DRAFT 10/04/96
1,800,000 Shares
SBS TECHNOLOGIES, INC.
COMMON STOCK, NO PAR VALUE
UNDERWRITING AGREEMENT
, 1996
XXXXX & COMPANY
SOUNDVIEW FINANCIAL GROUP, INC.
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. SBS Technologies, Inc., a New Mexico corporation
(the "Company") and a shareholder of the Company named in Schedule B hereto
(the "Firm Selling Shareholder" propose to sell, pursuant to the terms of
this Agreement, to the several underwriters named in Schedule A hereto (the
"Underwriters," or, each, an "Underwriter"), 1,580,000 and 220,000 shares of
Common Stock, no par value (the "Common Stock") of the Company, respectively.
The aggregate of 1,800,000 shares so proposed to be sold is hereinafter
referred to as the "Firm Stock." The Company, the Firm Selling Shareholder,
certain shareholders of the Company designated as principal selling
shareholders in Schedule B hereto (the "Principal Selling Shareholders") and
other shareholders of the Company named in Schedule B hereto (the "Other
Selling Shareholders," and together with the Firm Selling Shareholder and the
Principal Selling Shareholders, the "Selling Shareholders") also propose to
sell to the Underwriters, upon the terms and conditions set forth in Section
3 hereof, up to an additional 270,000 shares of Common Stock (the "Optional
Stock"). The Firm Stock and the Optional Stock are hereinafter collectively
referred to as the "Stock." Xxxxx & Company ("Cowen") and SoundView
Financial Group, Inc. are acting as representatives of the several
Underwriters and in such capacity are hereinafter referred to as the
"Representatives."
1.
2. (a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
PRINCIPAL SELLING SHAREHOLDERS. The Company and the Principal Selling
Shareholders represent and warrant to, and agree with, the several underwriters
that:
(a) (i) A registration statement on Form S-2 (File No. 333-_______) in the
form in which it became or becomes effective and also in such form as it
may be when any post-effective amendment thereto shall become effective
with respect to the Stock, including any pre-effective prospectuses
included as part of the registration statement as originally filed or as
part of any amendment or supplement thereto, or filed pursuant to Rule 424
under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, copies of which,
including all documents incorporated by reference therein, have heretofore
been delivered to you, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act and has been filed
with the Commission under the Securities Act; one or more amendments to
such registration statement, including in each case an amended
pre-effective prospectus, copies of which amendments, including all
documents incorporated by reference therein, have heretofore been delivered
to you, have been so prepared and filed. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared effective before
the offering of the Stock may commence, the term "Registration Statement"
as used in this Agreement means the registration statement as amended by
said post-effective amendment. The term "Registration Statement" as used
in this Agreement shall also include any registration statement relating to
the Stock that is filed and declared effective pursuant to Rule 462(b)
under the Securities Act. The term "Prospectus" as used in this Agreement
means the prospectus in the form included in the Registration Statement,
or, (A) if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act and such
information is included in a prospectus filed with the Commission pursuant
to Rule 424(b) under the Securities Act, the term "Prospectus" as used in
this Agreement means the prospectus in the form included in the
Registration Statement as supplemented by the addition of the Rule 430A
information contained in the prospectus filed with the Commission pursuant
to Rule 424(b) and (B) if prospectuses that meet the requirements of
Section 10(a) of the Securities Act are delivered pursuant to Rule 434
under the Securities Act, then (i) the term "Prospectus" as used in this
Agreement means the "prospectus subject to completion" (as such term is
defined in Rule 434(g) under the Securities Act) as supplemented by (a) the
addition of Rule 430A information or other information contained in the
form of prospectus delivered pursuant to Rule 434(b)(2) under the
Securities Act or (b) the information contained in the term sheets
described in Rule 434(b)(3) under the Securities Act, and (ii) the date of
such prospectuses shall be deemed to be the date of the term sheets. The
term "Pre-effective Prospectus" as used in this Agreement means the
prospectus subject to completion in the form included in the Registration
Statement at the time of the initial filing of the Registration Statement
with the Commission, and as such prospectus shall have been
2.
amended from time to time prior to the date of the Prospectus. Any
reference herein to any Pre-effective Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Form S-2 under the Securities Act, as of the date of
such Pre-effective Prospectus or Prospectus, as the case may be, and any
reference to any amendment or supplement to any Pre-effective Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and so incorporated by reference.
(b) (ii) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Pre-effective Prospectus, and, at
its date of issue, each Pre-effective Prospectus conformed in all material
respects with the requirements of the Securities Act and did not include
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
and, when the Registration Statement becomes effective and at all times
subsequent thereto up to and including each of the Closing Dates (as
hereinafter defined), the Registration Statement and the Prospectus and any
amendments or supplements thereto contained and will contain all material
statements and information required to be included therein by the
Securities Act and conformed and will conform in all material respects to
the requirements of the Securities Act and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto,
included or will include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing
representations, warranties and agreements shall not apply to information
contained in or omitted from any Pre-effective Prospectus or the
Registration Statement or the Prospectus or any such amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any Underwriter,
directly or through you, or by any Selling Shareholder, specifically for
use in the preparation thereof; there is no franchise, lease, contract,
agreement or document required to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed therein as required; and all
descriptions of any such franchises, leases, contracts, agreements or
documents contained in the Registration Statement are accurate and complete
descriptions of such documents in all material respects. The documents
incorporated by reference in the Registration Statement, any Preliminary
Prospectus and the Prospectus, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder, and none of
such documents 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.
(c) (iii) Subsequent to the respective dates as of which information is
given in the
3.
Registration Statement and Prospectus, and except as set forth or
contemplated in the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, nor entered into any transactions not in the ordinary course of
business, and there has not been any material adverse change in the
condition (financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole, or any change in the capital stock,
short-term or long-term debt of the Company and its subsidiaries considered
as a whole.
(d) (iv) The financial statements, together with the related notes and
schedules, set forth in the Prospectus and elsewhere in the Registration
Statement fairly present, on the basis stated in the Registration
Statement, the financial position and the results of operations and changes
in financial position of the Company and its consolidated subsidiaries at
the respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
except as may be set forth in the Prospectus. The selected financial and
statistical data set forth in the Prospectus under the captions "Summary
Financial Data" and "Selected Consolidated Financial Data" fairly present,
on the basis stated in the Registration Statement, the information set
forth therein.
(e) (v) KPMG Peat Marwick LLP, who have expressed their opinions on the
audited financial statements and related schedules included in the
Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(f) (vi) The Company and each of its subsidiaries have been duly organized
and are validly existing and in good standing as corporations under the
laws of their respective jurisdictions of organization, with power and
authority (corporate and other) to own or lease their properties and to
conduct their businesses as described in the Prospectus; the Company is and
each of its subsidiaries are in possession of and operating in compliance
with all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders required for the conduct of its business,
all of which are valid and in full force and effect; and the Company is and
each of such subsidiaries are duly qualified to do business and in good
standing as foreign corporations in all other jurisdictions where their
ownership or leasing of properties or the conduct of their businesses
requires such qualification. The Company has and each of its subsidiaries
have all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses
and permits of and from all public regulatory or governmental agencies and
bodies to own, lease and operate its properties and conduct its business as
now being conducted and as described in the Registration Statement and the
Prospectus, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially
burdensome
4.
restriction not adequately disclosed in the Registration Statement and the
Prospectus. The Company owns or controls, directly or indirectly, only the
corporations, associations or other entities listed in exhibit 21.1 to the
Registration Statement.
(g) (vii) The Company's authorized and outstanding capital stock is on the
date hereof, and will be on the Closing Dates, as set forth under the
heading "Capitalization" in the Prospectus; the outstanding shares of
common stock (including the outstanding shares of Stock) of the Company
conform to the description thereof in the Prospectus and have been duly
authorized and validly issued and are fully paid and nonassessable; are
duly listed on the Nasdaq National Market and have been issued in
compliance with all federal and state securities laws and were not issued
in violation of or subject to any preemptive rights or similar rights to
subscribe for or purchase securities and conform to the description thereof
contained in the Prospectus. Except as disclosed in and or contemplated by
the Prospectus and the financial statements of the Company and related
notes thereto included in the Prospectus, the Company does not have
outstanding any options or warrants to purchase, or any preemptive rights
or other rights to subscribe for or to purchase any securities or
obligations convertible into, or any contracts or commitments to issue or
sell, shares of its capital stock or any such options, rights, convertible
securities or obligations, except for options granted subsequent to the
date of information provided in the Prospectus pursuant to the Company's
employee and stock option plans as disclosed in the Prospectus. The
description of the Company's stock option and other stock plans or
arrangements, and the options or other rights granted or exercised
thereunder, as set forth in the Prospectus, accurately and fairly presents
the information required to be shown with respect to such plans,
arrangements, options and rights. All outstanding shares of capital stock
of each subsidiary have been duly authorized and validly issued, and are
fully paid and nonassessable and (except for directors' qualifying shares)
are owned directly by the Company or by another wholly owned subsidiary of
the Company free and clear of any liens, encumbrances, equities or claims.
