1
EXHIBIT 1.1
Draft Dated October 24, 1996
BTG, INC.
1,750,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
November ___, 1996
PRUDENTIAL SECURITIES INCORPORATED
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXX, XXXXX XXXXX, INCORPORATED
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
BTG, Inc., a Virginia corporation (the "Company"), and the
Securityholder of the Company named in Schedule 2 hereto (the "Selling
Securityholder") hereby confirm their agreement with the several underwriters
named in Schedule 1 hereto (the "Underwriters"), for whom you have been duly
authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
an aggregate of 1,670,000 shares of the Company's Common Stock, without par
value ("Common Stock"), and the Selling Securityholder proposes to sell to the
several Underwriters an aggregate of 80,000 shares of Common Stock
(collectively with the shares of Common Stock to be issued and sold by the
Company, the "Firm Securities"). The Company also proposes to issue and sell
to the several Underwriters not more than 242,500 additional shares of Common
Stock and the Selling Securityholder proposes to sell to the several
Underwriters not more than 20,000 additional shares of Common Stock, in each
case, if requested by the Representatives as provided in Section 3 of this
Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such options are referred to herein as the "Option
Securities", and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities".
__________________________________
1 Plus options to purchase from BTG, Inc. up to 242,500 additional
shares, and from the Selling Securityholder (as defined herein) up to
20,000 additional shares, to cover over-allotments.
2
2. Representations and Warranties of the Company and the Selling
Securityholder.
(a) The Company and the Selling Securityholder hereby jointly and
severally represent and warrant to, and agree with, each of the several
Underwriters that:
(i) A registration statement on Form S-1 (File No. 33-_________)
with respect to the Securities, including a prospectus subject to completion,
has been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed.
After the execution of this Agreement, the Company will file with the
Commission either (A) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act,
either (1) if the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify the
Preliminary Prospectus (as hereinafter defined) that it supplements containing
such information as is required or permitted by Rules 434, 430A and 424(b)
under the Act or (2) if the Company does not rely on Rule 434 under the Act, a
prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been filed, in such
registration statement), with such changes or insertions as are required by
Rule 430A under the Act or permitted by Rule 424(b) under the Act, and in the
case of either clause (A)(1) or (A)(2) of this sentence as have been provided
to and approved by the Representatives prior to the execution of this
Agreement, or (B) if such registration statement, as it may have been amended,
has not been declared by the Commission to be effective under the Act, an
amendment to such registration statement, including a form of prospectus, a
copy of which amendment has been furnished to and approved by the
Representatives prior to the execution of this Agreement. The Company may also
file a related registration statement with the Commission pursuant to Rule
462(b) under the Act for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission.
As used in this Agreement, the term "Original Registration Statement" means the
registration statement initially filed relating to the Securities, as amended
at the time when it was or is declared effective, including all financial
schedules and exhibits thereto and including any information omitted therefrom
pursuant to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Rule 462(b) Registration Statement" means any
registration statement filed with the Commission pursuant to Rule 462(b) under
the Act (including the Registration Statement and any Preliminary Prospectus or
Prospectus incorporated therein at the time such Registration Statement becomes
effective); the term "Registration Statement" includes both the Original
Registration Statement and any Rule 462(b) Registration Statement; the term
"Preliminary Prospectus" means each prospectus subject to completion filed with
such registration statement or any amendment thereto (including the prospectus
subject to completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective); the term
"Prospectus" means:
(I) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(II) if the Company does not rely on Rule 434 under the Act, the prospectus
first filed with the Commission pursuant to Rule 424(b) under the Act;
or
(III) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement;
-2-
3
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(ii) The Commission has not issued any order preventing or
suspending use of any Preliminary Prospectus. When any Preliminary Prospectus
was filed with the Commission it (A) contained all statements required to be
stated therein in accordance with, and complied in all material respects with
the requirements of, the Act and the rules and regulations of the Commission
thereunder and (B) did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective, it (A) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (B) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus
or any Term Sheet that is a part thereof or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or part thereof or such amendment or supplement is not required to
be so filed, when the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was or is declared
effective) and on the Firm Closing Date and any Option Closing Date (both as
hereinafter defined), the Prospectus, as amended or supplemented at any such
time, (A) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and regulations of the
Commission thereunder and (B) did not or will not include any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing provisions of this paragraph (ii) do
not apply to statements or omissions made in any Preliminary Prospectus, the
Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(iii) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (A) the Company
has filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation of
its receipt and (B) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act or the Commission has received payment of such filing fee.
(iv) The Company and each of its subsidiaries have been duly
organized and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation and are duly qualified
to transact business as foreign corporations and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries,
taken as a whole.
(v) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.
-3-
4
(vi) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and except as otherwise set forth in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus, are
owned beneficially by the Company free and clear of any security interests,
liens, encumbrances, equities or claims.
(vii) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus. All of the issued shares of
capital stock of the Company (including the Firm Securities being sold by the
Selling Securityholder) have been duly authorized and validly issued and are
fully paid and nonassessable. The Firm Securities (other than the Firm
Securities being sold by the Selling Securityholder) and the Option Securities
(other than the Option Securities held by the Selling Securityholder) have been
duly authorized and at the Firm Closing Date or the related Option Closing Date
(as the case may be), after payment therefor in accordance herewith, will be
validly issued, fully paid and nonassessable. No holders of outstanding shares
of capital stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Securities, and no holder of securities of
the Company has any right which has not been fully exercised or waived to
require the Company to register the offer or sale of any securities owned by
such holder under the Act in the public offering contemplated by this
agreement.
(viii) The capital stock of the Company conforms to the description
thereof contained in the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus.
(ix) Except as disclosed in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or options to subscribe
for or purchase from the Company or any such subsidiary any such capital stock
or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options.
(x) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) fairly present the financial position of
the Company and its consolidated subsidiaries and the results of operations and
changes in financial condition as of the dates and periods therein specified.
