1
EXHIBIT 1.1
1,575,000 SHARES
XXXXXXX TECHNOLOGIES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
October __, 1997
XXXXX & COMPANY
XXXXXXXXX & XXXXX L.L.C.
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Xxxxxxx Technologies, Inc., a Delaware corporation (the
"Company"), and the selling shareholders named in Schedule B hereto (the
"Selling Shareholders") propose to sell, pursuant to the terms of this
Agreement, to the several underwriters named in Schedule A hereto (the
"Underwriters," or, each, an "Underwriter"), an aggregate of 1,575,000 shares of
common stock, $0.10 par value (the "Common Stock") of the Company. The aggregate
of 1,575,000 shares so proposed to be sold is hereinafter referred to as the
"Firm Stock". The Company also proposes to sell to the Underwriters, upon the
terms and conditions set forth in Section 3 hereof, up to an additional 236,250
shares of Common Stock (the "Optional Stock"). The Firm Stock and the Optional
Stock are hereinafter collectively referred to as the "Stock". Xxxxx & Company
("Cowen") and Xxxxxxxxx & Xxxxx L.L.C. are acting as representatives of the
several Underwriters and in such capacity are hereinafter referred to as the
"Representatives".
2. Representations and Warranties
(a) Representations and Warranties and Agreements of the
Company. The Company represents and warrants to, and agrees with, the several
Underwriters that:
(i) A registration statement, including all financial
statements and exhibits thereto, on Form S-3- (File No. 333-_____) in the form
in which it became or becomes effective and also in such form as it may be when
any post-effective amendment thereto shall become effective with respect to the
Stock, including any preeffective prospectuses included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, copies of which (including all documents incorporated
by reference therein) have heretofore been delivered to the Representatives, has
been carefully prepared by the Company in conformity with the requirements of
the Securities Act and has been filed with the Commission under the Securities
Act; one or more amendments to such registration statement, including in each
case an amended preeffective prospectus, copies of which
2
amendments (including all documents incorporated by reference therein), have
heretofore been delivered to the representatives, have been so prepared and
filed. If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Stock may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement, including all financial statements and exhibits thereto, as amended
by said post-effective amendment. The term "Registration Statement" as used in
this Agreement shall also include any registration statement relating to the
Stock that is filed and declared effective pursuant to Rule 462(b) under the
Securities Act. The term "Prospectus" as used in this Agreement means the
prospectus, including all financial statements included therein, in the form
included in the Registration Statement, or, (A) if the prospectus included in
the Registration Statement omits information in reliance on Rule 430A under the
Securities Act and such information is included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act, the term
"Prospectus" as used in this Agreement means the prospectus in the form included
in the Registration Statement as supplemented by the addition of the Rule 430A
information contained in the prospectus filed with the Commission pursuant to
Rule 424(b) and (B) if prospectuses that meet the requirements of Section 10(a)
of the Securities Act are delivered pursuant to Rule 434 under the Securities
Act, then (i) the term "Prospectus" as used in this Agreement means the
"prospectus subject to completion" (as such term is defined in Rule 434(g) under
the Securities Act) as supplemented by (a) the addition of Rule 430A information
or other information contained in the form of prospectus delivered pursuant to
Rule 434(c)(2) under the Securities Act or (b) the information contained in the
term sheets described in Rule 434(c)(3) under the Securities Act, and (ii) the
date of such prospectuses shall be deemed to be the date of the term sheets. The
term "Preeffective Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the Registration Statement at the
time of the initial filing of the Registration Statement with the Commission,
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus. Any reference herein to any Preeffective Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Form S-3 under the Securities Act,
as of the date of such Preeffective Prospectus or Prospectus, as the case may
be, and any reference to any amendment or supplement to any Preeffective
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and so incorporated by reference.
(ii) The Commission has not issued or threatened to issue any
order preventing or suspending the use of any Preeffective Prospectus, and, at
its date of issue, each Preeffective Prospectus conformed in all material
respects with the requirements of the Securities Act and did not include any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and, when the
Registration Statement becomes effective and at all times subsequent thereto up
to and including each of the Closing Dates (as hereinafter defined), the
Registration Statement and the Prospectus and any amendments or supplements
thereto contained and will contain all material statements and information
required to be included therein by the Securities Act and conformed and will
conform in all material respects to the requirements of the Securities Act and
neither the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made (with respect to the Prospectus only), not misleading;
provided, however, that the foregoing representations, warranties and agreements
shall not apply to information contained in or omitted from any Preeffective
Prospectus or the Registration Statement or the Prospectus or any such amendment
or supplement thereto in direct reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any Underwriter,
directly or through the Representatives, specifically for inclusion therein;
there is no
2.
3
franchise, lease, contract, agreement or document required to be described in
the Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed therein as required; and
all descriptions of any franchises, leases, contracts, agreements or documents
contained in the Registration Statement are accurate and complete descriptions
of such documents in all material respects.
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, and except as
set forth or contemplated in the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or contingent
other than in the ordinary course of business, nor entered into any transactions
not in the ordinary course of business, and there has not been any material
adverse change in the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole, or any change in the capital stock (other
than as a result of option exercises pursuant to options exercised pursuant to
grants disclosed in the Registration Statement), short-term or long-term debt of
the Company (other than borrowings or payments made pursuant to the terms and
conditions of the Company's revolving credit agreement as the same is described
in the Registration Statement) and its subsidiaries considered as a whole
(collectively, a "Material Adverse Change").
(iv) The financial statements, together with the related notes,
set forth in the Prospectus and elsewhere in the Registration Statement fairly
present, on the basis stated in the Registration Statement, the financial
position and the results of operations and changes in financial position of the
Company and its consolidated subsidiaries at the respective dates or for the
respective periods therein specified. Such statements and related notes have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis. The selected and summary financial and
statistical data set forth in the Prospectus under the captions "Selected
Consolidated Financial Data" and "Summary Consolidated Financial Data" and in
the Company's Annual Report on Form 10-K for the fiscal year ended July 31,
1997, incorporated by reference in the Prospectus fairly present, on the basis
stated in the Registration Statement and such Annual Report, the information set
forth therein.
(v) Ernst & Young LLP, who have expressed their opinions on the
audited financial statements included in the Registration Statement and the
Prospectus are independent public accountants as required by the Securities Act
and the Rules and Regulations.
(vi) The Company and each of its subsidiaries have been duly
organized and are validly existing and in good standing as corporations under
the laws of their respective jurisdictions of organization, with power and
authority (corporate and other) to own or lease their properties and to conduct
their businesses as described in the Prospectus; the Company and each of its
subsidiaries are in possession of and operating in compliance with all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders required for the conduct of its business, all of which
are valid and in full force and effect except where the failure to possess or
operate in compliance would not cause a Material Adverse Change; and the Company
and each of such subsidiaries are duly qualified to do business and in good
standing as foreign corporations in all other jurisdictions where their
ownership or leasing of properties or the conduct of their businesses requires
such qualification except where the failure to be so qualified would not cause a
Material Adverse Change. The Company and each of its subsidiaries have all
requisite power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses and permits of
and from all public regulatory or governmental agencies and bodies to own, lease
and operate their properties and conduct their businesses as now being conducted
and as described in the Registration Statement and the Prospectus except where
the failure to be so qualified would not cause a Material Adverse Change, and no
such consent, approval, authorization, order, registration, qualification,
license or permit contains a materially burdensome restriction not
3.
4
adequately disclosed in the Registration Statement and the Prospectus. The
Company owns or controls, directly or indirectly, only the following
corporations, associations or other entities: PurePulse Technologies, Inc.
