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EXHIBIT 1.1
2,250,000 Shares(1)
COMPLETE BUSINESS SOLUTIONS, INC.
Common Stock
UNDERWRITING AGREEMENT
August , 1997
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XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
UBS SECURITIES LLC
XXXX XXXXX XXXX XXXXXX, INC.
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen and Ladies:
COMPLETE BUSINESS SOLUTIONS, INC., a Michigan corporation (the "COMPANY"),
and the Selling Shareholders named on Schedule II hereto (the "SELLING
SHAREHOLDERS"), propose to sell an aggregate of 2,250,000 shares of common
stock, no par value, of the Company (the "FIRM SHARES"), to the several
underwriters named in Schedule I hereto (the "UNDERWRITERS"). The Firm Shares
consist of 1,250,000 shares to be issued and sold by the Company and 1,000,000
outstanding shares to be sold by the Selling Shareholders. The Company and
the Selling Shareholders also propose to sell to the several
Underwriters not more than 337,500 additional shares of common stock, no par
value, of the Company (the "OPTION SHARES"), if and to the extent requested by
the Underwriters as provided in Section 2 hereof. The Firm Shares and the
Option Shares are herein collectively called the "SHARES." The shares of common
stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK." The
Company and the Selling Shareholders are hereinafter collectively called the
"SELLERS."
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(1)Plus an option to purchase up to 337,500 additional shares from the Company
and the Selling Shareholders to cover over-allotments.
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1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "COMMISSION") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"ACT"), a registration statement on Form S-1 (File No. 333-______) including a
prospectus relating to the Shares, which may be amended in accordance herewith.
The term "ORIGINAL REGISTRATION STATEMENT" as used in this Agreement shall
mean such registration statement, including all exhibits thereto, all financial
statements therein, all documents incorporated by reference therein and all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which such prospectus became
effective, and, in the event of any amendment thereto after the effective date
of such registration statement (the "EFFECTIVE DATE"), shall also mean (from
and after the effectiveness of such amendment) such registration statement as
so amended. The term "REGISTRATION STATEMENT" as used in this Agreement shall
mean the Original Registration Statement, together with the registration
statement filed pursuant to Rule 462(b) of the Act, if any (the "462(B)
REGISTRATION STATEMENT"). The term "PROSPECTUS" as used in this Agreement
shall mean the prospectus, including the documents incorporated by reference
therein, relating to the Shares first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Original Registration Statement) and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from
and after the filing of such supplement with the Commission or of the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term "PRELIMINARY PROSPECTUS" as used in this Agreement shall mean each
preliminary prospectus included in the Original Registration Statement prior to
the time it becomes effective.
2. Agreements to Sell and Purchase; Other Covenants.
(a) Firm Shares. On the basis of the representations and warranties
contained in this Agreement, and subject to its terms and conditions, (i)
the Company agrees to issue and sell 1,250,000 Firm Shares, (ii) each
Selling Shareholder agrees, severally and not jointly, to sell the number
of Firm Shares set forth opposite such Selling Shareholder's name in the
top portion of Schedule II hereto, and (iii) each Underwriter agrees,
severally and not jointly, to purchase from each Seller at a price per
share of $_____ (the "PURCHASE PRICE") the number of Firm Shares (subject
to such adjustments to eliminate fractional shares as you may determine)
that bears the same proportion to the total number of Firm Shares to be
sold by such Seller as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto bears to the total number
of Firm Shares.
(b) Option Shares. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and
conditions, (i) the Company agrees to issue and sell the Option Shares to
the Underwriters; (ii) each Selling Shareholder named in Schedule II
hereto agrees, severally and not jointly, to sell the number of Option
Shares set forth opposite such Selling Shareholder's
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name in the lower portion of Schedule II hereto; and (iii) the
Underwriters shall have the right to purchase, severally and not jointly,
up to an aggregate 337,500 Option Shares from the Sellers at the Purchase
Price. Option Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares.
The Underwriters may exercise their right to purchase Option Shares in
whole or in part from time to time by giving written notice thereof to
the Company, in care of its Chief Executive Officer, and to Xxxxxxxx X.
Xxxxxxxxx and Xxxxxxx X. Xxxxxx, the attorneys-in-fact for the Selling
Shareholders (the "ATTORNEYS"), within 30 days after the date of the
Prospectus. You shall give any such notice on behalf of the Underwriters
and such notice shall specify the aggregate number of Option Shares to be
purchased pursuant to such exercise and the date for payment and delivery
thereof. The date specified in any such notice shall be a business day
(i) no earlier than the Closing Date (as hereinafter defined), (ii) no
later than ten business days after such notice has been given, and (iii)
no earlier than two business days after such notice has been given. If
any Option Shares are to be purchased, each Underwriter, severally and
not jointly, agrees to purchase from the Company and each Selling
Shareholder the number of Option Shares (subject to such adjustments to
eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Option Shares to be purchased from the
Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
(c) Lock-Up. Each Seller hereby agrees, severally and not jointly,
and solely with respect to his, her or itself and his, her or its Shares,
and the Company shall, concurrently with the execution of this Agreement,
deliver an agreement (a "LOCK-UP AGREEMENT") executed by each of the
directors and executive officers of the Company who is not a Selling
Shareholder, pursuant to which each such person agrees, during the period
ending ninety (90) days after the date of the Prospectus (the "LOCK-UP
PERIOD"), not to (1) offer, pledge, sell, contract to sell, engage in any
short sale, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap
or similar agreement that transfers, in whole or in part, the economic
risk of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise, otherwise
than (i) as a bona fide gift or gifts, (ii) by will or intestacy to such
person's immediate family or to a trust the beneficiaries of which are
exclusively such person's and/or a member or members of his or her
immediate family, (iii) as a distribution to limited partners or
shareholders of such entity, or (iv) with the prior written consent of
Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation. In addition, all
Sellers holding registration rights agree that, without the prior written
consent of Xxxxxxxxx Lufkin & Xxxxxxxx Securities Corporation on behalf
of the Underwriters, he, she or it will not, during the Lock-up Period,
make any demand
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for or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock. Notwithstanding the foregoing, during the
Lock-Up Period (i) the Company may grant stock options pursuant to the
Company's existing stock option plan provided that such options are not,
by their terms, exercisable during the Lock-Up Period, and (ii) the
Company may issue shares of its Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date
hereof.
3. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable, and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and payment for
the Firm Shares shall be made at 10:00 A.M., New York City time, on the third
or fourth business day following the date of the initial public offering (the
"CLOSING DATE"), unless otherwise permitted by the Commission pursuant to Rule
15c6-1 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
at such place as you shall designate. The Closing Date and the location of
delivery of and the form of payment for the Firm Shares may be varied by
agreement between you and the Sellers.
Delivery to the Underwriters of, and payment for, any Option Shares to be
purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "OPTION
CLOSING DATE"). Any such Option Closing Date and the location of delivery of
and the form of payment for such Option Shares may be varied by agreement among
you, the Company and the Attorneys.
Payment for Shares purchased from the Company shall be made to the
Company or its order, and payment for the Shares purchased from the Selling
Shareholders shall be made to the Custodian (as defined herein), for the
account of the Selling Shareholders, in each case in same day funds. Such
payment shall be made against delivery of certificates for the Shares to you
for the respective accounts of the several Underwriters as set forth below,
against receipt therefor signed by you. Certificates for the Shares shall be
registered in such names and issued in such denominations as you shall request
in writing not later than two full business days prior to the Closing Date or
an Option Closing Date, as the case may be. Such certificates shall be made
available to you for inspection not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date or an Option Closing Date,
as the case may be. Certificates in definitive form evidencing the Shares shall
be delivered to you on the Closing Date or an Option Closing Date, as the case
may be, with any transfer taxes, if any, thereon duly paid by the respective
Sellers, for the respective accounts of the several Underwriters, against
payment of the Purchase Price therefor by wire transfer of same day funds to
the order of the applicable Sellers.
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5. Agreements of the Company. The Company agrees with you:
(a) If the Registration Statement is not effective as of the execution of
this Agreement, to use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective and
when any post-effective amendment to it becomes effective, (ii) of any request
by the Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement (a "STOP ORDER"), (iv) of the receipt by the Company
of any notification with respect to the suspension of qualification of the
Shares for offer or sale in any jurisdiction, or with respect to the initiation
of any proceeding for such purposes, and (v) of the happening of any event
during the period referred to in paragraph (e) below which makes any statement
of a material fact made in the Registration Statement or the Prospectus untrue
or which requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein not
misleading. If at any time the Commission shall issue a Stop Order, the Company
will make every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) To furnish to you, without charge, five signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits, and to furnish to you and each Underwriter
designated by you such number of conformed copies of the Registration Statement
as so filed and of each amendment to it, without exhibits, as you may
reasonably request.
(d) Not to file any amendment or supplement to the Registration Statement,
whether before or after the time when it becomes effective, or to make any
amendment or supplement to the Prospectus of which you shall not previously
have been advised or to which you shall reasonably object; and to prepare and
file with the Commission, promptly upon your reasonable request, any amendment
to the Registration Statement or supplement to the Prospectus which may be
necessary or advisable in connection with the distribution of the Shares by
you, and to use its best efforts to cause the same to become promptly
effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the reasonable opinion of
counsel for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any amendment
or supplement to the Prospectus) as such Underwriter or dealer may reasonably
request.
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(f) If during the period specified in paragraph (e), any event shall occur
as a result of which, in the reasonable opinion of counsel for the Underwriters
it becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with any law, forthwith to prepare and file
with the Commission an appropriate amendment or supplement to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented, will not
in the light of the circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with law, and to furnish to each Underwriter
and to such dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you and
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such consents to service of process
or other documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its shareholders not later
than the 45th day following the end of the fifth fiscal quarter occurring after
the Effective Date an earnings statement in accordance with Section 11(a) of
the Act and Rule 158 thereunder, and to advise you in writing when such
statement has been so made available.
(i) During the period of five years after the date of this Agreement, to
mail as soon as reasonably practicable after the end of each fiscal year to the
record holders of its Common Stock a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified
by independent certified public accountants.
(j) During the period referred to in paragraph (i), to furnish to you as
soon as available a copy of each report or other publicly available information
of the Company mailed to the holders of Common Stock or filed with the
Commission and such other publicly available information concerning the Company
and its subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes (other than expenses of
counsel to the Underwriters, except as provided in subclause (iii) below)
incident to (i) the preparation, printing, filing and distribution under the
Act of the Registration Statement (including financial statements and
exhibits), each Preliminary Prospectus and all amendments and supplements to
any of them prior to or during the period specified in
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paragraph (e), (ii) the printing and delivery of the Prospectus and all
amendments and supplements to it during the period specified in paragraph (e),
(iii) the printing and delivery of this Agreement, the Preliminary and
Supplemental Blue Sky Memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection
with the offering of the Shares (including in each case any disbursements of
counsel for the Underwriters relating to such printing and delivery), (iv) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states (including in each case the
fees and disbursements of counsel for the Underwriters relating to such
registration or qualification and memoranda relating thereto), (v) filings and
clearance with the National Association of Securities Dealers, Inc. ("NASD") in
connection with the offering, (vi) the listing of the Shares on the Nasdaq
National Market, (vii) furnishing such copies of the Registration Statement,
the Prospectus and all amendments and supplements thereto as may be requested
for use in connection with the offering or sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, and (viii) the
performance by the Sellers of their other obligations under this Agreement.
(l) To use its best efforts to maintain the inclusion of the Common Stock
in the Nasdaq National Market (or on a national securities exchange) for a
period of five years after the effective date of the Registration Statement.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
6. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no Stop Order is in
effect, and no proceedings for such purpose are pending before or threatened by
the Commission.
(b) (i) Each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented, if
applicable, will not 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 not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will comply
in all material respects with the Act and (iii) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
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(c) Each Preliminary Prospectus filed as part of the Original Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, and each Registration Statement filed
pursuant to Rule 462(b) under the Act, if any, complied when so filed in all
material respects with the Act and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) The Company owns, beneficially and of record, 100% of the capital
stock of CBS Complete Business Solutions (Mauritius) Limited, a company
organized under the laws of Mauritius ("CBSI MAURITIUS"), which Company, in
turn, owns 100% of the capital stock of Complete Business Solutions (India)
Private Limited, a company organized under the laws of India ("CBSI INDIA" and
collectively with CBSI Mauritius, the "SUBSIDIARIES"); all such shares of
capital stock are owned by the Company free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature. The Company does
not own or control, directly or indirectly, any corporation, association or
other entity other than the Subsidiaries.