Such financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the captions "Summary Consolidated Financial Data" and
"Selected Consolidated Financial Data" in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) fairly present, on
the basis stated in the Prospectus (or such Preliminary Prospectus), the
information included therein.
(xi) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), are
independent public accountants as required by the Act and the applicable rules
and regulations thereunder.
(xii) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding
-4-
5
agreement of the Company, enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, receivership,
conservatorship or other similar laws, regulations or procedures of general
applicability relating to or affecting enforcement of the rights of creditors
of savings or by general equity principles and the discretion of the court
before which any proceeding is brought (regardless of whether enforceability is
considered in a proceeding in equity or at law) and except as the obligations
of the Company under the indemnification and contribution provisions hereof may
be limited by public policy under certain circumstances, including applicable
federal or state securities laws.
(xiii) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and, to the Company's knowledge, no such proceedings have been
threatened against the Company or any of its subsidiaries or with respect to
any of their respective properties; and no contract or other document is
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement that is not described
therein (or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or filed as required.
(xiv) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (A) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the Registration
Statement is not effective under the Act as of the time of execution hereof,
such as may be required (and shall be obtained as provided in this Agreement)
under the Act, or (B) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties are bound, or
the charter documents or by-laws of the Company or any of its subsidiaries, or
any statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to the Company or any
of its subsidiaries.
(xv) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties is bound or may be
affected in any material adverse respect with regard to property, business or
operations of the Company and its subsidiaries.
(xvi) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus, (A) neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding and there has
not been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth, or results of the operations of the
Company or any of its subsidiaries; (B) neither the Company nor any of its
subsidiaries have incurred any material liability or obligation, direct or
contingent, nor entered into
-5-
6
any material transaction other than in the ordinary course of business; (C) the
Company has not purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its capital
stock; and (D) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its consolidated
subsidiaries, except in each case as described in or contemplated by the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(xvii) The Company has not, directly or indirectly, (A) taken any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities or (B) since the filing of the Registration Statement (1) sold,
bid for, purchased, or paid anyone any compensation for soliciting purchases
of, the Securities or (2) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company (except
for the sale of Securities by the Selling Securityholder under this Agreement).
(xviii) None of the Company, its subsidiaries or any employee of the
Company or its subsidiaries has made any payment of funds of the Company or its
subsidiaries prohibited by any applicable law and no funds of the Company or
its subsidiaries have been set aside to be used for any payment prohibited by
any such law.
(xix) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items of real property and marketable
title to all personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely affect the value
of such property and do not interfere with the use made or proposed to be made
of such property by the Company or such subsidiary, and any real property and
buildings held under lease by the Company or any such subsidiary are held under
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such subsidiary, in each case except
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(xx) No labor dispute with the employees of the Company or any of
its subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(xxi) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which
they are engaged; neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor any
such subsidiary 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 its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(xxii) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from
-6-
7
repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(xxiii) (A) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, and
(B) neither the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxiv) The Company is not an investment company under the Investment
Company Act of 1940, as amended, and this transaction will not cause the
Company to become an investment company subject to registration under such Act.
(xxv) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company and its subsidiaries) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(xxvi) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to occupational
safety and health or to the storage, handling or transportation of hazardous or
toxic materials and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to
conduct their respective businesses, and the Company and each such subsidiary
is in compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(xxvii) The Company has not distributed and, prior to the later of (A)
the Closing Date and (B) the completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering and
sale of the Securities other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus and any Term Sheet or any
amendment or supplement thereto, or other materials, if any, permitted by the
Act.
(xxviii) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
-7-
8
(xix) Except for the shares of capital stock of each of the
subsidiaries owned by the Company, neither the Company nor any such subsidiary
owns any shares of stock or any other equity securities of any corporation or
has any equity interest in any firm, partnership, association or other entity,
except as described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(xxx) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(A) transactions are executed in accordance with management's general or
specific authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxxi) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent applications,
trademarks, service marks, trade names, licenses, copyrights and proprietary or
other confidential information (collectively, the "Intellectual Property")
currently employed by them in connection with their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(xxxii) All patents, patent applications, trademark registrations,
trademark applications and registered copyrights which are owned by the Company
and its subsidiaries have been duly registered in, filed in or issued by the
United States Patent and Trademark Office, the United States Register of
Copyrights, or the corresponding offices of other jurisdictions, and have been
properly maintained and renewed in accordance with all applicable provisions of
law and administrative regulations of the United States and each such
jurisdiction.
(xxxiii) All licenses or other agreements under which the Company or
its subsidiaries are granted rights in Intellectual Property are in full force
and effect, except for those licenses or other agreements which are not
material to the Company or its subsidiaries and there is no default by any
party thereto which default could reasonably be expected to result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries. To the Company's and the Selling Securityholder's knowledge, the
licensors under said licenses and other agreements have and had all requisite
power and authority to grant the rights purported to be conferred thereby, to
the extent material with respect to the Company and its subsidiaries. All
licenses or other agreements under which the Company or its subsidiaries have
granted rights to others in Intellectual Property owned or licensed by the
Company or its subsidiaries are in full force and effect, except for those
licenses or other agreements which are not material to the Company or its
subsidiaries and there is no default by any party thereto which default could
reasonably be expected to result in a material adverse change in the condition
(financial or otherwise), business prospectus, net worth or results of
operations of the Company and its subsidiaries.
(xxxiv) The Company and its subsidiaries have taken reasonable steps
in accordance with sound business practice to establish and preserve its
ownership of all material Intellectual Property rights with respect to its
products, services and technology. Except for those instances which could not
reasonably be
-8-
9
expected to have a material adverse effect on the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, the Company and its subsidiaries have required
all employees having access to non-public information of the Company and its
subsidiaries to execute agreements under which such employees are required to
convey to the Company ownership of all inventions and developments conceived or
created by them in the course of their employment and to maintain the
confidentiality of all such information of the Company. Except for those
instances which could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its subsidiaries, the Company and
its subsidiaries have not made any such information available to any person
other than employees of the Company or its subsidiaries except pursuant to
written agreements requiring the recipients to maintain the confidentiality of
such information and appropriately restricting the use thereof. The Company
has no knowledge of any infringement by others of any Intellectual Property
rights of the Company or its subsidiaries which infringement could reasonably
be expected to result in a material adverse change in the condition (financial
or otherwise), business prospectus, net worth or results of operations of the
Company and its subsidiaries.