(h) (viii) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and nonassessable and free of any
preemptive or similar rights and will conform to the description thereof in
the Prospectus.
(i) (ix) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
subsidiary is subject, which, if determined adversely to the Company or any
such subsidiary or affiliate, might individually or in the aggregate (i)
prevent or adversely affect the transactions contemplated by this
Agreement, (ii) suspend the effectiveness of the Registration Statement,
(iii) prevent or suspend the use of the Pre-effective Prospectus in any
jurisdiction or (iv) result in a material adverse
5.
change in the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of the Company
and its subsidiaries considered as a whole and there is no valid basis for
any such legal or governmental proceeding; and to the best of the Company's
knowledge no such proceedings are threatened or contemplated against the
Company or any subsidiary by governmental authorities or others. The
Company is not a party nor subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body or
other governmental agency or body. The description of the Company's
litigation under the heading "Legal Proceedings" in the Prospectus is true
and correct and complies with the Rules and Regulations.
(j) (x) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated (A) will not result in
any violation of the provisions of the certificate of incorporation,
by-laws or other organizational documents of the Company or its subsidiary,
or any law, order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or its subsidiary or any of
their properties or assets, (B) will not conflict with or result in a
breach or violation of any of the terms or provisions of or constitute a
default under any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of its properties is or may
be bound, the Articles of Incorporation, By-laws or other organizational
documents of the Company or any of its subsidiaries, or any law, order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or will result in the creation of a lien.
(k) (xi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby, except such as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or under the
Securities Act or the Exchange Act or the securities or "Blue Sky" laws of
any jurisdiction in connection with the purchase and distribution of the
Stock by the Underwriters.
(l) (xii) The Company has the full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder (including to
issue, sell and deliver the Stock), and this Agreement has been duly and
validly authorized, executed and delivered by the Company and is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws or the public policy underlying such laws.
(m) (xiii) The Company and its subsidiaries are in all material respects
in compliance
6.
with, and conduct their businesses in conformity with, all applicable
federal, state, local and foreign laws, rules and regulations or any court
or governmental agency or body; to the knowledge of the Company, otherwise
than as set forth in the Registration Statement and the Prospectus, no
prospective change in any of such federal or state laws, rules or
regulations has been adopted which, when made effective, would have a
material adverse effect on the operations of the Company and its
subsidiaries.
(n) (xiv) The Company and its subsidiaries have filed all necessary
federal, state, local and foreign income, payroll, franchise and other tax
returns and have paid all taxes shown as due thereon or with respect to any
of their properties, and there is no tax deficiency that has been, or to
the knowledge of the Company is likely to be, asserted against the Company
or any of its subsidiaries or any of their respective properties or assets
that would adversely affect the financial position, business or operations
of the Company and its subsidiaries.
(o) (xv) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the
filing or effectiveness of the Registration Statement or otherwise, except
for persons and entities who have expressly waived such right or who have
been given proper notice and have failed to exercise such right within the
time or times required under the terms and conditions of such right.
(p) (xvi) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security
of the Company, or which caused or resulted in, or which might in the
future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(q) (viii) The Company and its subsidiaries own or possess the right to
use all patents, trademarks, trademark registrations, service marks,
service xxxx registrations, trade names, copyrights, licenses, inventions,
trade secrets and rights described in the Prospectus as being owned by them
or any of them or necessary for the conduct of their respective businesses,
and the Company is not aware of any claim to the contrary or any challenge
by any other person to the rights of the Company and its subsidiaries with
respect to the foregoing. The Company's business as now conducted and as
proposed to be conducted does not and will not infringe or conflict with in
any material respect patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses or other intellectual property or
franchise right of any person. Except as described in the Prospectus, no
claim has been made against the Company alleging the infringement by the
Company of any patent, trademark, service xxxx, trade name, copyright,
trade secret, license in or other intellectual property right or franchise
right of any person.
(r) (xix) The Company and its subsidiaries have performed all material
obligations required to be performed by them under all contracts required
by Item 601(b)(10) of
7.
Regulation S-K under the Securities Act to be filed as exhibits to the
Registration Statement, and neither the Company nor any of its subsidiaries
nor any other party to such contract is in default under or in breach of
any such obligations. Neither the Company nor any of its subsidiaries has
received any notice of such default or breach.
(s) (xx) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (A) any executive, key
employee or significant group of employees of the Company or any subsidiary
plans to terminate employment with the Company or any such subsidiary or
(B) any such executive or key employee is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or similar agreement
that would be violated by the present or proposed business activities of
the Company and its subsidiaries. Neither the Company nor any subsidiary
has or expects to have any liability for any prohibited transaction or
funding deficiency or any complete or partial withdrawal liability with
respect to any pension, profit sharing or other plan which is subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
to which the Company or any subsidiary makes or ever has made a
contribution and in which any employee of the Company or any subsidiary is
or has ever been a participant. With respect to such plans, the Company
and each subsidiary are in compliance in all material respects with all
applicable provisions of ERISA.
(t) (xxi) The Company has obtained the written agreement described in
Section 8(l) of this Agreement from each of its officers, directors and
holders of Common Stock listed on Schedule C hereto.
(u) (xxii) The Company and its subsidiaries have, and the Company and its
subsidiaries as of the Closing Dates will have, good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned or proposed to be owned by them which is material
to the business of the Company or of its subsidiaries, in each case free
and clear of all liens, encumbrances and defects except such as are
described the Prospectus or such as would not have a material adverse
effect on the Company and its subsidiaries considered as a whole; and any
real property and buildings held under lease by the Company and its
subsidiaries or proposed to be held after giving effect to the transactions
described in the Prospectus are, or will be as of each of the Closing
Dates, held by them under valid, subsisting and enforceable leases with
such exceptions as would not have a material adverse effect on the Company
and its subsidiaries considered as a whole, in each case except as
described in or contemplated by the Prospectus.
(v) (xxiii) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus; and neither the Company nor any
8.
subsidiary of the Company has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue their business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company and its subsidiaries
considered as a whole, except as described in or contemplated by the
Prospectus.
(w) (xxiv) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the Company
any brokerage or finder's fee or other fee or commission as a result of any
of the transactions contemplated by this Agreement.
(x) (xxv) The Company has complied with all provisions of Section 517.075
Florida Statutes (Chapter 92-198; Laws of Florida).
(y) (xxvi) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(z) (xxvii) To the Company's knowledge, neither the Company nor any of its
subsidiaries nor any employee or agent of the Company or any of its
subsidiaries has made any payment of funds of the Company or any of its
subsidiaries or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(aa) (xxviii) Neither the Company nor any of its subsidiaries is or, after
application of the net proceeds of this offering as described under the
caption "Use of Proceeds" in the Prospectus, will become an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
(bb) (xxix) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the matters
covered thereby.
(b) REPRESENTATIONS AND WARRANTIES AND AGREEMENTS OF THE SELLING
SHAREHOLDERS. Each Selling Shareholder represents and warrants to, and agrees
with, the several Underwriters
9.
that such Selling Shareholder:
(i) Now has, and on the Closing Dates will have, valid and marketable
title to the Shares to be sold by such Selling Shareholder, free and clear
of any lien, claim, security interest or other encumbrance, including,
without limitation, any restriction on transfer, and has full right, power
and authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement (each as hereinafter defined), and, to the extent such
Selling Shareholder is a corporation, has been duly organized and is
validly existing and in good standing as a corporation under the laws of
its jurisdiction of organization.
(ii) Now has, and on each of the Closing Dates will have, upon delivery
of and payment for each share of Stock hereunder, full right, power and
authority, any approval required by law to sell, transfer, assign and
deliver the Stock being sold by such Selling Shareholder hereunder, and
each of the several Underwriters will acquire valid and marketable title to
all of the Stock being sold to the Underwriters by such Selling
Shareholder, free and clear of any liens, encumbrances, equities claims,
restrictions on transfer or other defects whatsoever.
(iii) For a period of 120 days after the date of this Agreement, without
the consent of Cowen, such Selling Shareholder will not offer to sell,
sell, contract to sell or otherwise dispose of any Stock or securities
convertible into or exchangeable for Stock, including, without limitation
Stock which may be deemed to be beneficially owned by such Selling
Shareholder in accordance with the Rules and Regulations, except for the
Stock being sold hereunder.
(iv) Has duly executed and delivered a power of attorney, in
substantially the form heretofore delivered by the Representatives (the
"Power of Attorney"), appointing ____________ and ____________, and each of
them, as attorney-in-fact (the "Attorneys-in-fact") with authority to
execute and deliver this Agreement on behalf of such Selling Shareholder,
to authorize the delivery of the shares of Stock to be sold by such Selling
Shareholder hereunder and otherwise to act on behalf of such Selling
Shareholder in connection with the transactions contemplated by this
Agreement.
