Exhibit 1.1
2,727,272 Shares
TRACK 'N TRAIL
Common Stock
UNDERWRITING AGREEMENT
___________, 1997
ALEX. XXXXX & SONS INCORPORATED
X.X. XXXXXXX & SONS, INC.
LADENBURG XXXXXXXX & CO. INC.
As Representatives of the several Underwriters
named in Schedule A hereto
c/o Alex. Xxxxx & Sons Incorporated
0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Sirs:
1. INTRODUCTORY. Track 'n Trail, a Delaware corporation (the "Company"),
proposes 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 2,727,272 shares of Common Stock, par value $.01
per share (the "Common Stock"), of the Company. The aggregate of 2,727,272
shares so proposed to be sold is hereinafter referred to as the "Firm Stock".
The selling stockholders named in Schedule B hereto (the "Selling Stockholders")
propose to sell to the Underwriters, upon the terms and conditions set forth in
Section 3 hereof, up to an additional 409,090 shares of Common Stock (the
"Option Stock"). The Firm Stock and the Option Stock are hereinafter
collectively referred to as the "Stock". Alex. Xxxxx & Sons Incorporated
("Alex. Xxxxx") and the other Representatives are acting as representatives of
the several Underwriters and in such capacity are hereinafter referred to as the
"Representatives".
2. (a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND A CERTAIN
SELLING STOCKHOLDER. The Company and the Selling Stockholder named in Part I of
Schedule B, jointly and severally, represent and warrant to, and agree with, the
several Underwriters that:
(i) A registration statement on Form S-1 (File No.
333-23195), 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 effective
prospectuses included as part of the registration statement as originally
filed or as part of any amendment or supplement thereto, or filed pursuant
to Rule 424 under the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, copies of
which have heretofore been delivered to you, has been carefully prepared by
the Company in conformity with the requirements of the Securities Act and
has been filed with the Commission under the Securities Act; one or more
amendments to such registration statement, including in each case an
amended preeffective prospectus, copies of which amendments have heretofore
been delivered to you, have been so prepared and filed. Such registration
statement at the time which it became effective is referred to hereinafter
as the "Registration Statement". If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the Registration
Statement will be filed and must be declared effective before the offering
of the Stock may commence, the term "Registration Statement" as used in
this Agreement means the Registration Statement as amended by said
post-effective amendment. The term "Registration Statement" as used in
this Agreement shall also include any registration statement relating to
the Stock that is filed and declared effective pursuant to Rule 462(b)
under the Securities Act. The term "Prospectus" as used in this Agreement
means the prospectus in the form included in the Registration Statement,
or, (A) if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act and such
information is included in a prospectus filed with the Commission pursuant
to Rule 424(b) under the Securities Act, the term "Prospectus" as used in
this Agreement means the prospectus in the form included in the
Registration Statement as supplemented by the addition of the Rule 430A
information contained in the prospectus filed with the Commission pursuant
to Rule 424(b) and (B) if prospectuses that meet the requirements of
Section 10(a) of the Securities Act are delivered pursuant to Rule 434
under the Securities Act, then (i) the term "Prospectus" as used in this
Agreement means the "prospectus subject to completion" (as such term is
defined in Rule 434(g) under the Securities
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Act) as supplemented by (a) the addition of Rule 430A information or other
information contained in the form of prospectus delivered pursuant to Rule
434(b)(2) under the Securities Act or (b) the information contained in the
term sheets described in Rule 434(b)(3) under the Securities Act, and (ii)
the date of such prospectuses shall be deemed to be the date of the term
sheets. The term "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.
(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 the Closing Date, the
Registration Statement and the Prospectus and any amendments or
supplements thereto contained and will contain all material statements
and information required to be included therein by the Securities Act
and conformed and will conform in all material respects to the
requirements of the Securities Act and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto,
included or will include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representations, warranties and agreements
shall not apply to information contained in or omitted from any
Preeffective Prospectus or the Registration Statement or the
Prospectus or any such amendment or supplement thereto in reliance
upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter, directly or through you,
specifically for use in the preparation thereof; there is no
franchise, lease, contract, agreement or document required to be
described in the Registration Statement or Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or
filed therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents
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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 not 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 pursuant to the exercise of outstanding stock options),
short-term or long-term debt of the Company and its subsidiaries which
is material to the Company and its subsidiaries considered as a whole.
(iv) The financial statements, together with the related
notes and schedules, set forth in the Prospectus and elsewhere in the
Registration Statement fairly present, on the basis stated in the
Registration Statement, the financial position and the results of
operations and changes in financial position of the Company and its
consolidated subsidiaries at the respective dates or for the
respective periods therein specified. Such statements and related
notes and schedules have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis except as
may be set forth in the Prospectus. The selected financial and
statistical data set forth in the Prospectus under the captions
"Summary Consolidated Financial Information" and "Selected
Consolidated Financial Information" fairly present, on the basis
stated in the Registration Statement, the information set forth
therein. The pro forma financial information included in the
Registration Statement and the Prospectus has been prepared in
accordance with the applicable published rules and regulations of the
Commission with respect to pro forma financial information and the
assumptions used in preparing such information are reasonable.
(v) Coopers & Xxxxxxx L.L.P., Deloitte & Touche LLP and
KPMG Peat Marwick LLP, who have expressed their opinions on the
audited financial statements and related schedules included in the
Registration Statement and the Prospectus, are independent public
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accountants as required by the Securities Act and the Rules and
Regulations.