(b) The Selling Securityholder further represents and warrants to, and
agrees with, each of the several Underwriters that:
(i) The Selling Securityholder has full power to enter into this
Agreement and to sell, assign, transfer and deliver to the Underwriters the
Securities to be sold by the Selling Securityholder hereunder in accordance
with the terms of this Agreement; and this Agreement has been duly executed and
delivered by the Selling Securityholder.
(ii) The Selling Securityholder has duly executed and delivered a
custody agreement and power of attorney (the "Custody Agreement and
Power-of-Attorney"), each in the form heretofore delivered to the
Representatives, appointing each of [_________________] and [_______________]
(the "Attorneys-in-Fact") with authority to execute, deliver and perform this
Agreement on behalf of the Selling Securityholder and appointing
[________________], as custodian thereunder (the "Custodian"). Certificates in
negotiable form, endorsed in blank or accompanied by blank stock powers duly
executed, with signatures appropriately guaranteed, representing the Securities
to be sold by the Selling Securityholder hereunder have been deposited with the
Custodian pursuant to the Custody Agreement and Power of Attorney for the
purpose of delivery pursuant to this Agreement. The Selling Securityholder has
full power to enter into the Custody Agreement and Power-of-Attorney and to
perform his obligations thereunder. The Custody Agreement and
Power-of-Attorney have been duly executed and delivered by the Selling
Securityholder and, assuming due authorization, execution and delivery by the
Custodian, are the legal, valid, binding and enforceable instruments of the
Selling Securityholder. The Selling Securityholder agrees that each of the
Securities represented by the certificates on deposit with the Custodian is
subject to the interests of the Underwriters hereunder, that the arrangements
made for such custody, the appointment of the Attorneys-in-Fact and the right,
power and authority of the Attorney-in-Fact to execute and deliver this
Agreement, to agree on the price at which the Securities (including the Selling
Securityholder's Securities) are to be sold to the Underwriters, and to carry
out the terms of this Agreement, are to that extent irrevocable and that the
obligations of the Selling Securityholder hereunder shall not be terminated,
except as provided in this Agreement or the Custody Agreement and Power of
Attorney, by any act of the Selling Securityholder, by operation of law or
otherwise, whether by the death or incapacity of the Selling Securityholder or
in the case of a trust or estate by the death of the trustee or trustees or the
executor or executors or the termination of such trust or estate. If the
Selling Securityholder, or any trustee or executor should die or become
incapacitated or any such trust should be terminated, or if any other event
should occur, before the delivery of such Securities hereunder, the
certificates for such Securities deposited with the Custodian shall be
-9-
10
delivered by the Custodian in accordance with the respective terms and
conditions of this Agreement as if such death, incapacity, termination or other
event had not occurred, regardless of whether or not the Custodian or the
Attorneys-in-Fact shall have received notice thereof.
(iii) The Selling Securityholder is the lawful owner of the
Securities to be sold by the Selling Securityholder hereunder and upon sale and
delivery of, and payment for, such Securities, as provided herein, the Selling
Securityholder will convey good and marketable title to such Securities, free
and clear of any security interests, liens, encumbrances, equities, claims or
other defects.
(iv) The Selling Securityholder has not, directly or indirectly,
(A) taken any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or (B) since the filing of the Registration
Statement (1) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (2) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling Securityholder
under this Agreement).
(v) To the extent that any statements or omissions are made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by the Selling Securityholder specifically
for use therein, such Preliminary Prospectus did, and the Registration
Statement and the Prospectus and any amendments or supplements thereto, when
they become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Act and the
respective rules and regulations of the Commission thereunder and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading.
The Selling Securityholder has reviewed the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding the Selling
Securityholder set forth therein under the caption "Principal and Selling
Stockholders" is complete and accurate.
(vi) The Selling Securityholder has not distributed and, prior to
the later of (A) the Closing Date and (B) the completion of the distribution of
the Securities, will not distribute any offering material in connection with
the offering and sale of the Securities other than the Registration Statement
or any amendment thereto, any Preliminary Prospectus and the Prospectus or any
amendment or supplement thereto, or other materials, if any, permitted by the
Act.
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986, as
amended, with respect to the transactions herein contemplated, the Selling
Securityholder agrees to deliver to you prior to or on the Firm Closing Date,
as hereinafter defined, a properly completed and executed United States
Treasury Department Form W-8 or W-9 (or other applicable form of statement
specified by Treasury Department regulations in lieu thereof).
(viii) The sale by the Selling Securityholder of Securities pursuant
hereto is not prompted by any adverse information concerning the Company that
is not set forth in the Registration Statement or the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(ix) The sale of the Securities to the Underwriters by the Selling
Securityholder pursuant to this Agreement, the compliance by the Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein contemplated do
not (A) require
-10-
11
the consent, approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the Registration
Statement is not effective under the Act as of the time of execution hereof,
such as may be required (and shall be obtained as provided in this Agreement)
under the Act, or (B) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Selling Securityholder is a party or by which the Selling Securityholder or any
of the Selling Securityholder's properties are bound, or any statute or any
judgment, decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Selling Securityholder.
