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EXHIBIT 1.1
UNDERWRITING AGREEMENT
March __, 0000
Xxxx xx Xxxxxxx Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxxxx Xxxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
CIBC World Markets Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
As Representatives of the several Underwriters
Ladies and Gentlemen:
Xxxxxxxxx Xxxxx Holding, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in Schedule A (the
"Underwriters") an aggregate of 100,000 shares of its Common Stock, par value
$0.01 per share (the "Common Shares"), and the selling stockholders of the
Company (all of which are identified in Schedule B, and are collectively
referred to as the "Selling Stockholders") severally and not jointly propose to
sell to the Underwriters an aggregate of 3,400,000 Common Shares (the "selling
Stockholder Shares"). The 100,000 Common Shares to be sold by the Company and
the 3,400,000 Common Shares to be sold by the Selling Stockholders are
collectively called the "Firm Shares." In addition, certain Selling Stockholders
named in Schedule B have granted the Underwriters an option to purchase up to an
additional 525,000 Common Shares, each of such Selling Stockholders selling up
to the amount set forth opposite the name of such Selling Stockholder on
Schedule B, all as provided in Section 2. The additional 525,000 Common Shares
to be sold by the Selling Stockholders pursuant to such option are collectively
called the "Option Shares." The Firm Shares and, if and to the extent such
option is exercised, the Option Shares are collectively called the "Shares."
Banc of America Securities LLC, Xxxxxxxxx Xxxxxxxx, Inc., Bear, Xxxxxxx & Co.
Inc. and CIBC World Markets Corp. have agreed to act as Representatives of the
several Underwriters (in such capacity, the "Representatives") in connection
with the offering and sale of the Shares and have advised the Company and the
Selling Stockholders that they are authorized to enter into this Agreement on
behalf of the several Underwriters.
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The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-55356), which contains a form of prospectus to be used in connection with
the public offering and sale of the Shares. Such registration statement, as
amended, including the financial statements, exhibits and schedules thereto, in
the form in which it was declared effective by the Commission under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the "Securities Act"), including all documents
incorporated or deemed to be incorporated by reference therein and any
information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A or Rule 434 under the Securities Act or the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder (the "Exchange Act"),
is called the "Registration Statement." Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the "Rule
462(b) Registration Statement," and from and after the date and time of filing
of the Rule 462(b) Registration Statement the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Such prospectus, in the
form first used by the Underwriters to confirm sales of the Shares, is called
the "Prospectus"; provided, however, if the Company has, with the consent of the
Representatives, elected to rely upon Rule 434 under the Securities Act, the
term "Prospectus" shall mean the Company's prospectus subject to completion
(each, a "preliminary prospectus") dated _____, 2001 (such preliminary
prospectus is called the "Rule 434 preliminary prospectus"), together with the
applicable term sheet (the "Term Sheet") prepared and filed by the Company with
the Commission under Rules 434 and 424(b) under the Securities Act and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a preliminary prospectus, the
Prospectus or the Term Sheet, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," "set forth," "described"
or "stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the Exchange Act which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
The Company and each of the Selling Stockholders hereby confirm their
respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
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(a) Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
with all requests of the Commission for additional or supplemental information.
No stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for such
purpose have been instituted or are pending or, to the best knowledge of the
Company, are contemplated or threatened by the Commission. The Company is
qualified and eligible under the requirements of Form S-3 to file the
Registration Statement on Form S-3.
Each preliminary prospectus and the Prospectus when filed complied in
all material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Shares. Each
of the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and on each
Closing Date, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, as
amended or supplemented, as of its date and on each Closing Date, did not and
will not contain 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. The
representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements thereto,
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by the Representatives expressly
for use therein. There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the Registration
Statement which have not been described or filed as required.
(b) Exchange Act Compliance. The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act.
(c) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives (1) one complete conformed copy of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof and (2) conformed copies of the Registration Statement, without
exhibits, and preliminary prospectuses in such quantities and at such places as
the Representatives shall have reasonably requested for each of the
Underwriters. The Company shall also deliver the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives
reasonably request for each of the Underwriters.
(d) Distribution of Offering Material By the Company. The Company has
not distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Shares, any offering material
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in connection with the offering and sale of the Shares other than a preliminary
prospectus, the Prospectus or the Registration Statement.
(e) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(f) Authorization of the Shares to be Sold by the Company. The Common
Shares to be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued,
delivered and paid for in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable.
(g) Authorization of the Shares to Be Sold by the Selling Stockholders.
The Common Shares to be purchased by the Underwriters from the Selling
Stockholders and, if applicable, the Option Shares, when issued, were, or in the
case of shares issuable upon the exercise of options, will be, validly issued,
fully paid and nonassessable.
(h) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, other than the Selling Stockholders
with respect to their respective Selling Stockholder Shares included in the
Registration Statement and their respective Option Shares, if applicable, and
except for such rights as have been duly waived.
(i) No Material Adverse Change. Subsequent to the respective dates as of
which information is given in the Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to result
in a material adverse change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries, considered as one entity (any such change or effect, where the
context so requires, is called a "Material Adverse Change" or a "Material
Adverse Effect"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation, indirect, direct
or contingent, or entered into any material transaction or agreement, other than
liabilities incurred or transactions entered into in the ordinary course of
business; and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company or, except for dividends paid to the
Company or other subsidiaries, any of its subsidiaries on any class of capital
stock or repurchase or redemption by the Company or any of its subsidiaries of
any class of capital stock.
(j) Independent Accountants. Ernst & Young LLP, who have expressed their
opinion with respect to the financial statements (which term as used in this
Agreement includes the related notes thereto) and supporting schedules filed
with the Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants as required
by the Securities Act and the Exchange Act.
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(k) Preparation of the Financial Statements. The financial statements,
together with the related notes and schedules filed with the Commission as a
part of the Registration Statement and included in the Prospectus, present
fairly the consolidated financial position of the Company and its subsidiaries
as of and at the dates indicated and the results of their operations and cash
flows for the periods specified. Such financial statements and supporting
schedules have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus under the
captions "Prospectus Summary--Summary Consolidated Financial and Operating
Data," "Selected Consolidated Financial and Operating Data" and "Capitalization"
fairly present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration Statement.
(l) Company's Accounting System. The Company and each of its
subsidiaries maintain a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(m) Subsidiaries of the Company. The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
the subsidiaries listed in Exhibit 21 to the Company's registration statement on
Form S-1 (File No. 333-84297).
(n) Incorporation and Good Standing of the Company and its Subsidiaries.
Each of the Company and its subsidiaries has been duly organized and is validly
existing as a corporation or limited liability company, as the case may be, in
good standing under the laws of the jurisdiction in which it is organized with
full corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to be
so qualified would not have a Material Adverse Effect.
(o) Capitalization of the Subsidiaries. All the outstanding shares of
capital stock of each subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise set forth
in the Prospectus, all outstanding shares of capital stock of the subsidiaries
are owned by the Company either directly or through wholly owned subsidiaries
free and clear of any security interests, claims, liens or encumbrances.
(p) No Prohibition on Subsidiaries from Paying Dividends or Making Other
Distributions. Other than the restrictions contained in the Company's credit
facility with Fleet National Bank, 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
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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.
(q) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options or warrants described in the
Prospectus). The Common Shares (including the Shares) conform in all material
respects to the description thereof contained (or incorporated by reference) in
the Prospectus. All of the issued and outstanding Common Shares have been duly
authorized and validly issued, are fully paid and nonassessable and have been
issued in compliance with federal and state securities laws. None of the
outstanding Common Shares were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any of its subsidiaries
other than (1) those accurately described in the Prospectus and (2) the grant of
less than 150,000 stock options after the date set forth in the Prospectus.
(r) Stock Exchange Listing. The Company's Common Shares (including the
Shares) are registered pursuant to Section 12(b) of the Exchange Act and are
included on the Nasdaq National Market, and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Shares under the Exchange Act or delisting the Common Shares from the
Nasdaq National Market, nor has the Company received any notification that the
Commission or the National Association of Securities Dealers, Inc. (the "NASD")
is contemplating terminating such registration or listing.
(s) No Consents, Approvals or Authorizations Required. No consent,
approval, authorization, filing with or order of any court or governmental
agency or regulatory body is required in connection with the transactions
contemplated herein, except such as have been obtained or made under the
Securities Act and such as may be required (i) under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Shares by
the Underwriters in the manner contemplated here and in the Prospectus, (ii) by
the National Association of Securities Dealers, Inc. and (iii) by the federal
and provincial laws of Canada.
(t) Non-Contravention of Existing Instruments and Agreements. Neither
the issue and sale of the Shares by the Company to the Underwriters nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation of or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to, (i) the charter
or by-laws of the Company or any of its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or any of its subsidiaries is a party or bound or to which any
of their respective properties is subject or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority
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having jurisdiction over the Company or any of its subsidiaries or any of their
respective properties.