(vi) The Company was formed as a holding company for
Track 'n Trail, a California corporation, and Overland Management
Corporation, a Massachusetts corporation, pursuant to a Stock Exchange
Agreement (the "Exchange Agreement") among the Company, Track n'
Trail, a California corporation, and the Selling Stockholders. The
transactions contemplated by the Exchange Agreement occurred prior to
the effectiveness of the Registration Statement. The Company has and
each of its subsidiaries has been duly organized and is validly
existing and in good standing as a corporation under the laws of its
jurisdiction of incorporation, with corporate power and corporate
authority to own or lease its properties and to conduct its businesses
as described in the Prospectus; except as described in the Prospectus,
the Company is and each of its subsidiaries is in possession of and
operating in compliance with all material franchises, grants,
authorizations, licenses, permits, easements, consents, certificates
and orders required for the conduct of their respective businesses,
all of which are, to the Company's knowledge, valid and in full force
and effect; and the Company is and each of its subsidiaries is duly
qualified to do business and in good standing as a foreign corporation
in all other jurisdictions where its ownership or leasing of
properties or the conduct of its businesses requires such
qualification, except where the failure to be so qualified and in good
standing would not have a material adverse effect on the Company and
its subsidiaries taken as a whole. The Company has and each of its
subsidiaries has 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 respective properties and conduct their
respective businesses as now being conducted and as described in the
Registration Statement and the Prospectus, and no such consent,
approval, authorization, order, registration, qualification, license
or permit contains a materially burdensome restriction not adequately
disclosed in the Registration Statement and the Prospectus. The
Company owns 100% of the capital stock of Track 'n Trail, a California
corporation, and Overland Management Corporation, a Massachusetts
corporation, free and clear of any liens, encumbrances, equities or
claims except that the outstanding shares of capital stock of Track 'n
Trail, a California corporation, are pledged to Union Bank of
California, which pledge will be removed on or before the First
Closing Date. The Company does not directly or indirectly own or
control any other corporations or entities.
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(vii) The Company's authorized and outstanding capital
stock is on the date hereof, and will be on the Closing Dates (as
defined below), as set forth under the heading "Capitalization" in the
Prospectus; the outstanding shares of common stock (including the
outstanding shares of Stock) of the Company conform to the description
thereof in the Prospectus and have been duly authorized and validly
issued and are fully paid and nonassessable; have been duly authorized
for quotation on the Nasdaq National Market, subject to official
notice of issuance; have been issued in compliance with all federal
and state securities laws; and have not been issued in violation of
(other than violations subsequently cured and waived) or subject to
any preemptive rights or similar rights to subscribe for or purchase
securities. Except as disclosed in and or contemplated by the
Prospectus and the financial statements of the Company and related
notes thereto included in the Prospectus, 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 its capital stock or any such
options, rights, convertible securities or obligations. 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 of the Company have been duly
authorized and validly issued, and are fully paid and non-assessable.
(viii) The shares of Stock to be issued and sold by the
Company to the Underwriters hereunder have 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.
(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 or 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 such subsidiary or
affiliate, would reasonably be expected, individually or in the
aggregate, to (i) prevent or adversely affect the transactions
contemplated by this Agreement, (ii) suspend the effectiveness of the
Registration Statement, (iii) prevent or
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suspend the use of the Preeffective Prospectus in any jurisdiction or
(iv) result in a material adverse change in the condition (financial
or otherwise), properties, business, management, prospects, net worth
or results of operations of the Company and its subsidiaries
considered as a whole; and to the Company's knowledge no such
proceedings are threatened or contemplated against the Company or any
subsidiary or affiliate of the company by governmental authorities or
others. Neither the Company nor any of its subsidiaries is a party or
subject to the provisions of any material injunction, judgment, decree
or order of any court, regulatory body or other governmental agency or
body.
(x) The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, note agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them or any of their properties is or may be
bound, the Certificate of Incorporation, By-laws or other
organizational documents of the Company or any of its subsidiaries, or
any law, order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or will result in the creation
of a lien [on the Company or any of its subsidiaries or any of their
properties.]
(xi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
by the Company of the transactions contemplated by this Agreement,
except such as may be required by the Commission or the National
Association of Securities Dealers, Inc. (the "NASD") or under 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 rights to indemnity and contribution hereunder may
be limited by federal or state securities laws or the public policy
underlying such laws and except as the enforcement hereof may be
limited by
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applicable bankruptcy, insolvency, moratorium or similar laws
affecting creditors' rights generally, or by general equitable
principles regardless of whether considered in a proceeding at law or
in equity.
(xiii) The Company is and its subsidiaries are in all
material respects in compliance with, and are currently conducting
their businesses in conformity with, all applicable federal, state,
local and foreign laws, rules and regulations of each court or
governmental agency or body having jurisdiction over the Company and
its subsidiaries except where the failure to be in compliance or to so
conduct their businesses would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole; to the knowledge
of the Company, except as set forth in the Registration Statement and
the Prospectus, no prospective change in any of such federal or state
laws, rules or regulations has been adopted which, when made
effective, would have a material adverse effect on the operations of
the Company and its subsidiaries.
(xiv) The Company and its subsidiaries have filed all
necessary federal, state, local and foreign income, payroll, franchise
and other tax returns and have paid all taxes shown as due thereon or
with respect to any of their properties, and there is no tax
deficiency that has been, or to the knowledge of the Company is likely
to be, asserted against the Company or any of its subsidiaries or any
of their respective properties or assets that would adversely affect
the financial position, business or operations of the Company and its
subsidiaries.
(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, except for persons and entities who have expressly waived
such right or who have been given proper notice and have failed to
exercise such right within the time or times required under the terms
and conditions of such right.
(xvi) Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize or manipulate
the price of any security of the Company, or which caused or resulted
in, or which might in the future reasonably be expected to cause or
result in, stabilization or manipulation of the price of any security
of the Company.
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(xvii) The Company has provided you with all financial
statements since June 28, 1997, to the date hereof that are available
to the officers of the Company.
(xviii) The Company and its subsidiaries own or possess all
trademarks (including Track 'n Trail-TM-, Forza-TM-, New Terrain-TM-,
Mole-TM-, Overland Trading Company-TM-, Nordic Trail-TM- and Coloma
Trail-TM-) trademark registrations, service marks, service xxxx
registrations, tradenames, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by them
or any of them or necessary for the conduct of their respective
businesses, and the Company is not aware of any claim to the contrary
or any challenge by any other person to the rights of the Company and
its subsidiaries with respect to the foregoing. The Company's
business as now conducted and as proposed to be conducted does not
and, to its knowledge, 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. To the Company's knowledge, no claim has been made against
the Company or its subsidiaries alleging the infringement by the
Company or its subsidiaries of any patent, trademark, service xxxx,
tradename, copyright, trade secret, license in or other intellectual
property right or franchise right of any person.
(xix) The Company and its subsidiaries have performed all
material obligations required to be performed by them under any
indenture, mortgage, deed of trust, note agreement or other agreement
or instrument to which they are a party or by which they or any of
their properties may be bound, and neither the Company nor any of its
subsidiaries nor any other party to such indenture, mortgage, deed of
trust, note agreement or other agreement or instrument is in default
under or in breach of any such obligations which default or breach
would reasonably be expected to have a material adverse effect on the
Company and its subsidiaries taken as a whole. Neither the Company
nor any of its subsidiaries has received any notice of such default or
breach.