3. Purchase, Sale and Delivery of the Securities. (a) On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
and the Selling Securityholder agree, severally and not jointly, to issue (in
the case of the Company) and sell to each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company
and the Selling Securityholder, at a purchase price of $____ per share, the
number of Firm Securities set forth opposite the name of such Underwriter in
Schedule 1 hereto. The Company agrees to issue and sell to the Underwriters
1,670,000 Firm Securities and the Selling Securityholder agrees to sell to the
Underwriters the number of Firm Securities set forth opposite the Selling
Securityholder's name on Schedule 2 hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives request upon notice to
the Company at least 48 hours prior to the Firm Closing Date, shall be
delivered by or on behalf of the Company and the Selling Securityholder to the
Representatives for the respective accounts of the Underwriters, against
payment by or on behalf of the Underwriters of the purchase price therefor by
wire transfer in same-day funds (the "Wired Funds") to the account of the
Company and the Selling Securityholder. Such delivery of and payment for the
Firm Securities shall be made at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, One
Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 9:30 A.M., New
York time, on November ___, 1996, or at such other place, time or date as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 9 hereof, such time and date of delivery against
payment being herein referred to as the "Firm Closing Date". The Company and
the Selling Securityholder will make such certificates for the Firm Securities
available for checking and packaging by the Representatives at the offices in
New York, New York of the Company's transfer agent or registrar or of
Prudential Securities Incorporated at least 24 hours prior to the Firm Closing
Date.
(b) For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company and the Selling Securityholder hereby grant to the
several Underwriters options to purchase, severally and not jointly, the Option
Securities. The purchase price to be paid for any Option Securities shall be
the same price per share as the price per share for the Firm Securities set
forth above in paragraph (a) of this Section 3. The options granted hereby may
be exercised as to all or any part of the Option Securities from time to time
within 30 days after the date of the Prospectus (or, if such 30th day shall be
a Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading). The Underwriters shall not be
under any obligation to purchase any of the Option Securities prior to the
exercise of such options. The Representatives may from time to time exercise
the options granted hereby by giving notice in writing or by telephone
(confirmed in writing) to the Company and the Selling Securityholder setting
forth the aggregate number of Option Securities as to which the several
Underwriters are then exercising the options and the date and time for delivery
of and payment for such Option Securities. Any such date of delivery shall be
determined by the Representatives but shall not be earlier than two business
days or later than five business days after such exercise of the options and,
in any event, shall not be earlier than the Firm Closing Date. The
-11-
12
time and date set forth in such notice, or such other time on such other date
as the Representatives, the Company and the Selling Securityholder may agree
upon or as the Representatives may determine pursuant to Section 9 hereof, is
herein called the "Option Closing Date" with respect to such Option Securities.
Upon exercise of the options as provided herein, the Company and the Selling
Securityholder shall become obligated to sell to each of the several
Underwriters, and, subject to the terms and conditions herein set forth, each
of the Underwriters (severally and not jointly) shall become obligated to
purchase from the Company and the Selling Securityholder, the same percentage
of the total number of the Option Securities as to which the several
Underwriters are then exercising the options as such Underwriter is obligated
to purchase of the aggregate number of Firm Securities, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares. If the options are exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
paragraph (a) of this Section 3, except that reference therein to the Firm
Securities and the Firm Closing Date shall be deemed, for purposes of this
paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company and the Selling Securityholder hereby acknowledge
that the wire transfer by or on behalf of the Underwriters of the purchase
price for any Securities does not constitute closing of a purchase and sale of
the Securities. Only execution and delivery of a receipt for Securities by the
Underwriters indicates completion of the closing of a purchase of the
Securities from the Company or the Selling Securityholder, as the case may be.
Furthermore, in the event that the Underwriters wire funds to the Company or
the Selling Securityholder prior to the completion of the closing of a purchase
of Securities, the Company and the Selling Securityholder hereby acknowledge
that until the Underwriters execute and deliver a receipt for the Securities,
by facsimile or otherwise, neither the Company nor the Selling Securityholder
will be entitled to the wired funds and shall return the wired funds to the
Underwriters as soon as practicable (by wire transfer of same-day funds) upon
demand. In the event that the closing of a purchase of Securities is not
completed and the wire funds are not returned by the Company or the Selling
Securityholder, as the case may be, to the Underwriters on the same day the
wired funds were received by the Company or the Selling Securityholder, the
Company and the Selling Securityholder, as the case may be, agree to pay to the
Underwriters in respect of each day the wire funds are not returned by it, in
same-day funds, interest on the amount of such wire funds in an amount
representing the Underwriters' cost of financing as reasonably determined by
Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as one
of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations
hereunder.
4. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5. Covenants of the Company and the Selling Securityholder.
(a) The Company covenants and agrees with each of the Underwriters that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term Sheet
that constitutes a part thereof
-12-
13
and any amendment or supplement thereto with the Commission in the manner and
within the time period required by Rules 434 and 424(b) under the Act. During
any time when a prospectus relating to the Securities is required to be
delivered under the Act, the Company (A) will comply with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (B) will not file with the
Commission the Prospectus, Term Sheet or the amendment referred to in the
second sentence of Section 2(a) hereof, any amendment or supplement to such
Prospectus, Term Sheet or any amendment to the Registration Statement or any
Rule 462(b) Registration Statement of which the Representatives previously have
been advised and furnished with a copy for a reasonable period of time prior to
the proposed filing and as to which filing the Representatives shall not have
given their consent. The Company will prepare and file with the Commission, in
accordance with the rules and regulations of the Commission, promptly upon
request by the Representatives or counsel for the Underwriters, any amendments
to the Registration Statement or amendments or supplements to the Prospectus
that may be necessary or advisable in connection with the distribution of the
Securities by the several Underwriters, and will use its best efforts to cause
any such amendment to the Registration Statement to be declared effective by
the Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence satisfactory to the Representatives of each
such filing or effectiveness.