(u) No Defaults or Violations. Neither the Company nor any subsidiary is
in violation or default of (i) any provision of its charter or by-laws, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is subject
or (iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such subsidiary or any
of their respective properties, as applicable, except any such violation or
default which would not, singly or in the aggregate, result in a Material
Adverse Change or except as otherwise disclosed in the Prospectus.
(v) No Actions, Suits or Proceedings. No action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or its or their property is
pending or, to the best knowledge of the Company, threatened that (i) could
reasonably be expected to prevent the performance of this Agreement as required
or pursuant to its terms or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to result in a Material
Adverse Effect.
(w) All Necessary Permits, Etc. The Company and each subsidiary possess
such valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor any subsidiary
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Change.
(x) Title to Properties. Except for properties and assets disposed of in
the ordinary course of business, the Company and each of its subsidiaries has
good and marketable title to all the properties and assets reflected as owned in
the financial statements referred to in Section 1(A)(j) above or elsewhere in
the Prospectus, in each case free and clear of any security interests,
mortgages, liens, encumbrances, equities, claims and other defects, except such
as do not materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such property
by the Company or such subsidiary or as otherwise reflected in such financial
statements. The real property, improvements, equipment and personal property
held under lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the Company or such
subsidiary.
(y) Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns or have
properly requested extensions thereof and have paid all taxes required to be
paid as indicated by such returns and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them except as may be
being contested in good faith and by appropriate proceedings. The Company has
made adequate charges, accruals and reserves in the applicable financial
statements referred to in
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Section 1(A)(j) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company or
any of its subsidiaries has not been finally determined. The Company is not
aware of any tax deficiency that has been or might be asserted or threatened
against the Company or its subsidiaries that could result in a Material Adverse
Change.
(z) Intellectual Property Rights. Each of the Company, and its
subsidiaries owns or possesses adequate rights to use all patents, patent rights
or licenses, inventions, collaborative research agreements, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which are
identified as being used by it to conduct its businesses as described in the
Registration Statement and Prospectus; the expiration of any patents, patent
rights, trade secrets, trademarks, service marks, trade names or copyrights
would not result in a Material Adverse Change that is not otherwise disclosed in
the Prospectus; the Company has not received any notice of, and has no knowledge
of, any infringement of or conflict with asserted rights of others with respect
to any patent, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names or copyrights which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, might have a Material
Adverse Change. There is no claim being made against the Company regarding
patents, patent rights or licenses, inventions, collaborative research, trade
secrets, know-how, trademarks, service marks, trade names or copyrights. To the
Company's knowledge, the Company and its subsidiaries do not in the conduct of
their business as now conducted or proposed to be conducted as described in the
Prospectus infringe or conflict with any right or patent of any third party, or
any discovery, invention, product or process which is the subject of a patent
application filed by any third party, known to the Company or any of its
subsidiaries, which such infringement or conflict is reasonably likely to result
in a Material Adverse Change.
(aa) No Transfer Taxes or Other Fees. There are no transfer taxes or
other similar fees or charges under Federal law or the laws of any state, or any
political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by the Company
of the Firm Shares to be sold by it.
(bb) Company Not an "Investment Company." The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Company is not, and after receipt of
payment for the Shares will not be, an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act and will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(cc) Insurance. Each of the Company and its subsidiaries are insured by
recognized and reputable institutions with policies in such amounts and with
such deductibles and covering such risks as are generally deemed adequate and
customary for their businesses including, but not limited to, policies covering
real and personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes, general
liability and Directors and Officers liability. The Company has no reason to
believe that it or any subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a
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Material Adverse Change. Neither of the Company nor any subsidiary has been
denied any insurance coverage which it has sought or for which it has applied.
(dd) Labor Matters. To the best of the Company's knowledge, no labor
disturbance by the employees of the Company or any of its subsidiaries exists or
is imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, that might be
expected to result in a Material Adverse Change.
(ee) No Price Stabilization or Manipulation. The Company has not taken
and will not take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or manipulation of
the price of the Common Shares to facilitate the sale or resale of the Shares.
(ff) Lock-Up Agreements. Each executive officer (as defined in the
Securities Act) and director of the Company and each Selling Stockholder
(including any of their trusts or affiliates which owns Common Shares), all of
whom are listed on Schedule C hereto, has agreed to sign an agreement
substantially in the form attached hereto as Exhibit A (the "Lock-up
Agreements").
(gg) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the Prospectus which have not been described
as required.
(hh) No Unlawful Contributions or Other Payments. Neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any
employee or agent of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(ii) ERISA Compliance. The Company and its subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or maintained by
the Company, its subsidiaries or their "ERISA Affiliates" (as defined below) are
in compliance in all material respects with all applicable requirements of
ERISA. "ERISA Affiliate" means, with respect to the Company or a subsidiary, any
member of any group of organizations described in Sections 414(b), (c), (m) or
(o) of the Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the "Code") of which the Company or such
subsidiary is a member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates. No "employee benefit plan" established or maintained
by the Company, its subsidiaries or any of their ERISA Affiliates, if such
"employee benefit plan" were terminated, would have any "amount of unfunded
benefit liabilities" (as defined under ERISA). Neither the Company, its
subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "employee benefit plan" or (ii) Sections
412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan" established
or maintained by the Company, its subsidiaries or any of their ERISA Affiliates
that is intended to be qualified under Section 401(a)
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of the Code is so qualified and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.
(jj) Certificates. Any certificate signed by an officer of the Company
and delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter as
to the matters set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, represents, warrants and
covenants to each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly authorized
(where applicable), executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of the (i) Custody
Agreement signed by such Selling Stockholder and ChaseMellon Shareholder
Services, LLC, as custodian (the "Custodian"), relating to the deposit of the
Shares to be sold by such Selling Stockholder, or options or warrants
exercisable for the Shares to be sold by such Selling Stockholder (the "Custody
Agreement"), and (ii) Power of Attorney appointing certain individuals named
therein as such Selling Stockholder's attorneys-in-fact (each, an
"Attorney-in-Fact") to the extent set forth therein relating to the transactions
contemplated hereby and by the Prospectus (the "Power of Attorney"), of such
Selling Stockholder has been duly authorized (where applicable), executed and
delivered by such Selling Stockholder and is a valid and binding agreement of
such Selling Stockholder, enforceable in accordance with its terms, except as
rights to indemnification and contribution thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles. Each Selling Stockholder agrees that the Shares to be sold
by such Selling Stockholder, or options or warrants exercisable for the Shares
to be sold by such Selling Stockholder, on deposit with the Custodian are
subject to the interests of the Underwriters, that the arrangements made for
such custody are to that extent irrevocable, and that the obligations of such
Selling Stockholder hereunder shall not be terminated, except as provided in
this Agreement or in the Custody Agreement or the Power of Attorney, by any act
of the Selling Stockholder, by operation of law, by death or incapacity of such
Selling Stockholder or by the occurrence of any other event. If such Selling
Stockholder should die or become incapacitated, or if any other event that would
prevent the Selling Stockholder from performing its obligations or delivering
the Shares should occur, before the delivery of the Shares to be sold by such
Selling Stockholder hereunder, the documents evidencing the Shares to be sold by
such Selling Stockholder, or options or warrants exercisable for the Shares to
be sold by such Selling Stockholder, then on deposit with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement and the Custody Agreement as if
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such death, incapacity or other event had not occurred, regardless of whether or
not the Custodian shall have received notice thereof.
(c) Title to Shares to be Sold. Such Selling Stockholder is the lawful
owner of the Shares to be sold by such Selling Stockholder hereunder, or options
or warrants exercisable for the Shares to be sold by such Selling Stockholder,
and upon sale and delivery of, and payment for, such Shares, as provided herein,
such Selling Stockholder will convey good and marketable title to such Shares,
free and clear of all liens, encumbrances, equities and claims whatsoever.
(d) All Authorizations Obtained. Such Selling Stockholder has, and on
the First Closing Date and the Second Closing Date (as defined below) will have,
good and valid title to all of the Shares, or in the case of options or warrants
exercisable for Shares to be sold by such Selling Stockholder, has good and
valid title to the options or warrants, which may be sold by such Selling
Stockholder pursuant to this Agreement on such date and the legal right and
power, and all authorizations and approvals required by law and under its
charter, partnership agreements or by-laws, to enter into this Agreement and its
Custody Agreement and Power of Attorney, to sell, transfer and deliver all of
the Shares which may be sold by such Selling Stockholder pursuant to this
Agreement and to comply with its other obligations hereunder and thereunder.