(v) Has duly executed and delivered a custody agreement, in
substantially the form heretofore delivered by the Representatives (the
"Custody Agreement"), with ____________ as custodian (the "Custodian"),
pursuant to which certificates in negotiable form for the shares of Stock
to be sold by such Selling Shareholder hereunder have been placed in
custody for delivery under this Agreement.
(vi) Has, by execution and delivery of each of this Agreement, the Power
of Attorney and the Custody Agreement, created valid and binding
obligations of such Selling Shareholder, enforceable against such Selling
Shareholder in accordance with its terms, except to the extent that rights
to indemnity hereunder may be limited by federal or state
10.
securities laws or the public policy underlying such laws.
(vii) The performance of this Agreement, the Custody Agreement and the
Power of Attorney, and the consummation of the transactions contemplated
hereby and thereby will not result in a breach or violation by such Selling
Shareholder of any of the terms or provisions of, or constitute a default
by such Selling Shareholder under, any indenture, mortgage, deed of trust,
trust (constructive or other), loan agreement, lease, franchise, license or
other agreement or instrument to which such Selling Shareholder is a party
or by which such Selling Shareholder or any of its properties is bound, or
any judgment of any court or governmental agency or body applicable to such
Selling Shareholder or any of its properties, or to such Selling
Shareholder's knowledge, any statute, decree, order, rule or regulation of
any court or governmental agency or body applicable to such Selling
Shareholder or any of its properties.
(c) Each of the Other Selling Shareholders represents and warrants to, and
agrees with, the several Underwriters that it is not aware that any of the
representations and warranties set forth in Section 2(a) above is untrue or
inaccurate in any material respect.
Each Selling Shareholder agrees that the shares of Stock represented
by the certificates held in custody under the Custody Agreement are for the
benefit of and coupled with and subject to the interests of the
Underwriters, the other Selling Shareholders and the Company hereunder, and
that the arrangement for such custody and the appointment of the
Attorneys-in-fact are irrevocable; that the obligations of such Selling
Shareholder hereunder shall not be terminated by operation of law, whether
by the death or incapacity, liquidation or distribution of such Selling
Shareholder, or any other event, that if such Selling Shareholder should
die or become incapacitated or is liquidated or dissolved or any other
event occurs, before the delivery of the Stock hereunder, certificates for
the Stock to be sold by such Selling Shareholder shall be delivered on
behalf of such Selling Shareholder in accordance with the terms and
conditions of this Agreement and the Custody Agreement, and action taken by
the Attorneys-in-fact or any of them under the Power of Attorney shall be
as valid as if such death, incapacity, liquidation or dissolution or other
event had not occurred, whether or not the Custodian, the Attorneys-in-fact
or any of them shall have notice of such death, incapacity, liquidation or
dissolution or other event.
3. PURCHASE BY, AND SALE AND DELIVERY TO, UNDERWRITERS--CLOSING
DATES. The Company and the Firm Selling Shareholder agree, severally and not
jointly, to sell to the Underwriters the Firm Stock, with the number of shares
to be sold by the Company and the Firm Selling Shareholder being the number of
Shares set opposite his name in Schedule B; and on the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase the Firm Stock from the Company and the
Firm Selling Shareholder, the number of shares of Firm Stock to be purchased by
each Underwriter being set opposite its name in
11.
Schedule A, subject to adjustment in accordance with Section 12 hereof. The
number of shares of Stock to be purchased by each Underwriter from the Firm
Selling Shareholder hereunder shall bear the same proportion to the total number
of shares of Stock to be purchased by such Underwriter hereunder as the number
of shares of stock being sold by the Firm Selling Shareholder bears to the total
number of shares of Stock being sold by the Firm Selling Shareholder, subject to
adjustment by the Representatives to eliminate fractions.
The purchase price per share to be paid by the Underwriters to the
Company and the Firm Selling Shareholder will be the price per share set for
$____ in the table on the cover page of the Prospectus under the heading
"Proceeds to the Company" (the "Purchase Price").
The Company and the Firm Selling Shareholder will deliver the Firm
Stock to the Representatives for the respective accounts of the several
Underwriters (in the form of definitive certificates, issued in such names and
in such denominations as the Representatives may direct by notice in writing to
the Company and the Firm Selling Shareholder given at or prior to 12:00 Noon,
New York Time, on the second full business day preceding the First Closing Date
(as defined below) or, if no such direction is received, in the names of the
respective Underwriters or in such other names as Cowen may designate (solely
for the purpose of administrative convenience) and in such denominations as
Cowen may determine, against payment of the aggregate Purchase Price therefor by
certified or official bank check or checks in immediately available funds (same
day funds), payable to the order of the Company and ____________ as Custodian
for the Firm Selling Shareholder, all at the offices of Xxxxxxx, Xxxxxxxxxxx &
XxXxxxx, 0000 Xxxxxx Xxxxx, XX, Xxxxx 000, Xxxxxxxxxxx, Xxx Xxxxxx 00000. The
time and date of the delivery and closing shall be at 10:00 A.M., New York Time,
on ____________, 1996, in accordance with Rule 15c6-1 of the Exchange Act. The
time and date of such payment and delivery are herein referred to as the "First
Closing Date." The First Closing Date and the location of delivery of, and the
form of payment for, the Firm Stock may be varied by agreement among the
Company, the Firm Selling Shareholder and Cowen. The First Closing Date may be
postponed pursuant to the provisions of Section 12.
The Company and the Firm Selling Shareholder shall make the
certificates for the Stock available to the Representatives for examination on
behalf of the Underwriters not later than 10:00 A.M., New York Time, on the
business day preceding the First Closing Date at the offices of Xxxxx & Company,
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen or SoundView Financial Group, Inc.,
individually and not as Representatives of the several Underwriters, may (but
shall not be obligated to) make payment to the Company or to the Firm Selling
Shareholder on behalf of any Underwriter or Underwriters, for the Stock to be
purchased by such Underwriter or Underwriters. Any such payment by Cowen or
SoundView Financial Group, Inc. shall not relieve such Underwriter or
Underwriters from any of its or their other obligations hereunder.
The several Underwriters agree to make a public offering of the Firm
Stock at the
12.
public offering price as soon after the effectiveness of the Registration
Statement as in their judgment is advisable. The Representatives shall promptly
advise the Company and the Firm Selling Shareholder of the making of the initial
public offering.
For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Stock as contemplated by the
Prospectus, of the Selling Shareholders hereby grants to the Underwriters
an option to purchase, severally and not jointly, up to the aggregate number
of shares of Optional Stock set forth opposite the Company's and each such
Selling Shareholder's respective names on Schedule B hereto, for an aggregate
of up to 270,000 shares. The price per share to be paid for the Optional
Stock shall be the Purchase Price. The option granted hereby may be
exercised as to all or any part of the Optional Stock at any time, and from
time to time, not more than thirty (30) days subsequent to the effective date
of this Agreement. No Optional Stock shall be sold and delivered unless the
Firm Stock previously has been, or simultaneously is, sold and delivered.
The right to purchase the Optional Stock or any portion thereof may be
surrendered and terminated at any time upon notice by the Underwriters to the
Company and the Attorneys-in-fact, on behalf of the Selling Shareholders.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Cowen to the Company and the Attorney's-in-fact, on
behalf of the Selling Shareholders, setting forth the number of shares of the
Optional Stock to be purchased by them and the date and time for delivery of and
payment for the Optional Stock. Each date and time for delivery of and payment
for the Optional Stock (which may be the First Closing Date, but not earlier) is
herein called the "Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than ten (10) business days after written notice
is given. (The Option Closing Date and the First Closing Date are herein called
the "Closing Dates.") All purchases of Optional Stock from the Company and the
Selling Shareholders shall be made on a pro rata basis. Optional Stock shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Stock set forth opposite such Underwriter's name in
Schedule B hereto bears to the total number of shares of Firm Stock (subject to
adjustment by the Underwriters to eliminate odd lots). Upon exercise of the
option by the Underwriters, the Company and the Selling Shareholders agree to
sell to the Underwriters the number of shares of Optional Stock set forth in the
written notice of exercise and the Underwriters agree, severally and not jointly
and subject to the terms and conditions herein set forth, to purchase the number
of such shares determined as aforesaid.