("PurePulse"), Xxxxxxx Energy Products, Inc., Xxxxxxx Federal Division, Inc.,
I-Bus, Inc., Xxxxxxx Business Systems, Inc. ("MBS"), Maxwell Justice Systems,
Inc. ("MJS") and Xxxxxxx Information Systems, Inc. With the exception of
PurePulse, MBS and MJS, [and assuming that no options exercisable for shares of
such subsidiaries are exercised], each of the Company's subsidiaries is wholly
owned by the Company. The Company owns approximately 85% of the capital stock of
PurePulse. Five percent of PurePulse is owned by Terra Laval Holdings & Finance
SA and the balance is owned by employees and former employees. The Company owns
approximately 80% of MBS, with approximately 20% owned by employees. Xxxxxxx
Information Systems, Inc. owns approximately 90% of MJS, with approximately 10%
owned by employees.
(vii) The Company's authorized and outstanding capital stock is
on the date hereof, and will be on the Closing Dates, as set forth under the
heading "Capitalization" in the Prospectus, except as a result of the exercise
of options granted pursuant to the terms and conditions of option plans
described in the Registration Statement. The outstanding shares of common stock
(including the outstanding shares of Stock) of the Company conform to the
description thereof in the Prospectus and have been duly authorized and validly
issued and are fully paid and nonassessable; are duly listed on the Nasdaq
National Market and have been issued in compliance with all federal and state
securities laws and were not issued in violation of or subject to any preemptive
rights or similar rights to subscribe for or purchase securities. Except as
disclosed in or contemplated by the Prospectus and the financial statements of
the Company and related notes thereto included in the Prospectus, neither the
Company nor its subsidiaries have outstanding any options or warrants to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of their respective capital stock or any
such options, rights, convertible securities or obligations, except, with
respect to the Company, for options granted and sales of stock made subsequent
to the date of information provided in the Prospectus pursuant to the Company's
stock purchase and stock option plans as disclosed in the Prospectus. The
description of the Company's stock option and other stock plans or arrangements,
and the options or other rights granted or exercised thereunder, as set forth in
the Prospectus, accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights. All
outstanding shares of capital stock of each subsidiary have been duly authorized
and validly issued, and are fully paid and nonassessable and the shares owned by
the Company are owned free and clear of any liens, encumbrances, equities or
claims except for an option to purchase 29% of MJS issued to certain employees
and the shares of MJS owned by Xxxxxxx Information Systems, Inc., are owned by
Xxxxxxx Information Systems, Inc. free and clear of any liens, encumbrances,
equities or claims.
(viii) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights and will conform to the description thereof in the Prospectus. No further
approval or authority of the stockholders or the Board of Directors of the
Company will be required for the transfer and sale of the stock to be sold by
the Selling Security holders or the issuance and sale of the stock as
contemplated herein.
(ix) Except as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries, officers, directors or other affiliates is a party or of which any
property of the Company or any subsidiary or affiliate is subject, which, if
determined adversely to the Company or any subsidiary or other party, reasonably
could be expected to have individually or in the aggregate (i) prevent or
adversely affect the transactions contemplated by this
4.
5
Agreement, (ii) suspend the effectiveness of the Registration Statement, (iii)
prevent or suspend the use of the Preeffective Prospectus in any jurisdiction or
(iv) result in a Material Adverse Change; and to the best of the Company's
knowledge no such proceedings are threatened or contemplated against the Company
or any subsidiary or other party by governmental authorities or others. The
Company is not a party nor subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body or other governmental
agency or body. The description of the Company's litigation under the heading
"Litigation" in the Prospectus is true and correct, complies with the Rules and
Regulations and provides a fair summary of the matters addressed therein.
(x) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated (A) will not result
in any violation of the provisions of the certificate of incorporation, by-laws
or other organizational documents of the Company or its subsidiaries, or any
law, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or its subsidiaries or any of their
properties or assets, (B) will not conflict with or result in a breach or
violation of any of the terms or provisions of or constitute a default under any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which they or any of their properties are or may be bound, the certificate of
incorporation, bylaws or other organizational documents of the Company or any of
its subsidiaries, or any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or will result in the creation of a lien
or encumbrance of any nature whatsoever.
(xi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby, except such as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or under the Securities Act
or the Securities Exchange Act of 1934, as amended (the "Exchange Act") or the
securities or "Blue Sky" laws of any jurisdiction in connection with the
purchase and distribution of the Stock by the Underwriters.
(xii) The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder (including to
issue, sell and deliver the Stock), and this Agreement has been duly and validly
authorized, executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general equitable principals,
and except to the extent indemnification provided herein is contrary to law or
public policy.
(xiii) The Company and its subsidiaries are in all material
respects in compliance with, and conduct their businesses in conformity with,
all applicable federal, state, local and foreign laws, rules and regulations of
any court or governmental agency or body; to the knowledge of the Company,
otherwise than as set forth in the Registration Statement and the Prospectus, no
prospective change in any of such federal or state laws, rules or regulations
has been adopted which, when made effective, would cause a Material Adverse
Change. In the ordinary course of business, employees of the Company conduct
periodic review of the effect of Environmental Laws (as defined below) on the
business operations and properties of the Company and its subsidiaries in the
ordinary course of which they seek to identify and evaluate noncompliances and
on and/or off-site contamination of buildings, soil and/or ground water with
Hazardous Materials resulting from the Company's operations and associated costs
and liabilities. Except as disclosed in the Registration Statement, the company
and its subsidiaries have no on and/or off-site contamination of Hazardous
Materials resulting from their operations and are in compliance with all
applicable existing federal, state, local and foreign laws and regulations
relating to the protection of human
5.
6
health or the environment or imposing liability or requiring standards of
conduct concerning any Hazardous Materials ("Environmental Laws"), except for
such instances on noncompliance which, either singly or in the aggregate, would
not cause a Material Adverse Change. The term "Hazardous Material" means (a) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, amended, (b) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended, (c) any
petroleum or petroleum product, (d) any polychlorinated biphenyl and (e) any
pollutant or hazardous, dangerous or toxic chemical, waste or substance
regulated under or within the meaning of any other Environmental Law.
(xiv) The Company and its subsidiaries have filed all necessary
federal, state, local and foreign income, payroll, franchise and other tax
returns and have paid all taxes shown as due thereon or with respect to any of
their properties, and there is no tax deficiency that has been, or to the best
knowledge of the Company is likely to be, asserted against the Company or any of
its subsidiaries or any of their respective properties or assets that would
cause a Material Adverse Change.
(xv) No person or entity has the right to require registration
of shares of Common Stock or other securities of the Company because of the
filing or effectiveness of the Registration Statement or otherwise.
(xvi) Neither the Company nor any of its officers, directors or
other affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security of the
Company, or which caused or resulted in, or which might in the future reasonably
be expected to cause or result in, stabilization or manipulation of the price of
any security of the Company.
(xvii) The Company has provided the Representatives with all
financial statements since July 31, 1992 to the date hereof that are available
to the officers of the Company, including financial statements for the months of
August and September of 1997.
(xviii) The Company and its subsidiaries own or possess the
right to use all patents, trademarks (including, without limitation, "Xxxxxxx"),
trademark registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in the
Prospectus as being owned by them or any of them or necessary for the conduct of
their respective businesses, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and
its subsidiaries with respect to the foregoing. To the best of the Company's
knowledge, the Company's business as now conducted and as proposed to be
conducted does not and will not infringe or conflict with any patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses or
other intellectual property or franchise right of any person. No claim has been
made or threatened in writing against the Company or any of its subsidiaries
alleging the infringement by the Company or any of its subsidiaries of any
patent, trademark, service xxxx, trade name, copyright, trade secret, license in
or other intellectual property right or franchise right of any person which
claim has had or could be reasonably expected to cause a Material Adverse
Change.
