Exhibit 1.1
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XXXXXXX AMERICAN CORPORATION
(a Delaware corporation)
4,400,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated: ________, 1998
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TABLE OF CONTENTS
Page
U.S. PURCHASE AGREEMENT...................................................... 1
SECTION 1. Representations and Warranties.............................. 4
(a) Representations and Warranties by the Company............... 4
(i) Compliance with Registration Requirements.......... 4
(ii) Independent Accountants............................ 5
(iii) Financial Statements............................... 5
(iv) No Material Adverse Change in Business............. 5
(v) Good Standing of the Company....................... 6
(vi) Good Standing of Subsidiaries...................... 6
(vii) Capitalization..................................... 6
(viii) Authorization of Agreement......................... 7
(ix) Authorization and Description of Securities........ 7
(x) Absence of Defaults and Conflicts.................. 7
(xi) Absence of Labor Dispute........................... 8
(xii) Absence of Proceedings............................. 8
(xiii) Accuracy of Exhibits............................... 8
(xiv) Possession of Intellectual Property................ 9
(xv) Absence of Further Requirements.................... 9
(xvi) Possession of Licenses and Permits................. 9
(xvii) Title to Property.................................. 10
(xviii) Investment Company Act............................. 10
(xix) Environmental Laws................................. 10
(xx) Registration Rights................................ 11
(xxi) Tax Law Compliance................................. 11
(xxii) The Combination.................................... 11
(xxiii) Combination Agreements............................. 11
(b) Officer's Certificates...................................... 12
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing............. 12
(a) Initial Securities.......................................... 12
(b) Option Securities........................................... 12
(c) Payment..................................................... 13
(d) Denominations; Registration................................. 13
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SECTION 3. Covenants of the Company.................................... 13
(a) Compliance with Securities Regulations and Commission
Requests.................................................... 13
(b) Filing of Amendments........................................ 14
(c) Delivery of Registration Statements......................... 14
(d) Delivery of Prospectuses.................................... 14
(e) Continued Compliance with Securities Laws................... 15
(f) Rule 158.................................................... 15
(g) Use of Proceeds............................................. 15
(h) Listing..................................................... 15
(i) Restriction on Sale of Securities........................... 15
(j) Reporting Requirements...................................... 16
(k) Compliance with NASD Rules.................................. 16
(l) The Combination............................................. 16
(m) Blue Sky Qualifications..................................... 17
SECTION 4. Payment of Expenses......................................... 17
(a) Expenses.................................................... 17
(b) Termination of Agreement.................................... 18
SECTION 5. Conditions of U.S. Underwriters' Obligations................ 18
(a) Effectiveness of Registration Statement..................... 18
(b) Opinion of Counsel for Company.............................. 18
(c) Opinion of Counsel for U.S. Underwriters.................... 18
(d) Officers' Certificates...................................... 19
(e) Accountants' Comfort Letter................................. 19
(f) Bring-down Comfort Letter................................... 19
(g) Approval of Listing......................................... 19
(h) No Objection................................................ 19
(i) Lock-up Agreements.......................................... 20
(j) Purchase of Initial International Securities................ 20
(k) The Combination............................................. 20
(l) The Joinder Agreement....................................... 20
(m) Conditions to Purchase of U.S. Option Securities............ 20
(n) Additional Documents........................................ 21
(o) Termination of Agreement.................................... 21
SECTION 6. Indemnification............................................. 22
(a) Indemnification of U.S. Underwriters........................ 22
(b) Indemnification of Company and Its Directors and Officers... 23
ii
(c) Actions against Parties; Notification....................... 23
(d) Settlement Without Consent if Failure to Reimburse.......... 24
(e) Indemnification for Reserved Securities..................... 24
SECTION 7. Contribution................................................ 25
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.................................................... 26
SECTION 9. Termination of Agreement.................................... 26
(a) Termination; General........................................ 26
(b) Liabilities................................................. 27
SECTION 10. Default by One or More of the U.S. Underwriters............. 27
SECTION 11. Notices..................................................... 28
SECTION 12. Parties..................................................... 28
SECTION 13. GOVERNING LAW AND TIME...................................... 28
SECTION 14. Effect of Headings.......................................... 28
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SCHEDULES
Schedule A - List of Underwriters Sch A-1
Schedule B - Pricing Information Sch B-1
Schedule C - List of Persons and Entities Subject to Lock-up Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel A-1
Exhibit B - Form of Lock-up Letter B-1
ANNEXES
Annex A - Form of Accountants' Comfort Letter Annex A-1
Annex B - Form of Joinder Agreement Annex B-1
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XXXXXXX AMERICAN CORPORATION
(a Delaware corporation)
4,400,000 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
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_________, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BT Alex. Xxxxx Incorporated
Xxxxxx Brothers Inc.
as U.S. Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxxx American Corporation, a Delaware corporation, formerly known as
Monroe, Inc. (the "Company"), confirms its agreement with Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), and each
of the other U.S. Underwriters named in Schedule A hereto (collectively, the
"U.S. Underwriters," which term shall also include any underwriter substituted
as hereinafter provided in Section 10 hereof), for whom Xxxxxxx Xxxxx, XX Xxxx.
Xxxxx Incorporated and Xxxxxx Brothers Inc. are acting as representatives (in
such capacity, the "U.S. Representatives"), with respect to the issue and sale
by the Company and the purchase by the U.S. Underwriters, acting severally and
not jointly, of the respective numbers of shares of Common Stock, par value $.01
per share, of the Company ("Common Stock") set forth in said Schedule A, and
with respect to the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 660,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 4,400,000 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or
any part of the 660,000 shares of Common Stock subject to the option described
in Section 2(b) hereof (the "U.S. Option Securities") are hereinafter called,
collectively, the "U.S. Securities."
Prior to or simultaneously with the Closing Time (as defined in Section 2
herein), the Company will acquire in separate transactions (the "Combination")
all of the issued and outstanding capital stock of Xxxxxxx Enterprises, Inc., a
Massachusetts corporation ("Xxxxxxx"), pursuant to the terms of a stock purchase
agreement dated May 20, 1998, and Xxxxxx-American Company, a North Carolina
corporation ("Xxxxxx"), pursuant to the terms of a stock purchase agreement
dated May 22, 1998 (such stock purchase agreements being the "Combination
Agreements"). It is understood that at Closing Time, Xxxxxx, Xxxxxxx and the
U.S. Underwriters shall enter into a joinder agreement to this Agreement, which
shall be substantially in the form of Annex B hereto (the "Joinder Agreement").
All references herein to the Company, unless otherwise indicated, shall mean
Xxxxxxx American Corporation, including its wholly owned subsidiaries, Xxxxxxx
and Xxxxxx and each of their respective subsidiaries.