The Company and the Selling Shareholders will deliver the Optional
Stock to the Underwriters (in the form of definitive certificates, issued in
such names and in such denominations as the Representatives may direct by notice
in writing to the Selling Shareholders given at or prior to 12:00 Noon, New York
Time, on the second full business day preceding the Option Closing Date or, if
no such direction is received, in the names of the respective Underwriters or in
such other names as Cowen may designate (solely for the purpose of
administrative convenience) and in such denominations as Cowen may determine,
against
13.
payment of the aggregate Purchase Price therefor by certified or official bank
check or checks in Clearing House funds (next day funds), payable to the order
of the Company and to ____________, as Custodian for the Selling Shareholders or
payable as directed by such Custodian all at the offices of Xxxxxxx, Xxxxxxxxxxx
& XxXxxxx, 0000 Xxxxxx Xxxxx XX, Xxxxx 000, Xxxxxxxxxxx, Xxx Xxxxxx 00000. The
Selling Shareholders shall make the certificates for the Optional Stock
available to the Underwriters for examination not later than 10:00 A.M., New
York Time, on the business day preceding the Option Closing Date at the offices
of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option
Closing Date and the location of delivery of, and the form of payment for, the
Option Stock may be varied by agreement among the Company, the Selling
Shareholders and Cowen. The Option Closing Date may be postponed pursuant to
the provisions of Section 12.
4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants
and agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A of the of the Rules and
Regulations, use its best efforts to cause the Registration Statement to
become effective, (ii) if the Company and the Representatives have
determined to proceed pursuant to Rule 430A of the Rules and Regulations,
use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to Rule 430A and Rule 424 of
the Rules and Regulations and (iii) if the Company and the Representatives
have determined to deliver Prospectuses pursuant to Rule 434 of the
Rules and Regulations, to use its best efforts to comply with all the
applicable provisions thereof. The Company will advise the Representatives
promptly as to the time at which the Registration Statement becomes
effective, will advise the Representatives promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible the lifting thereof, if
issued. The Company will advise the Representatives promptly of the
receipt of any comments of the Commission or any request by the Commission
for any amendment of or supplement to the Registration Statement or the
Prospectus or for additional information and will not at any time file any
amendment to the Registration Statement or supplement to the Prospectus
which shall not previously have been submitted to the Representatives a
reasonable time prior to the proposed filing thereof or to which the
Representatives shall reasonably object in writing or which is not in
compliance with the Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly upon
the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus which in the opinion of
the Representatives may be necessary to enable the several
Underwriters to continue the distribution of the Stock and will use
its best efforts to cause the same to
14.
become effective as promptly as possible.
(c) If at any time after the effective date of the Registration Statement
when a prospectus relating to the Stock is required to be delivered
under the Securities Act any event relating to or affecting the
Company or any of its subsidiaries occurs as a result of which the
Prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representatives
thereof and will prepare an amended or supplemented prospectus which
will correct such statement or omission; and in case any Underwriter
is required to deliver a prospectus relating to the Stock nine (9)
months or more after the effective date of the Registration Statement,
the Company upon the request of the Representatives and at the expense
of such Underwriter will prepare promptly such prospectus or
prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as
originally filed with the Commission, and all amendments thereto
including all financial statements and exhibits thereto and all
documents incorporated by reference therein, and will deliver to the
Representatives such number of copies of the Registration Statement,
including such financial statements, and all documents theretofore
incorporated by reference therein but without exhibits, and all
amendments thereto, as the Representatives may reasonably request.
The Company will deliver or mail to or upon the order of the
Representatives, from time to time until the effective date of the
Registration Statement, as many copies of the Pre-effective Prospectus
as the Representatives may reasonably request. The Company will
deliver or mail to or upon the order of the Representatives on the
date of the initial public offering, and thereafter from time to time
during the period when delivery of a prospectus relating to the Stock
is required under the Securities Act, as many copies of the
Prospectus, in final form or as thereafter amended or supplemented as
the Representatives may reasonably request; provided, however, that
the expense of the preparation and delivery of any prospectus required
for use nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to
deliver such prospectus.
(e) The Company will make generally available to its shareholders as soon
as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earning statement
which will be in reasonable detail
15.
(but which need not be audited) and which will comply with
Section 11(a) of the Securities Act, covering a period of at least
twelve (12) months beginning after the "effective date" (as defined in
Rule 158 under the Securities Act) of the Registration Statement.
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such
jurisdictions as the Representatives may designate and at the request
of the Representatives will make such applications and furnish such
consents to service of process or other documents as may be required
of it as the issuer of the Stock for that purpose; provided, however,
that the Company shall not be required to qualify to do business or to
file a general consent (other than that arising out of the offering or
sale of the Stock) to service of process in any such jurisdiction
where it is not now so subject. The Company will, from time to time,
prepare and file such statements and reports as are or may be required
of it as the issuer of the Stock to continue such qualifications in
effect for so long a period as the Representatives may reasonably
request for the distribution of the Stock. The Company will advise
the Representatives promptly after the Company becomes aware of the
suspension of the qualifications or registration of (or any such
exception relating to) the Common Stock of the Company for offering,
sale or trading in any jurisdiction or of any initiation or threat of
any proceeding for any such purpose, and in the event of the issuance
of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the
Representatives use its best efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its shareholders annual reports containing
financial statements certified by independent public accountants and
with quarterly summary financial information in reasonable detail
which may be unaudited. During the period of five (5) years from the
date hereof, the Company will deliver to the Representatives and, upon
request, to each of the other Underwriters, as soon as they are
available, copies of each annual report of the Company and each other
report furnished by the Company to its shareholders and will deliver
to the Representatives, (i) as soon as they are available, copies of
any other reports (financial or other) which the Company shall publish
or otherwise make available to any of its shareholders as such, (ii)
as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange and (iii) from time to time such other information
concerning the Company as you may request. So long as the Company has
active subsidiaries, such financial statements will be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders
generally. Separate financial statements shall be furnished for all
subsidiaries whose accounts are not consolidated but which at the
16.
time are significant subsidiaries as defined in the Rules and
Regulations.
(h) The Company will use its best efforts to list the Stock, subject to
official notice of issuance, on the Nasdaq National Market
concurrently with the effectiveness of the Registration Statement.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) Prior to filing its quarterly statements on Form 10-Q, the Company
will have its independent auditors perform a limited quarterly review
of its quarterly numbers.
(k) The Company will not offer, sell, assign, transfer, encumber, contract
to sell, grant an option to purchase or otherwise dispose of, other
than by operation of law, gifts, pledges or dispositions by estate
representatives, any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock (including,
without limitation, Common Stock of the Company which may be deemed to
be beneficially owned by the Company in accordance with the Rules and
Regulations) during the 120 days following the date on which the price
of the Common Stock to be purchased by the Underwriters is set, other
than the Company's sale of Common Stock hereunder and the Company's
issuance of Common Stock upon the exercise of warrants and stock
options which are presently outstanding and described in the
Prospectus.
(l) The Company will apply the net proceeds from the sale of the Stock as
set forth in the description under "Use of Proceeds" in the
Prospectus, which description complies in all respects with the
requirements of Item 504 of Regulation S-K.
(m) The Company will supply you with copies of all correspondence to and
from, and all documents issued to and by, the Commission in connection
with the registration of the Stock under the Securities Act.
(n) Prior to each of the Closing Dates the Company will furnish to you, as
soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company and its subsidiaries
for any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the Prospectus.
(o) Prior to each of the Closing Dates the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company or any of its
subsidiaries, the financial condition, results of operations,
business, prospects, assets or liabilities of any of them, or the
offering of the Stock, without your prior written consent. For a
period of twelve (12) months following the first Closing Date, the
Company will use its best efforts
17.
to provide to you copies of each press release or other public
communications with respect to the financial condition, results of
operations, business, prospects, assets or liabilities of the Company
at least twenty-four (24) hours prior to the public issuance thereof
or such longer advance period as may reasonably be practicable.
(p) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the
Representatives, to each of the Underwriters: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as
of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii)
as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Report on Form 8-K or other report filed by the Company with the
Commission, or the NASD or any securities exchange; and (iii) as soon
as available, copies of any report or communication of the Company
mailed generally to holders of its Common Stock.
5. PAYMENT OF EXPENSES. (a) The Company will pay (directly or by
reimbursement) all costs, fees and expenses incurred in connection with expenses
incident to the performance of the obligations of the Company and of the Selling
Shareholders under this Agreement and in connection with the transactions
contemplated hereby, including but not limited to (i) all expenses and taxes
incident to the issuance and delivery of the Stock to the Representatives; (ii)
all expenses incident to the registration of the Stock under the Securities Act;
(iii) the costs of preparing stock certificates (including printing and
engraving costs); (iv) all fees and expenses of the registrar and transfer agent
of the Stock; (v) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Stock to the Underwriters; (vi)
fees and expenses of the Company's counsel and the Company's independent
accountants; (vii) all costs and expenses incurred in connection with the
preparation, printing filing, shipping and distribution of the Registration
Statement, each Pre-effective Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, the Selling Shareholders' Powers of Attorney, the Custody Agreement,
the "Agreement Among Underwriters" between the Representatives and the
Underwriters, the Master Selected Dealers' Agreement, the Underwriters'
Questionnaire and the Blue Sky memoranda (including related fees and expenses of
counsel to the Underwriters) and this Agreement; (viii) all filing fees,
attorneys' fees and expenses incurred by the Company or the Underwriters in
connection with exemptions from the qualifying or registering (or obtaining
qualification or registration of) all or any part of the Stock for offer and
sale and determination of its eligibility for investment under the Blue Sky or
other securities laws of such jurisdictions as the Representatives may
designate; (ix) fees and expenses of counsel to the Underwriters; (x) all fees
and expenses paid or incurred in connection with filings made with the NASD; and
(xi) all other costs and expenses incident to the performance of their
obligations hereunder which are not
18.
otherwise specifically provided for in this Section.
