3,100,000 Shares
AUDIOVOX CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
_____________, 1999
XX XXXXX SECURITIES CORPORATION
XXXXXX XXXXXX & COMPANY, INC.
PRUDENTIAL SECURITIES INCORPORATED
LADENBURG & XXXXXXXX & CO. INC.
As Representatives of the several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Audiovox Corporation, a Delaware corporation (the "Company"),
and the selling shareholders named in Schedule B hereto (the "Selling
Shareholders") propose to sell, pursuant to the terms of this Agreement, to the
several underwriters named in Schedule A hereto (the "Underwriters," or, each,
an "Underwriter"), an aggregate of 3,100,000 shares of Common Stock, $.01 par
value (the "Common Stock"), of the Company. The aggregate of 3,100,000 shares so
proposed to be sold is hereinafter referred to as the "Firm Stock". The Company
and the Selling Shareholders listed in Schedule B hereto also propose to sell to
the Underwriters, upon the terms and conditions set forth in Section 3 hereof,
up to an additional 465,000 shares of Common Stock (the "Optional Stock"). The
Firm Stock and the Optional Stock are hereinafter collectively referred to as
the "Stock". XX Xxxxx Securities Corporation ("XX Xxxxx"), Xxxxxx Xxxxxx &
Company, Inc. ("Xxxxxx Xxxxxx"), Prudential Securities Incorporated and
Ladenburg Xxxxxxxx & Co. Inc. are acting as representatives of the several
Underwriters and in such capacity are hereinafter referred to as the
"Representatives."
2. (I) REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SHAREHOLDERS. The Company and, with respect to Xxxxxxxx 0(X)(x)(xx), (x)(xx),
(x), (x), (x), (x), (x) and (gg) to their knowledge, the Selling Shareholders
represent and warrant to, and agree with, the several Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-__) (the
"Initial Registration Statement") in respect of the Stock has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference
in the prospectus contained therein, to you for each of the other
Underwriters, have been declared effective
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by the Commission in such form; other than a registration statement, if
any, increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
(the "Rules and Regulations") of the Commission thereunder, which
became effective upon filing, no other document with respect to the
Initial Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement
or filed with the Commission pursuant to Rule 424(a) of the Rules and
Regulations, is hereinafter called a "Preliminary Prospectus"); the
various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including (i) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities
Act and deemed by virtue of Rule 430A under the Securities Act to be
part of the Initial Registration Statement at the time it was declared
effective and (ii) the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time
such part of the Initial Registration Statement became effective, each
as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statements"; and such
final prospectus, in the form first filed pursuant to Rule 424(b) under
the Securities Act, is hereinafter called the "Prospectus" and any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; and any reference to any amendment to the Registration
Statements shall be deemed to refer to and include any annual report of
the Company filed pursuant to Section 13(a) or 15(d) of the Exchange
Act after the effective date of the Initial Registration Statement that
is incorporated by reference in the Registration Statements. No
document has been or will be prepared or distributed in reliance on
Rule 434 under the Securities Act. No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission.
(b) The Registration Statement (i) conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or
supplements to either of the Registration Statements or the Prospectus,
when they become effective or are filed with the Commission, as the
case may be, will conform) in all material respects to the requirements
of the Securities Act and the Rules and Regulations and (ii) do not and
will not, as of the applicable effective date (as to the Registration
Statements and any
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amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing
representations and warranties shall not apply to information contained
in or omitted from the Registration Statements or the Prospectus or any
such amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission (i) conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and (ii) none of such
documents contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus,
when such documents are filed with Commission will conform in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(d) The Company and each of its subsidiaries (as defined in Section 14)
have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power
and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except where the
failure to so qualify or have such power or authority would not have,
singularly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"). The Company owns or controls, directly or
indirectly, only the following corporations, associations or other
entities: [___].
(e) This Agreement has been duly authorized executed and delivered by
the Company.
(f) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive
or similar rights and will conform to the description thereof contained
in the Prospectus.
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company (including, without limitation, the shares of Stock to be sold
by the Selling Shareholders), have been duly and validly
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authorized and issued, are fully paid and non-assessable and conform to
the description thereof contained in the Prospectus.
(h) All the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully
paid and nonassessable and, except to the extent set forth in the
Prospectus, are owned by the Company directly or indirectly through one
or more wholly-owned subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party.
(i) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets.
(j) Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby.
(k) KPMG LLP, who have expressed their opinions on the audited
financial statements and related schedules included or incorporated by
reference in the Registration Statements and the Prospectus are
independent public accountants as required by the Securities Act and
the Rules and Regulations.