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 1,100,000 shares of
Common Stock (the "Initial International Securities") through arrangements with
certain underwriters outside the United States and Canada (the "International
Managers") for which Xxxxxxx Xxxxx International, BT Alex. Xxxxx International,
a division of Bankers Trust International PLC and Xxxxxx Brothers International
(Europe) are acting as lead managers (the "Lead Managers"), and the grant by the
Company to the International Managers, acting severally and not jointly, of an
option to purchase all or any part of the International Managers' pro rata
portion of up to 165,000 additional shares of Common Stock solely to cover over-
allotments, if any (the "International Option Securities" and, together with the
U.S. Option Securities, the "Option Securities"). The Initial International
Securities and the International Option Securities are hereinafter called the
"International Securities." It is understood that the Company is not obligated
to sell and the U.S. Underwriters are not obligated to purchase, any Initial
U.S. Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (in
such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to make a public
offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after this Agreement has been executed and delivered.
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The Company and the U.S. Underwriters agree that up to [275,000] shares of
the Initial U.S. Securities to be purchased by the U.S. Underwriters (the
"Reserved Securities") shall be reserved for sale by the Underwriters to certain
eligible directors, officers and employees of the Company and certain persons
having business relationships with the Company, as part of the distribution of
the Securities by the Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the National Association of
Securities Dealers, Inc. and all other applicable laws, rules and regulations.
To the extent that such Reserved Securities are not orally confirmed for
purchase by such eligible directors, officers and employees of the Company and
persons having business relationships with the Company by the end of the first
business day after the date of this Agreement, such Reserved Securities may be
offered to the public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-53419) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. Two forms of prospectus are to be used in connection
with the offering and sale of the Securities: one relating to the U.S.
Securities (the "Form of U.S. Prospectus") and one relating to the International
Securities (the "Form of International Prospectus"). The Form of International
Prospectus is identical to the Form of U.S. Prospectus, except for the front
cover and back cover pages and the information under the caption "Underwriting"
and the inclusion in the Form of International Prospectus of a section under the
caption "Certain United States Tax Considerations for Non-United States
Holders." The information included in any such prospectus that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Each Form of U.S. Prospectus and Form of International Prospectus
used before such registration statement became effective, and any prospectus
that omitted the Rule 430A Information that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto at the time it became effective and including the
Rule 430A Information, is herein called the "Registration Statement." Any
registration statement filed by the Company pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed
with the
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Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company represents
and warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each U.S. Underwriter,
as follows:
(i) Compliance with Registration Requirements. Each of the
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Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times that the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Prospectuses, any
preliminary prospectuses and any supplement thereto or prospectus wrapper
prepared in connection therewith, at their respective times of issuance and
at the Closing Time, complied and will comply in all material respects with
any applicable laws or regulations of foreign jurisdictions in which the
Prospectuses and such preliminary prospectuses, as amended or supplemented,
if applicable, are distributed in connection with the offer and sale of
Reserved Securities. Neither of the Prospectuses nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectuses or any amendments or supplements thereto were issued and at
the Closing Time (and, if any U.S. Option Securities are purchased, at the
Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the U.S. Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement or the U.S. Prospectus.
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Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules of the Company, Xxxxxxx and
Xxxxxx included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements of the
--------------------
Company, and the separate financial statements of each of Xxxxxxx and
Xxxxxx, included in the Registration Statement and the Prospectuses, in
each case together with the related schedules and notes, present fairly in
all material respects the financial position of the Company and each of
Xxxxxxx and Xxxxxx, at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and each of Xxxxxxx and
Xxxxxx for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved.
The supporting schedules included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The [selected consolidated financial data of each of Xxxxxxx and
Xxxxxx and the ] summary combined financial information of the Company
included in the Prospectuses present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement. The pro forma
combined financial statements of the Company and the related notes thereto
included in the Registration Statement and the Prospectuses present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its
5
subsidiaries considered as one enterprise, and (C) except for the stock
dividend to be declared by the Company prior to and in connection with the
Combination, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant subsidiary" of
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the Company (as such term is defined in Rule 1-02 of Regulation S-X), which
term includes Xxxxxxx and Xxxxxx (each a "Subsidiary" and, collectively,
the "Subsidiaries"), has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectuses
and is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and, after giving
effect to the Combination, will be owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity (except that the shares of
capital stock of Xxxxxx-American Company of Florida, Inc., a North Carolina
corporation and a wholly owned subsidiary of Xxxxxx, have been pledged by
Xxxxxx pursuant to a Stock Pledge Agreement dated October 31, 1995); none
of the outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
Subsidiary (except to the extent disclosed in the Combination Agreement
relating to Xxxxxx and the schedules and exhibits thereto, which violations
of preemptive rights will be waived by the securityholders of Xxxxxx in
connection with the Combination, to the extent set forth in Exhibit H to
the Combination Agreement relating to Xxxxxx). At Closing Time, the only
subsidiaries of the Company are the subsidiaries listed on Exhibit 21.1 to
the Registration Statement.
(vii) Capitalization. At Closing Time, after giving effect to the
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transactions contemplated by the Offering and the Combination, the
authorized, issued and outstanding
6
capital stock of the Company is as set forth in the Prospectuses in the
column entitled "As Adjusted" under the caption "Capitalization" (except
pursuant to reservations, agreements or employee benefit plans referred to
in the Prospectuses or pursuant to the exercise of convertible securities
or options referred to in the Prospectuses). After giving effect to the
Combination, the shares of issued and outstanding capital stock of the
Company will have been duly authorized and validly issued and will be fully
paid and non-assessable; none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(viii) Authorization of Agreement. This Agreement and the
--------------------------
International Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(ix) Authorization and Description of Securities. The Securities to
-------------------------------------------
be purchased by the U.S. Underwriters and the International Managers from
the Company have been duly authorized for issuance and sale to the U.S.
Underwriters pursuant to this Agreement and the International Managers
pursuant to the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth herein and the International Purchase Agreement,
respectively, will be validly issued, fully paid and non-assessable; the
Common Stock conforms to all statements relating thereto contained in the
Prospectuses and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be subject
to personal liability by reason of being such a holder; and the issuance of
the Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company, nor any
---------------------------------
of its Subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any of its Subsidiaries is subject (collectively, "Agreements
and Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement, the International Purchase Agreement, and the Combination
Agreements by the Company, and the consummation of the transactions
contemplated in this Agreement, the International Purchase Agreement, the
Combination Agreements, and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectuses under the caption
"Use of Proceeds"), and compliance by the Company with its obligations
under this Agreement, the International Purchase Agreement, and the
Combination Agreements have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of
7
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its Subsidiaries pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse Effect
and except as disclosed in the Registration Statement or in the Combination
Agreements (including the exhibits and schedules thereto)), and will not
result in any violation of (i) the provisions of the charter or by-laws of
the Company or any of its Subsidiaries or (ii) any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of their
assets, properties or operations except, in the case of clause (ii), to the
extent that any such violation would not have a Material Adverse Effect. As
used herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any of its Subsidiaries.