(e) No Further Consents, Authorization or Approvals. No consent,
approval, authorization or order of any court or governmental agency or body is
required for the consummation by such Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained under the Securities
Act and such as may be required under the federal and provincial securities laws
of Canada or the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Shares by the Underwriters and such other
approvals as have been obtained.
(f) Non-Contravention. Neither the sale of the Shares being sold by such
Selling Stockholder nor the consummation of any other of the transactions herein
contemplated by such Selling Stockholder or the fulfillment of the terms hereof
by such Selling Stockholder will conflict with, result in a breach or violation
of, or constitute a default under any law or under the terms of any material
indenture or other agreement or instrument to which such Selling Stockholder is
party or bound, any judgment, order or decree applicable to such Selling
Stockholder of any court or regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over such Selling Stockholder.
(g) No Registration or Other Similar Rights. Such Selling Stockholder
does not have any registration or other similar rights to have any equity or
debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement, except for
such rights as are described in the Prospectus.
(h) No Preemptive, Co-sale or other Rights. Such Selling Stockholder
does not have, or has waived prior to the date hereof, any preemptive right,
co-sale right or right of first refusal or other similar right to purchase any
of the Shares that are to be sold by the Company or any of the other Selling
Stockholders to the Underwriters pursuant to this Agreement; and such Selling
Stockholder does not own any warrants, options or similar rights to acquire, and
does not have
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any right or arrangement to acquire, any capital stock, right, warrants, options
or other securities from the Company, other than those described in the
Registration Statement and the Prospectus.
(i) Disclosure Made by Such Selling Stockholder in the Prospectus. All
information furnished by or on behalf of such Selling Stockholder in writing
expressly for use in the Registration Statement and Prospectus is, and on the
First Closing Date and the Second Closing Date (as defined below) will be, true,
correct, and complete in all material respects, and does not, and on the First
Closing Date and the Second Closing Date will not, contain any untrue statement
of a material fact or omit to state any material fact necessary to make such
information not misleading. Such Selling Stockholder confirms as accurate the
number of Common Shares set forth opposite such Selling Stockholder's name in
the Prospectus under the caption "Selling Stockholders," both prior to and after
giving effect to the sale of the Firm Shares.
(j) No Price Stabilization or Manipulation. Such Selling Stockholder has
not taken and will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Shares to facilitate the sale or resale
of the Shares.
(k) No Transfer Taxes or Other Fees. There are no transfer taxes or
other similar fees or charges under Federal law or the laws of any state, or any
political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the sale by the Selling Stockholders
of the Shares.
(1) Distribution of Offering Materials by the Selling Stockholders. Such
Selling Stockholder has not distributed and will not distribute, prior to the
later of the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Shares, any offering material in connection
with the offering and sale of the Shares by such Selling Stockholder other than
a preliminary prospectus, the Prospectus or the Registration Statement.
(m) Confirmation of Company Representations and Warranties. Such Selling
Stockholder has no reason to believe that the representations and warranties
of the Company contained in Section 1(A) hereof are not true and correct, is
familiar with the Registration Statement and the Prospectus and has no
knowledge of any material fact, condition or information not disclosed in the
Registration Statement or the Prospectus which has had or could reasonably be
expected to result in a Material Adverse Change, and is not prompted to sell
the Shares to be sold by such Selling Stockholder by any information concerning
the Company which is not set forth in the Registration Statement and the
Prospectus.
(n) Certificates. Any certificate signed by or on behalf of such Selling
Stockholder and delivered to the Representatives or to counsel for the
Underwriters shall be deemed to be a representation and warranty by such Selling
Stockholder to each Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) The Firm Shares. Upon the terms herein set forth, (i) the Company
agrees to issue and sell to the several Underwriters an aggregate of 100,000
Firm Shares and (ii) the Selling Stockholders agree, severally and not jointly,
to sell to the several Underwriters an
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aggregate of 3,400,000 Firm Shares, each Selling Stockholder selling the number
of Firm Shares set forth opposite such Selling Stockholder's name on Schedule B.
On the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company and
the Selling Stockholders the respective number of Firm Shares set forth opposite
their names on Schedule A. The purchase price per Firm Share to be paid by the
several Underwriters to the Company and the Selling Stockholders shall be $_____
per share.
(b) The First Closing Date. Delivery of the Firm Shares to be purchased
by the Underwriters and payment therefor shall be made by the Company, the
Selling Stockholders and the Representatives at 9:00 a.m., Eastern Standard
Time, at the New York offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx
Xxx Xxxx Xxxxx, Xxx Xxxx, XX 00000 (or at such other place as may be agreed upon
among the Representatives and the Company), (i) on the third (3rd) full business
day following the day that this Agreement is executed and delivered if this
Agreement is executed and delivered before 4:30 p.m. Eastern Standard Time, (ii)
if this Agreement is executed and delivered after 4:30 P.M., Eastern Standard
Time, the fourth (4th) full business day following the day that this Agreement
is executed and delivered or (iii) at such other time and date not later than
seven (7) full business days following the day that this Agreement is executed
and delivered as the Representatives and the Company may determine (or at such
time and date to which payment and delivery shall have been postponed pursuant
to Section 8 hereof), such time and date of payment and delivery being herein
called the "First Closing Date;" provided, however, that if the Company has not
made available to the Representatives copies of the Prospectus within the time
provided in Section 2(g) and 3(e) hereof, the Representatives may, in their sole
discretion, postpone the Closing Date until no later than two (2) full business
days following delivery of copies of the Prospectus to the Representatives.
(c) The Option Shares; the Second Closing Date. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Selling
Stockholders named in Schedule B hereby grant, severally and not jointly, an
option to the several Underwriters to purchase, severally and not jointly, up to
an aggregate of 525,000 Option Shares from such Selling Stockholders at the
purchase price per share to be paid by the Underwriters for the Firm Shares. The
maximum number of Option Shares to be sold by such Selling Stockholders is set
forth opposite their respective names on Schedule B. The option granted
hereunder is for use by the Underwriters solely in covering any over-allotments
in connection with the sale and distribution of the Firm Shares. The option
granted hereunder may be exercised once at any time upon notice by the
Representatives to the Attorney-in-Fact or Custodian for such Selling
Stockholders, which notice may be given at any time within 30 days from the date
of this Agreement and which shall set forth the number of Option Shares as to
which the several Underwriters are exercising such option. The time and date of
delivery of the Option Shares, if subsequent to the First Closing Date, is
called the "Second Closing Date" and shall be determined by the Representatives
and shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Option Shares are to be purchased,
(i) each Underwriter agrees, severally and not jointly, to purchase the number
of Option Shares (subject to such adjustments to eliminate fractional shares as
the Representatives may determine) that bears the same proportion to the total
number of Option Shares to be purchased as the number of Firm Shares set forth
on
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Schedule A opposite the name of such Underwriter bears to the total number of
Firm Shares and (ii) each Selling Stockholder named in Schedule B agrees,
severally and not jointly, to sell the number of Option Shares (subject to such
adjustments to eliminate fractional shares as the Representatives may determine)
that bears the same proportion to the total number of Option Shares to be sold
as the number of Option Shares set forth in Schedule B opposite the name of such
Selling Stockholder bears to the total number of Option Shares. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company and the
Attorney-in-Fact or Custodian for such Selling Stockholders.
(d) Public Offering of the Shares. The Representatives hereby advise the
Company and the Selling Stockholders that the Underwriters intend to offer for
sale to the public, as described in the Prospectus, their respective portions of
the Shares as soon after this Agreement has been executed and the Registration
Statement has been declared effective as the Representatives, in their sole
judgment, have determined is advisable and practicable.
(e) Payment for the Shares. Payment for the Shares to be sold by the
Company shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date) by wire transfer of immediately available funds to the
order of the Company. Payment for the shares to be sold by the Selling
Stockholders shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date) by wire transfer of immediately available funds to the
order of the Custodian.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Shares and any Option Shares the Underwriters have agreed to purchase. Banc
of America Securities LLC, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Shares to
be purchased by any Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Shares to be sold by such Selling Stockholder to the
several Underwriters, or otherwise in connection with the performance of such
Selling Stockholder's obligations hereunder and (ii) the Custodian is authorized
to deduct for such payment any such amounts from the proceeds to such Selling
Stockholder hereunder and to hold such amounts for the account of such Selling
Stockholder with the Custodian under the Custody Agreement.