(l) The financial statements, together with the related notes and
schedules, included or incorporated by reference in the Prospectus and
in each Registration Statement fairly present the financial position
and the results of operations and changes in financial position of the
Company and its consolidated subsidiaries at the respective dates or
for the respective periods therein specified. Such statements and
related notes and schedules have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
except as may be set forth in the Prospectus.
(m) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or
interference with its business from fire, explosion, flood
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or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and,
since such date, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus.
(n) Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, singularly or
in the aggregate, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its obligations
under this Agreement; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(o) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default in any respect, and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its property or
assets is subject or (iii) is in violation in any respect of any law,
ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject except any violations or defaults
which, singularly or in the aggregate, would not have a Material
Adverse Effect.
(p) The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate state, federal or
foreign regulatory agencies or bodies which are necessary or desirable
for the ownership of their respective properties or the conduct of
their respective businesses as described in the Prospectus, except
where any failures to possess or make the same, singularly or in the
aggregate, would not have a Material Adverse Effect, and the Company
has not received notification of any revocation or modification of any
such license, authorization or permit and has no reason to believe that
any such license, certificate, authorization or permit will not be
renewed.
(q) Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering of the Stock and the application of the proceeds
thereof as described in the Prospectus, will become an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended and the rules and regulations of the Commission thereunder.
(r) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate
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the price of any security of the Company, or which caused or resulted
in, or which might in the future reasonably be expected to cause or
result in, stabilization or manipulation of the price of any security
of the Company.
(s) The Company and its subsidiaries own or possess the right to use
all patents, trademarks, trademark registrations, service marks,
service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by them for the conduct of their respective businesses, and
the Company is not aware of any claim to the contrary or any challenge
by any other person to the rights of the Company and its subsidiaries
with respect to the foregoing. The Company's business as now conducted
and as proposed to be conducted does not and will not infringe or
conflict with any patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses or other intellectual property or
franchise right of any person. Except as described in the Prospectus,
no claim has been made against the Company alleging the infringement by
the Company of any patent, trademark, service xxxx, trade name,
copyright, trade secret, license in or other intellectual property
right or franchise right of any person.
(t) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use,
all items of real or personal property which are material to the
business of the Company and its subsidiaries taken as a whole, in each
case free and clear of all liens, encumbrances, claims and defects that
may result in a Material Adverse Effect.
(u) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to have a Material Adverse Effect. The
Company is not aware that any key employee or significant group of
employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary.
(v) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time (the "Code")) or "accumulated funding deficiency" (as defined
in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the 30-day
notice requirement under Section 4043 of ERISA has been waived) has
occurred with respect to any employee benefit plan which could have a
Material Adverse Effect; each employee benefit plan is in compliance in
all material respects with applicable law, including ERISA and the
Code; the Company has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of,
or withdrawal from, any "pension plan"; and each "pension plan" (as
defined in ERISA) for which the Company would have any liability that
is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could cause the loss of such
qualification.
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(w) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or
caused by the Company or any of its subsidiaries (or, to the best of
the Company's knowledge, any other entity for whose acts or omissions
the Company or any of its subsidiaries is or may be liable) upon any of
the property now or previously owned or leased by the Company or any of
its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or
permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or
liability which would not have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; there has
been no disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to
which the Company or any of its subsidiaries have knowledge, except for
any such disposal, discharge, emission, or other release of any kind
which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse Effect.
(x) The Company and its subsidiaries each (i) have filed with the
appropriate authorities all necessary federal, state and foreign income
and franchise tax returns, (ii) have paid all federal sate, local and
foreign taxes due and payable for which it is liable, and (iii) do not
have any tax deficiency or claims outstanding or assessed or, to the
best of the Company's knowledge, proposed against it which could
reasonably be expected to have a Material Adverse Effect.
(y) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(z) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(aa) The minute books of the Company and each of its subsidiaries have
been made available to the Underwriters and counsel for the
Underwriters, and such books (i) contain a complete summary of all
meetings and actions of the directors and shareholders of the Company
and each of its subsidiaries since the time of its respective
incorporation through the date of the latest meeting and action, and
(ii) accurately in all material respects reflect all transactions
referred to in such minutes.
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(bb) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or to be filed as an exhibit to the
Registration Statements which is not described or filed therein as
required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the Registration
Statements are accurate and complete descriptions of such documents in
all material respects.
(cc) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is
required to be described in the Prospectus and which is not so
described.
(dd) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statements or
otherwise, except for persons and entities who have expressly waived
such right or who have been given proper notice and have failed to
exercise such right within the time or times required under the terms
and conditions of such right.