(xx) The Company is not involved in any labor dispute nor
TO 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
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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(k) of this Agreement from each of its officers,
directors and holders of Common Stock, or securities convertible into
Common Stock, listed on Schedule C hereto.
(xxii) The real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid and
enforceable leases with such exceptions as would not have a material
adverse effect on the Company and its subsidiaries considered as a
whole or as are described in the Prospectus.
(xxiii) The Company and its subsidiaries are insured
against such losses and risks and in such amounts as are customary in
the businesses in which they are engaged; 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 business at a cost that would
not materially and adversely affect the condition, financial or
otherwise, or the earnings, business or operations of the Company and
its subsidiaries considered as a whole, except as described in or
contemplated by the Prospectus.
(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 inventory of the Company and its subsidiaries is
in fit and merchantable condition and can be sold in the ordinary
course
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of business at the carrying value of such inventory, as shown on the
Company's consolidated financial statements, subject, however, to
pricing reductions in the ordinary course of business.
(xxvi) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorization; (ii) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxvii) To the Company's knowledge, neither the Company nor
any of its subsidiaries nor any employee or agent of the Company or
any of its subsidiaries has made any payment of funds of the Company
or any of its subsidiaries or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Prospectus.
(xxviii) Neither the Company nor any of its subsidiaries is
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) For all periods from its election under Subchapter S
of the Internal Revenue Code of 1986, as amended (the "Code"), until
[_____, 1997 (the "Termination Date"), Track 'n Trail, a California
corporation, was qualified as an S Corporation pursuant to an election
validly made under Subchapter S of the Code (which election has not
been and will not be revoked or terminated for any such period) and
Track 'n Trail, a California corporation, has not been and will not be
subject to federal corporate taxes for such periods. THE Subchapter S
election of Track 'n Trail, a California corporation will be duly
terminated on the Termination Date, and such corporation will be
subject to federal corporate income taxes from and after the date of
such termination but not for any prior period.
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(b) REPRESENTATIONS AND WARRANTIES AND AGREEMENTS OF THE SELLING
STOCKHOLDERS. Each Selling Stockholder severally represents and warrants to,
and severally agrees with, the several Underwriters that such Selling
Stockholder:
(i) Now has, and on the option Closing Date will have, good and
marketable title to the Stock to be sold by such Selling Stockholder,
without notice of any adverse claim and 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).
(ii) Now has, and on the Option Closing Date will have, upon
delivery of and payment for each share of Stock being sold by such
Selling Stockholder hereunder, full right, power and authority and any
approval required by law to sell, transfer, assign and deliver such
shares, and, upon delivery and payment for such shares as contemplated
hereby and assuming that the Underwriters are bona fide purchasers
within the meaning of the Uniform Commercial Code, the several
Underwriters will acquire good and marketable title to such shares,
free and clear of any liens, encumbrances, equities, claims,
restrictions on transfer or other defects whatsoever.
(iii) For a period of 180 days after the date of the Prospectus,
without the consent of Alex. Xxxxx, such Selling Stockholder will not
offer to sell, sell, contract to sell or otherwise dispose of any
Stock or securities convertible into or exchangeable for Stock,
including without limitation Stock which may be deemed to be
beneficially owned by such Selling Stockholder in accordance with the
Rules and Regulations, except for the Stock being sold hereunder.
(iv) Has duly executed and delivered a power of attorney in
substantially the form heretofore delivered to the Representatives
(the "Power of Attorney"), appointing Xxxxx X. Xxxxxxxxx, Xx., Xxxxxxx
X. Xxxxxxx and Xxxxxx X. Xxxxxxx, and each of them, as
attorney-in-fact (the "Attorneys-in-fact") with authority to execute
and deliver this Agreement on behalf of such Selling Stockholder, to
authorize the delivery of the shares of Stock to be sold by such
Selling Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions contemplated
by this Agreement.
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(v) Has duly executed and delivered a custody agreement in
substantially the form heretofore delivered to the Representatives
(the "Custody Agreement"), with American Securities Transfer & Trust,
Inc. as custodian (the "Custodian"), pursuant to which certificates in
negotiable form for the shares of Stock to be sold by such Selling
Stockholder 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 Stockholder, enforceable against
such Selling Stockholder in accordance with its 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 and
except as the enforcement hereof may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally, or by general equitable principles
regardless of whether considered in a proceeding at law or in equity.
(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 Stockholder of any of the terms or
provisions of, or constitute a default by such Selling Stockholder
under, any indenture, mortgage, deed of trust, trust, loan agreement,
lease, franchise, license or other material agreement or material
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or any of its properties is bound, or any
judgment of any court or governmental agency or body applicable to
such Selling Stockholder or any of its properties, or to such Selling
Stockholder's knowledge, any statute, decree, order, rule or
regulation of any court or governmental agency or body applicable to
such Selling Stockholder or any of its properties.
(viii) Without having undertaken to determine independently the
accuracy or completeness of either the representations and warranties
of the Company contained herein or the information contained in the
Registration Statement, such Selling Stockholder (other than the
Selling Stockholder named in Part 1 of Schedule B) has no reason to
believe that the representations and warranties of the Company
contained in Section 2 hereof are not true and correct. Such Selling
Stockholder is familiar with the Registration Statement and has no
knowledge of any material fact, condition or information not disclosed
in the Registration
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Statement which has adversely affected or is reasonably likely to
adversely affect the business of the Company; and the sale of the
Stock by such Selling Stockholder pursuant hereto is not prompted by
any information concerning the Company which is not set forth in the
Registration Statement.
(ix) The information pertaining to such Selling Stockholder
under the caption "Principal and Selling Stockholders" in the
Prospectus is complete and accurate in all material respects.
Each Selling Stockholder 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 Company and the other Selling Stockholders hereunder, and that the
arrangement for such custody and the appointment of the Attorneys-in-fact are
irrevocable; that the obligations of such Selling Stockholder hereunder shall
not be terminated by operation of law, whether by the death or incapacity,
liquidation or distribution of such Selling Stockholder, or any other event,
that if such Selling Stockholder 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
Stockholder shall be delivered on behalf of such Selling Stockholder in
accordance with the terms and conditions of this Agreement and the Custody
Agreement, and action taken by the Attorneys-in-fact or any of them under the
Power of Attorney shall be as valid as if such death, incapacity, liquidation or
dissolution or other event had not occurred, whether or not the Custodian, the
Attorneys-in-fact or any of them shall have notice of such death, incapacity,
liquidation or dissolution or other event.