(b) Each Selling Shareholder will pay (directly or by reimbursement)
all fees and expenses incident to the performance of such Selling Shareholder's
obligations under this Agreement which are not otherwise specifically provided
for herein, including but not limited to any fees and expenses of counsel for
such Selling Shareholder, such Selling Shareholder's pro rata share of fees and
expenses of the Attorneys-in-fact and the Custodian and all expenses and taxes
incident to the sale and delivery of the Stock to be sold by such Selling
Shareholder to the Underwriters hereunder.
(c) In addition to their other obligations under Section 6(a) hereof,
the Company and each Selling Shareholder jointly and severally agrees (except
for the Firm Selling Shareholder, whose obligation will not exceed a
proportional amount based on the ratio of the number of shares of stock sold to
the Underwriters by such Firm Selling Shareholder to the total number of Shares
sold to the Underwriters) that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon (I) any statement or omission or any alleged statement or omission,
(ii) any act or failure to act or any alleged act or failure to act or (iii) any
breach or inaccuracy in their representations and warranties, they will
reimburse each Underwriter on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's and each Selling Shareholder's obligation to reimburse each
Underwriter for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, each Underwriter shall promptly return it to the Company and each
Selling Shareholder, as the case may be, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to timed
by _____________, New York, New York (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Underwriter in a timely manner
as provided below shall bear interest at the Prime Rate from the due date for
such reimbursement. This expense reimbursement agreement will be in addition to
any other liability which the Company or any Selling Shareholder may otherwise
have. The request for reimbursement will be sent to the Company with a copy to
each Selling Shareholder. In the event that the Company fails to make such
reimbursement payment within thirty (30) days of the reimbursement request, the
Representatives shall notify the Selling Shareholders of their obligation to
make such reimbursement payments within fifteen (15) days; provided, however,
that each Selling Shareholder shall be required to advance at such time only its
pro rata portion of the reimbursement payment. To the extent that any Selling
Shareholder fails to pay its pro rata portion in timely response to the
Underwriters' request, the other Selling Shareholders shall be jointly and
severally liable for such reimbursement payment and each shall render such
payment to the Representatives within fifteen (15) days of written demand
therefor by the Representatives.
19.
(d) In addition to its other obligations under Section 6(d) hereof,
each Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in Section 6(b) hereof which relates to information
furnished to the Company pursuant to Section _____ hereof, it will reimburse the
Company (and, to the extent applicable, each officer, director, controlling
person or Selling Shareholder) on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director, controlling person or Selling Shareholder)
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director, controlling person or
Selling Shareholder) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within thirty
(30) days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in paragraph (c) and/or (d) of
this Section 5, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in paragraph (c) and/or (d) of
this Section 5 and would not resolve the ultimate propriety or enforceability of
the obligation to reimburse expenses which is created by the provisions of
Section 6.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the
Principal Selling Shareholders agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of the Securities Act and the respective officers, directors, partners,
employees, representatives and agents of each of such Underwriter (collectively,
the "Underwriter Indemnified Parties" and, each, an "Underwriter Indemnified
Party"), against any losses, claims, damages, liabilities or expenses (including
the reasonable cost of investigating and defending against any claims therefor
and counsel fees incurred in connection therewith), joint or several, which may
be based upon the Securities Act, or any other
20.
statute or at common law, (i) on the ground or alleged ground that any
Pre-effective Prospectus, the Registration Statement or the Prospectus (or any
Pre-effective Prospectus, the Registration Statement or the Prospectus as from
time to time amended or supplemented) includes or allegedly includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter, directly or through the
Representatives, specifically for use in the preparation thereof or (ii) for any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or expense arising out of or based upon matters
covered by clause (i) above (provided that neither the Company nor any Principal
Selling Shareholder shall be liable under this clause (ii) to the extent that it
is determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, or liability or expense resulted directly from any such
acts or failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct). The Company and the
Principal Selling Shareholders will be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but if the Company and the Principal
Selling Shareholders elects to assume the defense, such defense shall be
conducted by counsel chosen by it and reasonably acceptable to the Underwriters.
In the event the Company and the Principal Selling Shareholders elect to assume
the defense of any such suit and retain such counsel, any Underwriter
Indemnified Parties, defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) the
Company and the Principal Selling Shareholders shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include any such Underwriter Indemnified Parties, and the Company, the Principal
Selling Shareholders and such Underwriter Indemnified Parties at law or in
equity have been advised by counsel to the Underwriters that one or more legal
defenses may be available to it or them which may not be available to the
Company and the Principal Selling Shareholders, in which case neither the
Company nor any Principal Selling Shareholder shall be entitled to assume the
defense of such suit notwithstanding its obligation to bear the fees and
expenses of such counsel. This indemnity agreement is not exclusive and will be
in addition to any liability which the Company or any principal Selling
Shareholder might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to each Underwriter
Indemnified Party. In addition, in no event shall the liability of any
Principal Selling Shareholder for indemnification under this Section 6(a) or for
breach of representations or warranties under this Agreement exceed the net
proceeds received by such Principal Selling Shareholder from the Underwriters in
the offering.
(b) The Firm Selling Shareholder agrees to indemnify and hold
harmless each Underwriter Indemnified Party against any losses, claims, damages,
liabilities or expenses (including, unless such Firm Selling Shareholder elects
to assume the defense, the reasonable cost of investigating and defending
against any claims therefor and counsel fees incurred in
21.
connection therewith), joint or several, which may be based upon the Securities
Act, or any other statute or at common law, on the ground or alleged ground that
any Pre-effective Prospectus, the Registration Statement or the Prospectus (or
any Pre-effective Prospectus, the Registration Statement or the Prospectus, as
from time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, written information furnished
to the Company by any Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof. Such Firm Selling Shareholder
shall be entitled to participate at his own expense in the defense, or, if such
Firm Selling Shareholder so elects, to assume the defense of any suit brought to
enforce any such liability, but, if such Firm Selling Shareholder elects to
assume the defense, such defense shall be conducted by counsel chosen by him.
In the event that the Firm Selling Shareholder elects to assume the defense of
any such suit and retain such counsel, the Underwriter Indemnified Parties,
defendant or defendants in the suit, may retain additional counsel but shall
bear the fees and expenses of such counsel unless (i) such Firm Selling
Shareholder shall have specifically authorized the retaining of such counsel or
(ii) the parties to such suit include such Underwriter Indemnified Parties and
such Firm Selling Shareholder and such Underwriter Indemnified Parties have been
advised by counsel that one or more legal defenses may be available to it or
them which may not be available to such Firm Selling Shareholder, in which case
such Firm Selling Shareholder shall not be entitled to assume the defense of
such suit notwithstanding its obligation to bear the fees and expenses of such
counsel. This indemnity agreement is not exclusive and will be in addition to
any liability which such Firm Selling Shareholder might otherwise have and shall
not limit any rights or remedies which may otherwise be available at law or in
equity to each Underwriter Indemnified Party. The Company and the Firm Selling
Shareholder may agree, as among themselves and without limiting the rights of
the Underwriters under this Agreement, as to their respective amounts of such
liability for which they each shall be responsible. In addition, in no event
shall the liability of the Firm Selling Shareholder for indemnification under
this Section 6(b) or for breach of representations or warranties under this
Agreement exceed the net proceeds received by such Firm Selling Shareholder from
the Underwriters in the offering and such liability shall not exceed a
proportional amount based on the ratio of the number of shares of Stock sold to
the Underwriters by such Firm Selling Shareholder to the total number of shares
of Stock sold to the Underwriters.
(c) Each Other Selling Shareholder agrees to indemnify and hold
harmless each Underwriter Indemnified Party against any losses, claims, damages,
liabilities or expenses (including, unless such Other Selling Shareholder elects
to assume the defense, the reasonable cost of investigating and defending
against any claims therefor and counsel fees incurred in connection therewith),
joint or several, which may be based upon the Securities Act, or any other
statute or at common law, on the ground or alleged ground that any Pre-effective
Prospectus, the Registration Statement or the Prospectus (or any Pre-effective
Prospectus, the Registration Statement or the Prospectus, as from time to time
amended and supplemented) includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
22.