(ii) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (A) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (B) the suspension of the qualification of the Securities for offering
or sale in any jurisdiction, (C) the institution, threatening or contemplation
of any proceeding for any such purpose or (D) any request made by the
Commission for amending the Original Registration Statement or any Rule 462(b)
Registration Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(iii) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(iv) If, at any time prior to the later of (A) the final date when
a prospectus relating to the Securities is required to be delivered under the
Act or (B) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 5(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
-13-
14
(v) The Company will, without charge, provide (A) to the
Representatives and to counsel for the Underwriters a conformed copy of the
Original Registration Statement and each amendment thereto (in each case
including exhibits thereto) or any Rule 462(b) Registration Statement,
certified by the Secretary or an Assistant Secretary of the Company to be true
and complete copies thereof as filed with the Commission by electronic
transmission, (B) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (C) so long as a
prospectus relating to the Securities is required to be delivered under the
Act, as many copies of each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Representatives may reasonably request;
without limiting the application of clause (C) of this sentence, the Company,
not later than (1) 6:00 PM, New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to 10:00
A.M., New York City time, on such date or (2) 2:00 PM, New York City time, on
the business day following the date of determination of the public offering
price, if such determination occurred after 10:00 A.M., New York City time, on
such date, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Representatives
may reasonably request for purposes of confirming orders that are expected to
settle on the Firm Closing Date.
(vi) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earnings statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(vii) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(viii) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 120 days after the date hereof, except pursuant to this
Agreement and except for (A) grants of employee stock options under the
Company's 1995 Employee Stock Option Plan, grants of director stock options
under the Company's Director Stock Option Plan (and sales to such employees or
directors pursuant to such options), (B) sales to employees under the Company's
Employee Stock Purchase Plan or Annual Leave Stock Plan and (C) sales of shares
to Nomura Holding America, Inc. issuable upon exercise of warrants issued in
connection with a certain Note and Warrant Purchase Agreement dated as of
February 16, 1996.
(ix) The Company will not, directly or indirectly, (A) take any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities or (B) (1) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities or (2) pay or agree to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company (except for the sale of Securities by the Selling
Securityholder under this Agreement).
(x) The Company will obtain the agreements described in Section
7(h) hereof prior to the Firm Closing Date.
(xi) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the
-14-
15
Company shall occur as a result of which in your opinion the market price of
the Common Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after notice from you advising
the Company to the effect set forth above, forthwith prepare, consult with you
concerning the substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(xii) If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on
the date of this Agreement and (ii) the time confirmations are sent or given,
as specified by Rule 462(b)(2).
(xiii) The Company will cause the Securities to be duly included for
quotation on the Nasdaq Stock Market's National Market (the "Nasdaq National
Market") prior to the Firm Closing Date. The Company will ensure that the
Securities remain included for quotation on the Nasdaq National Market
following the Firm Closing Date.
(b) The Selling Securityholder covenants and agrees with each of the
Underwriters that:
(i) The Selling Securityholder will not, directly or indirectly,
(A) take any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Firm Securities or (B) (1) sell, bid for, purchase, or pay
anyone any compensation for soliciting purchases of, the Firm Securities or (2)
pay or agree to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of the Firm
Securities being sold by the Selling Securityholder under this Agreement).
(ii) The Selling Securityholder will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell, grant
any option to purchase or otherwise sell or dispose (or announce any offer,
sale, offer of sale, contract of sale, grant of any option to purchase or other
sale or disposition) of any Securities legally or beneficially owned by the
Selling Securityholder or any securities convertible into, or exchangeable or
exercisable for, Securities for a period of 120 days after the date hereof.
(iii) The Selling Securityholder will pay all Federal and other
taxes, if any on the transfer or sale of the Securities being sold by the
Selling Securityholder to the Underwriters.
(iv) The Selling Securityholder will do or perform all things
required to be done or performed by the Selling Securityholder prior to the
Firm Closing Date or any Option Closing Date, as the case may be, to satisfy
all conditions precedent to the delivery of the Securities pursuant to this
Agreement.
6. Expenses. The Company will pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the Original Registration
Statement and any amendment thereto, any Rule 462(b) Registration Statement,
any Preliminary Prospectus and the Prospectus and any amendment or supplement
thereto, this Agreement and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other
-15-
16
experts or advisors retained by the Company, (iv) preparation, issuance and
delivery to the Underwriters of any certificates evidencing the Securities,
including transfer agent's and registrar's fees, (v) the qualification of the
Securities under state securities and blue sky laws, including filing fees and
fees and disbursements of counsel for the Underwriters relating thereto, (vi)
the filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Securities, (vii) any quotation of the Securities
on the Nasdaq National Market and (viii) any meetings with prospective
investors in the Securities (other than as shall have been specifically
approved by the Representatives to be paid for by the Underwriters) and (ix)
advertising relating to the offering of the Securities (other than advertising
specifically approved by the Representatives in the Wall Street Journal,
National Edition, to be paid for by the Underwriters). If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 11 hereof or because
of any failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations
of the several Underwriters to purchase and pay for the Firm Securities shall
be subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm
Closing Date, to the accuracy of the statements of the Company's officers made
pursuant to the provisions hereof, to the performance by the Company of its
covenants and agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective as
of the time of execution hereof, the Original Registration Statement or such
amendment and, if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have been declared effective not later than
the earlier of (i) 11:00 A.M., New York time, on the date on which the
amendment to the Original Registration Statement or to the Registration
Statement, as the case may be, containing information regarding the initial
public offering price of the Securities has been filed with the Commission and
(ii) the time confirmations are sent or given as specified by Rule 462(b)(2),
or with respect to the Original Registration Statement, or such later time and
date as shall have been consented to by the Representatives; if required, the
Prospectus or any Term Sheet that constitutes a part thereof and any amendment
or supplement thereto shall have been filed with the Commission in the manner
and within the time period required by Rules 434 and 424(b) under the Act; no
stop order suspending the effectiveness of the Registration Statement or any
amendment thereto shall have been issued, and no proceedings for that purpose
shall have been instituted or threatened or, to the knowledge of the Company or
the Representatives, shall be contemplated by the Commission; and the Company
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxx & Xxxxxxx, L.L.P., counsel for the Company and the
Selling Securityholder, to the effect that:
(i) the Company and each of its subsidiaries listed in
Exhibit 21.1 to the Registration Statement (the "Subsidiaries") have
been duly organized and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation and are duly qualified
-16-
17
to transact business as foreign corporations and are in good standing
under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the
failure to be so qualified does not amount to a material liability or
disability to the Company and the Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have
corporate power to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement and the Prospectus, and the Company has corporate power to
enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except as otherwise set forth in the
Prospectus, are owned beneficially by the Company free and clear of
any perfected security interests or, to the best knowledge of such
counsel, any other security interests, liens, encumbrances, equities
or claims; and the certificates representing the Firm Securities are
in valid and sufficient form;
(iv) (A) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus; all of the
issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable,
have been issued in compliance with all applicable federal and state
securities laws and were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase
securities; the Securities have been duly authorized by all necessary
corporate action of the Company and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be
validly issued, fully paid and nonassessable; the Securities have been
duly included for trading on the Nasdaq National Market; no holders of
outstanding shares of capital stock of the Company are entitled as
such to any preemptive or other rights to subscribe for any of the
Securities; and no holders of securities of the Company are entitled
to have such securities registered under the Registration Statement;
and (B) except as disclosed in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), there
are no outstanding (1) securities or obligations of the Company or any
of its subsidiaries convertible into or exchangeable for any capital
stock of the Company or any such subsidiary, (2) warrants, rights or
options to subscribe for or purchase from the Company or any such
subsidiary any such capital stock or any such convertible or
exchangeable securities or obligations, or (3) obligations of the
Company or any such subsidiary to issue any shares of capital stock,
any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options.
