Schedule of Underwriters
--------------------------------------------------------------------------------
Number of Firm Number of Optional
Underwriter Shares to be Purchased Shares to be Purchased
----------- ---------------------- ----------------------
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
--------------------------------------------------------------------------------
First Security Xxx Xxxxxx
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx & Co., Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------- ----------------------
--------------------------------------------------------------------------------
Total ====================== ======================
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SCHEDULE II
Stockholder NASD Affiliations
X.X. Xxxxxxxxxx, L.P. is an affiliate of Xxxxxx Xxxxxx & Co., Inc., a member of
the National Association of Securites Dealers, Inc.
SCHEDULE III
List of Persons Who Are to Deliver Lock-Up
Agreements Called for Under Sections 5(k) and 7(e)
EXHIBIT A
Acquisition Agreements
1. Asset Purchase Agreement, among Components Acquisition Corp., Xxxx XxXxx
and Components by Xxxx XxXxx, Inc., dated as of March 11, 1999.
2. Asset Purchase Agreement, among the Company, DAG Acquisition Corp., Xxxxxx
Xxxxx and Diversified Apparel Group, Ltd., dated as of March 11, 1999.
3. Stock Purchase Agreement, among the Company, Xxxxx Xxxxxx and Global
Sourcing Network, Ltd., dated as of March 11, 1999.
4. [Windsong Agreement]
A-1
EXHIBIT B
Matters to be Covered in the Opinion of
Xxxxxxx, Xxxxxxxx & Kotel,
Counsel for the Company
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with corporate power
and authority to conduct all of the activities conducted by it, own or lease all
of the assets owned or leased by it, and conduct its business all as described
in the Registration Statement and the Prospectus; and the Company is duly
licensed or qualified to do business and in good standing as a foreign
corporation in all jurisdictions, domestic or foreign, in which failure to be so
licensed or qualified would have a material adverse effect on the Company and
the Subsidiaries considered as a whole.
2. Each of the Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to conduct its business all as
described in the Registration Statement and Prospectus and own or lease all of
the assets owned or leased by it, and each Subsidiary is duly licensed or
qualified to do business and is in good standing as a foreign corporation in all
jurisdictions, domestic and foreign, in which failure to be so licensed or
qualified would have a material adverse effect on the Company and the
Subsidiaries considered as a whole.
3. No authorization, approval, consent or license of any
governmental or regulatory body, domestic or foreign, except as may be required
under the securities (blue sky) laws of the various jurisdictions, is required
in connection with the (i) authorization, issuance, transfer, sale or delivery
of the Shares to be sold by the Company; (ii) execution, delivery and
performance of the Underwriting Agreement by the Company or (iii) taking of any
action contemplated in the Underwriting Agreement or in the Registration
Statement or the Prospectus, or, if so required, all such authorizations,
approvals, consents and licenses have been obtained and are in full force and
effect.
4. The Company has authorized and outstanding capital stock, stock
options and other derivative securities as set forth in the Registration
Statement and the Prospectus. The outstanding shares of the Class A Stock and
the Class B Stock, have been, and all of the Shares will be, upon issuance and
payment therefor, duly authorized, validly issued, fully paid and nonassessable,
are not subject to preemptive rights and have not been issued in violation of
any statutory preemptive rights or, to our knowledge, similar contractual
rights. The holders of Shares are not and will not be subject to personal
liability solely by reason of being such holders. The issue and sale of the
Shares by the Company have been duly and validly authorized and the Shares have
been duly listed for trading on the Nasdaq National Market. The transactions
consummated pursuant to the Reorganization Agreements were exempt from, or
complied in all material respects with, the provisions of all applicable,
federal, state and foreign securities and corporate laws.
B-1
5. To such counsel's knowledge, no holder of any securities of the
Company has the right to require registration of shares of the Class A Stock or
other securities of the Company. The description of the Class A Stock, the Class
B Stock and the Shares contained in the Registration Statement and the
Prospectus conforms to the rights set forth in the instruments or certificates
defining the same and is in conformity with the requirements of the Act and the
Regulations.
6. The Company is not an "investment company" as defined in Section
3(a) of the Investment Company Act; the Company has not, prior to the date of
the Prospectus, been required to make any filings pursuant to the Exchange Act.
7. The Company has the corporate power and authority to enter into
the Underwriting Agreement, and the Underwriting Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding obligation of the Company enforceable in accordance with its terms,
except as such enforceablility may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or similar laws
affecting creditors' rights generally and to equitable principles (including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at law,
and except insofar as rights to indemnity or contribution may be limited by
applicable securities laws.
8. The statements in the Prospectus under "Properties," "Legal
Proceedings," "Certain Relationships and Related Transactions," and "Description
of Capital Stock," and in the Registration Statement in Items 14 and 15, insofar
as such statements constitute a summary of the terms of the capital stock, legal
matters, documents or proceedings referred to therein, accurately reflect the
information called for with respect to such terms, legal matters, documents or
proceedings.