(f) Delivery of the Shares. The Company and the Selling Stockholders
shall deliver, or cause to be delivered, a credit representing the Firm Shares
to an account or accounts at The Depository Trust Company as designated by the
Representatives for the accounts of the Representatives and the several
Underwriters at the First Closing Date, against the irrevocable release of a
wire transfer of immediately available funds for the amount of the purchase
price therefor. The Selling Stockholders shall also deliver, or cause to be
delivered a credit representing the Option Shares to an account or accounts at
The Depository Trust Company as
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designated by the Representatives for the accounts of the Representatives and
the several Underwriters, at the First Closing Date or the Second Closing Date,
as the case may be, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price therefor. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00
noon on the second business day following the date the Shares are released by
the Underwriters for sale to the public, the Company shall deliver or cause to
be delivered copies of the Prospectus in such quantities and at such places as
the Representatives shall reasonably request.
SECTION 3. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
A. COVENANTS OF THE COMPANY. The Company further covenants and agrees
with each Underwriter as follows:
(a) Registration Statement Matters. The Company will (i) use its best
efforts to cause the Registration Statement to become effective or, if the
procedure in Rule 430A of the Securities Act is followed, to prepare and timely
file with the Commission under Rule 424(b) under the Securities Act a Prospectus
in a form approved by the Representatives containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance
on Rule 430A of the Securities Act and (ii) not file any amendment to the
Registration Statement or supplement to the Prospectus during the Prospectus
Delivery Period (including any amendment or supplement through incorporation by
reference of any report filed under the Exchange Act) of which the
Representatives shall not previously have been advised and furnished with a copy
or to which the Representatives shall have reasonably objected in writing or
which is not in compliance with the Securities Act. If the Company elects to
rely on Rule 462(b) under the Securities Act, the Company shall file a Rule
462(b) Registration Statement with the Commission in compliance with Rule 462(b)
under the Securities Act prior to the time confirmations are sent or given, as
specified by Rule 462(b)(2) under the Securities Act, and shall pay the
applicable fees in accordance with Rule 111 under the Securities Act.
(b) Securities Act Compliance. The Company will advise the
Representatives promptly (i) when the Registration Statement or any
post-effective amendment thereto shall have become effective, (ii) of receipt of
any comments from the Commission, (iii) of any request of the Commission for
amendment of the Registration Statement or for supplement to the Prospectus or
for any additional information and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the use
of the Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(c) Blue Sky Compliance. The Company will cooperate with the
Representatives and counsel for the Underwriters in endeavoring to qualify the
Shares for sale under the securities laws of such jurisdictions (both national
and foreign) as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be
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required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so qualified or
required to file such a consent. The Company will, from time to time, prepare
and file such statements, reports and other documents, as are or may be required
to continue such qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the Shares.
(d) Amendments and Supplements to the Prospectus and Other Securities
Act Matters. The Company will comply with the Securities Act and the Exchange
Act, and the rules and regulations of the Commission thereunder, so as to permit
the completion of the distribution of the Shares as contemplated in this
Agreement and the Prospectus. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any event shall
occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Representatives or counsel for the Underwriters, it becomes
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is necessary at any time
to amend or supplement the Prospectus to comply with any law, the Company
promptly will prepare and file with the Commission, and furnish at its own
expense to the Underwriters and to dealers, an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that the Prospectus as
so amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that the Prospectus will comply with the
law.
(e) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Representatives, without charge, during the period
beginning on the date hereof and ending on the later of the First Closing Date
or such date, as in the opinion of counsel for the Underwriters, the Prospectus
is no longer required by law to be delivered in connection with sales by an
Underwriter or dealer (the "Prospectus Delivery Period"), as many copies of the
Prospectus and any amendments and supplements thereto (including any documents
incorporated or deemed incorporated by reference therein) as the Representatives
may reasonably request.
(f) Insurance. The Company shall maintain Directors and Officers
liability insurance in the minimum amount of $10 million which shall apply to
the offering contemplated hereby.
(g) Transfer Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Shares.
(h) Earnings Statement. As soon as practicable, the Company will make
generally available to its securityholders and to the Representatives an
earnings statement (which need not be audited) that satisfies the provisions of
Section 11(a) of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and the
Nasdaq National Market all reports and documents required to be filed under the
Exchange Act.
(j) Agreement Not to Offer or Sell Additional Securities. The Company
will not, without the prior written consent of Banc of America Securities LLC,
for a period of 90 days following the date of the Prospectus (the "Lock-Up
Period"), offer, sell or contract to sell, or
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otherwise dispose of or enter into any transaction which is designed to, or
could be expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company) directly or indirectly, or announce the
offering of, any other Common Shares or any securities convertible into, or
exchangeable for, Common Shares; provided, however, that the Company may (i)
issue and sell Common Shares and issue options to purchase Common Shares
pursuant to any director or employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company in effect at the date of the
Prospectus and described in the Prospectus and (ii) the Company may issue Common
Shares issuable upon the conversion of securities or the exercise of options or
warrants outstanding at the date of the Prospectus and described in the
Prospectus.
(k) Future Reports to the Representatives. During the period of five
years hereafter, the Company will furnish to the Representatives (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the National Association of Securities Dealers,
Inc. or any securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of its
capital stock.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
further covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such Selling
Stockholder will not, during the Lock-Up Period, make a Disposition of
Securities (as defined in Exhibit A hereto) now owned or hereafter acquired
directly by such person or with respect to which such person has or hereafter
acquires the power of disposition, otherwise than (i) as a bona fide gift or
gifts, provided the donee or donees thereof agree in writing to be bound by this
restriction, (ii) as a distribution to limited partners, members or shareholders
of such person, provided that the distributees thereof agree in writing to be
bound by the terms of this restriction, or (iii) with the prior written consent
of Banc of America Securities LLC. The foregoing restriction has been expressly
agreed to preclude the holder of the Securities from engaging in any hedging or
other transaction which is designed to or reasonably expected to lead to or
result in a disposition of Securities during the Lock-Up Period, even if such
Securities would be disposed of by someone other than such holder. Such
prohibited hedging or other transactions would include, without limitation, any
short sale (whether or not against the box) or any purchase, sale or grant of
any right (including, without limitation, any put or call option) with respect
to any Securities (as defined in Exhibit A hereto) or with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from Securities (as
defined in Exhibit A hereto). Notwithstanding the foregoing, this restriction
does not prohibit the sale of shares of Common Shares by the Selling
Stockholders to the Underwriters as contemplated herein. Furthermore, such
person has also agreed and consented to
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the entry of stop transfer instructions with the Company's transfer agent
against the transfer of the Securities held by such person except in compliance
with this restriction.
(b) Delivery of Forms W-8 and W-9. To deliver to the Representatives
prior to the First Closing Date a properly completed and executed United States
Treasury Department Form W-8 (if the Selling Stockholder is a non-United States
person) or Form W-9 (if the Selling Stockholder is a United States Person).
(c) Notification of Untrue Statements, etc. If, at any time prior to the
date on which the distribution of the Common Shares as contemplated herein and
in the Prospectus has been completed, as determined by the Representatives, such
Selling Stockholder has knowledge of the occurrence of any event as a result of
which the Prospectus or the Registration Statement, in each case as then amended
or supplemented, would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, such Selling
Stockholder will promptly notify the Company and the Representatives.
SECTION 4. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Shares as
provided herein on the First Closing Date and, with respect to the Option
Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders set forth in Sections 1(A) and l(B) hereof as of the date hereof
and as of the First Closing Date as though then made and, with respect to the
Option Shares, as of the Second Closing Date as though then made, to the timely
performance by the Company and the Selling Stockholders of their respective
covenants and other obligations hereunder, and to each of the following
additional conditions:
(a) Compliance with Registration Requirements; No Stop Order; No
Objection from the National Association of Securities Dealers, Inc. The
Registration Statement shall have become effective prior to the execution of
this Agreement, or at such later date as shall be consented to in writing by
you; no stop order suspending the effectiveness thereof shall have been issued
and no proceedings for that purpose shall have been initiated or, to the
knowledge of the Company, any Selling Stockholder or any Underwriter, threatened
by the Commission, and any request of the Commission for additional information
(to be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with; and the National Association of Securities
Dealers, Inc. shall have raised no objection to the fairness and reasonableness
of the underwriting terms and arrangements.
(b) Corporate Proceedings. All corporate proceedings and other legal
matters in connection with this Agreement, the form of Registration Statement
and the Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares, shall have been reasonably satisfactory to Underwriters'
Counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section.
(c) No Material Adverse Change. Subsequent to the execution and delivery
of this Agreement and prior to the First Closing Date, or the Second Closing
Date, as the case may be,
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there shall not have been any Material Adverse Change in the Company as set
forth and described in the Registration Statement or Prospectus, which, in your
sole judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Prospectus.
(d) Opinion of Counsel for the Company and the Selling Stockholders. You
shall have received on the First Closing Date, or the Second Closing Date, as
the case may be, an opinion of Ropes & Xxxx, counsel for the Company and the
Selling Stockholders, substantially in the form of Exhibit B attached hereto,
dated the First Closing Date, or the Second Closing Date, addressed to the
Underwriters and with reproduced copies or signed counterparts thereof for each
of the Underwriters.