(xi) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company has no knowledge of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which may reasonably be expected to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company or its Subsidiaries, threatened, against or affecting the
Company or any of its Subsidiaries, which is required to be disclosed in
the Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect the
properties or assets thereof (taken as a whole) or the consummation of the
transactions contemplated in this Agreement, the International Purchase
Agreement and the Combination Agreements, or the performance by the Company
of its obligations hereunder or thereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any of its
Subsidiaries is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents
--------------------
that are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
8
(xiv) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any written notice of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities by the Company under this Agreement and the International
Purchase Agreement or the consummation of the transactions contemplated by
this Agreement and the International Purchase Agreement, except (i) such as
have been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations or under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or the rules and regulations promulgated
thereunder (the "1934 Act Regulations"), (ii) such as have been obtained
under the laws and regulations of jurisdictions outside the United States
in which the Reserved Securities are offered, and (iii) such as have been
obtained in connection with the Combination, including all applicable
requirements, if any, of state takeover laws, the pre-merger notification
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations thereunder.
(xvi) Possession of Licenses and Permits. Except as would not be
----------------------------------
reasonably expected to have a Material Adverse Effect, the Company and its
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies,
including any licenses required under the U.S. Perishable Agricultural
Commodities Act, necessary to conduct the business now operated by them;
the Company and its Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any written notice of proceedings relating to the
revocation or modification
9
of any such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xvii) Title to Property. The Company and its Subsidiaries have
-----------------
good and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses or either Combination Agreement (including
the exhibits and schedules thereto) or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company or any of its Subsidiaries; and all of the leases
and subleases material to the business of the Company and its Subsidiaries,
considered as one enterprise, and under which the Company or any of its
Subsidiaries holds material properties described in the Prospectuses, are
in full force and effect, and neither the Company nor any subsidiary has
any written notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any Subsidiary under any
of the material leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such Subsidiary to the continued
possession of the material leased or subleased premises under any such
lease or sublease.
(xviii) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, 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 "1940 Act").
(xix) Environmental Laws. Except as described in the Registration
------------------
Statement or either Combination Agreement (including the exhibits and
schedules thereto), and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
Subsidiaries is in violation of any applicable federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its Subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) to the knowledge of the Company, there are no
pending or threatened administrative, regulatory or judicial actions,
10
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its Subsidiaries and (D) to the knowledge of
the Company, there are no events or circumstances that might reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or
agency, against or affecting the Company or any of its Subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(xx) Registration Rights. Except as disclosed in the Prospectuses
-------------------
under "Shares Eligible For Future Sale -- Registration Rights," there are
no persons with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xxi) Tax Law Compliance. Except as disclosed in the Registration
------------------
Statement or either Combination Agreement (including the exhibits and
schedules thereto), (i) the Company and its Subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns and
have paid all taxes required to the paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied against
any of them, (ii) each of the Company, Xxxxxxx and Xxxxxx has made adequate
charges, accruals in the applicable financial statements referred to in
Section 1(iii) above in respect of all federal, state and foreign income
and franchise taxes for all periods as to which the tax liability of the
Company or any of their respective subsidiaries has not been finally
determined, and (iii) the Company has no knowledge of any tax deficiency
which might by asserted against the Company or any of its Subsidiaries
which could have a Material Adverse Effect.
(xxii) The Combination. The Combination has been duly and validly
---------------
authorized by the Company and all the necessary governmental filings,
consents and approvals required to be obtained or made in connection
therewith have been obtained or made, and all such approvals and consents
are in full force and effect; and the Combination will be effected in
compliance with all applicable state and federal laws and regulations and
will be consummated prior to or at the Closing Time.
(xxiii) Combination Agreements. The Company has entered into the
----------------------
Combination Agreements, filed as Exhibits 10.1 and 10.2 to the
Registration Statement, pursuant to which the Company will acquire in
separate transactions all of the capital stock and ownership interests in
Xxxxxxx and Xxxxxx. Each of the Combination Agreements has been duly and
validly authorized, executed and delivered by the Company, and is valid and
binding on the Company and is enforceable against the Company in accordance
with its terms and the Company is not in default in any respect thereunder.
A complete and correct copy of each Combination Agreement (including
exhibits and schedules) has been delivered to the U.S. Representatives and,
except with the U.S. Representatives' prior written approval, no material
changes therein will be made subsequent hereto and prior to the Closing
Time. The representations and warranties made in each Combination
Agreement
11
by the Company and by each of Xxxxxxx and Xxxxxx, respectively, and/or each
of their respective stockholders are true and correct in all material
respects to the extent set forth in Section 8.2(b) of each of the
Combination Agreements, except for such changes contemplated by such
Combination Agreement.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its Subsidiaries delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to each U.S. Underwriter as to the
matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
-----------------------------------------------
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each U.S. Underwriter, severally and not
jointly, and each U.S. Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per share set forth in Schedule B, the
number of Initial U.S. Securities set forth in Schedule A opposite the name of
such U.S. Underwriter, plus any additional number of Initial U.S. Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the U.S. Underwriters,
severally and not jointly, to purchase up to an additional 660,000 shares of
Common Stock at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Company setting forth the number of U.S. Option Securities as
to which the several U.S. Underwriters are then exercising the option and the
time and date of payment and delivery for such U.S. Option Securities. Any such
time and date of delivery for the U.S. Option Securities (a "Date of Delivery")
shall be determined by the Global Coordinator, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the U.S. Option Securities, each of the U.S. Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of U.S. Option Securities then being purchased which the number of
Initial U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter bears to the total number of Initial U.S. Securities, subject in
each case to such adjustments as the Global Coordinator in its discretion shall
make to eliminate any sales or purchases of fractional shares.
12
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Xxxxxxx, Procter & Xxxx, LLP, Exchange Place, Boston, Massachusetts 02109, or at
such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the U.S. Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Xxxxxxx Xxxxx, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A and will notify the Global Coordinator immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any
13
supplement to the Prospectuses or any amended Prospectuses shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectuses or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the initiation or threatening of any proceedings for any of such
purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule
424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), or any
amendment, supplement or revision to either any prospectus included in the
Registration Statement at the time it became effective or to the
Prospectuses, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Global Coordinator or counsel for the U.S. Underwriters shall reasonably
object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the U.S.
Representatives without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such
number of copies of the U.S. Prospectus (as amended or supplemented) as
such U.S. Underwriter may reasonably request. The U.S. Prospectus and any
amendments or
14
supplements thereto furnished to the U.S. Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the International Purchase Agreement and in the Prospectuses.