(e) The Company and each of the Subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business as it is currently being conducted and to own, lease and
operate its properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on business,
prospects, condition (financial or otherwise) or results of operations of the
Company and the Subsidiaries, taken as a whole (any such effect to be referred
to as a "MATERIAL ADVERSE EFFECT").
(f) The conversion of the minority interest in CBSI Mauritius into
Common Stock by the Selling Shareholder contemplated by the Shareholders'
Agreement dated as of July 19, 1996 (the "SHAREHOLDERS' AGREEMENT"), among the
Company, the Selling Shareholder, CBSI Mauritius and Xxxxxxxx Xxxxxxxxx, has
been duly and validly consummated and is effective under applicable law. No
consent, approval, authorization or order of any government or governmental
agency, which has jurisdiction over any of the parties to the Shareholders'
Agreement or over their respective properties, is required for the execution
and delivery of the Shareholders' Agreement and the consummation of the
transactions contemplated thereby, except for such consents, approvals,
authorizations or orders as have been duly and timely received or obtained. The
performance of the Shareholders' Agreement and the consummation of the
transactions therein contemplated will not result in a breach or violation of
any of the terms or provisions of, or constitute a default under, (i) any bond,
debenture, note or other evidence of indebtedness, indenture, mortgage, deed of
trust or loan agreement, or under any material lease, contract, joint venture
or other agreement, in each case to the best of the Company's knowledge, to
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which any of the parties to the Shareholders' Agreement was a party or
by which any of such parties or their respective properties were bound, (ii)
the charter or by-laws of any of the parties to the Shareholders' Agreement, or
(iii) any law or, to the best of the Company's knowledge, order of any court
which had jurisdiction over any of the parties to the Shareholders' Agreement
or over their respective property.
(g) All the outstanding shares of capital stock of the Company and the
Subsidiaries (including the Shares to be sold by the Selling Shareholder) have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be issued
and sold by the Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as provided by this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights.
(h) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in the
Prospectus.
(i) Neither the Company nor either of the Subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or
any other evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company and the
Subsidiaries, taken as a whole, to which the Company or either of the
Subsidiaries is a party or by which it or either of the Subsidiaries or their
respective property is bound.
(j) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the provisions of
the Shareholders' Agreement and the consummation of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body, except as such may be required under the
securities or Blue Sky laws of the various states, and will not conflict with
or constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its Subsidiaries or any
agreement, indenture or other instrument to which it or any of its Subsidiaries
is a party or by which it or any of the Subsidiaries or their respective
property is bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company or the
Subsidiaries, or their respective property.
(k) Except as otherwise set forth in the Prospectus, there are no material
legal or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or to which any of their respective property is the
subject, and, to the Company's knowledge, no such proceedings are threatened or
contemplated. No contract or document of a character required to be described
in the Registration Statement
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or the Prospectus or to be filed as an exhibit to the Registration Statement
is not so described or filed as required.
(l) Neither the Company nor either of the Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection
of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), nor any foreign,
federal or state law relating to discrimination in the hiring, promotion or pay
of employees nor any applicable federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which in each case might result in any
Material Adverse Effect.
(m) The Company and each of the Subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("PERMITS"), including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease and operate its respective properties and
to conduct its business in the manner described in the Prospectus, except those
Permits the absence of which would not, singly or in the aggregate, give rise
to a Material Adverse Effect; the Company and each of its Subsidiaries has
fulfilled and performed all of its material obligations with respect to such
Permits and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit; and, except
as described in the Prospectus, such Permits contain no restrictions that are
materially burdensome to the Company or any of its Subsidiaries.
(n) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of
operation of the Company and its Subsidiaries, taken as a whole, the Company
and each of the Subsidiaries has good and marketable title, free and clear of
all liens, claims, encumbrances and restrictions except liens for taxes not yet
due and payable, to all property and assets described in the Registration
Statement as being owned by it. All leases to which the Company or either of
the Subsidiaries is a party are valid and binding and no default has occurred
or is continuing thereunder, which might result in any Material Adverse Effect,
and the Company and the Subsidiaries enjoy peaceful and undisturbed possession
under all such leases to which any of them is a party as lessee with such
exceptions as do not materially interfere with the use made by the Company or
such Subsidiary.
(o) The Company and each of the Subsidiaries maintain reasonably adequate
errors and omissions and other liability insurance.
(p) Xxxxxx Xxxxxxxx LLP are independent public accountants with respect to
the Company as required by the Act.
(q) The financial statements, together with related schedules and notes
forming part of the Registration Statement and the Prospectus (and any
amendment or
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supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company and the
Subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(r) Except as disclosed in or specifically contemplated by the Prospectus,
the Company and the Subsidiaries, taken as a whole, have sufficient
intellectual property rights (including, without limitation, trademarks, trade
names, patent rights, copyrights and licenses), approvals and governmental
authorizations to conduct their businesses as now conducted; the expiration of
any intellectual property rights (including, without limitation, trademarks,
trade names, patent rights, copyrights and licenses), approvals or governmental
authorizations would not have a Material Adverse Effect; and the Company has no
knowledge of any infringement by it or the Subsidiaries of intellectual
property rights (including, without limitation, trademarks, trade names, patent
rights, copyrights and licenses), trade secret or other similar rights of
others, and there is no claim being made against the Company or any Subsidiary
regarding trademark, trade name, patent, copyright, license, trade secret or
other infringement of intellectual property rights which could have a Material
Adverse Effect.
(s) The Company is not an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
(t) Except as disclosed in the Registration Statement, no holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company.
(u) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(v) The Company's outstanding Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is listed on the Nasdaq National Market.
(w) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company except as
otherwise disclosed in the Registration Statement.
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(x) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed therein by
Item 404 of Regulation S-K of the Commission.