9. The Registration Statement and the Prospectus, and each amendment
thereof or supplement thereto (including any Rule 462(b) Registration
Statement), comply as to form with the requirements of the Act and the Rules and
Regulations. Such counsel expresses no opinion as to matters concerning
financial statements and other financial data and related notes, schedules and
financial or statistical data contained in the Registration Statement or the
Prospectus.
10. In connection with the Registration Statement, such counsel has
participated in discussions and conferences with certain of the officers and
representatives of the Company, representatives of the Underwriters, counsel to
the Underwriters, and the independent accountants for the Company and the
Acquired Businesses at which the contents of the Registration Statement and the
Prospectus were discussed. While such counsel does not assume any responsibility
for the accuracy, completeness or fairness of the statements made in the
Registration Statement and the Prospectus, nothing has come to such counsel's
attention which lead them to believe that either the Registration Statement or
the Prospectus, or any amendment or supplement thereto, as of their respective
effective or issue dates, or as of the date hereof, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
B-2
[The preceding text will be removed after review of 10b-5 letter.] The
descriptions in the Registration Statement and Prospectus of statutes and legal
and governmental proceedings are accurate and fairly present the information
required to be shown. There are no legal proceedings pending or, to such
counsel's knowledge, threatened against the Company which are required to be
disclosed in the Registration Statement and Prospectus, except as described
therein. Such counsel expresses no opinion as to the financial statements or
other financial or statistical data contained in the Registration Statement or
the Prospectus.
11. Such counsel has read all contracts and other documents
specifically enumerated in the Registration Statement and the Prospectus, and
such contracts and other documents are fairly summarized or described therein,
fairly present the information required to be shown, conform in all material
respects to the descriptions thereof contained therein, and are filed as
exhibits thereto, if required, and to such counsel's knowledge, there are no
contracts or documents required to be so summarized or disclosed or so filed
which have not been so summarized or disclosed or so filed.
12. The Registration Statement has become effective under the Act,
and, to our knowledge, (i) no stop order suspending the effectiveness of the
Registration Statement has been issued, and (ii) no proceedings for that purpose
have been instituted or are threatened, pending or contemplated.
13. The Reorganization Agreements have been duly authorized,
executed and delivered by the Company and the Partnership and are the valid and
binding obligations of the Company and the Partnership, enforceable against the
Company and the Partnership in accordance with their respective terms, except as
such enforceability may be limited by equitable principles or by the application
of bankruptcy, insolvency or other similar laws affecting creditors' rights
generally. The Reorganization has been consummated on the terms and conditions
set forth in the Prospectus and in accordance with the terms and provisions of
the Reorganization Agreements.
14. Each Acquisition Agreement has been duly authorized, executed
and delivered by the Company and the applicable Sellers and are the valid and
binding obligations of the Company and such Sellers, enforceable against the
Company and such Sellers in accordance with its terms, except as such
enforceability may be limited by equitable principles or by the application of
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally. Each Acquisition has been consummated on the terms and conditions set
forth in the Prospectus and in accordance with the terms and provisions of the
applicable Acquisition Agreement.
15. The execution and delivery of the Underwriting Agreement by the
Company and the consummation by the Company of the transactions therein
contemplated, and the compliance with the terms of the Underwriting Agreement do
not and will not conflict with or result in a breach of any of the terms or
provisions of or violate or constitute a default under the Certificate of
Incorporation or Bylaws or other constituent documents of the Company or the
Subsidiaries or, (i) any indenture, mortgage or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or any material portion
B-3
of its properties is bound, or (ii) to such counsel's knowledge, after due
inquiry, any judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over the Company or any of the
Subsidiaries or any material portion of its properties, or (iii) any existing
statute, rule or regulation applicable to the Company or the where, with respect
to clauses (i), (ii) and (iii) of this paragraph, such violation or default
could reasonably be expected to have a material adverse effect on the general
affairs, properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole.
16. To such counsel's knowledge, except as described in the
Prospectus, neither the Company nor any of the Subsidiaries owns any interest in
any corporation, partnership, joint venture, trust or other business entity.
In rendering such opinions, counsel for the Company may set forth
that as to certain matters of fact, where appropriate, such counsel is relying
on one or more certificates of public officials, governmental agencies or
officers of the Company. In addition, as to matters of law, counsel for the
Company may rely as to matters involving the application of laws other than the
laws of the United States (except for laws dealing with matters within the
jurisdiction of the United States Federal Trade Commission), the laws of
Delaware and jurisdictions in which they are admitted, to the extent such
counsel deems proper and to the extent specified in such opinion, if at all,
upon an opinion or opinions (in form and substance satisfactory to the
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws.
Unless the context clearly indicates otherwise, the term "Company"
as used in this Exhibit, shall include the Subsidiaries and the Acquired
Businesses. The opinion of counsel for the Company shall include a statement to
the effect that it may be relied upon by counsel for the Underwriters in their
opinion delivered to the Underwriters.
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