Counsel rendering the opinion contained in Exhibit B may rely as to
questions of law not involving the laws of the United States or the States of
Massachusetts or Delaware upon opinions of local counsel, and as to questions of
fact upon representations or certificates of officers or partners of the
Company, the Selling Stockholders or officers of the Selling Stockholders (when
the Selling Stockholder is not a natural person), and of government officials,
in which case their opinion is to state that they are so relying and that they
have no knowledge of any material misstatement or inaccuracy in any such
opinion, representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of the
Underwriters, and to Underwriters' Counsel.
(e) Opinion of Counsel for the Underwriters. You shall have received on
the First Closing Date or the Second Closing Date, as the case may be, an
opinion of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters. The Company shall have furnished to such counsel such documents as
they may have requested for the purpose of enabling them to render such opinion.
(f) Accountants' Comfort Letter. You shall have received on the First
Closing Date and on the Second Closing Date, as the case may be, a letter from
Ernst & Young LLP addressed to the Underwriters, dated the First Closing Date or
the Second Closing Date, as the case may be, confirming that they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the applicable published Rules and Regulations and based
upon the procedures described in such letter delivered to you concurrently with
the execution of this Agreement (herein called the "Original Letter"), but
carried out to a date not more than four (4) business days prior to the First
Closing Date or the Second Closing Date, as the case may be, (i) confirming, to
the extent true, that the statements and conclusions set forth in the Original
Letter are accurate as of the First Closing Date or the Second Closing Date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of such letter, or to reflect the availability of more recent financial
statements, data or information. The letter shall not disclose any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one enterprise from
that set forth in the Registration Statement or Prospectus, which, in your sole
judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus. The Original Letter from Ernst & Young LLP
shall be
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addressed to or for the use of the Underwriters in form and substance
satisfactory to the Underwriters and shall (i) represent, to the extent true,
that they are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable published Rules and
Regulations, (ii) set forth their opinion with respect to their examination of
the consolidated balance sheets of the Company as of September 25, 1999 and
September 30, 2000, and the related consolidated statements of shareholders'
equity for each of the three years in the period ended September 30, 2000, the
consolidated statements of income for the three years in the period ended
September 30, 2000 and the consolidated statements of cash flows for the three
years in the period ended September 30, 2000, (iii) state that Ernst & Young LLP
has performed the procedures set out in Statement on Auditing Standards No. 71
("SAS 71") for a review of interim financial information and providing the
report of Ernst & Young LLP as described in SAS 71 on the financial statements
for the quarters ended December 30, 2000 and December 25, 1999 (the "Quarterly
Financial Statements"), (iv) state that in the course of such review, nothing
came to their attention that leads them to believe that any material
modifications need to be made to any of the Quarterly Financial Statements in
order for them to be in compliance with generally accepted accounting principles
consistently applied across the periods presented, and address other matters
agreed upon by Ernst & Young and you.
(g) Officers' Certificate. You shall have received on the First Closing
Date and the Second Closing Date, as the case may be, a certificate of the
Company, dated the First Closing Date or the Second Closing Date, as the case
may be, signed by the Chief Executive Officer and Chief Financial Officer of the
Company, to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company in this Agreement
are true and correct, as if made on and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the First Closing Date
or the Second Closing Date, as the case may be;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act;
(iii) In his or her opinion, based on his or her careful examination of
the Registration Statement and the Prospectus, and any amendments or
supplements thereto, when the Registration Statement became effective
and as of the date of delivery of such certificate, the Registration
Statement and the Prospectus, and any amendments or supplements thereto,
did not and does not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and, since the effective
date of the Registration Statement, there has occurred no event required
to be set forth in an amended or supplemented Prospectus which has not
been so set forth; and
(iv) Subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus, there has not been (a) any
Material Adverse Change, (b) any transaction that is material to the
Company and its subsidiaries considered as one enterprise, except
transactions entered into in the ordinary course of
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business, (c) any obligation, direct or contingent, that is material to
the Company and its subsidiaries considered as one enterprise, incurred
by the Company or its subsidiaries, except obligations incurred in the
ordinary course of business, (d) any change in the capital stock or
outstanding indebtedness of the Company or any of its subsidiaries that
is material to the Company and its subsidiaries considered as one
enterprise, (e) any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company or any of its subsidiaries,
or (f) any loss or damage (whether or not insured) to the property of
the Company or any of its subsidiaries which has been sustained or will
have been sustained which has a Material Adverse Effect.
(h) Lock-up Agreement from Certain Stockholders of the Company. The
Company shall have obtained and delivered to you an agreement substantially in
the form of Exhibit A attached hereto from each of the executive officers and
directors of the Company and each Selling Stockholder (and each of their
respective trusts or affiliates which owns Common Shares). The Company will not
authorize or consent to any requests for the physical transfer of shares that
are restricted from transfer pursuant to the terms of the Lock-Up Agreements.
(i) Selling Stockholders' Certificate. On each of the First Closing Date
and the Second Closing Date, as the case may be, the Representatives shall
receive a written certificate executed by the Attorney-in-Fact of each Selling
Stockholder, dated as of such Closing Date, to the effect that:
(i) the representations, warranties and covenants of such Selling
Stockholder set forth in Section l(B) of this Agreement are true and correct
with the same force and effect as though expressly made by such Selling
Stockholder on and as of such Closing Date; and
(ii) such Selling Stockholder has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(j) Selling Stockholders' Documents. At least three business days prior
to the date hereof, the Company and the Selling Stockholders shall have
furnished for review by the Representatives copies of the Powers of Attorney and
Custody Agreements executed by each of the Selling Stockholders and such further
information, certificates and documents as the Representatives may reasonably
request.
(k) Stock Exchange Listing. The Shares shall remain approved for
inclusion on the Nasdaq National Market, subject only to official notice of
issuance.
(l) Compliance with Prospectus Delivery Requirements. The Company shall
have complied with the provisions of Sections 2(g) and 3A(e) hereof with respect
to the furnishing of Prospectuses.
(m) Additional Documents. On or before each of the First Closing Date
and the Second Closing Date, as the case may be, the Representatives and counsel
for the Underwriters shall have received such information, documents and
opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.
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If any condition specified in this Section 4 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Option
Shares, at any time prior to the Second Closing Date, which termination shall be
without liability on the part of any party to any other party, except that
Section 5 (Payment of Expenses), Section 6 (Reimbursement of Underwriters'
Expenses), Section 7 (Indemnification and Contribution) and Section 10
(Representations and Indemnities to Survive Delivery) shall at all times be
effective and shall survive such termination.
SECTION 5. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of the obligations
of the Company and the Selling Stockholders hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Common Shares (including all
printing and engraving costs), (ii) all fees and expenses of the registrar and
transfer agent of the Common Shares, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Shares to the
Underwriters, (iv) all fees and expenses of the Company's counsel, independent
public or certified public accountants and other advisors and of a single
counsel for the Selling Stockholders, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each preliminary prospectus and the
Prospectus, and all amendments and supplements thereto, and this Agreement, (vi)
all filing fees, attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Shares for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada or any other country, and, if requested by
the Representatives, preparing and printing a "Blue Sky Survey," an
"International Blue Sky Survey" or other memorandum, and any supplements
thereto, advising the Underwriters of such qualifications, registrations and
exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Underwriters in connection with, the National
Association of Securities Dealers, Inc. review and approval of the Underwriters'
participation in the offering and distribution of the Common Shares, (viii) the
fees and expenses associated with inclusion of the Common Shares on the Nasdaq
National Market, (ix) all costs and expenses incident to the preparation and
undertaking of "road show" preparations to be made to prospective investors, and
(x) all other fees, costs and expenses referred to in Item 14 of Part II of the
Registration Statement. Except as provided in this Section 5, Section 6, and
Section 7 hereof, the Underwriters shall pay their own expenses, including the
fees and disbursements of their counsel.
The Company further agrees with each Underwriter to pay all fees and
expenses incident to the performance of the Selling Stockholders' obligations
under this Agreement which are not otherwise specifically provided for herein,
including but not limited to (i) fees and expenses of counsel and other advisors
for such Selling Stockholders, (ii) fees and expenses of the Custodian and (iii)
expenses and taxes incident to the sale and delivery of the Common Shares to be
sold by such Selling Stockholders to the Underwriters hereunder (which taxes, if
any, may be deducted by the Custodian under the provisions of Section 2 of this
Agreement).