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, written information furnished
to the Company by any Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof. Such Other Selling Shareholder
shall be entitled to participate at his own expense in the defense, or, if such
Other Selling Shareholder so elects, to assume the defense of any suit brought
to enforce any such liability, but, if such Other Selling Shareholder elects to
assume the defense, such defense shall be conducted by counsel chosen by him.
In the event that any Other Selling Shareholder elects to assume the defense of
any such suit and retain such counsel, the Underwriter Indemnified Parties,
defendant or defendants in the suit, may retain additional counsel but shall
bear the fees and expenses of such counsel unless (i) such Other Selling
Shareholder shall have specifically authorized the retaining of such counsel or
(ii) the parties to such suit include such Underwriter Indemnified Parties and
such Other Selling Shareholder and such Underwriter Indemnified Parties have
been advised by counsel that one or more legal defenses may be available to it
or them which may not be available to such Other Selling Shareholder, in which
case such Other Selling Shareholder shall not be entitled to assume the defense
of such suit notwithstanding its obligation to bear the fees and expenses of
such counsel. This indemnity agreement is not exclusive and will be in addition
to any liability which such Other Selling Shareholder might otherwise have and
shall not limit any rights or remedies which may otherwise be available at law
or in equity to each Underwriter Indemnified Party. The Company and the Other
Selling Shareholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to their respective amounts
of such liability for which they each shall be responsible. In addition, in no
event shall the liability of any Other Selling Shareholder for indemnification
under this Section 6(c) or for breach of representations or warranties under
this Agreement exceed the net proceeds received by such Other Selling
Shareholder from the Underwriters in the offering.
(d) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties") and each Selling Shareholder and each person, if any, who
controls a Selling Shareholder within the meaning of the Securities Act
(collectively, the "Shareholder Indemnified Parties"), against any losses,
claims, damages, liabilities or expenses (including, unless the Underwriter or
Underwriters elect to assume the defense, the reasonable cost of investigating
and defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which arise out of or are based in
whole or in part upon the Securities Act, the Exchange Act or any other federal,
state, local or foreign statute or regulation, or at common law, on the ground
or alleged ground that any Pre-effective Prospectus, the Registration Statement
or the Prospectus (or any Pre-effective Prospectus, the Registration Statement
or the Prospectus, as from time to time amended and supplemented) includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances in which they were made, not misleading, but only
insofar as any such statement
23.
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by such Underwriter, directly or through
the Representatives, specifically for use in the preparation thereof; provided,
however, that in no case is such Underwriter to be liable with respect to any
claims made against any Company Indemnified Party or Shareholder Indemnified
Party against whom the action is brought unless such Company Indemnified Party
or Shareholder Indemnified Party shall have notified such Underwriter in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Company
Indemnified Party or Shareholder Indemnified Party, but failure to notify such
Underwriter of such claim shall not relieve it from any liability which it may
have to any Company Indemnified Party or Shareholder Indemnified Party otherwise
than on account of its indemnity agreement contained in this paragraph. Such
Underwriter shall be entitled to participate at its own expense in the defense,
or, if it so elects, to assume the defense of any suit brought to enforce any
such liability, but, if such Underwriter elects to assume the defense, such
defense shall be conducted by counsel chosen by it. In the event that any
Underwriter elects to assume the defense of any such suit and retain such
counsel, the Company Indemnified Parties or Shareholder Indemnified Parties and
any other Underwriter or Underwriters or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, respectively. The Underwriter against whom
indemnity may be sought shall not be liable to indemnify any person for any
settlement of any such claim effected without such Underwriter's consent. This
indemnity agreement is not exclusive and will be in addition to any liability
which such Underwriter might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to any Company
Indemnified Party or Shareholder Indemnified Party.
(e) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other from the offering
of the Stock. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholders bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
24.
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, 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 Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to above shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating, defending, settling or
compromising any such claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the shares of the Stock 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. The Underwriters' obligations to contribute are several in proportion
to their respective underwriting obligations and not joint. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
7. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company, the Selling Shareholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Shareholders, the Company or any of its officers or directors or any controlling
person, and shall survive delivery of and payment for the Stock.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the several Underwriters hereunder shall be subject to the
accuracy, at and (except as otherwise stated herein) as of the date hereof and
at and as of each of the Closing Dates, of the representations and warranties
made herein by the Company and the Selling Shareholders, to compliance at and as
of each of the Closing Dates by the Company and the Selling Shareholders with
their covenants and agreements herein contained and other provisions hereof to
be satisfied at or prior to each of the Closing Dates, and to the following
additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness thereof shall have been issued and
no proceedings for that purpose shall have been initiated or, to the
knowledge of the Company or the Representatives, shall be threatened
by the Commission, and any request for additional information on the
part of the Commission (to be included in the
25.
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives.
Any filings of the Prospectus, or any supplement thereto, required
pursuant to Rule 424(b) or Rule 434 of the Rules and Regulations,
shall have been made in the manner and within the time period required
by Rule 424(b) and Rule 434 of the Rules and Regulations, as the case
may be.
(b) The Representatives shall have been satisfied that there shall not
have occurred any change, on a consolidated basis, prior to each of
the Closing Dates in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results of
operations of the Company and its subsidiaries considered as a whole,
or any change in the capital stock, short term or long term debt of
the Company and its subsidiaries considered as a whole, such that (i)
the Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact which, in the
opinion of the Representatives, is material, or omits to state a fact
which, in the opinion of the Representatives, is required to be stated
therein or is necessary to make the statements therein not misleading,
or (ii) it is unpracticable in the reasonable judgment of the
Representatives to proceed with the public offering or purchase the
Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or governmental
action, suit or proceeding affecting the Company which is material and
adverse to the Company or which affects or may affect the Company's or
the Selling Shareholders' ability to perform their respective
obligations under this Agreement shall have been instituted or
threatened and there shall have occurred no material adverse
development in any existing such action, suit or proceeding.
(d) At the time of execution of this Agreement, the Representatives shall
have received from KPMG Peat Marwick LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance
satisfactory to the Underwriters.
(e) The Representatives shall have received from KPMG Peat Marwick LLP,
independent certified public accountants, letters, dated each of the
Closing Dates, to the effect that such accountants reaffirm, as of
each of the Closing Dates, and as though made on each of the Closing
Dates, the statements made in the letter furnished by such accountants
pursuant to paragraph (d) of this Section 8.
(f) The Representatives shall have received from Xxxxxxx, Xxxxxxxxxxx &
XxXxxxx, counsel for the Company, opinions, dated each of the Closing
Dates, to the effect set forth in Exhibit I hereto.
26.
(g) The Representatives shall have received from Xxxxxxx, Xxxxxxxxxxx &
XxXxxxx, counsel for the Selling Shareholders, an opinion dated each
of the Closing Dates to the effect set forth in Exhibit II hereto.
(h) The Representatives shall have received from Xxxxxxx, Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, their opinions dated each
of the Closing Dates with respect to the incorporation of the Company,
the validity of the Stock, the Registration Statement and the
Prospectus and such other related matters as it may reasonably
request, and the Company and the Selling Shareholders shall have
furnished to such counsel such documents as they may request for the
purpose of enabling them to pass upon such matters.
(i) The Representatives shall have received a certificates, dated each of
the Closing Dates, of the chief executive officer or the President and
the chief financial or accounting officer of the Company to the effect
that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued, and, to the best of the knowledge of the
signers, no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act;
(ii) Neither any Pre-effective Prospectus, as of its date, nor the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, as of the time when the Registration
Statement became effective and at all times subsequent thereto
up to the delivery of such certificate, included any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading;
(iii) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as set forth or contemplated in the Prospectus, neither
the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, nor
entered into any material transactions not in the ordinary
course of business and there has not been any material adverse
change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of
operations of the Company and its subsidiaries considered as a
whole, or any change in the capital stock, short-term or
long-term debt of the Company and its subsidiaries considered
as a whole;
(iv) The representations and warranties of the Company in this
Agreement are true and correct at and as of each of the Closing
Dates, and the Company
27.
has complied with all the agreements and performed or satisfied
all the conditions on its part to be performed or satisfied at
or prior to the Closing Dates; and
(v) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as
disclosed in or contemplated by the Prospectus, (i) there has
not been any material adverse change or a development involving
a material adverse change in the condition (financial or
otherwise), properties, business, management, prospects, net
worth or results of operations of the Company and its
subsidiaries considered as a whole; (ii) the business and
operations conducted by the Company and its subsidiaries have
not sustained a loss by strike, fire, flood, accident or other
calamity (whether or not insured) of such a character as to
interfere materially with the conduct of the business and
operations of the Company and its subsidiaries considered as a
whole; (iii) no legal or governmental action, suit or
proceeding is pending or threatened against the Company which
is material to the Company, whether or not arising from
transactions in the ordinary course of business, or which may
materially and adversely affect the transactions contemplated
by this Agreement; (iv) since such dates and except as so
disclosed, the Company has not incurred any material liability
or obligation, direct, contingent or indirect, made any change
in its capital stock (except pursuant to its stock plans), made
any material change in its short-term or funded debt or
repurchased or otherwise acquired any of the Company's capital
stock; and (v) the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding
capital stock payable to stockholders of record on a date prior
to the Closing Date.