3. PURCHASE BY, AND SALE AND DELIVERY TO, UNDERWRITERS--CLOSING DATES. The
Company agrees to sell to the Underwriters the Firm Stock, with the number of
shares to be sold by the Company being the number of shares of Stock set forth
on 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; 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 accordance with Section 12 hereof.
The purchase price per share to be paid by the Underwriters to the
Company will be $_________ per share (the "Purchase Price").
-14-
The Company 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
Stockholders given at or prior to 12:00 Noon, New York City 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 Alex. Xxxxx may designate (solely for the purpose of
administrative convenience) and in such denominations as Alex. Xxxxx may
determine), against payment of the aggregate Purchase Price therefor by wire
transfer of same-day funds, payable to the order of the Company and American
Securities Transfer & Trust, Inc. as Custodian for the Selling Stockholders, all
at the offices of [Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000]. The time and date of the delivery and closing shall be at 10:00
A.M., New York City Time), on ________, 1997 , in accordance with Rule 15c6-1 of
the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"). The time and date of
such payment and delivery are herein referred to as the "First Closing Date".
The First Closing Date and the location of delivery of, and the form of payment
for, the Firm Stock may be varied by agreement among the Company and Alex.
Xxxxx. The First Closing Date may be postponed pursuant to the provisions of
Section 12.
The Company 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 City Time, on the business day preceding the First Closing
Date at the offices of Alex. Xxxxx, New York, New York.
It is understood that Alex. Xxxxx or the other Representatives,
individually and not as Representatives of the several Underwriters, may (but
shall not be obligated to) make payment to the Company on behalf of any
Underwriter or Underwriters, for the Stock to be purchased by such Underwriter
or Underwriters. Any such payment by Alex. Xxxxx or the other Representative
shall not relieve such Underwriter or Underwriters from any of its or their
other obligations hereunder.
The several Underwriters agree to make an initial public offering of
the Firm Stock at the initial 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
Stockholders of the making of the initial public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Selling Stockholders hereby grant to the Underwriters an option to purchase,
severally and not jointly, up to the aggregate number of shares of Option Stock
set forth opposite each
-15-
Selling Stockholder's name on Schedule B hereto, for an aggregate of up to
409,090 shares. The price per share to be paid for the Option Stock shall be
the Purchase Price. The option granted hereby may be exercised as to all or any
part of the Option Stock at any time on or after the First Closing Date but not
more than once thereafter, and from time to time, not more than thirty (30) days
subsequent to the effective date of this Agreement. No Option Stock shall be
sold and delivered unless the Firm Stock previously has been, or simultaneously
is, sold and delivered. The right to purchase the Option Stock or any portion
thereof may be surrendered and terminated at any time upon notice by the
Underwriters to the Company and the Selling Stockholders.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Alex. Xxxxx to the Company and the Selling
Stockholders setting forth the number of shares of the Option Stock to be
purchased by them and the date and time for delivery of and payment for the
Option Stock. Each date and time for delivery of and payment for the Option
Stock (which may be the First Closing Date, but not earlier) is herein called
the "Option Closing Date" and shall in no event be earlier than two (2) business
days nor later than ten (10) business days after written notice is given. (The
Option Closing Date and the First Closing Date are herein called the "Closing
Dates".) All purchases of Option Stock from the Selling Stockholders shall be
made on a pro rata basis. Option 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 A 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
Selling Stockholders agree to sell to the Underwriters the number of shares of
Option 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 Selling Stockholders will deliver the Option 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 Company and the Selling Stockholders given at or prior to 12:00 Noon, New
York City 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 Alex. Xxxxx may designate (solely for the
purpose of administrative convenience) and in such denominations as Alex. Xxxxx
may determine), against payment of the aggregate Purchase Price therefor by wire
transfer of same-day funds, payable as directed by the Custodian (or such
Selling Stockholder, as the case may be), all at the offices of [Fulbright &
Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000]. The Selling
Stockholders shall make the certificates for the Option Stock available to the
Underwriters for examination not later than 10:00 A.M., New York
-16-
City Time, on the business day preceding the Option Closing Date at the offices
of Alex. Xxxxx, New York, New York. The Option Closing Date and the location of
delivery of, and the form of payment for, the Option Stock may be varied by
agreement among the Company, the Selling Stockholders and Alex. Xxxxx. 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, use its best efforts to cause the
Registration Statement to become effective, (ii) if the Company and the
Representatives have determined to proceed pursuant to Rule 430A, 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 is reasonably practicable the lifting thereof, if
issued. The Company will advise the Representatives promptly of the receipt of
any comments of the Commission or any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for additional information and will not at any time file any amendment to the
Registration Statement or supplement to the Prospectus which shall not
previously have been submitted to the Representatives a reasonable time prior to
the proposed filing thereof or to which the Representatives shall reasonably
object in writing within a reasonable time or which is not in compliance with
the Securities Act and the Rules and Regulations.
(b) 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 in
the judgment of the Company or the reasonable judgment of the
Representatives 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
-17-
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representatives
thereof and will prepare an amended or supplemented prospectus which
will correct such statement or omission; and in case any Underwriter
is required to deliver a prospectus relating to the Stock nine (9)
months or more after the effective date of the Registration Statement,
the Company upon the request of the Representatives and at the expense
of such Underwriter will prepare promptly such prospectus or
prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(c) The Company will deliver to the Representatives, at or
before the First Closing Date, signed copies of the Registration
Statement, as originally filed with the Commission, and all amendments
thereto including all financial statements and exhibits thereto, and
will deliver to the Representatives such number of copies of the
Registration Statement, including such financial statements 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;
provided, however, that the expense of the preparation and delivery of
any prospectus required for use nine (9) months or more after the
effective date of the Registration Statement shall be borne by the
Underwriters required to deliver such prospectus.
(d) The Company will make generally available to its
stockholders as soon as practicable, but not later than fifteen (15)
months after the effective date of the Registration Statement, an
earnings 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.
-18-
(e) 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 in the United States 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 to service of
process in any such jurisdiction where it is not now so subject. 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.
(f) The Company will furnish to its stockholders 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 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 and will deliver to the
Representatives, (i) as soon as they are available, copies of any
other reports or communication (financial or other) which the Company
shall publish or otherwise make available to any of its stockholders
as such and (ii) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission, or
the NASD or any national securities exchange. 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 stockholders
generally. Similar reports 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.