(xix) The Company and its subsidiaries have performed all
material obligations required to be performed by them under all contracts
required by Item 601(b)(10) of Regulation S-K under the Securities Act to be
filed as exhibits to the Registration Statement, and neither the Company nor any
of its subsidiaries nor any other party to such contract is in default under or
in breach of any such obligations. Neither the Company nor any of its
subsidiaries has received any notice of such default or breach.
6.
7
(xx) The Company is not involved in any labor dispute nor to
the best of the Company's knowledge is any such dispute threatened. The Company
is not aware that (A) any executive, key employee or significant group of
employees of the Company or any subsidiary plans to terminate employment with
the Company or any such subsidiary or (B) any such executive or key employee is
subject to any noncompete, nondisclosure, confidentiality, employment,
consulting or similar agreement that would be violated by the present or
proposed business activities of the Company and its subsidiaries. Neither the
Company nor any subsidiary has or expects to have any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other plan
which is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company or any subsidiary makes or ever has made
a contribution and in which any employee of the Company or any subsidiary is or
has ever been a participant. With respect to such plans, the Company and each
subsidiary are in compliance in all material respects with all applicable
provisions of ERISA.
(xxi) The Company has obtained the written agreement described
in Section 8(l) of this Agreement from each of its officers, directors and
holders of Common Stock listed on Schedule C hereto.
(xxii) The Company and its subsidiaries have, and the Company
and its subsidiaries as of the Closing Dates will have, good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned or proposed to be owned by them which is material to the
business of the Company or of its subsidiaries, in each case free and clear of
all liens, encumbrances and defects except such as are described the Prospectus
or such as would not cause a Material Adverse Change; and any real property and
buildings held under lease by the Company and its subsidiaries or proposed to be
held after giving effect to the transactions described in the Prospectus are, or
will be, as of each of the Closing Dates, held by them under valid, subsisting
and enforceable leases with such exceptions as would not cause a Material
Adverse Change.
(xxiii) The Company and its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in the
Prospectus; and neither the Company nor any subsidiary of the Company has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue their businesses at a cost that
would not materially and adversely affect the condition, financial or otherwise,
or the earnings, business or operations of the Company and its subsidiaries
considered as a whole, except as described in or contemplated by the Prospectus.
(xxiv) Other than as contemplated by this Agreement, there is
no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder's fee or other fee or commission as a result of any of
the transactions contemplated by this Agreement.
(xxv) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida)
(xxvi) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
7.
8
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(xxvii) To the best of the Company's knowledge, neither the
Company nor any of its subsidiaries nor any employee or agent of the Company or
any of its subsidiaries has made any payment of funds of the Company or any of
its subsidiaries or received or retained any funds in violation of any law, rule
or regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(xxviii) Neither the Company nor any of its subsidiaries is or,
after application of the net proceeds of this offering as described under the
caption "Use of Proceeds" in the Prospectus, will become an "investment company"
or an entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
(xxix) Each certificate signed by any officer of the Company
and delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the matters
covered thereby.
(b) Representations and Warranties and Agreements of the Selling
Shareholders. Each Selling Shareholder represents and warrants to, and agrees
with, the several Underwriters that such Selling Shareholder:
(i) Now has, and on the Closing Dates will have, valid and
marketable title to the Shares to be sold by such Selling Shareholder, free and
clear of any lien, claim, security interest or other encumbrance, including,
without limitation, any restriction on transfer, and has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement (each as hereinafter defined), and, to the extent such Selling
Shareholder is a corporation, has been duly organized and is validly existing
and in good standing as a corporation under the laws of its jurisdiction of
organization.
(ii) Now has, and on each of the Closing Dates will have, upon
delivery of and payment for each share of Stock hereunder, full right, power and
authority, any approval required by law to sell, transfer, assign and deliver
the Stock being sold by such Selling Shareholder hereunder, and each of the
several Underwriters will acquire valid and marketable title to all of the Stock
being sold to the Underwriters by such Selling Shareholder, free and clear of
any liens, encumbrances, equities claims, restrictions on transfer or other
defects whatsoever.
(iii) Has duly executed and delivered a lock-up agreement, in
substantially the form heretofore delivered by the Representatives (the "Lock-up
Agreement").
(iv) Has duly executed and delivered a power of attorney, in
substantially the form heretofore delivered by the Representatives (the "Power
of Attorney"), appointing Xxxxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxxx X.
Xxxxxxx as attorney-in-fact (the "Attorneys-in-fact") with authority to execute
and deliver this Agreement on behalf of such Selling Shareholder, to authorize
the delivery of the shares of Stock to be sold by such Selling Shareholder
hereunder and otherwise to act on behalf of such Selling Shareholder in
connection with the transactions contemplated by this Agreement.
(v) Has duly executed and delivered a custody agreement, in
substantially the form heretofore delivered by the Representatives (the "Custody
Agreement"), with [Xxxxx Xxxxxx Services, Inc.] as custodian (the "Custodian"),
pursuant to which certificates in negotiable form for the shares of
8.
9
Stock to be sold by such Selling Shareholder hereunder have been placed in
custody for delivery under this Agreement.
(vi) Has, by execution and delivery of each of this Agreement,
the Power of Attorney and the Custody Agreement, created valid and binding
obligations of such Selling Shareholder, enforceable against such Selling
Shareholder in accordance with their terms, except to the extent that rights to
indemnity hereunder may be limited by federal or state securities laws or the
public policy underlying such laws.
(vii) The performance of this Agreement, the Custody Agreement
and the Power of Attorney, and the consummation of the transactions contemplated
hereby and thereby will not result in a breach or violation by such Selling
Shareholder of any of the terms or provisions of, or constitute a default by
such Selling Shareholder under, any indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise, license or other
agreement or instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder or any of its properties is bound, or any judgment of
any court or governmental agency or body applicable to such Selling Shareholder
or any of its properties, or to such Selling Shareholder's knowledge, any
statute, decree, order, rule or regulation of any court or governmental agency
or body applicable to such Selling Shareholder or any of its properties.
Each Selling Shareholder agrees that the shares of Stock represented by
the certificates held in custody under the Custody Agreement are for the benefit
of and coupled with and subject to the interests of the Underwriters, the other
Selling Shareholders and the Company hereunder, and that the arrangement for
such custody and the appointment of the Attorneys-in-fact are irrevocable; that
the obligations of such Selling Shareholder hereunder shall not be terminated by
operation of law, whether by the death or incapacity, liquidation or
distribution of such Selling Shareholder, or any other event, that if such
Selling Shareholder should die or become incapacitated or is liquidated or
dissolved or any other event occurs, before the delivery of the Stock hereunder,
certificates for the Stock to be sold by such Selling Shareholder shall be
delivered on behalf of such Selling Shareholder in accordance with the terms and
conditions of this Agreement and the Custody Agreement, and action taken by the
Attorneys-in-fact or any of them under the Power of Attorney shall be as valid
as if such death, incapacity, liquidation or dissolution or other event had not
occurred, whether or not the Custodian, the Attorneys-in-fact or any of them
shall have notice of such death, incapacity, liquidation or dissolution or other
event.
(c) Representations and Warranties and Agreements of the Underwriters.
The information set forth in the last paragraph on the front cover page and
under "Underwriting" in the Registration Statement, any Preeffective Prospectus
and the Prospectus relating to the Stock issued by the Company (insofar as such
information relates to the Underwriters) constitutes the only information
furnished by the Underwriters to the Company for inclusion in the Registration
Statement, any Preeffective Prospectus and the Prospectus, and the
Representatives represent and warrant to the Company that the statements made
therein are correct.