If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the U.S. Underwriters or for the Company, to amend
the Registration Statement or amend or supplement any Prospectus in order
that the Prospectuses will not include any untrue statements of a material
fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances
existing at the time any such Prospectus is delivered to a purchaser, or if
it shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement any Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the
Company will furnish to the U.S. Underwriters such number of copies of such
amendment or supplement as the U.S. Underwriters may reasonably request.
(f) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds."
(h) Listing. The Company will use its best efforts to effect the
listing of the Common Stock (including the Securities) on the Nasdaq
National Market ("NASDAQ").
(i) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter
15
into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of
ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or
under the International Purchase Agreement, (B) the issuance of options to
purchase Common Stock granted pursuant to the 1998 Employee Stock Option
and Incentive Plan referred to in the Prospectuses, or (C) the registration
of shares of Common Stock with the Securities and Exchange Commission
pursuant to a registration statement relating to one or more acquisitions
to be made by the Company; provided, however, that, during the 180 day
-------- -------
period from the date of the Prospectuses, any further action taken by the
Company with respect to such shares of Common Stock so registered for the
purposes of making such acquisition(s) shall be subject to the prior
written consent of the Global Coordinator, which consent shall not be
unreasonably withheld.
(j) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the rules and regulations of the Commission thereunder.
(k) Compliance with NASD Rules. The Company hereby agrees that it
will ensure that the Reserved Securities will be restricted as required by
the National Association of Securities Dealers, Inc. (the "NASD") or the
NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of this Agreement. The
Underwriters will notify the Company as to which persons will need to be so
restricted. At the request of the Underwriters, the Company will direct
the transfer agent to place a stop transfer restriction upon such
securities for such period of time. Should the Company release, or seek to
release, from such restrictions any of the Reserved Securities, the Company
agrees to reimburse the Underwriters for any reasonable expenses
(including, without limitation, legal expenses) they incur in connection
with such release.
(l) The Combination. The Company will (i) perform or satisfy all
conditions on its part to be performed or satisfied pursuant to the
Combination Agreements and to take any action necessary or required
pursuant thereto in order to consummate the Combination prior to or at the
Closing Time and (ii) obtain all applicable authorizations and approvals
and make all filings required under the Combination Agreements in
connection with the Combination. The Company will promptly notify the U.S.
Representatives of the occurrence of any event which may result in the non-
consummation of the Combination prior to or at the Closing Time.
16
(m) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representatives may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not qualified or subject
itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company agrees to pay all expenses incident to the
performance of its obligations under this Agreement and in connection with the
Combination, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, the Intersyndicate Agreement
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (v) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, the Prospectuses and any amendments or supplements
thereto, (vi) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (vii) the fees and
expenses of any transfer agent or registrar for the Securities, (viii) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the NASD of the terms of the
sale of the Securities, (ix) the fees and expenses incurred in connection with
the listing of the Securities on NASDAQ and (x) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company for sale to certain directors, officers and
employees of the Company and others having a business relationship with the
Company.
17
(b) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the U.S. Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
--------------------------------------------
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and/or other obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the U.S.
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion dated as of
Closing Time, of Xxxxxxx, Procter & Xxxx LLP, counsel for the Company, in
form and substance reasonably satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters to the effect set forth in Exhibit A
hereto and to such further effect as counsel to the U.S. Underwriters may
reasonably request.
(c) Opinion of Counsel for U.S. Underwriters. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of Shearman & Sterling, counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters with respect to the matters set forth in clauses
(i), (ii), (v), (vi) (solely as to preemptive or other similar rights
arising by operation of law or under the charter or by-laws of the
Company), (viii) through (x), inclusive, (xiii) (solely as to the
information in the Prospectus under "Description of Capital Stock--
Authorized and Outstanding Capital Stock" and "Underwriting") and the
penultimate paragraph of Exhibit A hereto. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the
United States and the General Corporation Law of the State of Delaware,
upon the opinions of counsel
18
satisfactory to the U.S. Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its Subsidiaries and certificates of public officials.
(d) Officers' Certificates. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its Subsidiaries, Xxxxxxx and
Xxxxxx, considered as one enterprise, whether or not arising in the
ordinary course of business, and the U.S. Representatives shall have
received certificates of the President or a Vice President and of the chief
financial or chief accounting officer of the Company, dated as of Closing
Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are
true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending, to their knowledge, or are
contemplated by the Commission.
(e) Accountants' Comfort Letter. At the time of the execution of
this Agreement, the U.S. Representatives shall have received from Xxxxxx
Xxxxxxxx a letter dated such date, in form and substance reasonably
satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information of each of the
Company, Xxxxxxx and Xxxxxx contained in the Registration Statement and the
Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Xxxxxx Xxxxxxxx a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on NASDAQ, subject only to official notice of
issuance.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
19
(i) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received the agreements relating to each of
Xxxxxx and Xxxxxxx, substantially in the form of Exhibit B hereto signed by
the persons listed on Schedule C hereto.
(j) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities
under this Agreement, the International Managers shall have purchased the
Initial International Securities under the International Purchase
Agreement.
(k) The Combination. With respect to the Combination, at Closing
Time, (i) the Combination Agreements shall have been duly executed and
delivered by each of the Company, Xxxxxxx and Xxxxxx, and shall be in full
force and effect and none of the parties thereto shall be in default
thereunder, (ii) each condition to the respective obligations of the
Company, Xxxxxxx and Xxxxxx set forth in Section 8 of each of the
Combination Agreements shall have been satisfied, without waiver or
modification, except as may be approved by the U.S. Representatives, (iii)
each of the representations and warranties of the Company contained in
Section 2 of the Combination Agreements shall be true and correct with the
same force and effect as though expressly made at and as Closing Time to
the extent set forth in Section 8.2(b) of each of the Combination
Agreements, (iv) the U.S. Representatives shall have received assurances
reasonably satisfactory to it that all documents required to be filed in
order to effectuate the consummation of each Combination shall have been
approved for filing by the appropriate state and federal authorities and
that all such Combination documents shall have been duly filed prior to
this Agreement and (v) the U.S. Representatives shall have received
opinions from counsel for the Company and counsel for each of Xxxxxxx and
Xxxxxx, each substantially in the form of Exhibit F to the Combination
Agreements, to the effect that each Combination (a) has become effective,
(b) was consummated in accordance with the provisions of the respective
Combination Agreement and applicable state and federal laws and (c) has
been duly authorized by the Company, and by each of Xxxxxxx and Xxxxxx,
respectively, and their respective stockholders.
(l) The Joinder Agreement. The Joinder Agreement shall have been
entered into by each of Xxxxxxx and Xxxxxx and shall have been confirmed
and accepted by the U.S. Underwriters, and is in full force and effect.