-19-
(g) The Company has received approval for listing the Stock,
subject to official notice of issuance, on the Nasdaq National Market.
(h) The Company will maintain a transfer agent and a registrar
(if required by its jurisdiction of incorporation) for its Common
Stock.
(i) The Company will not offer, sell, assign, transfer,
encumber, contract to sell, grant an option to purchase or otherwise
dispose of any shares of Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock during the 180 days
following the date of the Prospectus, other than the Company's sale of
Common Stock hereunder and the Company's issuance of Common Stock upon
the exercise of warrants and of stock options which are presently
outstanding and described in the Prospectus or pursuant to employee
benefit plans described in the Prospectus.
(j) 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.
(k) The Company will supply you with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(l) Prior to the Closing Dates the Company will furnish to you,
as soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company and its subsidiaries
for any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the Prospectus.
(m) Prior to the Closing Dates the Company will issue no press
release or other communications to the general public directly or
indirectly and will hold no press conference with respect to the
Company or any of its subsidiaries, the financial condition, results
of operation, business, prospects, assets or liabilities of any of
them, or the offering of the Stock, without your prior written
consent.
5. PAYMENT OF EXPENSES. (a) The Company will pay (directly or by
reimbursement) all costs, expenses and fees incident to the performance of the
Company and the Selling Stockholders under this Agreement, including the
following: the fees and expenses of the Company's independent public
accountants; the fees and
-20-
disbursements of counsel for the Company and the Selling Stockholders (except as
expressly provided below with respect to counsel to be paid for by the Selling
Stockholders); the filing fees of the Commission; the costs of preparing stock
certificates (including printing and engraving costs); all fees and expenses of
the registrar and transfer agent for the Common Stock; all necessary transfer
and other stamp taxes in connection with the issuance and sale of the Stock to
the Underwriters hereunder; the cost of printing and delivering to, or as
requested by, the Underwriters copies of the Registration Statement, Preliminary
Prospectus, Prospectus and any supplements or amendments thereto except as
provided in Section 4(c) hereof; the NASD filing fees incident to securing any
required review by the NASD of the terms of the sale of the Stock; the listing
fee of the Nasdaq National Market; and the expenses, including the reasonable
fees and disbursements of counsel for the Underwriters incurred in connection
with review by the NASD of the terms of the sale of the Stock and exemptions
from qualifying or registering (or obtaining qualification or registration of)
all or any part of the Stock for offer or sale under the Blue Sky or other
securities laws of such jurisdictions within the United States as the
Representatives may designate. To the extent, if at all, that any Selling
Stockholder engages special legal counsel to represent such Selling Stockholder
in connection with this offering, the fees and expenses of such counsel shall be
borne by such Selling Stockholder. The Company shall not, however, be required
to pay for any of the Underwriters' expenses (other than the fees incident to
securing any required review by the NASD and those related to qualification
under state securities or "blue sky" laws), except as provided in Section 11
hereof.
(b) Each Selling Stockholder will pay (directly or by reimbursement)
all fees and expenses incident to the performance of such Selling Stockholder'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 Stockholder other than Pillsbury Madison & Sutro LLP, and all
transfer, stamp and other taxes incident to the sale and delivery of the Stock
to be sold by such Selling Stockholder to the Underwriters hereunder.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and each
Selling Stockholder, jointly and severally, agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls such Underwriter within
the meaning of the Securities Act and the respective officers, directors,
partners, employees, representatives and agents of each of such Underwriter
(collectively, the "Underwriter Indemnified Parties" and, each, an "Underwriter
Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (including the reasonable cost of investigating and defending against
any claims therefor and counsel fees incurred in connection therewith), joint or
several, which may be based upon the Securities Act, or any other statute or at
common law, on the ground or alleged ground
-21-
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 omits to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, unless
such statement or omission was made in reliance upon, and in conformity with,
written information furnished to the Company or any subsidiary by any
Underwriter, directly or through the Representatives, specifically for use in
the preparation thereof; provided, however, that neither the Company nor any
Selling Stockholder will be liable to any Underwriter Indemnified Party with
respect to any loss, claim, damage, expense or liability arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged
omission to state a material fact in the Preeffective Prospectus which is
corrected in the Prospectus if the person asserting such loss, claim, damage,
expense or liability was not sent or given a copy of the Prospectus at or prior
to the written confirmation of the sale of Stock to such person. In no event,
shall the liability of any Selling Stockholder to the Underwriter Indemnified
Parties under this Agreement (including with respect to such Selling
Stockholder's representations hereunder) exceed the proceeds, net of
underwriting discounts and commissions, received by such Selling Stockholder
from the Underwriters in the offering of the stock. The Company or such Selling
Stockholder will be entitled to participate at its own expense in the defense
or, if it so elects, to assume jointly the defense of any suit brought to
enforce any such liability, but if the Company or such Selling Stockholder elect
to assume the defense, such defense shall be conducted by counsel chosen by it.