3. Purchase by, and Sale and Delivery to, Underwriters--Closing Dates. The
Company and the Selling Shareholders agree, severally and not jointly, to sell
to the Underwriters the Firm Stock, with the number of shares to be sold by the
Company and each Selling Shareholder being the number of Shares set opposite
his, her or its name in Schedule B; and on the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Underwriters agree, severally and not
jointly, to purchase the Firm Stock from the Company and the Selling
Shareholders, the number of shares of Firm Stock to be purchased by each
Underwriter being set opposite its name in Schedule A, subject to adjustment in
certain circumstances in accordance with Section
9.
10
12 hereof. The number of shares of Stock to be purchased by each Underwriter
from each Selling Shareholder hereunder shall bear the same proportion to the
total number of shares of Stock to be purchased by such Underwriter hereunder as
the number of shares of stock being sold by each Selling Shareholder bears to
the total number of shares of Stock being sold by all Selling Shareholders,
subject to adjustment by the Representatives to eliminate fractions.
The purchase price per share to be paid by the Underwriters to the
Company and the Selling Shareholders will be the price per share set forth in
the table on the cover page of the Prospectus under the heading "Proceeds to the
Company" (the "Purchase Price").
The Company and the Selling Shareholders will deliver the Firm Stock to
the Representatives for the respective accounts of the several Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company and the Selling Shareholders given at or prior to 12:00 Noon, New York
Time, on the second full business day preceding the First Closing Date (as
defined below) or, if no such direction is received, in the names of the
respective Underwriters or in such other names as Cowen may designate (solely
for the purpose of administrative convenience) and in such denominations as
Cowen may determine, against payment of the aggregate Purchase Price therefor by
certified or official bank check or checks in immediately available funds (same
day funds), payable to the order of the Company and Xxxxx Xxxxxx Shareholder
Services, Inc. as Custodian for the Selling Shareholders, all at the offices of
[Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000]. The time and date of the delivery and closing shall be at 10:00
A.M., New York Time, on ________ , 1997, in accordance with Rule 15c6-1 of the
Exchange Act. The time and date of such payment and delivery are herein referred
to as the "First Closing Date". The First Closing Date and the location of
delivery of, and the form of payment for, the Firm Stock may be varied by
agreement between among the Company, the Selling Shareholders and Cowen. The
First Closing Date may be postponed pursuant to the provisions of Section 12.
The Company and the Selling Shareholders shall make the certificates for
the Stock available to the Representatives for examination on behalf of the
Underwriters not later than 10:00 A.M., New York Time, on the business day
preceding the First Closing Date at the offices of Xxxxx & Company, Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen or other Representatives, individually and
not as Representatives of the several Underwriters, may (but shall not be
obligated to) make payment to the Company or to the Selling Shareholders on
behalf of any Underwriter or Underwriters, for the Stock to be purchased by such
Underwriter or Underwriters. Any such payment by Cowen or other Representatives
shall not relieve such Underwriter or Underwriters from any of its or their
other obligations hereunder.
The several Underwriters agree to make a public offering of the Firm
Stock at the public offering price as soon after the effectiveness of the
Registration Statement as in their judgment is advisable. The Representatives
shall promptly advise the Company and the Selling Shareholders of the making of
the public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase, severally and
not jointly, up to ___________ to _____ shares of Optional Stock. The price per
share to be paid for the Optional Stock shall be the Purchase Price. The option
granted hereby may be exercised as to all or any part of the Optional Stock at
any time, and from time to time, not more than thirty (30) days subsequent to
the effective date of this Agreement. No Optional Stock shall be sold and
delivered unless the Firm Stock previously has been, or simultaneously is, sold
and delivered. The
10.
11
right to purchase the Optional Stock or any portion thereof may be surrendered
and terminated at any time upon notice by the Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters by giving
written notice from Cowen to the Company setting forth the number of shares of
the Optional Stock to be purchased by them and the date and time for delivery of
and payment for the Optional Stock. Each date and time for delivery of and
payment for the Optional Stock (which may be the First Closing Date, but not
earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than ten (10) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates".) Optional Stock shall be purchased for the
account of each Underwriter in the same proportion as the number of shares of
Firm Stock set forth opposite such Underwriter's name in Schedule B hereto bears
to the total number of shares of Firm Stock (subject to adjustment by the
Underwriters to eliminate odd lots). Upon exercise of the option by the
Underwriters, the Company agrees to sell to the Underwriters the number of
shares of Optional Stock set forth in the written notice of exercise and the
Underwriters agree, severally and not jointly and subject to the terms and
conditions herein set forth, to purchase the number of such shares determined as
aforesaid. The Company will deliver the Optional Stock to the Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Selling Shareholders given at or prior to 12:00 Noon, New York Time, on the
second full business day preceding the Option Closing Date or, if no such
direction is received, in the names of the respective Underwriters or in such
other names as Cowen may designate (solely for the purpose of administrative
convenience) and in such denominations as Cowen may determine, against payment
of the aggregate Purchase Price therefor by certified or official bank check or
checks in Clearing House funds (next day funds), payable to the order of the
Company all at the offices of [Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000]. The Option Closing Date and the
location of delivery of, and the form of payment for, the Option Stock may be
varied by agreement between among the Company and Cowen. The Option Closing Date
may be postponed pursuant to the provisions of Section 12.
4. Covenants and Agreements of the Company. The Company covenants and agrees
with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A of the of the Rules and
Regulations, use its best efforts to cause the Registration Statement to become
effective, (ii) if the Company and the Representative[s] have determined to
proceed pursuant to Rule 430A of the Rules and Regulations, use its best efforts
to comply with the provisions of and make all requisite filings with the
Commission pursuant to Rule 430A and Rule 424 of the Rules and Regulations and
(iii) if the Company and the Representatives have determined to deliver
Prospectuses pursuant to Rule 434 of the Rules and Regulations, to use its best
efforts to comply with all the applicable provisions thereof. The Company will
advise the Representatives promptly as to the time at which the Registration
Statement becomes effective, will advise the Representatives promptly of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible the lifting thereof, if issued. The
Company will advise the Representatives promptly of the receipt of any comments
of the Commission or any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for additional
information and will not at any time file any amendment to the Registration
Statement or supplement to the Prospectus which shall not previously have been
submitted to the Representatives a reasonable time prior to the proposed filing
thereof or to which the Representatives shall
11.
12
reasonably object in writing or which is not in compliance with the Securities
Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly upon
the request of the Representatives, any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may be necessary to enable the several Underwriters to continue
the distribution of the Stock and will use its best efforts to cause the same to
become effective as promptly as possible. The Company will promptly file all
reports and any definitive proxy or information statements required to be filed
with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Stock.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be delivered
under the Securities Act any event relating to or affecting the Company or any
of its subsidiaries occurs as a result of which the Prospectus or any other
prospectus as then in effect would include an untrue statement of a material
fact, or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Securities Act, the Company will promptly notify the Representatives
thereof and will prepare an amendment or supplement to the Prospectus or make an
appropriate filing pursuant to Section 13 or 14 of the Exchange Act which will
correct such statement or omission; and in case any Underwriter is required to
deliver a prospectus relating to the Stock nine (9) months or more after the
effective date of the Registration Statement, the Company upon the request of
the Representatives and at the expense of such Underwriter will prepare promptly
such prospectus or prospectuses as may be necessary to permit compliance with
the requirements of Section 10(a)(3) of the Securities Act. The Company
authorizes the Underwriters and all dealers to whom any of the Stock may be sold
by the several Underwriters to use the Prospectus, as from time to time amended
or supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the Rules and Regulations.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as originally filed
with the Commission, and all amendments thereto including all financial
statements and exhibits thereto and all documents theretofore incorporated by
reference therein, and will deliver to the Representatives such number of copies
of the Registration Statement, including such financial statements and all
documents theretofore incorporated by reference therein but without exhibits,
and all amendments thereto, as the Representatives may reasonably request. The
Company will deliver or mail to or upon the order of the Representatives, from
time to time until the effective date of the Registration Statement, as many
copies of the Preeffective Prospectus as the Representatives may reasonably
request. The Company will deliver or mail to or upon the order of the
Representatives on the date of the initial public offering, and thereafter from
time to time during the period when delivery of a prospectus relating to the
Stock is required under the Securities Act, as many copies of the Prospectus, in
final form or as thereafter amended or supplemented as the Representatives may
reasonably request.