(m) Conditions to Purchase of U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company or any subsidiary
of the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the U.S. Representatives
shall have received:
20
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company confirming that
the certificate delivered at Closing Time pursuant to Section 5(d) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
------------------------------
Xxxxxxx, Procter & Xxxx LLP, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the U.S. Underwriters, dated such
Date of Delivery, relating to the U.S. Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The
----------------------------------------
favorable opinion of Shearman & Sterling, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S. Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Xxxxxx Xxxxxxxx,
-------------------------
in form and substance reasonably satisfactory to the U.S. Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the U.S. Representatives pursuant to
Section 5(f) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(n) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with
such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall
be reasonably satisfactory in form and substance to the U.S.
Representatives and counsel for the U.S. Underwriters.
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of U.S.
Option Securities on a Date of Delivery which is after the Closing Time,
the obligations of the several U.S. Underwriters to purchase the relevant
Option Securities, may be terminated by the U.S. Representatives by notice
to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without
liability of any party to any other party
21
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of U.S. Underwriters. The Company agrees to indemnify
and hold harmless each U.S. Underwriter and each person, if any, who controls
any U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information, if
applicable, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact included in any preliminary prospectus
or the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) the violation of any applicable
laws or regulations of jurisdictions where Reserved Securities have been
offered and (B) any untrue statement or alleged untrue statement of a
material fact included in the supplement or prospectus wrapper material
distributed in connection with the reservation and sale of the Reserved
Securities to certain directors, officers and employees of the Company and
certain distributors, dealers, business persons, and related persons or the
omission or alleged omission therefrom of a material fact necessary to make
the statements therein, when considered in conjunction with the
Prospectuses or preliminary prospectuses, not misleading;
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission or in connection with any violation of
the nature referred to in Section 6(a)(ii)(A) hereof; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based
22
upon any such untrue statement or omission, or any such alleged untrue
statement or omission or in connection with any violation of the nature
referred to in Section 6(a)(ii)(A) hereof, to the extent that any such
expense is not paid under (i), (ii) or (iii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, if applicable, or any preliminary prospectus or the U.S. Prospectus
(or any amendment or supplement thereto); and provided further that the Company
will not be liable to an Underwriter with respect to any Preliminary Prospectus
to the extent that the Company shall sustain the burden of proving that any such
loss, liability, claim, damage or expense resulted from the fact that such
Underwriter, in contravention of a requirement of this Agreement or applicable
law, sold Securities to a person to whom such Underwriter failed to send or
give, at or prior to the Closing Time, a copy of the Final Prospectus, as then
amended or supplemented if: (i) the Company has previously furnished copies
thereof (sufficiently in advance of the Closing Time and in sufficient quantity
to allow for distribution by the Closing Time) to the Underwriter and the loss,
liability, claim, damage or expense of such Underwriter resulted from an untrue
statement or omission of a material fact contained in or omitted from the
Preliminary Prospectus which was corrected in the Final Prospectus as, if
applicable, amended or supplemented prior to the Closing Time and such Final
Prospectus was required by law to be delivered at or prior to the written
confirmation of a sale to such person and (ii) such failure to give or send such
Final Prospectus by the Closing Time to the party or parties asserting such
loss, liability, claim, damage or expense would have constituted the sole
defense to the claim asserted by such person.
(b) Indemnification of Company and Its Directors and Officers. Each U.S.
Underwriter severally agrees to indemnify and hold harmless the Company and its
directors, its officers who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, if
applicable, or any preliminary U.S. prospectus or the U.S. Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such U.S. Underwriter through the U.S.
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the U.S. Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying
23
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 6(a) above, counsel to the indemnified parties shall be selected by
Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
-------- -------
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested in writing an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(iii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement. Notwithstanding the immediately preceding
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement of the
nature contemplated by Section 6(a)(iii) effected without its consent if such
indemnifying party (i) reimburses such indemnified party in accordance with such
request to the extent it considers such request to be reasonable and (ii)
provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each case prior to the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of certain eligible directors, officers and employees of
the Company and certain persons having business relationships with the
24
Company to pay for and accept delivery of Reserved Securities which, by the end
of the first business day following the date of this Agreement, were subject to
a properly confirmed agreement to purchase.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the U.S. Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
U.S. Underwriters on the other hand in connection with the statements or
omissions, or in connection with any violation of the nature referred to in
Section 6(a)(ii)(A) hereof, which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the U.S.
Underwriters on the other hand in connection with the offering of the U.S.
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus,
bear to the aggregate initial public offering price of the U.S. Securities as
set forth on such cover.
The relative fault of the Company on the one hand and the U.S. Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission or any violation of the nature referred to in Section
6(a)(ii)(A) hereof.
The Company and the U.S. Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation (even if the U.S. 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 in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
25
Notwithstanding the provisions of this Section, no U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section are
several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of officers of the Company or any of its
Subsidiaries submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any U.S.
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
------------------------
26
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, New York or
Massachusetts authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
-----------------------------------------------
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, the non-defaulting
U.S. Underwriters shall be obligated, each severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
U.S. Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after Closing Time, the
obligation of the U.S. Underwriters to
27
purchase and of the Company to sell the Option Securities to be purchased
and sold on such Date of Delivery shall terminate without liability on the
part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectuses or in any other
documents or arrangements. As used herein, the term "U.S. Underwriter" includes
any person substituted for a U.S. Underwriter under this Section.
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at Xxxxx Xxxxx, Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxx Xxxxxxx, Vice
President; and notices to the Company shall be directed to it at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, attention of Xxxxx X. Xxxxxx, President.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the U.S. Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the U.S.
Underwriters, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the U.S. Underwriters, the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
28
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the U.S. Underwriters and the Company in accordance with its terms.
Very truly yours,
XXXXXXX AMERICAN CORPORATION
By
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BT ALEX. XXXXX INCORPORATED
XXXXXX BROTHERS INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By ______________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A hereto.
29
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
--------------------------------------- ------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated..................................
BT Alex. Xxxxx Incorporated...............................
Xxxxxx Brothers Inc. .....................................
------------
Total 4,400,000
============
Sch A-1
SCHEDULE B
XXXXXXX AMERICAN CORPORATION
4,400,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ _____.
2. The purchase price per share for the U.S. Securities to be paid by
the several U.S. Underwriters shall be $ _____, being an amount equal to
the initial public offering price set forth above less $ _____ per share;
provided that the purchase price per share for any U.S. Option Securities
purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends
or distributions declared by the Company and payable on the Initial U.S.
Securities but not payable on the U.S. Option Securities.
Sch B-1
SCHEDULE C
List of persons and entities
subject to lock-up
Xxxx X. Xxxxx, Xx.