(y) Except as disclosed in the Prospectus, the Company has not paid any
dividends to any holders of the capital stock of the Company.
(z) There is (i) no significant unfair labor practice complaint pending
against the Company or any of its Subsidiaries or, to the knowledge of the
Company, threatened against any of them, before the National Labor Relations
Board or any state or local labor relations board, and no significant grievance
or significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of its
Subsidiaries or, to the knowledge of the Company, threatened against any of
them, and (ii) no significant strike, labor dispute, slowdown or stoppage
pending against the Company or any of its Subsidiaries or, to the knowledge of
the Company, threatened against it or any of its Subsidiaries except for such
actions specified in clause (i) above, which, singly or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
(aa) All material tax returns required to be filed by the Company and each
of its Subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its Subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
7. Representations and Warranties of the Selling Shareholders. Each
Selling Shareholder severally represents, warrants and, with respect to
paragraph 7(i) below, covenants and agrees, in each case solely with respect to
him, her or itself and his, her or its Shares, to and with each Underwriter
that:
(a) Such Selling Shareholder is the lawful owner of the Shares to be sold
by such Selling Shareholder pursuant to this Agreement and has, and on the
Closing Date (and Option Closing Date, if applicable) will have, good and clear
title to such Shares, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
(b) Upon delivery of and payment for the Shares to be sold by such Selling
Shareholder pursuant to this Agreement, good and clear title to such Shares
will pass to the Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
(c) Such Selling Shareholder has, and on the Closing Date will have, full
legal right, power and authority to enter into this Agreement and the Custody
Agreement (the "CUSTODY AGREEMENT") between such Selling Shareholder First
Chicago
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Trust Company of New York, as Custodian (the "CUSTODIAN") and to sell,
assign, transfer and deliver such Shares in the manner provided herein and
therein, and this Agreement and the Custody Agreement have been duly
authorized, executed and delivered by such Selling Shareholder and each of this
Agreement and the Custody Agreement is a valid and binding agreement of such
Selling Shareholder enforceable in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by applicable law.
(d) The power of attorney signed by such Selling Shareholder appointing
the Attorneys, or any one of them, as his, her or its attorneys-in-fact to the
extent set forth therein with regard to the transactions contemplated hereby
and by the Registration Statement and the Custody Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling Shareholder
and is a valid and binding instrument of such Selling Shareholder enforceable
in accordance with its terms, and, pursuant to such power of attorney, such
Selling Shareholder has authorized, as appropriate, the Attorneys, or any one
of them, to execute and deliver on its behalf this Agreement and any other
document necessary or desirable in connection with transactions contemplated
hereby and to deliver the Shares to be sold by such Selling Shareholder
pursuant to this Agreement.
(e) Such Selling Shareholder has not taken, and will not take, directly or
indirectly, any action designed to, or which might reasonably be expected to,
cause or result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares pursuant to the
distribution contemplated by this Agreement, and other than as permitted by the
Act, such Selling Shareholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Shares.
(f) The execution, delivery and performance of this Agreement by such
Selling Shareholder, compliance by such Selling Shareholder with all the
provisions hereof and the consummation of the transactions contemplated
hereby will not require any consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental body
(except as such may be required under the Act, state securities laws or Blue
Sky laws), will not require any consent, approval, authorization or other order
of any board of directors, shareholders or other governing body of such Selling
Shareholder (other than the consent of the board of directors of such Selling
Shareholder, if applicable, which has previously been obtained), and will not
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, organizational documents of such Selling Shareholder or any
agreement, indenture or other instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder or property of such Selling
Shareholder is bound, or violate or conflict with any laws, administrative
regulation or ruling or court decree applicable to such Selling Shareholder or
property of such Selling Shareholder.
(g) Certificates in negotiable form for the Shares to be sold by such
Selling Shareholder have been placed in custody under the Custody Agreement
with
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Custodian for delivery under this Agreement. Such Selling Shareholder
specifically agrees that the Shares represented by the certificates so held in
custody for such Selling Shareholder are subject to the interests of the
several Underwriters and the Company, that the arrangements made by such
Selling Shareholder for such custody, including the Power of Attorney
referenced in such Custody Agreement, are to that extent irrevocable, and that
the obligations of such Selling Shareholder shall not be terminated by any act
of such Selling Shareholder or by operation of law, whether by the death or
incapacity of such Selling Shareholder (or, in the case of a Selling
Shareholder that is not an individual, the dissolution or liquidation of such
Selling Shareholder) or the occurrence of any other event; if any such death,
incapacity, dissolution, liquidation or such other event should occur before
the delivery of such Shares hereunder, certificates for such Shares shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such death, incapacity, dissolution, liquidation or other event
had not occurred, regardless of whether the Custodian shall have received
notice of such death, incapacity, dissolution, liquidation or other event.
(h) Such parts of the Registration Statement under the captions
"Management," "Principal and Selling Shareholders" and "Certain Transactions"
which specifically relate to such Selling Shareholder do not, and will not on
the Closing Date (and any Option Closing Date, if applicable), 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, in light of
circumstances under which they were made, not misleading.
(i) At any time during the period described in paragraph 5(e) hereof, if
there is any change in the information referred to in paragraph 7(h) above with
respect to such Selling Shareholder, such Selling Shareholder will immediately
notify you of such change.
8. Indemnification.
(a) The Company and each Selling Shareholder agree, jointly and severally,
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments ("LOSSES"), joint or several, to which such
indemnified parties or any of them may become subject under the Act, the
Exchange Act, state securities laws, common law or otherwise, and the Company
and the Selling Shareholders jointly and severally agree to reimburse each such
Underwriter and controlling person for any legal or other expenses (including,
except as otherwise hereinafter provided, reasonable fees and disbursements of
counsel) incurred by the respective indemnified parties in connection with
defending against any such Losses or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in or
incorporated by reference into the Registration Statement (including the
Prospectus as part thereof) or any post-effective amendment thereto, or the
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omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained or incorporated by reference into any Preliminary Prospectus or the
Prospectus (as amended or supplemented if the Company shall have filed with the
Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that (i) the indemnity agreements of
the Company and the Selling Shareholders contained in this paragraph (a) 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 and
liabilities and judgments purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written confirmation of
the sale of the Shares to such person, and if the Prospectus (as so amended and
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or judgment; provided, however, that the aggregate liability
of any Selling Stockholder pursuant to the provisions of this paragraph (a) and
paragraph (d) below shall be limited to an amount equal to the product of the
Purchase Price times the number of Shares sold by such Selling Shareholder
hereunder.