(e) The Company will make generally available to its shareholders as
soon as practicable, but not later than fifteen (15) months after the effective
date of the Registration Statement, an earning statement which will be in
reasonable detail (but which need not be audited) and which will comply with
Section 11(a) of the Securities Act, covering a period of at least twelve (12)
months beginning after the "effective date" (as defined in Rule 158 under the
Securities Act) of the Registration Statement.
12.
13
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the Underwriters
and by dealers under the securities laws of such jurisdictions as the
Representatives may designate and at the request of the Representatives will
make such applications and furnish such consents to service of process or other
documents as may be required of it as the issuer of the Stock for that purpose;
provided, however, that the Company shall not be required to qualify to do
business or to file a general consent (other than that arising out of the
offering or sale of the Stock) to service of process in any such jurisdiction
where it is not now so subject. The Company will, from time to time, prepare and
file such statements and reports as are or may be required of it as the issuer
of the Stock to continue such qualifications in effect for so long a period as
the Representatives may reasonably request for the distribution of the Stock.
The Company will advise the Representatives promptly after the Company becomes
aware of the suspension of the qualifications or registration of (or any such
exception relating to) the Common Stock of the Company for offering, sale or
trading in any jurisdiction or of any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any orders suspending such
qualifications, registration or exception, the Company will, with the
cooperation of the Representatives use its best efforts to obtain the withdrawal
thereof.
(g) The Company will furnish to its shareholders annual reports
containing financial statements certified by independent public accountants and
with quarterly summary financial information in reasonable detail which may be
unaudited. During the period of five (5) years from the date hereof, the Company
will deliver to the Representatives and, upon request, to each of the other
Underwriters, as soon as they are available, copies of each annual report of the
Company and each other report furnished by the Company to its shareholders and
will deliver to the Representatives, (i) as soon as they are available, copies
of any other reports (financial or other) which the Company shall publish or
otherwise make available to any of its shareholders as such, (ii) as soon as
they are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange and (iii) from
time to time such other information concerning the Company as the
Representatives reasonably may request. So long as the Company has active
subsidiaries, such financial statements will be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its shareholders generally. Separate financial statements
shall be furnished for all subsidiaries whose accounts are not consolidated but
which at the time are significant subsidiaries as defined in the Rules and
Regulations.
(h) The Company will use its best efforts to list the Stock, subject to
official notice of issuance, on the Nasdaq National Market concurrently with the
effectiveness of the Registration Statement.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) For a period of five (5) years subsequent to the date hereof, prior
to filing its quarterly statements on Form 10-Q, the Company will have its
independent auditors perform a limited quarterly review of its quarterly
numbers.
(k) The Company will not for a period of 90 days following the
commencement of the public offering of the Stock by the Underwriters, directly
or indirectly, (i) sell, offer, contract to sell, make any short sale, pledge,
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 shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences or ownership of Common Stock, whether
any such transaction
14
described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, other than (I)
the Company's sale of Common Stock hereunder (II) the Company's issuance of
Common Stock upon the exercise of warrants and stock options which are presently
outstanding and described in the Prospectus, (III) the grant of options pursuant
to the terms and conditions of the Company's 1995 Stock Option Plan and
Directors Stock Option Plan, and to the extent such grants are described in the
Prospectus and (IV) the sale and issuance of Common Stock pursuant to the terms
and conditions of the Employee Stock Purchase Plan and the Director Stock
Purchase Plan.
(l) The Company will apply the net proceeds from the sale of the Stock
as set forth in the description under "Use of Proceeds" in the Prospectus, which
description complies in all respects with the requirements of Item 504 of
Regulation S-K.
(m) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Stock under the Securities Act.
(n) Prior to each of the Closing Dates the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Company and its subsidiaries
for any periods subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.
(o) Prior to each of the Closing Dates the Company will issue no press
release or other communications directly or indirectly and hold no press
conference with respect to the Company or any of its subsidiaries, the financial
condition, results of operations, business, prospects, assets or liabilities of
any of them, or the offering of the Stock, without the prior written consent of
the Representatives. For a period of twelve (12) months following the first
Closing Date, the Company will use its best efforts to provide to the
Representatives copies of each press release or other public communications with
respect to the financial condition, results of operations, business, prospects,
assets or liabilities of the Company at least twenty-four (24) hours prior to
the public issuance thereof or such longer advance period as may reasonably be
practicable.
(p) During the period of five (5) years after the date hereof, the
Company will furnish to the Representatives, and upon request of the
Representatives, to each of the Underwriters: (i) as soon as practicable after
the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on
Form 8-K or other report filed by the Company with the Commission, or the NASD
or any securities exchange; and (iii) as soon as available, copies of any report
or communication of the Company mailed generally to holders of its Common Stock.
5. Payment of Expenses.
(a) The Company will pay (directly or by reimbursement) all costs, fees
and expenses incurred in connection with expenses incident to the performance of
the obligations of the Company and of the Selling Shareholders under this
Agreement and in connection with the transactions contemplated hereby, including
but not limited to (i) all expenses and taxes incident to the issuance and
delivery of the Stock to the Representatives; (ii) all expenses incident to the
registration of the Stock under the Securities
14.
15
Act; (iii) the costs of preparing stock certificates (including printing and
engraving costs); (iv) all fees and expenses of the registrar and transfer agent
of the Stock; (v) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Stock to the Underwriters; (vi)
fees and expenses of the Company's counsel and the Company's independent
accountants (but not Underwriters' counsel, except as specified below); (vii)
all costs and expenses incurred in connection with the preparation, printing
filing, shipping and distribution of the Registration Statement, each
Preeffective Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein , the Selling
Shareholders' Powers of Attorney, the Custody Agreement, the "Agreement Among
Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and the Blue Sky
memoranda (including related fees and expenses of counsel to the Underwriters)
and this Agreement; (viii) all filing fees, attorneys' fees and expenses
incurred by the Company or the Underwriters in connection with exemptions from
the qualifying or registering (or obtaining qualification or registration of)
all or any part of the Stock for offer and sale and determination of its
eligibility for investment under the Blue Sky or other securities laws of such
jurisdictions as the Representatives may designate; (ix) all fees and expenses
paid or incurred in connection with filings made with the NASD; and (x) all
other costs and expenses incident to the performance of their obligations
hereunder which are not otherwise specifically provided for in this Section.
(b) The Company on behalf of each Selling Shareholder will pay (directly
or by reimbursement) all fees and expenses incident to the performance of such
Selling Shareholder's obligations under this Agreement which are not otherwise
specifically provided for herein, including but not limited to any fees and
expenses of counsel for such Selling Shareholder, such Selling Shareholder's pro
rata share of fees and expenses of the Attorneys-in-fact and the Custodian but
excluding all expenses and taxes incident to the sale and delivery of the Stock
to be sold by such Selling Shareholder to the Underwriters hereunder which
expenses and taxes shall be paid by the appropriate Selling Shareholders.