(v) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as such
statements purport to summarize certain provisions of the capital
stock of the Company, provide a fair summary of such provisions; and
the statements set forth under the headings "Business - Bid Protests,"
"- Certain Regulatory Matters" and "- Legal Proceedings" in the
Prospectus, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, provide a
fair summary of such legal matters, documents and proceedings;
(vi) the execution and delivery of this Agreement have
been duly authorized by all necessary corporate action of the Company
and this Agreement has been duly executed and delivered by the
Company;
-17-
18
(vii) (A) no legal or governmental proceedings are pending
to which the Company or any of the Subsidiaries is a party or to which
the property of the Company or any of the Subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not described therein, and, to the best knowledge
of such counsel, no such proceedings have been threatened against the
Company or any of the Subsidiaries or with respect to any of their
respective properties and (B) no contract or other document is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(viii) the issuance, offering and sale of the Securities to
the Underwriters by the Company (and the offering and sale thereof by
the Selling Securityholder) pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (1)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws, or (2) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company
or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or any of their respective properties are bound,
or the charter documents or by-laws of the Company or any of the
Subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to the Company or
Subsidiaries;
(ix) the Registration Statement is effective under the
Act; any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, pursuant to Rules 434 and 424(b) has been
made in the manner and within the time period required by Rules 434
and 424(b); and no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened or,
to the best knowledge of such counsel, are contemplated by the
Commission; and
(x) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, any Rule 462(b)
Registration Statement and the Prospectus (in each case, other than
the financial statements and other financial information contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Act and the rules and regulations of the Commission thereunder.
(xi) if the Company elects to rely on Rule 434, the
Prospectus is not "materially different", as such term is used in Rule
434, from the prospectus included in the Registration Statement at the
time of its effectiveness or an effective post-effective amendment
thereto (including such information that is permitted to be omitted
pursuant to Rule 430A).
(xii) The Selling Securityholder has full power to enter
into this Agreement and the Custody Agreement and Power-of-Attorney
and to sell, transfer and deliver the Securities being sold by the
Selling Securityholder hereunder in the manner provided in this
Agreement and to perform his obligations under the Custody Agreement
and Power of Attorney; this Agreement and the Custody Agreement and
Power-of-Attorney have been duly executed and delivered by the Selling
Securityholder; assuming due authorization, execution and delivery by
the Custodian, the Custody Agreement and Power-of-Attorney are the
legal, valid, binding and enforceable instruments of the Selling
Securityholder, subject to applicable bankruptcy, insolvency and
similar laws affecting
-18-
19
creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(xiii) the delivery by the Selling Securityholder to the
several Underwriters of certificates for the Securities being sold
hereunder by the Selling Securityholder against payment therefor as
provided herein, will convey good and marketable title to such
Securities to the several Underwriters, free and clear of all security
interests, liens, encumbrances, equities, claims or other defects; and
(xiv) the sale of the Securities to the Underwriters by the
Selling Securityholder pursuant to this Agreement, the compliance by
the Selling Securityholder with the other provisions of this
Agreement, the Custody Agreement and Power of Attorney, and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Selling Securityholder is a party
or by which the Selling Securityholder or any of the Selling
Securityholder's properties are bound, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Selling Securityholder.