(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company and the
Selling Shareholders, such Underwriter shall promptly notify the Company and
the Selling Shareholder as appropriate, in writing, and the Company and the
Selling Shareholders shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all reasonable fees and expenses of such counsel. Any Underwriter or
any such controlling person shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless (i) the employment of such counsel has been
specifically authorized in writing by the Company, (ii) the Company and the
Selling Shareholders shall have failed to assume the defense and employ counsel
or (iii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Company or the
Selling Shareholder, as the case may be, and such Underwriter or such
controlling person shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the Company or the Selling Shareholders, as
the case may be (in which case the Company and the Selling Shareholders shall
not have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person, it being understood, however, that the
Company and the Selling Shareholders shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or
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circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all such
Underwriters and controlling persons, which firm shall be designated in writing
by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and that all such
reasonable fees and expenses shall be reimbursed as they are incurred). A
Seller shall not be liable for any settlement of any such action effected
without the written consent of such Seller but if settled with the written
consent of such Seller, such Seller agrees to indemnify and hold harmless any
Underwriter and any such controlling person from and against any Losses by
reason of such settlement. Notwithstanding the immediately preceding sentence,
if in any case where the fees and expenses of counsel are at the expense of the
indemnifying party and an indemnified party shall have requested the
indemnifying party to reimburse the indemnified party for such fees and
expenses of counsel as incurred, such indemnifying party agrees that it shall
be liable for any settlement of any action effected without its written consent
if (i) such settlement is entered into more than thirty business days after the
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Shareholder and each person, if any, controlling each Selling
Shareholder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Sellers to
each Underwriter but only with reference to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through
you expressly for use in the Registration Statement, the Prospectus or any
Preliminary Prospectus. In case any action shall be brought against the
Company, any of its directors, any such officer or any person controlling the
Company, any Selling Shareholder or any person controlling such Selling
Shareholder based on the Registration Statement, the Prospectus or any
Preliminary Prospectus and in respect of which indemnity may be sought against
any Underwriter, the Underwriter shall have the rights and duties given to the
Sellers (except that if any Seller shall have assumed the defense thereof, such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of such Underwriter), and the Company, its
directors, any such officers and any person controlling the Company and such
Selling Shareholder and any person controlling the Selling Shareholder shall
have the rights and duties given to the Underwriter, in each case by Section
8(b) hereof.
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(d) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party in respect of any Losses referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Sellers on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Sellers and the Underwriters in
connection with the statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers and the Underwriters shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Sellers, and the total underwriting discounts and
commissions received by the Underwriters, bear to the total price to the public
of the Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Sellers and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company, the Selling Shareholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution 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 which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the Losses referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, 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, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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 to contribute pursuant to this
Section 8(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
(f) Each Seller hereby designates ____________________, as its authorized
agent, upon which process may be served in any action, suit or proceeding which
may be instituted in any state or federal court in the State of New York by any
Underwriter or person controlling an Underwriter asserting a claim for
indemnification or
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contribution under or pursuant to this Section 8, and each Seller will
accept the jurisdiction of such court in such action, and waives, to the
fullest extent permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process shall be sent or
given to such Seller, at the address for notices specified in Section 12
hereof.
9. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not later than
5:00 P.M. (and in the case of a Registration Statement filed under Rule 462(b)
of the Act, not later than 10:00 p.m.), New York City time, on the date of this
Agreement or at such later date and time as you may approve in writing, and at
the Closing Date no Stop Order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending before or contemplated by the Commission.
(c)(i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary course of
business, of the Company, (ii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus, there shall not have
been any change, or any development involving a prospective material adverse
change, in the capital stock or in the long-term debt of the Company from that
set forth in the Registration Statement and Prospectus, (iii) the Company and
its Subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its Subsidiaries, taken as a whole, other
than those reflected in the Registration Statement and the Prospectus, and (iv)
on the Closing Date you shall have received a certificate dated the Closing
Date, signed by Xxxxxxxx Xxxxxxxxx and Xxxxxxx X. Xxxxxx, in their capacities
as the Chief Executive Officer and Chief Financial Officer of the Company,
respectively, confirming the matters set forth in paragraphs (a), (b), and (c)
of this Section 9.
(d) All the representations and warranties of the Selling Shareholders
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date, and you
shall have received a certificate to such effect, dated the Closing Date, from
each Selling Shareholder.