In the event the Company or any Selling Stockholder as applicable elects to
assume the defense of any such suit and retain such counsel, any Underwriter
Indemnified Parties, defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) the
Company or such Selling Stockholder as applicable shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include any such Underwriter Indemnified Parties, and the Company or such
Selling Stockholder and such Underwriter Indemnified Parties at law or in equity
have been advised by counsel to the Underwriters that one or more legal defenses
may be available to it or them which may not be available to the Company or any
Selling Stockholder, in which case the Company or such Selling Stockholder shall
not be entitled to assume the defense of such suit notwithstanding its
obligation to bear the fees and expenses of such counsel. It is understood that
the Company Indemnified Parties and Stockholder Indemnified Parties shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all Underwriter Indemnified Parties. The Company and the
Selling Stockholders against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any such claim effected without the
-22-
consent of the Company or such Selling Stockholder, as applicable. In no case
is the Company or any Selling Stockholder to be liable with respect to any
claims made against any Underwriter Indemnified Party against whom the action is
brought unless such Indemnified Party shall have notified the Company and the
Selling Stockholders 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 Underwriter Indemnified Party, but failure to notify
the Company and the Selling Stockholders of such claim shall not relieve them
from any liability which they may have to any Underwriter Indemnified Party
otherwise then on account of its indemnity agreement contained in this
paragraph. This indemnity agreement is not exclusive and will be in addition to
any liability which the Company or any Selling Stockholder might otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each person named as a
prospective director in the Registration Statement, 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 the Selling Stockholders and each person, if any, who
controls any Selling Stockholder within the meaning of the Securities Act
(collectively, the "Stockholder Indemnified Parties"), against any losses,
claims, damages, liabilities or expenses (including, unless the Underwriter or
Underwriters elect to assume the defense, the reasonable cost of investigating
and defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which arise out of or are based in
whole or in part upon the Securities Act, the Exchange Act or any other federal,
state, local or foreign statute or regulation, or at common law, on the ground
or alleged ground that any 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 in reliance upon, and in
conformity with, written information furnished to the Company by such
Underwriter, directly or through the Representatives, specifically for use in
the preparation thereof; provided, however, that in no case is such Underwriter
to be liable with respect to any claims made against any Company Indemnified
Party or Stockholder Indemnified Party against whom the action is brought unless
such Company Indemnified Party or Stockholder 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 Stockholder Indemnified
Party, but failure to notify
-23-
such Underwriter of such claim shall not relieve it from any liability which it
may have to any Company Indemnified Party or Stockholder 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 Stockholder 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, unless (i) the Underwriters
shall have specifically authorized the retaining of such counsel or (ii) the
parties to such suit includes any such Company Indemnified Parties and the
Underwriters, and the Underwriters and such Company Indemnified Parties at law
or in equity have been advised by counsel to the Company and the Selling
Stockholders that one or more legal defenses may be available to it or them
which may not be available to the Underwriters, in which case the Underwriters
shall not be entitled to assume the defense of such suit notwithstanding their
obligation to bear the fees and expenses of such counsel. It is understood that
the Underwriter Indemnified Parties shall not, in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm for all Company Indemnified
Parties and Stockholder Indemnified Parties. 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 Stockholder Indemnified Party.
(c) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) 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
Stockholders 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
-24-
Company and the Selling Stockholders on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders 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 Stockholders 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 Stockholders 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 Stockholders 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
(c), 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 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. The Underwriters' obligations to contribute are several in
proportion to their respective underwriting obligations and not joint.
7. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Stockholders, the Company or any of their officers or directors or any
controlling persons, and shall survive delivery of and payment for the Stock.
-25-
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 the Closing Dates, of the representations and warranties made
herein by the Company and the Selling Stockholders, to compliance at and as of
the Closing Dates by the Company and the Selling Stockholders with their
covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to 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 that the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, does not contain 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.
(c) At the time of execution of this Agreement, the
Representatives shall have received from each of Coopers & Xxxxxxx
L.L.P., Deloitte & Touche LLP and KPMG Peat Marwick LLP, independent
certified public accountants, a letter, dated the date hereof, in form
and substance satisfactory to the Representatives.
(d) The Representatives shall have received from each of
Coopers & Xxxxxxx L.L.P., Deloitte & Touche LLP and KPMG Peat Marwick
LLP, independent certified public accountants, a letter, dated the
Closing Dates, to the effect that such accountants reaffirm, as of the
Closing Dates, and as though made on the Closing Dates, the statements
-26-
made in the letter furnished by such accountants pursuant to paragraph
(b) of this Section 8.
(e) The Representatives shall have received from Pillsbury
Madison & Sutro LLP, counsel for the Company, an opinion, dated the
Closing Dates, to the effect set forth in Exhibit I hereto.
(f) The Representatives shall have received from Pillsbury
Madison & Sutro LLP, counsel for the Selling Stockholders, an opinion
dated the Closing Dates to the effect set forth in Exhibit II hereto.
(g) The Representatives shall have received from Fulbright
& Xxxxxxxx L.L.P., counsel for the Underwriters, their opinion or
opinions dated 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 Stockholders shall have
furnished to such counsel such documents as they may request for the
purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received a certificate,
dated the Closing Dates, of the president and the chief financial
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) Such officers have carefully reviewed the
Registration Statement, and in their opinion none of 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, not misleading;
-27-
(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 not in the ordinary course of business, nor entered
into any material transactions not in the ordinary course of
business and there has not been any material adverse change in
the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of the
Company and its subsidiaries considered as a whole, or any change
in the capital stock (other than pursuant to the exercise of
outstanding stock options), short-term or long-term debt of the
Company and its subsidiaries which is material to the Company and
its subsidiaries considered as a whole;
(iv) The representations and warranties of the Company
in this Agreement are true and correct at and as of the Closing
Dates, and the Company has complied with all the agreements and
performed or satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Dates; and
(v) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, (i)
there has not been any material adverse change or a development
involving a material adverse change in the condition (financial
or otherwise), properties, business, management, prospects, net
worth or results of operations of the Company and its
subsidiaries considered as a whole; (ii) the business and
operations conducted by the Company and its subsidiaries have not
sustained a loss by strike, fire, flood, accident or other
calamity (whether or not insured) of such a character as to
interfere materially with the conduct of the business and
operations of the Company and its subsidiaries considered as a
whole; (iii) no legal or governmental action, suit or proceeding
is pending or threatened against the Company which is material to
the Company, whether or not arising from transactions in the
ordinary course of business, or which may materially and
adversely affect the transactions contemplated by this Agreement;
(iv) since such dates and except as so disclosed, the Company has
not repurchased or otherwise
-28-
acquired any of the Company's capital stock (other than pursuant
to written plans or agreements existing on the date of the
Prospectus, copies of which have been provided to counsel for the
Underwriters); and (v) the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding
capital stock payable to stockholders of record on a date prior
to the Closing Date.
(j) The Representatives shall have received a certificate or certificates,
dated the Closing Dates, of each Selling Stockholder to the effect that as of
the Closing Dates such Selling Stockholder's representations and warranties in
this Agreement are true and correct as if made on and as of the Closing Dates,
and that he has performed all his obligations and satisfied all the conditions
on such Selling Stockholder's part to be performed or satisfied at or prior to
the Closing Dates.
(k) Alex. Xxxxx shall have received the written agreements
of the officers and directors of the Company and the holders of
securities of the Company listed in Schedule C that each will not
offer, sell, assign, transfer, encumber, contract to sell, grant an
option to purchase or otherwise dispose of, other than by operation of
law, gifts, pledges or dispositions by estate representatives, any
shares of Common Stock (including, without limitation, Common Stock
which may be deemed to be beneficially owned by such officer, director
or holder in accordance with the Rules and Regulations) or securities
convertible into or exercisable or exchangeable for Common Stock
during the 180 days following the date of the final Prospectus, except
for the Stock being sold hereunder by the Selling Stockholders.