(ee) Neither the Company nor any of its subsidiaries own any "margin
securities" as that term is defined in Regulations G and U of the Board
of Governors of the Federal Reserve System (the "Federal Reserve
Board"), and none of the proceeds of the sale of the Stock will be
used, directly or indirectly, for the purpose of purchasing or carrying
any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
(ff) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give
rise to a valid claim against the Company or the Underwriters for a
brokerage commission, finder's fee or like payment in connection with
the offering and sale of the Stock.
(gg) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in
the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(hh) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Company or any of its
subsidiaries will be affected by the Year 2000 Problem. As a result of
such review, the Company has no reason to believe, and does not
believe, that the Year 2000 Problem will have a Material Adverse
Effect. The "Year 2000 Problem" as used herein means any significant
risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of
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dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
(ii) The Stock is listed on the American Stock Exchange.
(II) REPRESENTATIONS AND WARRANTIES AND AGREEMENTS OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder severally represents and warrants to, and agrees with,
the several Underwriters that such Selling Shareholder:
(a) Has, and immediately prior to the Closing Date (as defined in
Section 3 hereof) the Selling Shareholder will have good and valid
title to the shares of Stock to be sold by such Selling Shareholder
hereunder on such date, free and clear of all liens, encumbrances,
equities or claims; and upon delivery of such shares and payment
therefor pursuant hereto, good and valid title to such shares, free and
clear of all liens, encumbrances, equities or claims, will pass to the
several Underwriters.
(b) Has duly and irrevocably executed and delivered a power of
attorney, in substantially the form heretofore delivered by the
Representatives (the "Power of Attorney"), appointing, [insert names of
attorneys-in-fact] and each of them, as attorney-in-fact (the
"Attorneys-in-fact") with authority to execute and deliver this
Agreement on behalf of such Selling Shareholder, to authorize the
delivery of the shares of Stock to be sold by such Selling Shareholder
hereunder and otherwise to act on behalf of such Selling Shareholder in
connection with the transactions contemplated by this Agreement.
(c) Has duly and irrevocably executed and delivered a custody
agreement, in substantially the form heretofore delivered by the
Representatives (the "Custody Agreement"), with [insert name of
custodian] as custodian (the "Custodian"), pursuant to which
certificates in negotiable form for the shares of Stock to be sold by
such Selling Shareholder hereunder have been placed in custody for
delivery under this Agreement.
(d) Has full right, power and authority to enter into this Agreement,
the Power of Attorney and the Custody Agreement; the execution,
delivery and performance of this Agreement, the Power of Attorney and
the Custody Agreement by such Selling Shareholders and the consummation
by such Selling Shareholders of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Shareholder is a party or
by which the Selling Shareholder is bound or to which any of the
property or assets of the Selling Shareholder is subject, nor will such
actions result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Selling Shareholder or the property or assets of
the Selling Shareholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters,
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no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement,
the Power of Attorney or the Custody Agreement by such Selling
Shareholder and the consummation by the Selling Shareholder of the
transactions contemplated hereby and thereby.
(e) The Registration Statements do not, and the Prospectus and any
further amendments or supplements to the Registration Statements or the
Prospectus will not, as of the applicable effective date (as to the
Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The preceding
sentence does not apply to information contained in or omitted from the
Registration Statements or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Shareholders
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Shareholders, that number of shares of Firm Stock (rounded up or
down, as determined by XX Xxxxx in its discretion, in order to avoid fractions)
obtained by multiplying _____ shares of Firm Stock in the case of the Company
and the number of shares of Firm Stock set forth opposite the name of such
Selling Shareholder in Schedule B hereto, in the case of a Selling Shareholder,
in each case by a fraction the numerator of which is the number of shares of
Firm Stock set forth opposite the name of such Underwriter in Schedule A hereto
and the denominator of which is the total number of shares of Firm Stock.
The purchase price per share to be paid by the Underwriters to the Company and
the Selling Shareholders for the Stock will be $_____ per share (the "Purchase
Price").
The Company and the Selling Shareholders will deliver the Firm Stock to the
Representatives for the respective accounts of the several Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York time, on the second full business day preceding
the Closing Date (as defined below) against payment of the aggregate Purchase
Price therefor by wire transfer to an account at a bank acceptable to XX Xxxxx,
payable to the order of the Company and [insert name of custodian], as Custodian
for the Selling Shareholders, all at the offices of __________. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligations of each Underwriter
hereunder. The time and date of the delivery and closing shall be at 10:00 A.M.,
New York time, on _______________, _____, in accordance with Rule 15c6-1 of the
Exchange Act. The time and date of such payment and delivery are herein referred
to as the "Closing Date". The Closing Date and the location of delivery of, and
the form of payment for, the Firm Stock may be varied by agreement among the
Company, the Selling Shareholders and XX Xxxxx.