Such counsel shall also state that they have no reason to believe that
the Registration Statement, as of its effective date, contained 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 not misleading or
that the Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. In rendering
any such opinion, such counsel may rely, as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of the
Company and public officials. References to the Registration Statement and the
Prospectus in this paragraph (b) shall include any amendment or supplement
thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxxxx Xxx, Esq., General Counsel of the Company, to the
effect that:
(i) no default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of the Subsidiaries is a party
or by which the Company or any of the Subsidiaries or any of their
respective properties is bound or may be affected in any material
adverse respect with regard to property, business or operations of the
Company and the Subsidiaries;
(ii) The Company and each of the Subsidiaries have good
and marketable title in fee simple to all items of real property and
marketable title to all personal property owned by each of them, in
each case free and clear of any security interests, liens,
encumbrances, equities, claims and other defects, except such as do
not materially and adversely affect the value of such property and do
not interfere with the use made or proposed to be made of such
property by the Company or such Subsidiary, and any real property and
buildings held under lease by the Company or any such Subsidiary are
held under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company
or such Subsidiary, in each case except as described in or
contemplated
-19-
20
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus);
(iii) The Company and the Subsidiaries own or possess, or
can acquire on reasonable terms, all material patents, patent
applications, trademarks, service marks, trade names, licenses,
copyrights and proprietary or other confidential information currently
employed by them in connection with their respective businesses, and
neither the Company nor any such Subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party
with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and the Subsidiaries, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus);
(iv) The Company and each of the Subsidiaries are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such Subsidiary 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 its
business at a cost that would not materially and adversely affect the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and the Subsidiaries, except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus);
(v) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiary's capital stock, from
repaying to the Company any loans or advances to such Subsidiary from
the Company or from transferring any of such Subsidiary's property or
assets to the Company or any other Subsidiary of the Company;
(vi) The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus);
(vii) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a material adverse effect on the Company and the
Subsidiaries) and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus);
(viii) Neither the Company nor any of the Subsidiaries is in
violation of any federal or
-20-
21
state law or regulation relating to occupational safety and health or
to the storage, handling or transportation of hazardous or toxic
materials and the Company and the Subsidiaries have received all
permits, licenses or other approvals required of them under applicable
federal and state occupational safety and health and environmental
laws and regulations to conduct their respective businesses, and the
Company and each such Subsidiary is in compliance with all terms and
conditions of any such permit, license or approval, except any such
violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and the Subsidiaries, except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus);
(ix) Except for the shares of capital stock of each of the
Subsidiaries owned by the Company and such Subsidiaries, neither the
Company nor any such Subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, association or other entity, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
Xxxxxxx Xxx, Esq. shall also state that she has no reason to believe
that the Registration Statement, as of its effective date, contained 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 not misleading or
that the Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. In rendering
any such opinion, Xxxxxxx Xxx, Esq. may rely, as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers of
the Company and public officials. References to the Registration Statement and
the Prospectus in this paragraph (c) shall include any amendment or supplement
thereto at the date of such opinion.
(d) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Underwriters,
with respect to the issuance and sale of the Firm Securities, the Registration
Statement and the Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Representatives shall have received from KPMG Peat
Marwick, LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance satisfactory to the Representatives,
to the effect that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the
Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules and pro forma financial data read by them and
included in the Registration Statement and the Prospectus comply in
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;
(iii) on the basis of a reading of the latest available
interim unaudited consolidated
-21-
22
condensed financial statements of the Company and its consolidated
subsidiaries, a reading of the unaudited amounts for sales, net revenues and
total and per share amounts of net income for the six months ending September
30, 1995 and 1996 and of the unaudited consolidated financial statements of the
Company and its consolidated subsidiaries for the periods from which such
amounts are derived, carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of significance with
respect to the comments set forth in this paragraph (iii), a reading of the
minute books of the shareholders, the board of directors and any committees
thereof of the Company and each of its consolidated subsidiaries, and inquiries
of certain officials of the Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated condensed financial statements
of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus do not comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder or are
not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration
Statement and the Prospectus;
(B) the unaudited amounts for sales, net revenues and total
and per share amounts of net income included in the Registration
Statement and the Prospectus do not agree with the amounts set forth
in any unaudited consolidated financial statements for those same
periods or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the corresponding amounts in the audited consolidated financial
statements included in the Registration Statement and the Prospectus;
and
(C) at a specific date not more than five business days
prior to the date of such letter, there were any changes in the
capital stock or long-term debt of the Company and its consolidated
subsidiaries or any decreases in not current assets or stockholders'
equity of the Company and its consolidated subsidiaries, in each case
compared with amounts shown on the September 30, 1996 unaudited
consolidated balance sheet included in the Registration Statement and
the Prospectus, or for the period from October 1, 1996 to such
specified date there were any decreases, as compared with the
corresponding period beginning October 1, 1995, in sales, net
revenues, net income before income taxes or total or per share amounts
of net income of the Company and its consolidated subsidiaries except
in all instances for changes, decreases or increases set forth in such
letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records of
the Company and its consolidated subsidiaries and are included in the
Registration Statement and the prospectus and in the exhibits to the
Registration Statement, and have compared such amounts, percentages and
financial information with such records of the Company and its consolidated
subsidiaries and with information derived from such records and have found them
to be in agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof. References to
-22-
23
the Registration Statement and the Prospectus in this paragraph (e) with
respect to either letter referred to above shall include any amendment or
supplement thereto at the date of such letter.
(f) The Representatives shall have received a certificate, dated
the Firm Closing Date, of Xx. Xxxxxx X. Xxxxxxx and Xx. Xxxx X. Xxxxxx, in
their capacities as the principal executive officer and the principal financial
or accounting officer, respectively, of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented
as of the Firm Closing Date, does not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company has
performed all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Firm Closing
Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose are instituted or, to the best of the
Company's knowledge, threatened or contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of the Subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the Company
or any of the Subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto).
(g) The Representatives shall have received a certificate signed
by or on behalf of the Selling Securityholder, dated the Closing Date, to the
effect that:
(i) the representations and warranties of the Selling
Securityholder in this Agreement are true and correct as if made on
and as of the Closing Date;
(ii) to the extent that any statements or omissions are
made in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by the
Selling Securityholder specifically for use therein, the Registration
Statement, as amended as of the Closing Date, does not include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented as of the Closing Date, does
not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and
(iii) the Selling Securityholder has performed all
covenants and agreements on his part to be performed or satisfied at
or prior to the Closing Date.
-23-
24
(h) The Representatives shall have received from each person who
is a director or executive officer of the Company an agreement to the effect
that such person will not, directly or indirectly, without the prior written
consent of the Representatives, on behalf of the Underwriters, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of an option to purchase or other sale or disposition)
of any shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of 120
days after the date of this Agreement.