00000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Xxxxx X. Xxxxxx
00000 Xxxx Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx
00 Xxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx
00 Xxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx
0 Xxxxxxxxx Xxxx
Xxxxxxxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxxxxx Xxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
E. Xxx Xxxxxxx
00000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Sch C-1
Xxxxxx X. Xxxxx, Xx.
00 Xxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx
000 Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxxx, Xx.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxxx, Xx.
0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, XX 00000-0000
XXXXXX X. XXXXXXX
1984 REVOCABLE TRUST
Xxxxxx X. Xxxxxxx, Trustee
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, XX 00000-0000
XXXXXX X. XXXXXXX 1991
CHARITABLE REMAINDER UNITRUST
Xxxxxx X. Xxxxxxx, Trustee
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, XX 00000-0000
XXXXXXX ENTERPRISES, INC.
EMPLOYEE STOCK OWNERSHIP TRUST
Xxxxx X. Xxxxxxxxxxx, as Trustee and not individually
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Monroe & Company II, LLC
0 Xxxxx Xxxxxx
Xxxxx 00X
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Sch C-2
Xxxxxx X. Xxxxxx, Xx.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx, III
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx, Xx.
00 Xxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx
00 Xxxxxxxx Xxxxx
X. Xxxxxxxx, XX 00000
Sch C-3
Exhibit A
[subject to further negotiation]
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the U.S.
Purchase Agreement, the International Purchase Agreement and the Combination
Agreements.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction identified on
Schedule A attached hereto, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "As Adjusted" under the
caption "Capitalization" (except reservations, agreements or employee benefit
plans referred to in the Prospectuses or pursuant to the exercise of convertible
securities or options referred to in the Prospectuses); the shares of issued and
outstanding capital stock of the Company issued prior to Closing have been duly
authorized and validly issued and are fully paid and non-assessable; and none
of the outstanding shares of capital stock of the Company was issued in
violation of preemptive or other similar rights of any securityholder of the
Company.
(v) The Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for issuance
and sale to the Underwriters pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement, respectively, and, when issued and delivered
by the Company pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement, respectively, against payment of the consideration set forth
in the U.S. Purchase Agreement and the International Purchase Agreement, will be
validly issued and fully paid and non-assessable and no holder of the Securities
is or will be subject to personal liability by reason of being such a holder.
(vi) The issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
A-1
(vii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectuses and,
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction identified on Schedule A attached hereto, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid and non-
assessable and, after giving effect to the Combination, will be owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.
(viii) The U.S. Purchase Agreement, the International Purchase
Agreement and the Joinder Agreement have been duly authorized, executed and
delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectuses pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement and the Rule 430A Information, if applicable, the Prospectuses and
each amendment or supplement to the Registration Statement and the Prospectuses
as of their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or omitted therefrom and
the exhibits to the Registration Statement, as to which we need express no
opinion) complied as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
(xi) The form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company, and the
requirements of NASDAQ.
(xii) To the knowledge of such counsel, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any Subsidiary is a party, or to which the property of the Company or
any Subsidiary is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated in the U.S.
Purchase
A-2
Agreement, International Purchase Agreement and the Combination Agreements or
the performance by the Company of its obligations thereunder.
(xiii) The information in the Prospectuses under "Risk Factors -- Anti-
takeover Effect of Certificate of Incorporation and By-Law Provisions and
Delaware Law," "The Combination," "Business -- Litigation," "Management -- Board
of Directors," "Certain Transactions," "Principal Stockholders," "Description of
Capital Stock," and "Shares Eligible for Future Sale," and in the Registration
Statement under Items 14 and 15, to the extent that it constitutes matters of
law, summaries of legal matters, the Company's charter and by-laws or legal
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects.
(xiv) To the knowledge of such counsel, there are no statutes or
regulations that are required to be described in the Prospectuses that are not
described as required.
(xv) To the knowledge of such counsel, all descriptions in the Registration
Statement of contracts and other documents to which the Company or its
Subsidiaries are a party are accurate in all material respects; there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(xvi) Neither the Company nor any subsidiary is in violation of its
charter or by-laws and no default by the Company or any subsidiary exists in the
due performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed or incorporated by reference
as an exhibit to the Registration Statement.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of any jurisdiction, or as may be required or which
have been made in connection with the Combination, including all applicable
requirements, if any, of state takeover laws, the pre-merger notification
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder as to which no opinion is
rendered) is necessary or required in connection with the due authorization,
execution and delivery of the U.S. Purchase Agreement, the International
Purchase Agreement and the Combination Agreements or for the offering, issuance,
sale or delivery of the Securities.
(xviii) The execution, delivery and performance of the U.S. Purchase
Agreement, the International Purchase Agreement and the Combination Agreements
and the consummation of the
A-3
transactions contemplated in the U.S. Purchase Agreement; the International
Purchase Agreement; the Combination Agreements, and in the Registration
Statement (including the issuance and sale of the Securities, and the use of the
proceeds from the sale of the Securities as described in the Prospectuses under
the caption "Use Of Proceeds"), and compliance by the Company with its
obligations under the U.S. Purchase Agreement, the International Purchase
Agreement and the Combination Agreements, do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(x) of the Purchase Agreements) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to, any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company or any Subsidiary is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any Subsidiary is subject (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of (i) the
provisions of the charter or by-laws of the Company or any Subsidiary, or (ii)
any applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any of their
respective properties, assets or operations, except with respect to this clause
(ii), any such violation which could reasonably be expected to have a Material
Adverse Effect.
(xix) Except as disclosed in the Prospectuses under "Shares Eligible
for Future Sale --Registration Rights," to the knowledge of such counsel, there
are no persons with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 0000 Xxx.
(xx) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 0000 Xxx.
(xxi) The Combination and the Combination Agreements have been duly
and validly authorized by the Company and all the necessary governmental
filings, consents and approvals required to be obtained or made in connection
therewith have been obtained by the Company and are in full force and effect on
the on the date hereof. The Combination has become effective on or prior to the
date hereof and was consummated in accordance with the provisions of the
Combination Agreements and complies in all material respects with all applicable
state and federal laws and regulations.
Nothing has come to our attention that would lead us to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information (if applicable), (except for financial statements and schedules and
other financial data included therein or omitted therefrom, as to which we need
make no statement), at the time such Registration Statement or any such
amendment became effective, contained an 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
A-4
misleading or that the Prospectuses or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
therein or omitted therefrom, as to which we need make no statement), at the
time the Prospectuses were issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (i) as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials, and
(ii) on counsel to Xxxxxxx and Xxxxxx with respect to matters related to Xxxxxxx
and Xxxxxx. Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
A-5
[Form of lock-up from directors, officers or other stockholders pursuant to
Section 5(i)]
Exhibit B
_____ , 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
BT Alex. Xxxxx Incorporated
Xxxxxx Brothers Inc.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Xxxxxxx American Corporation
--------------------------------------------------------
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of Xxxxxxx
American Corporation, a Delaware corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), BT Xxxx. Xxxxx Incorporated and Xxxxxx Brothers Inc. propose
to enter into a U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the
Company providing for the public offering of shares (the "Securities") of the
Company's common stock, par value $.01 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the U.S. Purchase Agreement that, during a period of 180 days from
the date of the U.S. Purchase Agreement, the undersigned will not, without the
prior written consent of Xxxxxxx Xxxxx, directly or indirectly, (a) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or
B-1
(b) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction is to be
settled by delivery of Common Stock or other securities, in cash or otherwise.