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The Company and the Selling Shareholders shall make the certificates for the
Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York at least twenty-four hours prior to the
Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The
Company and the Selling Shareholders agree, severally and not jointly, to sell
to the Underwriters the respective numbers of shares of Optional Stock obtained
by multiplying the number of shares of Optional Stock specified in such notice
by a fraction, the numerator of which is 2,000,000 in the case of the Company
and the number of shares set forth opposite the names of such Selling
Shareholders in Schedule B hereto under the caption "Number of Optional Shares
to be Sold" in the case of the Selling Shareholders and the denominator of which
is the total number of shares of Optional Stock (subject to adjustment by XX
Xxxxx to eliminate fractions). Such shares of Optional Stock shall be purchased
from the Company and each Selling Shareholder for the account of each
Underwriter in the same proportion as the number of shares of Firm Stock set
forth opposite such Underwriter's name bears to the total number of shares of
Firm Stock (subject to adjustment by XX Xxxxx to eliminate fractions). The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
option granted hereby may be exercised as to all or any part of the Optional
Stock at any time, and from time to time, not more than thirty (30) days
subsequent to the date of this Agreement. No Optional Stock shall be sold and
delivered unless the Firm Stock previously has been, or simultaneously is, sold
and delivered. The right to purchase the Optional Stock or any portion thereof
may be surrendered and terminated at any time upon notice by XX Xxxxx to the
Company.
The option granted hereby may be exercised by written notice being given to the
Company by XX Xxxxx, setting forth the number of shares of the Optional Stock to
be purchased by the Underwriters and the date and time for delivery of and
payment for the Optional Stock. Each date and time for delivery of and payment
for the Optional Stock (which may be the Closing Date, but not earlier) is
herein called the "Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than five (5) business days after written notice
is given. (The Option Closing Date and the Closing Date are herein called the
"Closing Dates".)
The Company will deliver the Optional Stock to the Underwriters (in the form of
definitive certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York time, on the second full business day preceding the
Option Closing Date against payment of the aggregate Purchase Price therefor in
federal (same day) funds by certified or official bank check or checks or wire
transfer to an account at a bank acceptable to XX Xxxxx payable to the order of
[the Company] [and] [[insert name of custodian], as Custodian for the Selling
Shareholder(s)] all at the offices of _________. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligations of each Underwriter hereunder. The Company
shall make the certificates for the Optional Stock available to the
Representatives for examination on behalf of the Underwriters in New York, New
York not later than 10:00 A.M., New York Time, on the business day preceding the
Option Closing Date. The
12
Option Closing Date and the location of delivery of, and the form of payment
for, the Optional Stock may be varied by agreement between the Company and XX
Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the terms and
conditions set forth in the Prospectus.
4. (I) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters that:
(a) The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and file such Rule
462(b) Registration Statement with the Commission on the date hereof;
prepare the Prospectus in a form approved by the Representatives and
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the second business day following the execution and
delivery of this Agreement; make no further amendment or any supplement
to the Registration Statements or to the Prospectus prior to the Option
Closing Date to which the Representatives shall reasonably object by
notice to the Company after a reasonable period to review; advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to either Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with
copies thereof; file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Stock; advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statements or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, use
promptly its best efforts to obtain its withdrawal.
(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus
relating to the Stock is required to be delivered any event occurs as a
result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
to comply with the Securities Act or the Exchange Act, the Company will
promptly notify the Representatives thereof and upon their request will
prepare an amended or supplemented Prospectus or make an appropriate
filing pursuant to Section 13 or 14 of the Exchange Act which will
correct such statement or omission or effect
13
such compliance. The Company will furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of such
amended or supplemented Prospectus; and in case any Underwriter is
required to deliver a prospectus relating to the Stock nine months or
more after the effective date of the Initial Registration Statement,
the Company upon the request of the Representatives and at the expense
of such Underwriter will prepare promptly an amended or supplemented
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(c) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith.
(d) To deliver promptly to the Representatives in New York City such
number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statements
as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits), (ii) each Preliminary Prospectus, (iii)
the Prospectus (not later than 10:00 A.M., New York time, of the
business day following the execution and delivery of this Agreement)
and any amended or supplemented Prospectus (not later than 10:00 A.M.,
New York City time, on the business day following the date of such
amendment or supplement) and (iv) any document incorporated by
reference in the Prospectus (excluding exhibits thereto).