(c) In addition to their other obligations under Section 6(a) hereof,
the Company and each Selling Shareholder (provided that the obligation of each
Selling Shareholder under this Section 5(c) shall in no event exceed the amount
of proceeds received by such Selling Shareholder from the sale of Stock pursuant
to this Agreement) jointly and severally agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon (i) any statement or omission or any
alleged statement or omission, (ii) any act or failure to act or any alleged act
or failure to act or (iii) any breach or inaccuracy in their representations and
warranties, they will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's and each Selling Shareholder's obligation to
reimburse each Underwriter for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, each Underwriter shall promptly return it to the
Company and each Selling Shareholder, as the case may be, together with
interest, compounded daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit standing) announced
from time to time by Bank of America, San Francisco, California (the "Prime
Rate"). Any such interim reimbursement payments which are not made to an
Underwriter in a timely manner as provided below shall bear interest at the
Prime Rate from the due date for such reimbursement. This expense reimbursement
agreement will be in addition to any other liability which the Company or any
Selling Shareholder may otherwise have. The request for reimbursement will be
sent to the Company with a copy to each Selling Shareholder. In the event that
the Company fails to make such reimbursement payment within thirty (30) days of
the reimbursement request, the Representatives shall notify the Selling
Shareholders of their obligation to
15.
16
make such reimbursement payments within fifteen (15) days; provided, however,
that each Selling Shareholder shall be required to advance at such time only its
pro rata portion of the reimbursement payment. To the extent that any Selling
Shareholder fails to pay its pro rata portion in timely response to the
Underwriters' request, the other Selling Shareholders shall be jointly and
severally liable for such reimbursement payment and each shall render such
payment to the Representatives within fifteen (15) days of written demand
therefor by the Representatives.
(d) In addition to its other obligations under Section 6(b) hereof, each
Underwriter severally agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in Section 6(b) hereof which relates to written information furnished
to the Company by or on behalf of any Underwriter, directly or through the
Representatives specifically for inclusion in the Prospectus, it will reimburse
the Company (and, to the extent applicable, each officer, director, controlling
person or Selling Shareholder) on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director, controlling person or Selling Shareholder)
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director, controlling person or
Selling Shareholder) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within thirty
(30) days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in paragraph (c) and/or (d) of
this Section 5, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of the Code of Arbitration Procedure of the NASD.
Any such arbitration must be commenced by service of a written demand for
arbitration or written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding arbitration does not make
such designation of an arbitration tribunal in such demand or notice, then the
party responding to said demand or notice is authorized to do so. Such an
arbitration would be limited to the operation of the interim reimbursement
provisions contained in paragraph (b) and/or (c) of this Section 5 and would not
resolve the ultimate propriety or enforceability of the obligation to reimburse
expenses which is created by the provisions of Section 6.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls such Underwriter within the meaning of the
Securities Act and the respective officers, directors, partners, employees,
representatives and agents of each of such Underwriter (collectively, the
"Underwriter Indemnified Parties" and, each, an "Underwriter Indemnified
Party"), against any losses, claims, damages, liabilities or expenses (including
the reasonable cost of investigating and defending against any claims therefor
and counsel fees incurred in connection therewith), joint or several, which may
be based upon the Securities Act, or any other statute, at common law or
otherwise, (i) on the ground or alleged ground that any Preeffective Prospectus,
the Registration Statement or the Prospectus (or any Preeffective Prospectus,
the Registration Statement or the Prospectus as from time to time amended or
supplemented) includes or allegedly includes an untrue statement of a material
fact or
16.
17
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made (with respect to the Preeffective Prospectus and Prospectus
only), not misleading, unless such statement or omission was made directly in
reliance upon, and in conformity with, written information furnished to the
Company by any Underwriter, directly or through the Representatives,
specifically for inclusion therein or (ii) for any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
expense arising out of or based upon matters covered by clause (i) above
(provided that the Company shall not be liable under this clause (ii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, or liability or expense resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful misconduct. The
Company will be entitled to participate at its own expense in the defense or, if
it so elects, to assume the defense of any suit brought to enforce any such
liability, but if the Company elects to assume the defense, such defense shall
be conducted by counsel chosen by it; provided, that such counsel shall be
reasonably acceptable to the Underwriters. In the event the Company elects to
assume the defense of any such suit and retain such counsel, any Underwriter
Indemnified Party, defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) the
Company shall have specifically authorized the retaining of such counsel at the
Company's expense (but no more than one counsel for the Underwriters) or (ii)
the parties to such suit include any such Underwriter Indemnified Party and the
Company, and such Underwriter Indemnified Party has been advised by counsel to
the Underwriters that one or more legal defenses may be available to it or them
which may not be available to the Company, in which case the Company shall not
be entitled to assume the defense of such suit notwithstanding its obligation to
bear the fees and expenses of such additional counsel; provided that the Company
need only bear the fees and expenses of one counsel to the Underwriters. This
indemnity agreement is not exclusive and will be in addition to any liability
which the Company might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to each
Underwriter Indemnified Party.
(b) Each Selling Shareholder, jointly and severally, agrees to indemnify
and hold harmless each Underwriter Indemnified Party against any losses, claims,
damages, liabilities or expenses (including, unless such Selling Shareholder
elects to assume the defense, the reasonable cost of investigating and defending
against any claims therefor and counsel fees incurred in connection therewith),
joint or several, which may be based upon the Securities Act, or any other
statute, at common law or otherwise, on the ground or alleged ground that any
Preeffective Prospectus, the Registration Statement or the Prospectus (or any
Preeffective Prospectus, the Registration Statement or the Prospectus, as from
time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made (with respect to the Preeffective Prospectus and
Prospectus only), not misleading, unless such statement or omission was made
directly in reliance upon, and in conformity with, written information furnished
to the Company by any Underwriter, directly or through the Representatives,
specifically for inclusion therein. Such Selling Shareholder shall be entitled
to participate at his own expense in the defense, or, if he she or it so elects,
to assume the defense of any suit brought to enforce any such liability, but, if
such Selling Shareholder elects to assume the defense, such defense shall be
conducted by counsel chosen by her, him or it; provided, that such counsel shall
be reasonably acceptable to the Underwriter Indemnified Parties. In the event
that any Selling Shareholder elects to assume the defense of any such suit and
retain such counsel, the Underwriter Indemnified Parties, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) such Selling Shareholder shall have
specifically authorized the retaining of such counsel; provided, however, that
the obligation of each Selling Shareholder under this Section 6(b) shall
17.
18
in no event exceed the amount of proceeds received by such Selling Shareholder
from the sale of Stock pursuant to this Agreement or (ii) the parties to such
suit include such Underwriter Indemnified Parties and such Selling Shareholder,
and such Underwriter Indemnified Parties have been advised by counsel that one
or more legal defenses may be available to it or them which may not be available
to such Selling Shareholder, in which case such Selling Shareholder shall not be
entitled to assume the defense of such suit notwithstanding its obligation to
bear the fees and expenses of such counsel at the Selling Shareholders' expense
(but no more than one counsel for the Underwriters). This indemnity agreement is
not exclusive and will be in addition to any liability which such Selling
Shareholder might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to each Underwriter
Indemnified Party. The Company and the Selling Shareholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to their respective amounts of such liability for which they each
shall be responsible.