(j) The Representatives shall have received a certificate or certificates,
dated each of the Closing Dates, of the Attorney-in-fact, on behalf of
the Selling Shareholders, to the effect that as of each of the Closing
Dates its representations and warranties in this Agreement are true
and correct as if made on and as of each of the Closing Dates, and
that it has performed all its obligations and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Dates.
(k) The Company and each of the Selling Shareholders shall have furnished
to the Representatives such additional certificates as the
Representatives may have reasonably requested as to the accuracy, at
and as of each of the Closing Dates, of the representations and
warranties made herein by them and as to compliance at and as of each
of the Closing Dates by them with their covenants and agreements
herein contained and other provisions hereof to be satisfied at or
prior to each of the Closing Dates, and as to satisfaction of the
other conditions to the obligations of the Underwriters hereunder.
28.
(l) Cowen shall have received the written agreements, substantially in the
form of Exhibit II hereto, of the officers, directors and holders of
Common Stock listed in Schedule C that each will not offer, sell,
assign, transfer, encumber, contract to sell, grant an option to
purchase or otherwise dispose of, other than by operation of law,
gifts, pledges or dispositions by estate representatives, any shares
of Common Stock (including, without limitation, Common Stock which may
be deemed to be beneficially owned by such officer, director or holder
in accordance with the Rules and Regulations) during the 120 days
following the date of the final Prospectus, except for the Stock being
sold hereunder by the Selling Shareholders.
(m) The Nasdaq National Market shall have approved the stock for listing,
subject only to official notice of issuance.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to each of the Closing Dates, but Cowen,
on behalf of the Representatives, shall be entitled to waive any of such
conditions.
9. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to
all other provisions, at 11:00 a.m. New York City time on the first full
business day following the effectiveness of the Registration Statement or at
such earlier time after the Registration Statement becomes effective as the
Representatives may determine on and by notice to the Company or by release of
any of the Stock for sale to the public. For the purposes of this Section 9,
the Stock shall be deemed to have been so released upon the release for
publication of any newspaper advertisement relating to the Stock or upon the
release by you of telegrams (i) advising Underwriters that the shares of Stock
are released for public offering or (ii) offering the Stock for sale to
securities dealers, whichever may occur first.
10. TERMINATION. This Agreement (except for the provisions of
Section 5) may be terminated by the Company at any time before it becomes
effective in accordance with Section 9 by notice to the Representatives and may
be terminated by the Representatives at any time before it becomes effective in
accordance with Section 9 by notice to the Company. In the event of any
termination of this Agreement under this or any other provision of this
Agreement, there shall be no liability of any party to this Agreement to any
other party, other than as provided in Sections 5, 6 and 11 and other than as
provided in Section 12 as to the liability of defaulting Underwriters.
29.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First Closing
Date trading in securities on any of national exchanges or the Nasdaq National
Market shall have been suspended or minimum or maximum prices shall have been
established on any such exchange or market, or a banking moratorium shall have
been declared by New York or United States authorities; (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) if at or prior to the First Closing Date there
shall have been (A) an outbreak or escalation of hostilities between the United
States and any foreign power or of any other insurrection or armed conflict
involving the United States or (B) any change in financial markets or any
calamity or crisis which, in the judgment of the Representatives, makes it
impractical or inadvisable to offer or sell the Stock on the terms contemplated
by the Prospectus; (iv) if there shall have been any development or prospective
development involving particularly the business or properties or securities of
the Company or any of its subsidiaries or the transactions contemplated by this
Agreement, which, in the judgment of the Representatives, makes it impracticable
or inadvisable to offer or deliver the Stock on the terms contemplated by the
Prospectus; (v) if there shall be any litigation or proceeding, pending or
threatened, which, in the judgment of the Representatives, makes it
impracticable or inadvisable to offer or deliver the on the terms contemplated
by the Prospectus; or (vi) if there shall have occurred any of the events
specified in the immediately preceding clauses (i) to (v) together with any
other such event that makes it, in the judgment of the Representatives,
impractical or inadvisable to offer or deliver the Stock on the terms
contemplated by the Prospectus.
11. REIMBURSEMENT OF UNDERWRITERS. Notwithstanding any other
provisions hereof, if this Agreement shall not become effective by reason of any
election of the Company or the Selling Shareholders pursuant to the first
paragraph of Section 10 or shall be terminated by the Representatives under
Section 8 or Section 10, the Company will bear and pay the expenses specified in
Section 5 hereof and, in addition to their obligations pursuant to Section 6
hereof, the Company will reimburse the reasonable out-of-pocket expenses of the
several Underwriters (including reasonable fees and disbursements of counsel for
the Underwriters) incurred in connection with this Agreement and the proposed
purchase of the Stock, and promptly upon demand the Company will pay such
amounts to you as Representatives.
12. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters
shall default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of shares underwritten, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
30.
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company and
the Selling Shareholders shall have the right to postpone the Closing Dates for
a period of not more than five (5) full business days in order that the Company
and the Selling Shareholders may effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Company, the Selling Shareholders or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the part of
any non-defaulting Underwriter, the Selling Shareholders or the Company, except
for expenses to be paid or reimbursed pursuant to Section 5 and except for the
provisions of Section 6.
13. NOTICES. All communications hereunder shall be in writing and,
if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives c/o Cowen & Company at Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxx, with a copy to Xxxxxxx,
Phleger & Xxxxxxxx at Two Embarcadero Road, 0000 Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq. except that notices given
to an Underwriter pursuant to Section 6 hereof shall be sent to such Underwriter
at the address furnished by the Representatives or, if sent to the Company,
shall be mailed, delivered or telegraphed and confirmed c/o SBS Technologies,
Inc. at AFC Building 5, 0000 Xxxxxxxxx Xxxxxxxxx, X.X., Xxxxx 000, Xxxxxxxxxxx,
Xxx Xxxxxx 00000, Attention: Xx. Xxxxxxxxxxx X. Xxxxxxx, with a copy to
Xxxxxxx, Xxxxxxxxxxx & XxXxxxx, 0000 Xxxxxx Xxxxx, XX, Xxxxx 000, Xxxxxxxxxxx,
Xxx Xxxxxx 00000, Attention: Xxxxxx Xxxxxxx, Esq..
14. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and the Selling Shareholders
and their respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company and the Selling
Shareholders contained in this Agreement shall also be for the benefit of the
person or persons, if any, who control any Underwriter or Underwriters within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the indemnities of the several Underwriters shall also be for the
benefit of
31.
each director of the Company, each of its officers who has signed the
Registration Statement and the person or persons, if any, who control the
Company or any Selling Shareholders within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
15. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. AUTHORITY OF THE REPRESENTATIVES. In connection with this
Agreement, you will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by Cowen, as Representative, will be binding
on all the Underwriters; and any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Shareholders.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Shareholders and the
Representatives.
19. COUNTERPARTS. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Any person executing and delivering this Agreement as Attorney-in-fact
for a Selling Shareholder represents by so doing that he has been duly appointed
as Attorney-in-fact by such Selling Shareholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-fact to take
such action.
32.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
SBS TECHNOLOGIES, INC.
By:
-----------------------------------------------
President
SELLING SHAREHOLDERS LISTED IN SCHEDULE B
By: [Attorney-in-fact]
Acting on his own behalf and on behalf of the
Selling Shareholders listed in Schedule B.
By:
-----------------------------------------------
Attorney-in-fact
Accepted and delivered in
San Francisco as of
the date first above written.
XXXXX & COMPANY
SOUNDVIEW FINANCIAL GROUP, INC.
Acting on their own behalf and as
Representatives of several Underwriters
referred to in the foregoing Agreement.
By: XXXXX & COMPANY
By: Cowen Incorporated,
its general partner
By:
----------------------------
Xxxx X. Xxxxxx
33.
Managing Director - Syndicate
34.
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Purchased Purchased
--------- ---------
Name
----
Xxxxx & Company. . . . . . . . . . . . . . . . .
SoundView Financial Group, Inc.. . . . . . . . .