Notwithstanding the foregoing, the following transfers shall be permitted for
all purposes hereunder: (i) in the case of the Xxxxxxx Enterprises, Inc.
Employee Stock Ownership Trust (the "ESOP Trust") any disposition of shares of
Common Stock (x) in connection with the termination of the Xxxxxxx Enterprises,
Inc. Employee Stock Ownership Plan (the "ESOP") and (y) in connection with the
termination of any employee of the Company or of its wholly-owned subsidiary
Xxxxxxx Enterprises, Inc. who is a participant in the ESOP, and (ii) in the case
of all holders of shares of Common Stock, the disposition of shares of Common
Stock as bona fide gifts, subject, in each of the foregoing cases, to the
execution by the transferee of any such shares of Common Stock of a written
agreement which shall be delivered to the addressees hereof, stating that such
transferee agrees to be bound by the provisions of this letter with respect to
any remaining portion of the lock-up period applying to any shares of Common
Stock so transferred; provided that, with respect to clause (i)(y) above, the
--------
Company shall use its reasonable best efforts to obtain such written agreement.
Very truly yours,
Signature:
-------------------------------
Print Name:
------------------------------
B-2
Annex A
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations.
(i) in our opinion, the audited financial statements and the related
financial statement schedules included in the Registration Statement and the
Prospectuses comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the published rules and
regulations thereunder;
(ii) on the basis of procedures (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of each of the Company,
Xxxxxxx and Xxxxxx for the three-month period ended March 31, 1998 included
in the Registration Statement and the Prospectuses (the "three-month
financials"), a reading of the minutes of all meetings of the stockholders
and directors of each of the Company, Xxxxxxx and Xxxxxx, since January 1,
1998, inquiries of certain officials of the Company, Xxxxxxx and Xxxxxx,
responsible for financial and accounting matters, a review of interim
financial information in accordance with standards established by the
American Institute of Certified Public Accountants in Statement on Auditing
Standards No. 71, Interim Financial Information ("SAS 71"), with respect to
the three-month financials and such other inquiries and procedures as may be
specified in such letter, nothing came to our attention that caused us to
believe that:
(A) the three-month financials of each of the Company, Xxxxxxx and
Xxxxxx included in the Registration Statement and the Prospectuses do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations applicable to
unaudited interim financial statements included in registration statements or
any material modifications should be made to the three-month financials
included in the Registration Statement and the Prospectuses for them to be in
conformity with generally accepted accounting principles;
(B) at a specified date not more than five days prior to the date of
this Agreement, there was any change in the capital stock of Xxxxxxx or
Xxxxxx, or any decrease in the consolidated net current assets of Xxxxxxx or
Xxxxxx, or any increase in the long-term debt of Xxxxxxx or Xxxxxx, or any
increase in stockholders' deficit of Xxxxxxx or decrease in the stockholders'
equity of Xxxxxx, in each case as compared with amounts shown in the latest
balance sheet included in the Registration Statement, except in each
Annex A-1
case for changes, decreases or increases that the Registration Statement
discloses have occurred or may occur; or
(C) for the period from December 31, 1998 to March 31, 1998 and for
the period from April 1, 1998 to a specified date not more than five days
prior to the date of this Agreement, there was any decrease in the
consolidated revenues of Xxxxxxx or Xxxxxx, or an increase in the
consolidated net loss before provision for income taxes or net loss of
Xxxxxxx or any decrease in the consolidated income before provision for
income taxes or net income of Xxxxxx in each case as compared with the
comparable period in the preceding year, except in each case for any
decreases that the Registration Statement discloses have occurred or may
occur;
(iii) based upon the procedures set forth in clause (ii) above and a
reading of the Selected Financial Data included in the Registration
Statement, nothing came to our attention that caused us to believe that the
Selected Financial Data included in the Registration Statement do not comply
as to form in all material respects with the disclosure requirements of Item
301 of Regulation S-K of the 1933 Act;
(iv) we have compared the information in the Registration Statement under
selected captions with the disclosure requirements of Regulation S-K of the
1933 Act and on the basis of limited procedures specified herein, nothing
came to our attention that caused us to believe that this information does
not comply as to form in all material respects with the disclosure
requirements of Items 302 and 402, respectively, of Regulation S-K;
(v) we are unable to and do not express any opinion on the Pro Forma
Combined Statement of Operations (the "Pro Forma Statement") included in the
Registration Statement or on the pro forma adjustments applied to the
historical amounts included in the Pro Forma Statement; however, for purposes
of this letter we have:
(A) read the Pro Forma Statement;
(B) performed a review in accordance with SAS 71 of the financial
statements to which the pro forma adjustments were applied;
(C) made inquiries of certain officials of the Company and its
subsidiaries, Xxxxxxx and Xxxxxx, who have responsibility for financial and
accounting matters about the basis for their determination of the pro forma
adjustments and whether the Pro Forma Statement complies as to form in all
material respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the Pro Forma Statement; and
Annex A-2
on the basis of such procedures and such other inquiries and procedures as
specified herein, nothing came to our attention that caused us to believe
that the Pro Forma Statement included in the Registration Statement does not
comply as to form in all material respects with the applicable requirements
of Rule 11-02 of Regulation S-X or that the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of those
statements; and
(vii) in addition to the procedures referred to in clause (ii) above, we
have performed other procedures, not constituting an audit, with respect to
certain amounts, percentages, numerical data and financial information
appearing in the Registration Statement, which are specified herein, and have
compared certain of such items with, and have found such items to be in
agreement with, the accounting and financial records of the Company, Xxxxxxx
and Xxxxxx.
Annex A-3
Annex B
[FORM OF JOINDER AGREEMENT]
JOINDER AGREEMENT, dated as of _______ , 1998, among Xxxxxxx
Enterprises, Inc., a Massachusetts corporation ("Xxxxxxx"), Xxxxxx-American
Company, Inc., a North Carolina corporation ("Xxxxxx"), and Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, BT Alex. Xxxxx Incorporated
and Xxxxxx Brothers Inc., as representatives of the underwriters named in
Schedule A (collectively, the "U.S. Underwriters") to the U.S. Purchase
Agreement dated __________, 1998 (the "Purchase Agreement"), among Xxxxxxx
American Corporation, a Delaware corporation (the "Company"), and the U.S.