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This Section 5 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Stockholders, on the other hand.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated by the Representatives pursuant to Section 4, Section 9 or Section
15, or if the sale to the Underwriters of the Shares on the First Closing Date
is not consummated because of any refusal, inability or failure on the part of
the Company or the Selling Stockholders to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the
Representatives and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification of the Underwriters.
The Company and each of the Selling Stockholders, severally and not
jointly, agree to indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company, which consent shall not be
unreasonably withheld), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based:
(i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule
430A or Rule 434 under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading; or
(ii) upon any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; or
(iii) in whole or in part upon any inaccuracy in the representations and
warranties of the Company or the Selling Stockholders contained herein
(except that pursuant to this clause (iii), each Selling Stockholder
shall only be liable, severally and not jointly, for its representations
and warranties set forth in Section 1(B) hereof); or
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(iv) in whole or in part upon any failure of the Company or the Selling
Stockholders to perform their respective obligations hereunder or under
law (except that pursuant to this clause (iv), each Selling Stockholder
shall only be liable, severally and not jointly, for its respective
obligations hereunder or under law); or
(v) any act or failure to act or any alleged act or failure to act by
any Underwriter in connection with, or relating in any manner to, the
Shares or the offering contemplated hereby, which is included as part of
or referred to in any loss, claim, damage, liability or action arising
out of or based upon any matter with respect to which the Company or
such Selling Stockholder, as applicable, provides indemnification
pursuant to clause (i), (ii), (iii) or (iv) above, provided that the
Company and the Selling Stockholders shall not be liable under this
clause (v) to the extent that a court of competent jurisdiction shall
have determined by a final judgment that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its
bad faith or willful misconduct;
and to reimburse each Underwriter and each such controlling person for any and
all expenses (including the reasonable fees and disbursements of counsel chosen
by Banc of America Securities LLC) as such expenses are reasonably incurred by
such Underwriter or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company or the Selling Stockholders by the Representatives expressly for use in
the Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and provided, further, that with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not inure to
the benefit of any Underwriter from whom the person asserting any loss, claim,
damage, liability or expense purchased Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 7(a) shall be in addition to any liabilities that the
Company or the Selling Stockholders may otherwise have.
Notwithstanding the foregoing, (i) the aggregate liability of any Selling
Stockholder pursuant to this Subsection 7(a) shall be limited to an amount equal
to the total proceeds (net of underwriting discounts and commissions) received
by the respective Selling Stockholder from the Underwriters for the sale of the
Shares sold by the respective Selling Stockholder hereunder and (ii) the
aggregate liability of any Selling Stockholder pursuant to this Section 7(a) in
respect of any specific loss, claim, damage, liability or expense shall be
limited to an amount equal to such Selling Stockholder's pro rata share of such
loss, claim, damage, liability or expense based on the number of Common Shares
sold hereunder by such Selling Stockholder as compared to the total number of
Common Shares sold by all Selling Stockholders.
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(b) Indemnification of the Company, its Directors and Officers and the
Selling Stockholders. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, the Selling Stockholders and
each person, if any, who controls the Company or any Selling Stockholder within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer, Selling Stockholder or controlling person may become subject,
under the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein 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 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 and the Selling Stockholders by the Representatives
expressly for use therein; and to reimburse the Company, or any such director,
officer, Selling Stockholder or controlling person for any reasonable legal and
other expense reasonably incurred by the Company, or any such director, officer,
Selling Stockholder or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The indemnity agreement set forth in this Section
7(b) shall be in addition to any liabilities that each Underwriter may otherwise
have.
(c) Information Provided by the Underwriters. The Company and each of
the Selling Stockholders hereby acknowledges that the only information that the
Underwriters have furnished to the Company and the Selling Stockholders
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) are the statements set
forth in the following paragraphs under the caption "Underwriting" in the
Prospectus:
(i) the table in the first paragraph,
(ii) the third paragraph, and
(iii) the tenth through fourteenth paragraphs;
and the Underwriters confirm that such statements are correct.
(d) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve such indemnifying party
from any liability which it may have to any indemnified party for contribution
or otherwise under the
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indemnity agreement contained in this Section 7 except to the extent it is
otherwise materially prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, 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 a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7 for any legal
or other expenses 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 the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (Banc of America Securities LLC in
the case of Section 7(b) and Section 8), representing the indemnified parties
who are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party, in each of
which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(e) Settlements. The indemnifying party under this Section 7 shall not
be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 7(d) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. Notwithstanding the
foregoing, no indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of
judgment in any pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and indemnity was or
could have been sought hereunder by such indemnified party, unless such
settlement, compromise or consent includes (i) an unconditional release of such
indemnified
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party from all liability on claims that are the subject matter of such action,
suit or proceeding and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(f) Contribution. If the indemnification provided for in this Section 7
is unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) hereof in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriter on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholders bears
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders, and Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 7(f)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7(f). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 7(f) shall be deemed to include any
reasonable legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(f): (i) no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter; (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation; and (iii) no Selling
Stockholder shall be required to contribute any amount in excess of the total
proceeds (net of underwriter discounts and commissions) received by such Selling
Stockholder from the Underwriters for the sale of the Shares sold by such
Selling Stockholder hereunder. The Underwriters' obligations in this Section
7(f) to contribute are several in proportion to their respective underwriting
obligations and not joint.
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(g) Timing of Any Payments of Indemnification. Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred, but in all cases, no later than thirty
(30) days of invoice to the indemnifying party.
(h) Survival. The indemnity and contribution agreements contained in
this Section 7 and the representations, warranties, agreements and other
covenants of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, regardless of and shall survive
(i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Selling Stockholders, the Company, its
directors or officers or of any persons controlling the Company or any of the
Selling Stockholders, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, a Selling Stockholder or to the Company, its directors or officers,
or any person controlling the Company or the Selling Stockholders shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 7.
(i) Acknowledgements of Parties. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 7, and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 7 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectus as required by
the Securities Act and the Exchange Act.
(j) Claims for Indemnification by the Selling Stockholders. The Company
and each of the Underwriters agree with each of the Selling Stockholders that
any claim of such Underwriter against the Selling Stockholders for
indemnification pursuant to Section 7(a) hereof shall first be sought by such
Underwriter to be satisfied in full by the Company and, subject to the
limitation on the aggregate liability of the Selling Stockholders set forth in
Section 7(a) hereof, shall be satisfied by the Selling Stockholders only to the
extent that such claim has not been satisfied in full by the Company within the
thirty (30) day period following the date requested for payment by such
Underwriter.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Shares that
it or they have agreed to purchase hereunder on such date, and the aggregate
number of Common Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase does not exceed 10% of the aggregate number of
the Shares to be purchased on such date, the other Underwriters shall be
obligated, severally, in the proportions that the number of Firm Shares set
forth opposite their respective names on Schedule A bears to the aggregate
number of Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as may be specified by the
Representatives with the consent of the non-defaulting Underwriters, to purchase
the Shares which such defaulting Underwriter or Underwriters agreed but failed
or refused to
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purchase on such date. If, on the First Closing Date or the Second Closing Date,
as the case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares and the aggregate number of Shares with respect to which such
default occurs exceeds 10% of the I aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, and Section 7 shall at all
times be effective and shall survive such termination. In any such case either
the Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
8. Any action taken under this Section 8 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 9. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date, this Agreement may be terminated by the Representatives by notice given to
the Company and the Selling Stockholders if at any time (i) trading or quotation
in any of the Company's securities shall have been suspended or limited by the
Commission or by the Nasdaq Stock Market, or trading in securities generally on
either the Nasdaq Stock Market or the New York Stock Exchange shall have been
suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the National
Association of Securities Dealers, Inc.; (ii) a general banking moratorium shall
have been declared by any of federal, New York, Delaware or California
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective change in United States' or
international political, financial or economic conditions, as in the judgment of
the Representatives is material and adverse and makes it impracticable or
inadvisable to market the Common Shares in the manner and on the terms described
in the Prospectus or to enforce contracts for the sale of securities; (iv) in
the judgment of the Representatives there shall have occurred any Material
Adverse Change; or (v) the Company shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as in the
judgment of the Representatives may interfere materially with the conduct of the
business and operations of the Company regardless of whether or not such loss
shall have been insured. Any termination pursuant to this Section 9 shall be
without liability on the part of (a) the Company or the Selling Stockholders to
any Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 5 and
6 hereof, (b) any Underwriter to the Company or the Selling Stockholders, or (c)
of any party hereto to any other party except that the provisions of Section 7
shall at all times be effective and shall survive such termination.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties, agreements and
other covenants of the
29
30
Company, of its officers, of the Selling Stockholders and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect as set forth in Section 7(h) hereof.