Total
--------- ---------
--------- ---------
--------- ---------
SCHEDULE B
Number Number of
of Firm Optional
Shares Shares
to be to be
Sold Sold
-------- ---------
SBS Technologies, Inc. 1,580,000 0
Principal Selling Shareholders 0
------------------------------
Xxxxxx X. Xxxxx, Ph.D. 0 100,000
Xxxxxxxxxxx X. Xxxxxxx 0 33,000
The Selling Shareholder
-----------------------
X. Xxxx Black 120,000 80,000
Other Selling Shareholders
--------------------------
J. Xxxxxxx Xxxxxxx 27,000
Xxxxx X. Xxxxxxxxx 30,000
[X. X. Xxxxx] 100,000
Total
--------- ---------
1,800,000 270,000
--------- ---------
--------- ---------
SCHEDULE C
Lockups
[Form of Opinion of Issuer's Counsel]
Exhibit I
We are of the opinion that:
1. The Company and each of its subsidiaries have been duly incorporated and
are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and
have all power and authority necessary to own or hold their respective
properties and conduct the businesses in which they are engaged;
2. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock off the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and all of the Shares to be issued and sold by the Company
to the Underwriters pursuant to the Underwriting Agreement have been duly
and validly authorized and, when issued and delivered against payment
therefor as provided for in the Underwriting Agreement, shall be duly and
validly issued, fully paid and non-assessable; and all of the issued shares
of capital stock of each subsidiary of the Company have been duly and
validly authorized and issued and are fully paid, non-assessable and are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
3. There are no preemptive or other rights to subscribe for or to purchase,
nor any restriction upon the voting or transfer of, any of the Shares
pursuant to the Company's Certificate of Incorporation or By-Laws or any
agreement or other instrument;
4. There are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property or assets of
the Company or any of its Subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, could have a material
adverse effect on the Company and its subsidiaries; and, to the best of our
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or other third parties;
5. The Company and each of its subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Prospectus as being owned by them or any of
them or necessary for the conduct of their respective businesses, and the
Company is not aware of any claim to the contrary or any challenge by any
other person to the rights of the Company or any of its subsidiaries with
respect to the foregoing. The Company's business as now conducted and as
proposed to be
conducted does not and will not infringe or conflict with any patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses
or other intellectual property or franchise right of any person;
6. The Company and each of its subsidiaries have, and the Company and each of
its subsidiaries as of the Closing Dates will have, good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned or proposed to be owned by them which is
material to the business of the Company or any of its subsidiaries, in each
case free and clear of all liens, encumbrances and defects; and any real
property and buildings held under lease by the Company and its subsidiaries
or proposed to be held after giving effect to the transactions described in
the Prospectus are, or will be as of the Closing Dates, held by them under
valid, subsisting and enforceable leases with such exceptions as would not
have a material adverse effect on the Company and its subsidiaries
considered as a whole;
7. The Company has full corporate power and authority to enter into the
Underwriting Agreement and to perform its obligations thereunder (including
to issue, sell and deliver the Shares), and the Underwriting Agreement has
been duly and validly authorized, executed and delivered by the Company and
is a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that rights to
indemnification and contribution thereunder may be limited by federal or
state securities laws or the public policy underlying such laws;
8. The execution, delivery and performance of the Underwriting 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 any indenture, mortgage, deed of trust, note agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or any of their properties
is or may be bound, the Certificate of Incorporation, By-laws or other
organizational documents of the Company or any of its subsidiaries, or any
law, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties or result in the creation of a lien;
9. No consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by the Underwriting Agreement, except such as may
be required by the National Association of Securities Dealers, Inc. (the
"NASD") or under the Securities Act or the securities or "Blue Sky" laws of
any jurisdiction in connection with the purchase and distribution of the
Shares by the Underwriters;
10. The Company and each of its subsidiaries are in compliance with, and
conduct their businesses in conformity with, all applicable federal, state,
local and foreign laws, rules
and regulations, including, but not limited to, those of any governmental
agency, court or tribunal; to the best of our knowledge, no prospective
change in any of such federal, state, local or foreign laws, rules or
regulations has been adopted which, when made effective, would have a
material adverse effect on the operations of the Company and its
subsidiaries. The Company and its subsidiaries are in compliance with all
applicable federal, state, local and foreign laws and regulations relating
to the protection of human health or the environment or imposing liability
or requiring standards of conduct concerning any Hazardous Materials;
11. The Registration Statement was declared effective under the Securities Act
as of __________, 1996, the Prospectus was filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations on __________, 1996
and no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose is pending or,
to the best of our knowledge, threatened by the Commission;
12. The documents incorporated by reference in the Prospectus (except for any
financial statements and schedules and financial and statistical
information included in such documents as to which such counsel need
express no opinion), when they were filed with the Commission, complied as
to form in all material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder;
13. The Registration Statement and the Prospectus and any amendments or
supplements thereto comply as to form in all respects with the requirements
of the Securities Act and the Rules and Regulations and the documents
incorporated by reference in the Prospectus, when they became effective or
were filed with the Commission, as the case may be, complied as to form in
all respects with the requirements of the Securities Act or the Exchange
Act, as applicable, and the Rules and Regulations; and any amendment or
supplement to any such incorporated document, when they became effective or
were filed with the Commission, as the case may be, complied as to form in
all respects with the requirements of the Securities Act or the Exchange
Act, as applicable, and the Rules and Regulations;
14. To the best of our knowledge, there are no contracts or other documents
which are required by the Securities Act or by the Rules and Regulations to
be described in the Prospectus or filed as exhibits to the Registration
Statement which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by reference
as permitted by the Rules and Regulations;
15. Other than as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right (other than rights which have been waived or
satisfied) to require the Company to file a registration statement under
the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to this
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Securities
Act;
16. The descriptions in the Registration Statement and Prospectus of statutes,
rules, regulations, legal or governmental proceedings, contracts and other
documents are accurate and such descriptions fairly present the information
required to be disclosed; and to the best of our knowledge, there are no
legal or governmental proceedings, statutes, ruler or regulations, or any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required;
17. The statements under the captions "Risk Factors"; and "Business-Government
Regulation," to the extent they reflect matters of federal law arising
under the laws of the United States or legal conclusions relating to such
law, accurately summarize and fairly present the legal and regulatory
matters described therein:
18. The Company has complied with all provisions of Section 517.075 of the
Florida Statutes (Chapter 92 - 198; Laws of Florida); and
19. The Company and each of its subsidiaries are not, nor will they be
immediately after receiving the proceeds from the sale of the Shares, an
"investment company" or an entity "controlled" by an "investment company"
as such terms are defined in the Investment Company Act of 1940, as
amended.
The foregoing opinion is limited to matters governed by the Federal laws of
the United States of America, the general corporate law of the State of New
Mexico and the laws of the State of New York.
We have acted as counsel to the Company on a regular basis, have acted as
counsel to the Company in connection with previous financing transactions and
have acted as counsel to the Company in connection with the preparation and
filing of the Registration Statement and the Prospectus, and based on the
foregoing, no facts have come to our attention which lead us to believe that (i)
the Registration Statement or any amendment thereto, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus contains any untrue statement of
a material fact or omits to state a material fact Required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (ii) any document
incorporated by reference in the Prospectus or any amendment or supplement to
any such incorporated document made by the Company, when they became effective
or were filed with the Commission, as the case may be, contained, in the case of
a registration statement which became effective under the
Securities Act, any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or, in the case of documents filed under the
Exchange Act with the Commission, contained any untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
[Form of Opinion of Selling Shareholders' Counsel]
Exhibit II
We are of the opinion that:
1. To the best of such counsel's knowledge, this Agreement and the Power of
Attorney and Custody Agreement have been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders; the Agent
has been duly and validly authorized to act as the custodian of the Common
Shares to be sold by each such Selling Shareholder in accordance with the
terms and provisions of the Power of Attorney and Custody Agreement; and
the performance of this Agreement and the Power of Attorney and Custody
Agreement and the consummation of the transactions herein contemplated by
the Selling Shareholders 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 agreement or
instrument to which any of the Selling Shareholders is a party or by which
any of the Selling Shareholders or any of their 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 any
of the Selling Shareholders or any of their properties; and to the best of
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
Power of Attorney and Custody Agreement or the consummation by the Selling
Shareholders of the transactions contemplated by this Agreement, except
such as have been obtained and are in full force and effect under the Act
and such as may be required under the rules of the NASD and applicable Blue
Sky laws;
2. To the best of such counsel's knowledge, each of the Selling Shareholders
has good and marketable title to such Common Shares so sold, free and clear
of all liens, encumbrances, equities, claims, restrictions, security
interests, voting trusts, or other defects of title whatsoever, has been
transferred to the Underwriters (whom counsel may assume to be bona fide
purchasers) (assuming payment in full therefor by such Underwriters) who
have purchased such Common Shares hereunder; and
3. To the best of such counsel's knowledge, this Agreement and the Power of
Attorney and Custody Agreement are valid and binding agreements of each of
the Selling Shareholders in accordance with their terms except as
enforceability may be limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and except with respect to those provisions relating to
indemnities or contributions for liabilities under the Act, as to which no
opinion need be expressed.
4. No transfer taxes are required to be paid in connection with the sale and
delivery of the Common Shares to the Underwriters hereunder.