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(e) You shall have received on the Closing Date an opinion (reasonably
satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Butzel Long, counsel for the Company, substantially to the effect that:
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority required to carry on
its business as it is currently being conducted and to own, lease and operate
its properties;
(ii) the Company is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect;
(iii) all the outstanding shares of Common Stock (including the Shares to
be sold by the Selling Shareholders) have been duly authorized and validly
issued and are fully paid, non-assessable and not subject to any preemptive or
similar rights;
(iv) the Shares to be issued and sold by the Company hereunder have been
duly authorized, and when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will have been validly issued
and will be fully paid and non-assessable, and the issuance of such Shares is
not subject to any preemptive or similar rights;
(v) this Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company and each Selling
Shareholder, enforceable in accordance with its terms (except as enforceability
(i) may be limited by laws relating to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally, and (ii) may be limited by general principles of equity);
(vi) the authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in the
Prospectus;
(vii) the Registration Statement has become effective under the Act, no
Stop Order suspending its effectiveness has been issued and no proceedings for
that purpose are, to the knowledge of such counsel, pending before or
contemplated by the Commission;
(viii) the statements under "Risk Factors--Shares Eligible for Future
Sale," "Description of Capital Stock" and "Shares Eligible for Future Sale" in
the Prospectus and Items 14 and 15 of Part II of the Registration Statement,
insofar as such statements constitute a summary of legal matters documents or
proceedings referred to
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therein, fairly present the information called for with respect to such legal
matters, documents and proceedings;
(ix) the Company is not in violation of its charter or by-laws and, to
such counsel's knowledge after due inquiry, the Company is not in default in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of the business of
the Company and its Subsidiaries, taken as a whole, to which the Company is a
party or by which it or its property is bound;
(x) the execution, delivery and performance of this Agreement by the
Company and each Selling Shareholder, compliance by the Company and each
Selling Shareholder with all the provisions hereof and the consummation of the
transactions contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the Act
or other securities or Blue Sky laws) and will not conflict with or constitute
a breach of any of the terms or provisions of, or a default under, the charter
or by-laws of the Company or the organizational documents of any Selling
Shareholder that is not an individual or, to the best of such counsel's
knowledge, any material agreement, indenture or other instrument to which the
Company or any Selling Shareholder is a party or by which the Company or any
Selling Shareholder or their respective properties are bound, or violate or
conflict with any laws, administrative regulations or, to the best of such
counsel's knowledge, rulings or court decrees applicable to the Company or any
Selling Shareholder or their respective properties;
(xi) such counsel does not know of any legal or governmental proceeding
pending or threatened to which the Company is a party or to which any of its
property is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any contract or
other document which is required to be described in the Registration Statement
or the Prospectus or is required to be filed as an exhibit to the Registration
Statement which is not described or filed as required;
(xii) to such counsel's knowledge, the Company has not violated any
Environmental Laws, nor any federal or state law relating to discrimination in
the hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which in each
case might result in any Material Adverse Effect;
(xiii) to such counsel's knowledge, the Company has such material permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("material permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate its
properties and to conduct its business in the manner described in the
Prospectus; to such counsel's knowledge, the Company has fulfilled and
performed all of its material obligations with
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respect to such material permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the holder
of any such material permit, subject in each case to such qualification as may
be set forth in the Prospectus; and, except as described in the Prospectus,
such material permits contain no restrictions that are materially burdensome to
the Company;
(xiv) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended;
(xv) to such counsel's knowledge, no holder of any security of the
Company has any right to require registration of shares of Common Stock or any
other security of the Company, except as disclosed and to the extent and on
the terms described in the Prospectus;
(xvi) to such counsel's knowledge, except as otherwise set forth in the
Registration Statement or such as are not material to the business, prospects,
financial condition or results of operation of the Company and its
Subsidiaries, taken as a whole, the Company has good and marketable title, free
and clear of all liens, claims, encumbrances and restrictions except liens for
taxes not yet due and payable, to all material property and assets described
in the Registration Statement as being owned by it;
(xvii) to such counsel's knowledge, all leases to which the Company is a
party are valid and binding and no default has occurred or is continuing
thereunder, which might result in any Material Adverse Effect, and the Company
enjoys peaceful and undisturbed possession under all such leases to which it is
a party as lessee with such exceptions as do not materially interfere with the
use made by the Company; and
(xviii) The Registration Statement and the Prospectus comply as to form in
all material respects as to the requirements of the Act, except that such
counsel does not need to express any opinion as to the financial statements and
related notes, schedules and other financial, statistical and accounting data
included in or excluded from the Registration Statement or in the Prospectus
and except that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus.
(xix) The Custody Agreement has been duly authorized, executed and
delivered by each Selling Shareholder and is a valid and binding agreement of
such Selling Shareholder enforceable in accordance with its terms; except (A)
as rights to indemnity and contribution may be limited by applicable laws and
considerations of public policy, (B) as may be limited by the effects of
applicable bankruptcy, insolvency, reorganization, receivership, moratorium and
other similar laws affecting rights and remedies of creditors generally, and
(C) as may be limited by the effects of general
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principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing), whether applied by a
court of law or equity.
(xx) Each Selling Shareholder has full legal right, power and authority,
and any approval required by law (other than any approval imposed by the
applicable state securities and Blue Sky laws) to sell, assign, transfer and
deliver the Shares to be sold by such Selling Shareholder in the manner
provided in this Agreement and the Custody Agreement.
(xxi) Delivery of the Shares to be sold by each Selling Shareholder to
the Underwriters against payment therefor as provided in this Agreement will
pass title to such Shares free and clear of any adverse claim, assuming that
each Underwriter purchases the Shares in good faith without notice of any
adverse claim.
(xxii) The Power of Attorney signed by each Selling Shareholder appointing
the Attorneys, or either of them, as his attorneys-in-fact to the extent set
forth therein with regard to the transactions contemplated hereby and by the
Registration Statement has been duly authorized, executed and delivered by or
on behalf of such Selling Shareholder and is a valid and binding instrument of
such Selling Shareholder enforceable in accordance with its terms,
except (A) as rights to indemnity and contribution may be limited by applicable
laws and considerations of public policy, (B) as may be limited by the effects
of applicable bankruptcy, insolvency, reorganization, receivership, moratorium
and other similar laws affecting rights and remedies of creditors generally,
and (C) as may be limited by the effects of general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing), whether applied by a court of law or equity, and
pursuant to such Power of Attorney, each of the Selling Shareholders has
authorized the Attorneys, or either of them, to execute and deliver on their
behalf this Agreement and any other document necessary or desirable in
connection with transactions contemplated hereby and to deliver the Shares to
be sold by such Selling Shareholders pursuant to this Agreement.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that although such counsel has not
independently verified the accuracy or completeness of the information in the
Registration Statement and Prospectus, they have participated in conferences
with representatives of the Company and its independent accountants and
investment bankers and their counsel at which the contents of the Registration
Statement and the Prospectus were discussed at length and nothing has come to
their attention that causes them to believe that (except for financial
statements and schedules, as to which no belief need be expressed) the
Registration Statement and the Prospectus included therein at the time the
Registration Statement became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, as amended or supplemented, if applicable (except for financial
statements and schedules and other financial or statistical data, as aforesaid)
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the
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statements therein, in the light of the circumstances under which they were
made, not misleading.
The opinion of Butzel Long described in paragraph (e) above shall be
rendered to you at the request of the Company, and shall so state therein.