(l) The Nasdaq National Market shall have approved the Stock for
inclusion, 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 unless such failure to satisfy
results from any default or omission on the part of any Underwriter, this
Agreement may be terminated by the Representatives by notifying the Company of
such termination in writing or by telegram at or prior to
-29-
the First Closing Date, but Xxxx Xxxxx shall be entitled to waive any of such
conditions.
9. EFFECTIVE DATE. This Agreement shall become effective immediately.
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 and the Selling Stockholders (i) if at
or prior to the First Closing Date trading in securities on any of the New York
Stock Exchange, American Stock Exchange or Nasdaq National Market, shall have
been suspended or minimum or maximum prices shall have been established on any
such exchange or market, or a banking moratorium shall have been declared by New
York State 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 reasonable judgment of the Representatives, makes it impractical
or inadvisable to offer or sell the Firm Stock on the terms contemplated by the
Prospectus; or (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 reasonable judgment of the Representatives, makes it
impracticable or inadvisable to offer or deliver the Firm 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 pursuant to the first paragraph of Section 10 or shall
be terminated by the Representatives under Section 8 or Section 10 (other than a
termination due to any failure, refusal or inability by the Company or any
Selling Stockholder to perform any covenant or satisfy any condition of this
Agreement on their part to be performed or satisfied which is due to the default
or omission of any Underwriter), the Company
-30-
will bear and pay the expenses specified in Section 5 hereof and, in addition to
its obligations pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the several Underwriters (including
reasonable fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives; provided, that the Company shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Stock.
12. SUBSTITUTION OF UNDERWRITERS. If on the First Closing Date any
Underwriter or Underwriters shall default in its or their obligations to
purchase shares of Stock hereunder (otherwise than by reason of default on the
part of the Company or the Selling Stockholders), you, as Representatives of the
Underwriters, shall use your reasonable efforts to procure within 48 hours
thereafter one or more of the other Underwriters, or any others, to purchase
from the Company such amounts as may be agreed upon and upon the terms set forth
herein, the shares of Stock which the defaulting Underwriter or Underwriters
failed to purchase. If during such 48 hours you, as such Representatives, shall
not have procured such other Underwriters, or any others, to purchase the shares
of Stock agreed to be purchased by the defaulting Underwriter or Underwriters,
then (a) if 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 of Stock which such defaulting Underwriter or Underwriters
agreed but failed to purchase, or (b) if the aggregate number of shares of Stock
with respect to which such default or defaults occur is more than ten percent
(10%) of the total number of shares underwritten, the Company or you, as the
Representatives of the Underwriters, will have the right, by written notice
given within the next 48-hour period to the parties to this Agreement, to
terminate this Agreement without liability on the part of the non-defaulting
Underwriters or the Company and the Selling Stockholders.
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 Stockholders 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 Stockholders 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
-31-
substituted Underwriters shall be taken as the basis of their underwriting
obligation for all purposes of this Agreement. The term "Underwriter" herein
includes any person or entity substituted for a defaulting underwriter
hereunder. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Company, the Selling Stockholders 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 Stockholders or the Company, except
for the provisions of Section 6.
13. NOTICES. All communications hereunder shall be in writing and,
if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives c/o Alex. Xxxxx & Sons Incorporated
at 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, attention: Xxxxxxx X. Xxxxx, with
a copy to Xxxxxxx X. Xxxxxx, Esq., Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx
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 or any Selling
Stockholder, shall be mailed, delivered or telegraphed and confirmed c/o Track
'n Trail, 0000-X Xxxxxxxx Xxxxx, Xx Xxxxxx Xxxxx, Xxxxxxxxxx 00000 attention:
Xxxxxx X. Xxxxxxx with a copy to Xxxxxxxxx X. Xxxxxxxx III, Esq., Pillsbury
Madison & Sutro LLP, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and the Selling Stockholders
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
Stockholders 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, who control the
Company or any Selling Stockholders within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
-32-
15. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the choice of law principles thereof.
16. AUTHORITY OF THE REPRESENTATIVES. In connection with this
Agreement, you will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by you, as Representatives, or individually as
a 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 the
Selling Stockholders.
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) thereto as are necessary to make it
valid and enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Stockholder 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 Stockholders represents by so doing that he has been duly
appointed as Attorney-in-fact by such Selling Stockholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-fact to
take such action.
-33-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
TRACK 'N TRAIL
By:
-------------------------
[ ]
SELLING STOCKHOLDERS LISTED
IN SCHEDULE B
By: Attorney-in-fact
By:
-------------------------
Attorney-in-fact
Acting on his own behalf and on behalf of the
Selling Stockholders listed in Schedule B.
Accepted and delivered in
New York, New York
as of the date first above
written.
By: ALEX. XXXXX & SONS INCORPORATED
X.X. XXXXXXX & SONS, INC.
LADENBURG XXXXXXXX & CO. INC.
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
-34-
By:
-------------------------
Title:
-35-
SCHEDULE A
Number of
shares of
Firm Stock
to be
Name Purchased
---- ---------
Alex. Xxxxx & Sons Incorporated
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxxxx Xxxxxxxx & Xx. Xxx.
-00-
XXXXXXXX X
Number of shares Number of shares
of Firm Stock of Option Stock
Seller to be sold to be sold
------ ---------- ----------
Track 'n Trail 2,727,272 --
Part 1
Xxxxx X. Xxxxxxxxx, Xx. and --
Xxxxxx Xxxxxxxxx, as Trustees of
the Xxxxxxxxx Family Trust
Part 2
Xxxxxxx Xxxxxxxxx --
--
------------ ----------
Xxxxxxx Xxxxxxxxx 2,727,272 409,090
-37-
SCHEDULE C
Xxxxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxx, Xx. and Xxxxxx Xxxxxxxxx,
as Trustees of The Xxxxxxxxx Family Trust
Xxxxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxxx Xxxx
Xxxxxxx X. Xxxxx
-38-
EXHIBIT I
MATTERS TO BE COVERED IN
OPINION OF COUNSEL TO THE COMPANY*
1. The Company and each of its subsidiaries has been duly organized and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of organization, is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its leasing of
property or the conduct of its businesses requires such qualification, and has
all power and authority necessary to own or hold its properties and conduct the
businesses in which it is engaged. The transactions contemplated by the
Exchange Agreement occurred prior to effectiveness of the Registration
Statement. Upon the consummation of the transactions contemplated in the
Underwriting Agreement, the Company's Subchapter S election was duly terminated.
2. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and all of the shares of Stock to be issued and sold by the Company to the
Underwriters pursuant to the Underwriting Agreement have been duly and validly
authorized and, when issued and delivered against payment therefor as provided
for in the Underwriting Agreement, will be duly and validly issued, fully paid
and non-assessable and free of any preemptive or similar rights; and all of the
issued shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued and are fully paid, non-assessable and are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
3. Except as disclosed in and or contemplated by the Prospectus and the
financial statements of the Company and related notes thereto included in the
Prospectus, the Company does not have outstanding any options or warrants to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase any securities or obligations convertible into, or any contracts or
----------------------------
* Capitalized terms used herein but not defined shall have the meanings given
such terms in the Underwriting Agreement.
-39-
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. There are no restrictions upon
the voting or transfer of, any of the Stock pursuant to the Certificate of
Incorporation or By-laws, other organizational documents or any agreement or
other instrument of the Company or its subsidiaries.
4. To the best of such counsel's knowledge, except as set forth in the
Prospectus, there are no material legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, could have a
material adverse effect on the Company and its subsidiaries or prevent or
adversely affect the transactions contemplated by the Underwriting Agreement;
and, to the best of such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or other third parties. To the best
of such counsel's knowledge, neither the Company nor any of its subsidiaries is
a party or subject to the provisions of any material injunction, judgment,
decree or order of any court, regulatory body or other governmental agency or
body.
5. The Company has the full corporate power and authority to enter into
the Underwriting Agreement and to perform its obligations thereunder (including
to issue, sell and deliver the Stock), and the Underwriting Agreement has been
duly and validly authorized, executed and delivered by the Company.
6. The execution, delivery and performance of the Underwriting Agreement
and the consummation of the transactions therein contemplated will not result in
a breach or violation of any of the terms or provisions of or constitute a
default under the Certificate of Incorporation, By-laws or other organizational
documents of the Company or any of its subsidiaries, or any indenture, mortgage,
deed of trust, note agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or by which
or any of them or any of its their properties is or may be bound, or any law,
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or result in the creation of a lien.
7. No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company of
the transactions contemplated by the Underwriting Agreement (except such as may
be required by the NASD or as required by the securities or "Blue Sky" laws of
any jurisdiction as to which such counsel need express no opinion) in
-40-
connection with the purchase and distribution of the Stock by the Underwriters
except such as have been obtained or made, specifying the same.
8. The Registration Statement was declared effective under the Securities
Act as of _____________, 1997, the Prospectus was filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations on , 1997 and,
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose is pending or threatened by the Commission.
9. The Registration Statement and the Prospectus and any amendments or
supplements thereto (except for the financial statements and notes thereto and
related schedules as to which such counsel need express no opinion) comply as to
form in all respects with the requirements of the Securities Act and the Rules
and Regulations.
10. To the best of such counsel's knowledge, there are no franchise,
lease, contract, agreement or other 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. All
descriptions of any such franchises, leases, contracts, agreements or documents
contained in the Registration Statement are accurate and complete descriptions
of such documents in all material respects.
11. To the best of such counsel's knowledge, no person or entity has the
right to require registration of shares of Common Stock or other securities of
the Company because of the filing or effectiveness of the Registration Statement
or otherwise, except for persons and entities who have expressly waived such
right or who have been given proper notice and have failed to exercise such
right within the time or times required under the terms and conditions of such
right.
12. The statements in the Prospectus, to the extent they constitute a
summary of documents referred to therein or they reflect matters of law or legal
conclusions relating to such law, accurately summarize and fairly present the
information called for with respect to such documents and matter and the legal
and regulatory matters described therein.
13. Neither the Company nor any of its subsidiaries is 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.
-41-
In addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that (i) the Registration Statement or any amendment
thereto, as of the time it became effective under the Securities Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Securities Act), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (ii) that the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the First Closing Date or the Option Closing
Date, as the case may be, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading (except that such counsel need express no view as
to financial statements and notes thereto, schedules and statistical information
therein). With respect to such statement, such counsel may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.
-42-
EXHIBIT II
MATTERS TO BE COVERED IN OPINION
OF COUNSEL TO THE SELLING STOCKHOLDERS**
1. Each Selling Stockholder has valid and marketable title to the
Stock to be sold by such Selling Stockholder, 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
the Underwriting Agreement, the Power of Attorney and the Custody Agreement.
2. Each Selling Stockholder has, and on the Closing Date will have,
upon delivery of and payment for each share of Stock being sold by such Selling
Stockholder hereunder, full right, power and authority, any approval required by
law to sell, transfer, assign and deliver such shares, and each of the several
Underwriters will acquire valid and marketable title to such shares, free and
clear of any liens, encumbrances, equities claims, restrictions on transfer or
other defects whatsoever.
3. Each of the Underwriting Agreement, the Power of Attorney and the
Custody Agreement has been duly executed and delivered by or on behalf of such
Selling Stockholder, and the Power of Attorney and the Custody Agreement each
constitutes a valid and binding obligation of such Selling Stockholder,
enforceable against such Selling Stockholder in accordance with its 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.
4. To the best of such counsel's knowledge, the performance of the
Underwriting Agreement, the Custody Agreement and the Power of Attorney, and the
consummation of the transactions contemplated thereby will not result in a
breach or violation by such Selling Stockholder of any of the terms or
provisions of, or constitute a default by such Selling Stockholder 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 Stockholder is a party or by which such Selling Stockholder or any
of its properties is bound, or any judgment
---------------------------
** Capitalized terms used herein but not defined shall have the meanings given
such terms in the Underwriting Agreement.
-43-
of any court or governmental agency or body applicable to such Selling
Stockholder or any of its properties, or to such counsel's knowledge, any
statute, decree, order, rule or regulation of any court or governmental agency
or body applicable to such Selling Stockholder or any of its properties.
In addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that (i) the Registration Statement or any amendment
thereto, as of the time it became effective under the Securities Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Securities Act), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (ii) that the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the First Closing Date or the Option Closing
Date, as the case may be, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading (except that such counsel need express no view as
to financial statements and notes thereto, schedules and statistical information
therein). With respect to such statement, such counsel may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.
-44-