(c) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties") and each Selling Shareholder and each person, if any, who
controls a Selling Shareholder within the meaning of the Securities Act
(collectively, the "Shareholder Indemnified Parties"), against any losses,
claims, damages, liabilities or expenses (including, unless the Underwriter or
Underwriters elect to assume the defense, the reasonable cost of investigating
and defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which arise out of or are based in
whole or in part upon the Securities Act, or any other statute or regulation, at
common law or otherwise, on the ground or alleged ground that any Preeffective
Prospectus, the Registration Statement or the Prospectus (or any Preeffective
Prospectus, the Registration Statement or the Prospectus, as from time to time
amended and supplemented) includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading, but only insofar as any such statement or
omission was made directly in reliance upon, and in conformity with, written
information furnished to the Company by such Underwriter, directly or through
the Representatives, specifically for inclusion therein; provided, however, that
in no case is such Underwriter to be liable with respect to any claims made
against any Company Indemnified Party or Shareholder Indemnified Party against
whom the action is brought unless such Company Indemnified Party or Shareholder
Indemnified Party shall have notified such Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Company
Indemnified Party or Shareholder Indemnified Party, but failure to notify such
Underwriter of such claim shall not relieve it from any liability which it may
have to any Company Indemnified Party or Shareholder Indemnified Party otherwise
than on account of its indemnity agreement contained in this paragraph. Such
Underwriter shall be entitled to participate at its own expense in the defense,
or, if it so elects, to assume the defense of any suit brought to enforce any
such liability, but, if such Underwriter elects to assume the defense, such
defense shall be conducted by counsel chosen by it. In the event that any
Underwriter elects to assume the defense of any such suit and retain such
counsel, the Company Indemnified Parties or Shareholder Indemnified Parties and
any other Underwriter or Underwriters or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, respectively. The Underwriter against whom
indemnity may be sought shall not be liable to indemnify any person for any
settlement of any such claim effected without such Underwriter's consent. This
indemnity agreement is not exclusive and will be in addition to any liability
which such Underwriter might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to any Company
Indemnified Party or Shareholder Indemnified Party.
18.
19
(d) Neither the Company nor any Selling Shareholder will, without the
prior written consent of each Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification is or may be sought hereunder
(whether or not such Underwriter or any person who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
(e) If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages, liabilities or expenses
(or actions in respect thereof) referred to herein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one hand
and the Underwriters on the other from the offering of the Stock. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company and the Selling Shareholders on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Shareholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, defending, settling or compromising any
such claim. Notwithstanding the provisions of this subsection (e), (i) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission and (ii)
no Selling Shareholder shall be liable under this Section 6(c) for more than the
proceeds received by such Selling Shareholder from the sale of Stock pursuant to
this Agreement. The Underwriters' obligations to contribute are several in
proportion to their respective underwriting obligations and not joint. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
7. Survival of Indemnities, Representations, Warranties, etc. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company, the Selling Shareholders and
19.
20
the several Underwriters, as set forth in this Agreement or made by them
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, the
Selling Shareholders, the Company or any of its officers or directors or any
controlling person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters' Obligations. The respective obligations of the
several Underwriters hereunder shall be subject to the accuracy, at and (except
as otherwise stated herein) as of the date hereof and at and as of each of the
Closing Dates, of the representations and warranties made herein by the Company
and the Selling Shareholders, to compliance at and as of each of the Closing
Dates by the Company and the Selling Shareholders with their covenants and
agreements herein contained and other provisions hereof to be satisfied at or
prior to each of the Closing Dates, and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company or the Representatives, shall be threatened by the Commission, and
any request for additional information on the part of the Commission (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the Representatives.
Any filings of the Prospectus, or any supplement thereto, required pursuant to
Rule 424(b) or Rule 434 of the Rules and Regulations, shall have been made in
the manner and within the time period required by Rule 424(b) and Rule 434 of
the Rules and Regulations, as the case may be.
(b) The Representatives shall have been satisfied, in their sole
discretion, that there shall not have occurred any change ,on a consolidated
basis, prior to each of the Closing Dates in the condition (financial or
otherwise), properties, business, management, prospects, net worth or results of
operations of the Company and its subsidiaries considered as a whole, or any
change in the capital stock, short-term or long-term debt of the Company and its
subsidiaries considered as a whole, such that (i) the Registration Statement or
the Prospectus, or any amendment or supplement thereto, contains an untrue
statement of fact which, in the opinion of the Representatives, is material, or
omits to state a fact which, in the opinion of the Representatives, is required
to be stated therein or is necessary to make the statements therein not
misleading, or (ii) it is unpracticable in the reasonable judgment of the
Representatives to proceed with the public offering or purchase the Stock as
contemplated hereby.
(c) The Representatives shall be satisfied, in their sole discretion,
that no legal or governmental action, suit or proceeding affecting the Company
which is material and adverse to the Company or which affects or may affect the
Company's or the Selling Stockholders' ability to perform their respective
obligations under this Agreement shall have been instituted or threatened and
there shall have occurred no Material Adverse Change in any existing such
action, suit or proceeding.
(d) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance satisfactory
to the Underwriters.
(e) The Representatives shall have received from Ernst & Young LLP,
independent certified public accountants, letters, dated each of the Closing
Dates, to the effect that such accountants reaffirm, as of each of the Closing
Dates, and as though made on each of the Closing Dates, the statements made in
the letter furnished by such accountants pursuant to paragraph (d) of this
Section 8.
20.
21
(f) The Representatives shall have received from Xxxxxxx & XxXxxxxx,
counsel for the Company, opinions, dated each of the Closing Dates, to the
effect set forth in Exhibit I hereto.
(g) The Representatives shall have received from __________, patent
counsel for the Company, opinions, dated each of the Closing Dates, to the
effect set forth in Exhibit II hereto.
(h) The Representatives shall have received from __________, counsel for
the Selling Shareholders, opinions dated each of the Closing Dates to the effect
set forth in Exhibit III hereto.
(i) The Representatives shall have received from Xxxxxxx, Phleger &
Xxxxxxxx LLP, counsel for the Underwriters, their opinions dated each of the
Closing Dates with respect to the incorporation of the Company, the validity of
the Stock, the Registration Statement and the Prospectus and such other related
matters as it may reasonably request, and the Company and the Selling
Shareholders shall have furnished to such counsel such documents as they may
request for the purpose of enabling them to pass upon such matters.
(j) The Representatives shall have received certificates, dated each of
the Closing Dates, of the chief executive officer or the President and the chief
financial or accounting officer of the Company to the effect that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best
of the knowledge of the signers, no proceedings for that
purpose have been instituted or are pending or
contemplated under the Securities Act;
(ii) Neither any Preeffective Prospectus, as of its date, nor
the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such
certificate, included any untrue statement of a material
fact or omitted to state any material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made (with respect to the Preeffective Prospectus
and Prospectus only), not misleading;
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and
the Prospectus, and except as set forth or contemplated
in the Prospectus, neither the Company nor any of its
subsidiaries has incurred any material liabilities or
obligations, direct or contingent, nor entered into any
material transactions in either case not in the ordinary
course of business and there has not been any Material
Adverse Change, or any change in the capital stock
(except as a result of the exercise of options granted
pursuant to the terms and conditions of plans as
described in the Registration Statement), short-term or
long-term debt of the Company (except for borrowings or
payments under the Company's revolving credit agreements
as described in the Prospectus) and its subsidiaries
considered as a whole;
21.
22
(iv) The representations and warranties of the Company in
this Agreement are true and correct in all material
respects at and as of each of the Closing Dates, and the
Company has complied in all material respects with all
the agreements and performed or satisfied all the
conditions on its part to be performed or satisfied at
or prior to the Closing Dates; and
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus,
and except as disclosed in or contemplated by the
Prospectus, (a) the business and operations conducted by
the Company and its subsidiaries have not sustained a
loss by strike, fire, flood, accident or other calamity
(whether or not insured) of such a character as to
interfere materially with the conduct of the business
and operations of the Company and its subsidiaries
considered as a whole; (b) no legal or governmental
action, suit or proceeding is pending or threatened
against the Company which is material to the Company,
whether or not arising from transactions in the ordinary
course of business, or which may materially and
adversely affect the transactions contemplated by this
Agreement; (c) since such dates and except as so
disclosed, the Company has not repurchased or otherwise
acquired any of the Company's capital stock; and (d) the
Company has not declared or paid any dividend, or made
any other distribution, upon its outstanding capital
stock payable to stockholders of record on a date prior
to the Closing Date.