(i) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(j) Prior to the commencement of the offering of the Securities,
the Securities shall have been included for trading on the Nasdaq National
Market.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution. (a) The Company and the
Selling Securityholder jointly and severally agree, subject to the provisos in
this Section 8(a) and in Section 8(e) hereof, to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Securities Exchange
Act of 1934 (the "Exchange Act"), against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue statement made
by the Company or the Selling Securityholder in Section 2 of this
Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or the Selling Securityholder or based upon written
information furnished by or on behalf of the Company or the Selling
Securityholder filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement
-24-
25
thereto, or any Application a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films, tape recordings,
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Company and the Selling Securityholder will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or any Application in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein. This indemnity agreement will be
in addition to any liability which the Company and the Selling Securityholder
may otherwise have. Neither the Company nor the Selling Securityholder will,
without the prior written consent of the Underwriter or Underwriters
purchasing, in the aggregate, more than fifty percent (50%) of the Securities,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Securityholder, and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company, any such director, officer, the Selling
Securityholder or any such controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated in the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives specifically for
use therein: and, subject to the limitation set forth immediately preceding
this clause, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company, the Selling Securityholder, or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against
-25-
26
the indemnifying party under this Section 8, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or
parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 8 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Securityholder on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Securityholder bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties 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 Securityholder or the Underwriters, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in
the circumstances.
-26-
27
The Company, the Selling Securityholder and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not
take into account the equitable considerations referred to above in this
paragraph (d). Notwithstanding any other provision of this paragraph (d), no
Underwriter shall be obligated to make contributions hereunder that in the
aggregate exceed the total public offering price of the Securities purchased by
such Underwriter under this Agreement, less the aggregate amount of any damages
that such Underwriter has otherwise been required to pay in respect of the same
or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section II (f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company.
(e) The aggregate liability of the Selling Securityholder under
all provisions of this Agreement shall not exceed the amount equal to the
aggregate proceeds received by the Selling Securityholder for the Securities
sold by the Selling Securityholder to the Underwriters.
9. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or
Option Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase. If one or more Underwriters so default with respect to an
aggregate number of Securities that is more than ten percent of the aggregate
number of Firm Securities or Option Securities, as the case may be, to be
purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representatives are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
the Company other than as provided in Section 10 hereof. In the event of any
default by one or more Underwriters as described in this Section 9, the
Representatives shall have the right to postpone the Firm Closing Date or the
Option Closing Date, as the case may be, established as provided in Section 3
hereof for not more than seven business days in order that any necessary
changes may be made in the arrangements or documents for the purchase and
delivery of the Firm Securities or Option Securities, as the case may be. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 9. Nothing herein shall relieve any
defaulting Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, the Selling Securityholder and the several Underwriters set
-27-
28
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Selling Securityholder, any Underwriter or any controlling
person referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with
respect to the Firm Securities or any Option Securities in the sole discretion
of the Representatives by notice to the Company given prior to the Firm Closing
Date or the related Option Closing Date, respectively, in the event that either
the Company or the Selling Securityholder shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Firm Closing Date or such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have, in
the sole judgment of the Representatives, sustained any material loss
or interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material adverse
change, or any development involving a prospective material adverse
change (including without limitation a change in management or control
of the Company), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except in each case as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended
by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or Nasdaq National
Market shall have been suspended or minimum or maximum prices shall
have been established on such exchange or market system;
(iii) a banking moratorium shall have been declared by New
York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended
as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided
in Section 10 hereof.
12. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Sections 2(b) and 8 hereof. The Underwriters confirm that such
statements (to such extent) are correct.
-28-
29
13. Notices. All communications hereunder shall be in writing
and, if sent to any of the Representatives or the Underwriters, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Equity Transactions Group; if sent to the Company,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to the Company at BTG, Inc., 0000 Xxx Xxxxxxx Xxxx,
Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx Xxx, Esq., General Counsel; and if
sent to the Selling Securityholder, to the Selling Securityholder's address set
forth opposite his name on Schedule 2 hereof.
14. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, the Selling
Securityholder, and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person 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 (i) the indemnities of the
Company and the Selling Securityholder contained in Section 8 of this Agreement
shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Underwriters contained in Section
8 of this Agreement shall also be for the benefit of the directors of the
Company, the officers of the Company who have signed the Registration
Statement, the Selling Securityholder and any person or persons who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Securities from any Underwriter shall be deemed
a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Selling Securityholder accepts
for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement. The
Selling Securityholder designates and appoints __________________, and such
other persons as may hereafter be selected by the Selling Securityholder
irrevocably agreeing in writing to so serve, as its agent to receive on its
behalf service of all process in any such proceedings in any such court, such
service being hereby acknowledged by the Selling Securityholder to be effective
and binding service in every respect. A copy of any such process so served
shall be mailed by registered mail to the Selling Securityholder at its address
provided in Section 13 hereof; provided, however, that, unless otherwise
provided by applicable law, any failure to mail such copy shall not affect the
validity of service of such process. If any agent appointed by the Selling
Securityholder refuses to accept service, the Selling Securityholder hereby
agrees that service of process sufficient for personal jurisdiction in any
action against the Selling Securityholder in the State of New York may be made
by registered or certified mail, return receipt requested, to the Selling
Securityholder at its address provided in Section 13 hereof, and the Selling
Securityholder hereby acknowledges that such service shall be effective and
binding in every respect. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of any
Underwriter to bring proceedings against the Selling Securityholder in the
courts of any other jurisdiction.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-29-
30
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, the
Selling Securityholder and each of the several Underwriters.
Very truly yours,
BTG, INC.
By:
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
SELLING SECURITYHOLDER
*
---------------------------
Name: Xxxxxx X. Xxxxxxx
* By:
-----------------------
Name:
Title: Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXX, XXXXX XXXXX, INCORPORATED
By PRUDENTIAL SECURITIES INCORPORATED
By
---------------------
Name: Xxxx-Xxxxxx Canfin
Title: Director
For itself and on behalf of the Representatives.
-30-
31
SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Xxxxxx, Xxxxx Xxxxx, Incorporated
---------------
Total 1,750,000
32
SCHEDULE 2
SELLING SECURITYHOLDER
Selling Securityholder Number of Firm Securities to be Sold
---------------------- ------------------------------------
Xx. Xxxxxx X. Xxxxxxx,
c/o BTG, Inc.,
0000 Xxx Xxxxxxx Xxxx
Xxxxxx Xxxxxxxx 80,000
--------------------
Total 80,000