(f) You shall have received on the Closing Date an opinion (reasonably
satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Xxxxxxxxx & Co., counsel for CBSI India to the effect that:
(i) CBSI India has been duly organized and is validly existing
as a private company limited by shares in good standing under the laws of India;
(ii) CBSI India has 2,000,000 shares of stock authorized, 552,756
of which are issued and outstanding; all necessary and proper corporate
proceedings have been taken in order to authorize validly such authorized
stock; all outstanding shares of such stock have been duly and validly issued,
are fully paid and non-assessable, have been issued in compliance with Indian
law, were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase any securities;
(iii) All of the outstanding shares of capital stock of, or other
ownership interests in, CBSI India have been duly and validly authorized and
issued and are fully paid and non-assessable, and are owned by CBSI Mauritius,
except one share held by Xx. Xxxxxxxx Xxxxxxxxx, one of the directors of CBSI
India, as nominee shareholder of CBSI Mauritius, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature; and
(iv) The consummation of the transactions contemplated hereby
will not result in a breach of, or constitute a default under, any material
indenture, mortgage, deed of trust, trust (constructive or other), loan
agreement, lease, franchise, license or other material agreement or instrument
to which CBSI India is a party or by which any of its properties may be bound,
or violate any statute, judgment, decree, order, rule or regulation known to
such counsel of any court or governmental body having jurisdiction over CBSI
India or any of its properties and to such counsel's knowledge, no approval,
authorization, order or consent of any court, regulatory body, administrative
agency or other governmental body is required for the execution and delivery of
this Agreement or the consummation by CBSI India of the transactions
contemplated herein, except as have been made or obtained.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the officers of CBSI India and of governmental officials, in
which case their opinion shall state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates shall be attached to the opinion.
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(g) [ you shall have received on the Closing Date an opinion (reasonably
satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Maigrot & Xxxxxx, counsel for JF Electra (Mauritius) Limited ("JF ELECTRA"),
to the effect that:
(i) JF Electra has been duly incorporated, is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority required to
carry on its business as it is currently being conducted;
(ii) This Agreement has been duly authorized, executed and
delivered by JF Electra and is a valid and binding agreement of JF
Electra enforceable in accordance with its terms (except as
enforceability (i) may be limited by laws relating to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally, (ii) may be limited by
general principles of equity and (iii) of provisions relating to
indemnity and contribution hereunder may be limited by principles of
public policy);
(iii) To such counsel's knowledge, the execution, delivery and
performance of this Agreement by JF Electra, compliance by JF Electra
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may be
required under the Act or other securities or Blue Sky laws) and will
not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter, by-laws or other
organizational documents of JF Electra or any material agreement,
indenture or other instrument known to such counsel to which JF Electra
is a party or by which JF Electra or its properties are bound, or
violate or conflict with any laws, administrative regulations or
rulings or court decrees applicable to JF Electra or its properties;
(iv) The Custody Agreement has been duly authorized, executed and
delivered by JF Electra and is a valid and binding agreement of such
entity, enforceable in accordance with its terms, except for
limitations on enforceability set forth in subpart (ii) above;
(v) JF Electra has full legal right, power and authority, and any
approval required by law (other than any approval imposed by the
applicable state securities and Blue Sky laws) to sell, assign,
transfer and deliver the Shares to be sold by it in the manner provided
in this Agreement and the Custody Agreement;
(vi) JF Electra has good and clear title to the certificates for
the Shares to be sold by it and upon delivery thereof, pursuant hereto
and
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payment therefor, good and clear title will pass to the
Underwriters, severally, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever; and
(vii) The power of attorney signed by JF Electra appointing the
Attorneys, or any of them as its attorney-in-fact to the extent set
forth therein with regard to the transactions contemplated hereby and
by the Registration Statement has been duly authorized, executed and
delivered by or on behalf of JF Electra and is a valid and binding
instruments of JF Electra, enforceable in accordance with its terms
(except for limitations on enforceability set forth in subpart (ii)
above), and pursuant to such power of attorney, JF Electra has
authorized the Attorneys, or any of them as its attorney-in-fact to
execute and deliver on its behalf this Agreement and any other document
necessary or desirable in connection with transactions contemplated
hereby and to deliver the Shares to be sold by it pursuant to this
Agreement.
(h) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxxxxx & Xxxxxx, Ltd., counsel for the Underwriters, as to
the matters set forth therein. In making the statements analogous to those
following section 9(e)(xviii) in the opinion for counsel for the issuer, above,
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification except as
specified.
(i) You shall have received from Xxxxxx Xxxxxxxx LLP a letter or letters,
in form and substance reasonably satisfactory to you and your counsel addressed
to the Underwriters and dated the Closing Date and any later date on which
Option Shares are purchased, confirming that they are independent public
accountants with respect to the Company within the meaning of the Act and based
upon the procedures described in their letter delivered to you concurrently
with the execution of this Agreement (herein called the "ORIGINAL LETTER"), but
carried out to a date not more than five business days prior to the Closing
Date or such later date on which the Option Shares are purchased, as the case
may be, (iii) confirming, to the extent true, that the statements and
conclusions set forth in the Original Letter are accurate as of the Closing
Date or such later date, as the case may be, and (iv) setting forth any
revisions and additions to the statements and conclusions set forth in the
Original Letter, or their knowledge thereof, after the date of the Original
Letter or to reflect the availability of more recent financial statements, date
or information. If such Original Letter discloses any material adverse
decreases or increases, as the case may be, in the items specified therein
which are not set forth in or contemplated by the Prospectus, or if the
subsequent letter or letters to be delivered at the Closing discloses any
material adverse change in the statements and conclusions set forth in the
Original Letter, which in either case, in the reasonable judgment of the
Underwriters, makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated by the Prospectus, this Agreement and all obligations of the
Underwriters hereunder may be terminated by
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the Underwriters by notifying the Company in the matter and with the
effect provided below in Section 12 of this Agreement.
(j) The Company and the Selling Shareholders shall not have failed at or
prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company
at or prior to the Closing Date.
(k) You shall have received on the Closing Date, a certificate of JF
Electra to the effect that JF Electra is not a US Person (as defined under
applicable US federal tax legislation), which certificate may be in the form of
a properly completed and executed United States Treasury Department Form W-8
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(l) You shall have received on the Closing Date a properly completed and
executed United States Treasury Department Form W-8 from the Selling
Shareholders.