(k) The Representatives shall have received a certificate or
certificates, dated each of the Closing Dates, of each of the Selling
Shareholders (or their Attorney-in-fact) to the effect that as of each of the
Closing Dates their representations and warranties in this Agreement are true
and correct as if made on and as of each of the Closing Dates, and that they
have performed in all material respects all of their obligations and satisfied
all the conditions on their part to be performed or satisfied at or prior to the
Closing Dates.
(l) The Company and each of the Selling Shareholders shall have
furnished to the Representatives such additional certificates as the
Representatives may have reasonably requested as to the accuracy, at and as of
each of the Closing Dates, of the representations and warranties made herein by
them and as to compliance at and as of each of the Closing Dates by them with
their covenants and agreements herein contained and other provisions hereof to
be satisfied at or prior to each of the Closing Dates, and as to satisfaction of
the other conditions to the obligations of the Underwriters hereunder.
(m) Xxxxx shall have received the written agreements, substantially in
the form of Exhibit IV hereto, of the Company, officers, directors and holders
of Common Stock listed in Schedule C.
The Nasdaq National Market shall have approved the stock for listing,
subject only to official notice of issuance.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram
22.
23
at or prior to each of the Closing Dates, but Xxxxx, on behalf of the
Representatives, shall be entitled to waive any of such conditions.
9. Effective Date. This Agreement shall become effective immediately as to
Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. New York City time on the first full business day
following the effectiveness of the Registration Statement or at such earlier
time after the Registration Statement becomes effective as the Representatives
may determine on and by notice to the Company or by release of any of the Stock
for sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by the
Representatives of telegrams (i) advising Underwriters that the shares of Stock
are released for public offering or (ii) offering the Stock for sale to
securities dealers, whichever may occur first.
10. Termination. This Agreement (except for the provisions of Section 5) may be
terminated by the Company at any time before it becomes effective in accordance
with Section 9 by notice to the Representatives and may be terminated by the
Representatives at any time before it becomes effective in accordance with
Section 9 by notice to the Company. In the event of any termination of this
Agreement under this or any other provision of this Agreement, there shall be no
liability of any party to this Agreement to any other party, other than as
provided in Sections 5, 6 and 11 and other than as provided in Section 12 as to
the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First Closing
Date trading in securities on any of the New York Stock Exchange, American Stock
Exchange, Nasdaq National Market, Chicago Board of Options Exchange, Chicago
Mercantile Exchange or Chicago Board of Trade shall have been suspended or
minimum or maximum prices shall have been established on any such exchange or
market, or a banking moratorium shall have been declared by New York or United
States authorities; (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market; (iii) if at or
prior to the First Closing Date there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign power or of
any other insurrection or armed conflict involving the United States or (B) any
change in financial markets or any calamity or crisis which, in the sole
judgment of the Representatives, makes it impractical or inadvisable to offer or
sell the Stock on the terms contemplated by the Prospectus; (iv) if there shall
have been any development or prospective development involving particularly the
business or properties or securities of the Company or any of its subsidiaries
or the transactions contemplated by this Agreement, which, in the judgment of
the Representatives, makes it impracticable or inadvisable to offer or deliver
the Stock on the terms contemplated by the Prospectus; (v) if there shall be any
litigation or proceeding, pending or threatened, which, in the sole judgment of
the Representatives, makes it impracticable or inadvisable to offer or deliver
the Stock on the terms contemplated by the Prospectus; or (vi) if there shall
have occurred any of the events specified in the immediately preceding clauses
(i) - (v) together with any other such event that makes it, in the judgment of
the Representatives, impractical or inadvisable to offer or deliver the Stock on
the terms contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other provisions hereof,
if this Agreement shall not become effective by reason of any election of the
Company or the Selling Shareholders pursuant to the first paragraph of Section
10 or shall be terminated by the Representatives under Section 8 or Section 10,
the Company will bear and pay the expenses specified in Section 5 hereof (as
well as the fees and expenses of counsel to the Underwriters) and, in addition
to their obligations pursuant to Section 6 hereof, the Company will reimburse
the reasonable out-of-pocket expenses of the several Underwriters
23.
24
(including reasonable fees and disbursements of counsel for the Underwriters)
incurred in connection with this Agreement and the proposed purchase of the
Stock, and promptly upon demand the Company will pay such amounts to the
Representatives.
12. Substitution of Underwriters. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company and
the Selling Shareholders shall have the right to postpone the Closing Dates for
a period of not more than five (5) full business days in order that the Company
and the Selling Shareholders may effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Company, the Selling Shareholders or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the part of
any non-defaulting Underwriter, the Selling Shareholders or the Company, except
for expenses to be paid or reimbursed pursuant to Section 5 and except for the
provisions of Section 6.
13. Notices. All communications hereunder shall be in writing and, if sent to
the Underwriters shall be mailed, delivered or telegraphed and confirmed to the
Representatives c/o Cowen & Company at Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 except that notices given to an Underwriter pursuant to Section 6 hereof
shall be sent to such Underwriter at the address furnished by the
Representatives or, if sent to the Company, shall be mailed, delivered or
telegraphed and confirmed c/o Xxxxxx X. Xxxxxxx, General Counsel, Xxxxxxx
Technologies, Inc. 0000 Xxx Xxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000.
14. Successors. This Agreement shall inure to the benefit of and be binding upon
the several Underwriters, the Company and the Selling Shareholders and their
respective successors and legal representatives. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person other
than the persons mentioned in the preceding sentence any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company and the Selling
Shareholders contained in this Agreement shall also be for the benefit of the
person or persons, if any, who control any Underwriter or Underwriters within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the indemnities of the several Underwriters shall also be for the
benefit of each director of the Company, each of its officers who has signed the
Registration Statement and the person or persons, if any,
24.
25
who control the Company or any Selling Shareholders within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this Agreement, the
Representatives will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by Cowen, as Representative, will be binding
on all the Underwriters; and any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Shareholders.
17. Partial Unenforceability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
18. General. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, any one of the Attorneys-in-fact on
behalf of the Selling Shareholders and the Representatives.
19. Counterparts. This Agreement may be signed in two (2) or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. Any person executing and
delivering this Agreement as Attorney-in-fact for the Selling Shareholders
represents by so doing that he or she has been duly appointed as
Attorney-in-fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-fact to take such
action.
25.
26
If the foregoing correctly sets forth the understanding, of the parties,
please indicate the acceptance by the Representatives in the space provided
below for that purpose, whereupon this letter and the acceptance by the
Representatives shall constitute a binding agreement between the parties.
Very truly yours,
XXXXXXX TECHNOLOGIES, INC.
By:____________________________
Xxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
SELLING SHAREHOLDERS LISTED
IN SCHEDULE B
By: Attorney-in-fact
By:______________________________
Xxxxxxx X. Xxxxxxxxx Acting on
his own behalf and on behalf of
the Selling Shareholders listed
in Schedule B.
Accepted and delivered in
Los Angeles, California as of
the date first above
written.
XXXXX & COMPANY
XXXXXXXXX & XXXXX L.L.C.
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: XXXXX & COMPANY
By: Cowen Incorporated,
its general partner
By:______________________________
Xxxx X. Xxxxxx
Managing Director - Syndicate
26.
27
SCHEDULE A
(Shares to be Purchased)
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- --------- ---------
Xxxxx & Company .....................
Xxxxxxxxx & Xxxxx L.L.C. ............
--------- ---------
Total................................
========= =========
28
SCHEDULE B
(Shares to be Sold)
Number of Number of
Firm Optional
Shares to Shares to
be Sold be Sold
--------- ---------
Xxxxxxx Technologies, Inc.
Selling Shareholders
--------- ---------
Total
========= =========
29
SCHEDULE C
(Parties subject to Lock-up Agreements)
30
SCHEDULE A
[Underwriters]