Underwriters (the U.S. Underwriters together with the Company are referred to
herein as the "Parties"). All capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Purchase Agreement.
WHEREAS, the Purchase Agreement has been executed and delivered by the
Parties in connection with the purchase and sale of the Securities of the
Company;
WHEREAS, upon the consummation of the purchase and sale of the Securities
as contemplated in the Purchase Agreement, the Company will acquire in two
separate transactions all the outstanding capital stock of each of Xxxxxxx and
Xxxxxx pursuant to the terms of two stock purchase agreements (such transactions
being the "Combination");
WHEREAS, simultaneously with the consummation of the Combination and the
purchase and sale of the Securities pursuant to the Purchase Agreement, the
Parties intend that Xxxxxxx and Xxxxxx will become parties to the Purchase
Agreement, and become bound to certain provisions contained therein pursuant to
the terms of this Joinder Agreement, as if each of Xxxxxxx and Xxxxxx were an
original party to the Purchase Agreement;
NOW, THEREFORE, each of Xxxxxxx and Xxxxxx hereby agrees as follows:
SECTION 1. Representations and Warranties of Xxxxxxx and Xxxxxx. Each
----------------------------------------------------
of Xxxxxxx and Xxxxxx, severally, represents and warrants to each U.S.
Underwriter, as to itself only, as of the date hereof, and if the date hereof is
different than the Closing Time, as of the Closing Time, and as of each Date of
Delivery (if any), and agrees with each U.S. Underwriter, as follows:
(a) each representation and warranty applicable to it in Section 1(a) of
the Purchase Agreement, specifically paragraphs (i), (iii), (iv), (vi), (xii),
(xvii), (xix) and (xxi) contained therein, shall be true and correct.
(b) This Joinder Agreement has been duly authorized, executed and delivered
by it.
(c) The execution, delivery and performance of this Joinder Agreement, and
the transactions contemplated in this Joinder Agreement and in the Purchase
Agreement, and compliance by it with its obligations under this Joinder
Agreement and in the Purchase Agreement, have been duly authorized by all
necessary corporate action and do not and will not, whether with
Annex B-1
or without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of it pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of it or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over it or any of its assets, properties or operations.
(d) There is no action, suit, proceeding, inquiry or investigation before
or brought by any court or governmental agency or body, domestic or foreign, now
pending, or, to its knowledge, threatened, against or affecting it, which might
reasonably be expected to result in a material adverse effect in the condition
(financial or otherwise), or in the earnings, business affairs or business
prospects of Xxxxxxx or Xxxxxx, as the case may be, or which might reasonably be
expected to materially and adversely affect the consummation of the transactions
contemplated in this Joinder Agreement and in the Purchase Agreement, or the
performance of its obligations hereunder or thereunder.
SECTION 2. Indemnification. Xxxxxxx and Xxxxxx jointly and severally
---------------
agree (a) to indemnify and hold harmless each U.S. Underwriter and each person,
if any, who controls any U.S. Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, in accordance with the provisions of
Section 6 of the Purchase Agreement to the same extent as the Company is so
obligated thereunder and (b) to be subject to the provisions relating to
contribution contained in Section 7 of the Purchase Agreement, to the same
extent as the Company is be so obligated thereunder.
SECTION 3. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Joinder
Agreement shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of Xxxxxxx or Xxxxxx, and shall survive delivery of
the Securities to the U.S. Underwriters.
SECTION 4. Governing Law. This Joinder Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York.
SECTION 5. Opinions of Counsels for Xxxxxxx and Xxxxxx. At Closing Time,
-------------------------------------------
the U.S. Representatives shall have received the favorable opinion dated as of
Closing Time, of _______________, counsel for Xxxxxxx, and _______________,
counsel for Xxxxxx, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letters for each
of the other U.S. Underwriters to the effect set forth in Exhibit A hereto and
to such further effect as counsel to the U.S. Underwriters may reasonably
request.
SECTION 6. Joinder with Purchase Agreement. This Joinder Agreement shall
-------------------------------
be attached as an exhibit to, and shall be read together with and construed as
part of, the Purchase Agreement.
Annex B-2
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to each of the U.S. Representatives a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the U.S. Underwriters, Xxxxxxx and Xxxxxx in accordance with its
terms.
Very truly yours,
XXXXXXX ENTERPRISES, INC.
By ________________________
Title:
XXXXXX-AMERICAN COMPANY, INC.
By _________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BT ALEX. XXXXX INCORPORATED
XXXXXX BROTHERS INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By __________________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A to the Purchase Agreement.
Annex B-3
Exhibit A
[FORM OF OPINION TO BE DELIVERED
BY COUNSEL TO XXXXXXX AND XXXXXX]
(i) The Joinder Agreement has been duly authorized, executed and delivered
by it and is in full force and effect.
(ii) There is not pending or threatened any action, suit, proceeding,
inquiry or investigation, to which Xxxxxxx or Xxxxxx, as the case may be, or any
subsidiary of Xxxxxxx or Xxxxxx is a party, or to which the property of Xxxxxxx
or Xxxxxx, as the case may be, or any subsidiary of Xxxxxxx or Xxxxxx is
subject, before or brought by any court or governmental agency or body, domestic
or foreign, which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in the Joinder Agreement, or by the performance of Xxxxxxx or
Xxxxxx, as the case may be, of their obligations thereunder.
(iii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required or which
have been made in connection with the Combination, including all applicable
requirements, if any, of state takeover laws, the pre-merger notification
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder) is necessary or required in
connection with the due authorization, execution and delivery of the Joinder
Agreement.
(iv) The execution, delivery and performance of the Joinder Agreement and
the consummation of the transactions contemplated therein, and compliance by
Xxxxxxx or Xxxxxx, as the case may be, with their obligations under the Joinder
Agreement, do not and will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(x) of the Purchase Agreement) under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of Xxxxxxx or Xxxxxx, as the case may be, or any
subsidiary of Xxxxxxx or Xxxxxx pursuant to, any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which Xxxxxxx or Xxxxxx, as the case may be, or any
subsidiary or Xxxxxxx or Xxxxxx is a party or by which it or any of them may be
bound, or to which any of the property or assets of Xxxxxxx or Xxxxxx, as the
case may be, or any subsidiary of Xxxxxxx or Xxxxxx is subject (except for such
conflicts, breaches or
Annex B-4
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of Xxxxxxx or Xxxxxx, as the case may be, or any
subsidiary of Xxxxxxx or Xxxxxx, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over Xxxxxxx or Xxxxxx, as the case may be, or any subsidiary of Xxxxxxx or
Xxxxxx or any of their respective properties, assets or operations.
Annex B-5