SECTION 11. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxxxx Xxxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
CIBC World Markets Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to the Company:
Xxxxxxxxx Xxxxx
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
If to the Selling Stockholders:
ChaseMellon Shareholder Services, LLC
000 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxxx
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
30
31
SECTION 12. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 8 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 7, and to their
respective successors, and personal Representatives, and no other person will
have any right or obligation hereunder. The term "successors" shall not include
any purchaser of the Shares as such from any of the Underwriters merely by
reason of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(a) Governing Law. This agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed in such state.
(b) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of New York or the
courts of the State of New York in each case located in the City and County of
New York (collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Each party not located in the
United States irrevocably appoints CT Corporation System as its agent to receive
service of process or other legal summons for purposes of any such suit, action
or proceeding that may be instituted in any state or federal court in the City
and County of New York.
(c) Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
31
32
SECTION 15. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL
AND DELIVER COMMON SHARES. If one or more of the Selling Stockholders shall fail
to sell and deliver to the Underwriters the Shares to be sold and delivered by
such Selling Stockholders at the First Closing Date pursuant to this Agreement,
then the Underwriters may at their option, by written notice from the
Representatives to the Company and the Selling Stockholders, either (i)
terminate this Agreement without any liability on the part of any Underwriter
or, except as provided in Sections 5, 6, and 7 hereof, the Company or the
Selling Stockholders, or (ii) purchase the shares which the Company and other
Selling Stockholders have agreed to sell and deliver in accordance with the
terms hereof. If one or more of the Selling Stockholders shall fail to sell and
deliver to the Underwriters the Shares to be sold and delivered by such Selling
Stockholders pursuant to this Agreement at the First Closing Date or the Second
Closing Date, then the Underwriters shall have the right, by written notice from
the Representatives to the Company and the Selling Stockholders, to postpone the
First Closing Date or the Second Closing Date, as the case may be, but in no
event for longer than seven days in order that the required changes, if any, to
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
SECTION 16. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
32
33
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Custodian the enclosed
copies hereof, whereupon this instrument, along with all counterparts hereof,
shall become a binding agreement in accordance with its terms.
Very truly yours,
XXXXXXXXX XXXXX HOLDINGS, INC.
By:
---------------------------------------------
Xxxxxxx Xxxxxxxx, President and Chief
Executive Officer
SELLING STOCKHOLDERS
By:
---------------------------------------------
Name:
Attorney-in-fact for the Selling Stockholders
named in Schedule B hereto
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives as of the date first above written on their behalf and on
behalf of each of the several underwriters named in Schedule A hereto.
BANC OF AMERICA SECURITIES LLC
By:
--------------------------------
[SIGNATURE PAGE TO UNDERWRITING AGREEMENT]
33
34
SCHEDULE A
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------------
Banc of America Securities LLC.................
Xxxxxxxxx Xxxxxxxx, Inc........................
Bear, Xxxxxxx & Co. Inc........................
CIBC World Markets Corp........................
Schedule A-1
35
SCHEDULE B
MAXIMUM NUMBER OF
NUMBER OF FIRM SHARES OPTION SHARES
SELLING STOCKHOLDERS TO BE SOLD TO BE SOLD
-------------------- --------------------- -------------------
SK Investment Fund, L.P........................
The SK Equity Fund, L.P........................
Xxxxxxx Xxxxxxxx............................... 250,000
R. Xxxx Xxxxxxxx............................... 10,000 --
Total..................................
Schedule B-1
36
SCHEDULE C
As of the effective date of the Registration Statement, the
following securityholders are required to enter into Lock-Up Agreements pursuant
to Section 1(A) of this Agreement:
SECURITYHOLDER
------------------------------
The SK Equity Fund, L.P.
SK Investment Fund, L.P.
Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxx-Xxxxxxxxx
Xxxxxx Xxxxxx
R. Xxxx Xxxxxxxx
Xxxxx Xxxx
Xxxxx Xxxx
Xxxx Del Xxxxx
Xxxxxx Xxxxx
Schedule C-1
37
LOCK-UP AGREEMENT
_________________, 2001
Banc of America Securities LLC
As Representative of the Underwriters
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several
underwriters (the "Underwriters"), propose to enter into an Underwriting
Agreement (the "Underwriting Agreement") with Xxxxxxxxx Xxxxx Holding, Inc. (the
"Company") providing for the public offering (the "Public Offering") by the
Underwriters, including yourselves, of Common Stock of the Company (the "Common
Stock") pursuant to the Company's Registration Statement on Form S-3 filed with
the Securities and Exchange Commission on or about February 9, 2001 (the
"Registration Statement").
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Common Stock, and for other good and valuable
consideration, receipt of which hereby acknowledged, the undersigned hereby
agrees, for a period of 90 days after the effective date of the Registration
Statement (the "Lock-Up Period"), not to offer to sell, contract to sell or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, "Securities"),
now owned or hereafter acquired directly by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree to be bound by this Lock-Up Agreement, (ii) as a distribution to
limited partners, members or shareholders of the undersigned, provided that the
distributees thereof agree in writing to be bound by the terms of this Lock-Up
Agreement or (iii) with the prior written consent of Banc of America Securities
LLC. The foregoing restriction is expressly agreed to preclude the holder of the
Securities from engaging in any hedging or other transaction which is designed
to or reasonably expected to lead to or result in a Disposition of Securities
during the Lock-Up Period even if such Securities would be disposed of by
someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale, whether or not
against the box, or any purchase, sale or grant of any right, including without
limitation any put or call option, with respect to any Securities or with
respect to any security, other than a broad-based market basket or index that
includes, relates to or derives any significant part of its value from
Securities. Notwithstanding the foregoing, this Lock-Up Agreement does not
prohibit the sale of shares of the Common Stock by the undersigned to the
Underwriters in the Public Offering.
38
Furthermore, the undersigned hereby agrees and consents to the entry of
stop transfer instructions with the transfer agent of the Company against the
transfer of the Securities held by the undersigned except in compliance with
this Lock-Up Agreement. In the event that the Registration Statement shall not
have been declared effective on or before April 23, 2001 this Lock-Up Agreement
shall be of no further force or effect.
Very truly yours,
-----------------------------------
(signature)
Name:
------------------------------
Address:
-----------------------------------
-----------------------------------
Accepted as of the date first set forth above:
Banc of America Securities LLC
As Representative of the Underwriters
Banc of America Securities LLC
By:
--------------------------------
(authorized signatory)
39
EXHIBIT B
March , 0000
Xxxx xx Xxxxxxx Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxxxx Xxxxxxxx Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
CIBC World Markets Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
As Representatives of the
Several Underwriters Named
in the Underwriting Agreement
Re: 3,500,000 shares of Common Stock, par value $0.01 per share, of
Xxxxxxxxx Xxxxx Holding, Inc.
Ladies and Gentlemen:
We have acted as counsel for Xxxxxxxxx Xxxxx Holding, Inc., a
Delaware corporation (the "Company"), in connection with the issuance and sale
by the Company of 100,000 shares (the "Company Shares") of its Common Stock, par
value $0.01 per share (the "Common Stock"), and the sale by Selling Stockholders
of 3,400,000 shares of Common Stock (the "Secondary Shares" and, together with
the Company Shares, the "Shares"). This opinion is furnished to you as
Representatives of the several Underwriters pursuant to Section 4(d) of the
underwriting agreement dated March , 2001 (the "Underwriting Agreement"),
among the Company, the Selling Stockholders and you as Representatives of the
several underwriters listed on Schedule A thereto relating to the issuance and
sale of the Shares. Terms defined in the
40
Underwriting Agreement and not otherwise defined herein are used herein with the
meanings so defined.
We have attended the Closing of the sale of the Shares held
today. We have examined signed copies of the Registration Statement of the
Company on Form S-3 (No. 333-55356), together with all amendments and all
exhibits thereto and documents incorporated by reference therein (the
"Registration Statement"), all as filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"); a copy of the prospectus dated March __, 2001, which included
documents incorporated by reference therein and information that under Rule 430A
under the Securities Act was deemed to be included in the Registration Statement
at the time it was declared effective (the "Prospectus"); [a Power of Attorney
and Custody Agreement executed and delivered by each of the Selling
Stockholders]; an executed copy of the Underwriting Agreement; and such other
documents as we have deemed necessary as a basis for the opinions expressed
herein. Additionally, we have relied upon oral advice from the staff of the
Securities and Exchange Commission to the effect that the Registration Statement
became effective on March __, 2001.
We express no opinion as to the laws of any jurisdiction other
than those of The Commonwealth of Massachusetts, the General Corporation Law of
the State of Delaware, the federal laws of the United States of America and,
with respect solely to the opinions expressed in paragraphs 1 and 4 below
relating to the subsidiaries of the Company, the General Corporation Law of the
State of California as in effect on the date hereof.