(m) You shall have received on the Closing Date an opinion (reasonably
satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Xxxxx Xxxxxx, Q.C., counsel for CBSI Mauritius to the effect that:
(i) CBSI Mauritius has been duly organized and is validly existing
as a private company limited by shares holding an offshore certificate in good
standing under the laws of Mauritius;
(ii) CBSI Mauritius has 100,000 shares of common stock authorized,
49,025 of which are issued and outstanding; all necessary and proper corporate
proceedings have been taken in order to authorize validly such authorized
stock; all outstanding shares of common stock have been duly and validly
issued, are fully paid and non-assessable, have been issued in compliance with
Mauritius law, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase any securities;
(iii) All of the outstanding shares of capital stock of, or other
ownership interests in, CBSI Mauritius have been duly and validly authorized
and issued and are fully paid and non-assessable, and are owned by the Company,
directly or indirectly, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature; and
(iv) The consummation of the transactions contemplated hereby will not
result in a breach of, or constitute a default under, any indenture, mortgage,
deed of trust, trust (constructive or other), loan agreement, lease, franchise,
license or other material agreement or instrument to which CBSI Mauritius is a
party or by which any of its properties may be bound, or violate any statute,
judgment, decree, order, rule or regulation known to such counsel of any court
or governmental body having jurisdiction
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over the Subsidiaries or any of their properties and to such counsel's
knowledge, no approval, authorization, order or consent of any court,
regulatory body, administrative agency or other governmental body is required
for conversion of the JF Electra shares, the execution and delivery of this
Agreement and the consummation by CBSI Mauritius of the transactions
contemplated herein, except as have been made or obtained.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the officers of CBSI Mauritius and of governmental officials,
in which case their opinion is to state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates are to be attached to the opinion.
The several obligations of the Underwriters to purchase any Option Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of such Option
Shares and other matters related to the issuance of such Option Shares.
10. Termination.
(a) This Agreement may be terminated at any time prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and Subsidiaries, taken as a whole, or
the earnings, affairs, or business prospects of the Company and its
Subsidiaries, taken as a whole, whether or not arising in the ordinary course
of business, which would, in your judgment, make it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and would, in your judgment, make it impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market or
limitation on prices for securities on any such exchange or Nasdaq National
Market, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business or operations of the
Company or any Subsidiary, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action
by any federal, state or local government or agency in respect of its monetary
or fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
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(b) If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Option Shares, as the case may be, which it or they have agreed
to purchase hereunder on such date and the aggregate number of Firm
Shares or Option Shares, as the case may be, which such defaulting Underwriter
or Underwriters, as the case may be, agreed but failed or refused to purchase
is not more than one-tenth of the total number of Shares to be purchased on
such date by all Underwriters, each non-defaulting Underwriter shall be
obligated severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I bears to the total number of Firm Shares
which all the non-defaulting Underwriters, as the case may be, have agreed to
purchase, or in such other proportion as you may specify, to purchase the Firm
Shares or Option Shares, as the case may be, which such defaulting Underwriter
or Underwriters, as the case may be, agreed but failed or refused to purchase
on such date; provided, however, that in no event shall the number of Firm
Shares or Option Shares, as the case may be, which any Underwriter has agreed
to purchase pursuant to Section 2 hereof be increased pursuant to this Section
10 by an amount in excess of one-ninth of such number of Firm Shares or Option
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Option Shares, as the case may be, and the aggregate number of Firm Shares or
Option Shares, as the case may be, with respect to which such default occurs is
more than one-tenth of the aggregate number of Shares to be purchased on such
date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the applicable Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
11. Agreements of the Selling Shareholders. Each Selling Shareholder
agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes, if any, with
respect to the Shares to be sold by such Selling Shareholder; and
(b) To take all reasonable actions in cooperation with the Company
and the Underwriters to cause the Registration Statement to become effective
at the earliest possible time, to do and perform all things to be done and
performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement.
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12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to Complete
Business Solutions, Inc., 00000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx
Xxxxx, XX 00000, (b) if to any Selling Shareholder, to any of the Attorneys,
and (c) if to any Underwriter or to you, to you c/x Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Shareholder, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Sellers, the officers or directors of
the Company or any controlling person of the Sellers, (ii) acceptance of the
Shares and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Sellers, the Underwriters, any
controlling persons referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "SUCCESSORS AND ASSIGNS" shall include controlling persons and
successors in interest by operation of law, or by virtue of sale of all the
assets of an entity, but shall not include a purchaser of any of the Shares
from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without reference to the rules governing the
conflicts of laws.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
* * * * *
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholders and the several Underwriters.
Very truly yours,
COMPLETE BUSINESS SOLUTIONS, INC.
By:
-------------------------------------------
Title: President and Chief Executive
Officer
THE SELLING SHAREHOLDERS NAMED IN SCHEDULE II
HERETO
By:
-------------------------------------------
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
UBS SECURITIES LLC
XXXX XXXXX XXXX XXXXXX, INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
----------------------------
Title:
----------------------------
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SCHEDULE I
UNDERWRITERS
NUMBER OF FIRM SHARES
NAME TO BE PURCHASED
---- ---------------
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES
CORPORATION............................
UBS SECURITIES LLC.....................
XXXX XXXXX XXXX XXXXXX, INC............
---------
TOTAL................................. 2,250,000
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SCHEDULE II
SELLING SHAREHOLDERS
NUMBER OF FIRM SHARES
NAME BEING SOLD
---- ----------
Xxxxxxxx X. Xxxxxxxxx 750,000
X.X. Electra (Mauritus) Limited 165,000
Xxxxxxx X. Xxxxxx 35,000
Xxxxxxx X. Land 20,000
Xxxxxx X. Xxxxxx 30,000
NUMBER OF OPTION SHARES
NAME BEING SOLD
---- ----------
Xxxxxxxx X. Xxxxxxxxx 112,500
X.X. Electra (Mauritus) Limited 24,750
Xxxxxxx X. Xxxxxx 5,250
Xxxxxxx X. Land 3,000
Xxxxxx X. Xxxxxx 4,500