Insofar as this opinion relates to factual matters, information
with respect to which is in the possession of the Company or the Selling
Stockholders, we have made inquiries to the extent we believe reasonable with
respect to such matters and have relied upon representations made by the Company
and by the Selling Stockholders in the Underwriting Agreement and
representations made to us by one or more officers of the Company and by the
Selling Stockholders. Although we have not independently verified the accuracy
of such representations, we do not know of the existence or absence of any fact
contradicting such representations.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
with corporate power and authority to own or lease and operate its properties
and conduct its business as described in the Prospectus. Each of Xxxxxxxxx
Xxxxx, Inc., Xxxxxxxxx Xxxxx Merchandising, Inc. and Xxxxxxxxx Xxxxx
Administration, Inc. (each a "Subsidiary" and collectively, the "Subsidiaries")
is a corporation validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority to own or
lease and operate its properties and conduct its business as described in the
Prospectus.
2. The Company and each Subsidiary is duly qualified to conduct
business in each of the jurisdictions set forth opposite its name on Exhibit A
attached hereto. To our knowledge, the Company does not own a majority of the
outstanding voting shares or otherwise control, directly or indirectly, any
corporation, association, or other entity other than the Subsidiaries.
41
3. The shares of Common Stock issued and outstanding on the date
hereof, including the Shares to be sold by Selling Stockholders, have been duly
authorized and validly issued and are fully paid and nonassessable and, to our
knowledge, have not been issued in violation of any statutory or contractual
preemptive rights.
4. The outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued and are fully paid and
nonassessable and are owned of record by the Company and, to our knowledge, the
outstanding shares of capital stock of each Subsidiary are owned free and clear
of all liens, encumbrances and claims, the shares of Common Stock to be sold by
the Company pursuant to the Underwriting Agreement have been duly authorized
and, when issued and paid for as contemplated by the Underwriting Agreement,
will be validly issued, fully paid and non-assessable; and, to our knowledge,
the shares of Common Stock to be sold by the Company pursuant to the
Underwriting Agreement will not be issued in violation of any statutory or
contractual preemptive rights.
5. The Shares conform as to matters of law to the description
thereof contained in the Registration Statement on Form 8-A incorporated by
reference in the Registration Statement, and the certificates for the Shares,
assuming they are in the form previously filed with the Securities and Exchange
Commission, comply with Delaware General Corporation Law.
6. The Company has the corporate power and authority to enter
into the Underwriting Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it thereunder.
7. The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
8. The execution and delivery of the Underwriting Agreement and
the issuance and sale of the Shares to be sold by the Company do not (i) violate
the Certificate of Incorporation or By-laws of the Company, (ii) breach or
result in a default under any agreement or instrument listed as an exhibit to
the Registration Statement or any document incorporated by reference in the
Registration Statement or (iii) violate any applicable Massachusetts, Delaware
Corporate or federal law or regulation or, to our knowledge, any order, writ,
injunction or decree of any jurisdiction, court or governmental instrumentality
binding upon the Company or any of its properties, except that we express no
opinion in this paragraph as to state securities or blue sky laws or as to
compliance with the antifraud provisions of federal and state securities laws or
the performance by the Company of its indemnification and contribution
obligations under the Underwriting Agreement.
9. No approval, consent, order, authorization, designation,
declaration or filing of any regulatory, administrative or governmental entity
is required to permit the Company to issue and sell the Shares, except such as
may be required under state securities or blue sky laws, each as to which we
express no opinion, and except for such as have been obtained under the
Securities Act and with the National Association of Securities Dealers, Inc.
10. The Company is not, and will not become as a result of the
consummation of the transactions contemplated by the Underwriting Agreement and
the application of the net proceeds therefrom as described in the Prospectus, an
"investment company" as defined in Section 3(a) of the Investment Company Act of
1940, as amended.
12. Except as described in the Prospectus, to our knowledge, no
holder of any securities of the Company has the right, contractual or otherwise,
that has not been satisfied or effectively waived, to cause the Company to
include any Common Stock or other securities of
42
the Company in the Registration Statement or the right, as a result of the
filing of the Registration Statement, to require registration under the
Securities Act of any shares of Common Stock or other securities of the Company.
13. The Underwriting Agreement has been duly authorized by each
of the Selling Stockholders that is a limited partnership (the "SKM Sellers"),
and the Underwriting Agreement has been duly executed and delivered by each of
the Selling Stockholders through their duly authorized attorney-in-fact.
14. A Power of Attorney and a Custody Agreement have been duly
authorized by each of the SKM Sellers, and a Power of Attorney and a Custody
Agreement have been duly executed and delivered by each of the Selling
Stockholders; and pursuant to such Power of Attorney and such Custody Agreement,
each Selling Stockholder has authorized its attorney-in-fact to carry out the
transactions contemplated in the Underwriting Agreement on its behalf and to
deliver the Shares being sold by it pursuant to the Underwriting Agreement.
15. Immediately prior to the date hereof, each Selling
Stockholder was the sole registered record owner of the Shares to be sold by
such Selling Stockholder; each SKM Seller has the partnership power and
authority, and each Selling Stockholder has any approval required by law, other
than any approval required by applicable state securities and blue sky laws, to
sell, assign, transfer and deliver the Shares to be sold by him, her or it in
the manner provided in the Underwriting Agreement and the Power of Attorney and
Custody Agreement of such Selling Stockholder.
16. Each Underwriter that is a "bona fide purchaser" within the
meaning of Article 8 of the Massachusetts Uniform Commercial Code (the "Code")
will acquire, upon payment for the Shares being sold by each Selling
Stockholder, its interest in the Shares, free of any adverse claim, as defined
in the Code.
The Registration Statement became effective on March , 2001. We do not
know of the issuance of any stop order suspending the effectiveness of the
Registration Statement by the Securities and Exchange Commission or of any
proceeding or threat of proceeding for that purpose under the Securities Act.
In the course of the preparation by the Company of the Registration
Statement and the Prospectus, we have participated in discussions with your
representatives and representatives of the Company and its independent
accountants, in which the business and affairs of the Company and the contents
of the Registration Statement and the Prospectus were discussed. On the basis of
information that we have gained in the course of our representation of the
Company in connection with its preparation of the Registration Statement and the
Prospectus and our participation in the discussions referred to above, we
believe that the Registration Statement, as of the time it became effective
under the Securities Act, but after giving effect to changes incorporated
pursuant to Rule 430A under the Securities Act, and the Prospectus, as of its
date, complied as to form in all material respects with the requirements of the
Securities Act and the published rules and regulations of the Commission
thereunder, and each document filed by the Company with the Commission pursuant
to the Securities Exchange Act of 1934, as amended, and incorporated or deemed
to be incorporated by reference in the Prospectus, when so filed,
43
complied as to form in all material respects with the requirements of the
Exchange Act and the published rules and regulations of the Commission
thereunder, and we do not know of any legal or governmental proceeding, pending
or threatened, to which the Company or any Subsidiary of the Company is a party
or to which any of their respective property is subject, required to be
described in the Prospectus which is not so described in the Prospectus, nor of
any contract or other document of a character required to be described in the
Prospectus or to be filed as an exhibit to the Registration Statement which is
not so described or filed. Further, based on the information and participation
described above, nothing that has come to our attention has caused us to believe
that the Registration Statement, as of the time it became effective under the
Securities Act, but after giving effect to changes incorporated pursuant to Rule
430A under the Securities Act, contained an untrue statement of material fact or
omitted to state a 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 hereof included or includes any untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. We express no belief, however, as to the
financial statements, including the notes and schedules thereto, or any other
financial or accounting information set forth or referred to in the Registration
Statement, the Prospectus or in any document incorporated or deemed to be
incorporated by reference in the Prospectus.
The limitations inherent in the independent verification of factual
matters and the character of the determinations involved in our review are such
that we do not assume any responsibility for the accuracy, completeness or
fairness of the statements made or the information contained in the Registration
Statement and Prospectus except for those statements in the Prospectus under the
caption "Important United States Tax Consequences to Non-United Stated Holders
of Common Stock", which accurately summarize in all material respects the
provisions of the laws and documents referred to therein.
This opinion is furnished by us to you as Representatives of the several
Underwriters and, except as otherwise expressly consented to by us in writing,
is solely for the benefit of the several Underwriters.
Very truly yours,
Ropes & Xxxx
44
EXHIBIT A
Xxxxxxxxx Xxxxx Holdings, Inc.
------------------------------
Delaware
Xxxxxxxxx Xxxxx, Inc.
---------------------
Arizona
California
Florida
Georgia
Illinois
New York
Texas
Xxxxxxxxx Xxxxx Merchandising, Inc.
-----------------------------------
California
Xxxxxxxxx Xxxxx Administration, Inc.
------------------------------------
California
Exhibit A-1