(e) To make generally available to its shareholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions as
the Representatives may reasonably request to qualify the Stock for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may designate and to continue such
qualifications in effect for so long as required for the distribution
of the Stock; provided that the Company and its subsidiaries shall not
be obligated to qualify as foreign corporations in any jurisdiction in
which they are not so qualified or to file a general consent to service
of process in any jurisdiction;
(g) During the period of five years from the date hereof, the Company
will deliver to the Representatives and, upon request, to each of the
other Underwriters, (i) as soon as they are available, copies of all
reports or other communications furnished to shareholders and (i) as
soon as they are available, copies of any reports and financial
statements furnished or filed with the Commission pursuant to the
Exchange Act or any national securities exchange or automatic quotation
system on which the Stock is listed or quoted.
14
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days from the date of
the Prospectus without the prior written consent of XX Xxxxx other than
the Company's sale of the Stock hereunder and the issuance of shares
pursuant to employee benefit plans, qualified stock option plans or
other employee compensation plans existing on the date hereof or
pursuant to currently outstanding options, warrants or rights.
(i) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(j) Prior to the Closing Date, the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company for
any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the Prospectus.
(k) Prior to the Closing Date, the Company will not issue any press
release or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of
which the Representatives are notified), without the prior written
consent of the Representatives, unless in the judgment of the Company
and its counsel, and after notification to the Representatives, such
press release or communication is required by law.
(l) In connection with the offering of the Stock, until XX Xxxxx shall
have notified the Company of the completion of the resale of the Stock,
the Company will not, and will cause its affiliated purchasers (as
defined in Regulation M under the Exchange Act) not to, either alone or
with one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial interest,
any Stock, or attempt to induce any person to purchase any Stock; and
not to, and to cause its affiliated purchasers not to, make bids or
purchase for the purpose of creating actual, or apparent, active
trading in or of raising the price of the Stock.
(m) The Company will not take any action prior to the Option Closing
Date which would require the Prospectus to be amended or supplemented
pursuant to Section 4(b);
(n) The Company will apply the net proceeds from the sale of the Stock
as set forth in the Prospectus under the heading "Use of Proceeds".
(II) FURTHER AGREEMENTS OF THE SELLING SHAREHOLDERS. The Selling Shareholders
agree with the several Underwriters that:
15
(a) They will not directly or indirectly offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for
Common Stock other than the sale of the Stock hereunder for a period of
90 days from the date of the Prospectus, without the prior written
consent of XX Xxxxx.
(b) The shares of Stock represented by the certificates held in custody
under the Custody Agreement are for the benefit of and coupled with and
subject to the interests of the Underwriters and the Selling
Shareholders, and the arrangement for such custody and the appointment
of the Attorneys-in-fact are irrevocable; the obligations of such
Selling Shareholders hereunder shall not be terminated by operation of
law, whether by the death or incapacity, liquidation or distribution of
such Selling Shareholders, or any other event, that if such Selling
Shareholders should die or become incapacitated or is liquidated or
dissolved or any other event occurs, before the delivery of the Stock
hereunder, certificates for the Stock to be sold by such Selling
Shareholders shall be delivered on behalf of such Selling Shareholders
in accordance with the terms and conditions of this Agreement and the
Custody Agreement, and action taken by the Attorneys-in-fact or any of
them under the Power of Attorney shall be as valid as if such death,
incapacity, liquidation or dissolution or other event had not occurred,
whether or not the Custodian, the Attorneys-in-fact or any of them
shall have notice of such death, incapacity, liquidation or dissolution
or other event.
(c) They will deliver to XX Xxxxx on or prior to the Closing Date a
properly completed and executed United States Treasury Department Form
W-8 (if the Selling Shareholder is a non-United States person) or Form
W-9 (if the Selling Shareholder is a United States person) or such
other applicable form or statement, if any, specified by Treasury
Department regulations in lieu thereof.
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriter to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the Registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement,
Preliminary Prospectus, Prospectus, any amendments and exhibits thereto or any
document incorporated by reference therein the costs of printing, reproducing
and distributing the Power of Attorney, the Custody Agreement, the "Agreement
Among Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and this Agreement
by mail, telex or other means of communications; (d) the fees and expenses
(including related fees and expenses of counsel for the Underwriters) incurred
in connection with filings made with the National Association of Securities
Dealers; (e) any applicable listing or other fees; (f) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 4(I)(f) and of preparing, printing and distributing Blue Sky
Memoranda and Legal Investment Surveys (including related fees and expenses of
counsel to the Underwriters); (g) all fees and expenses of the registrar and
transfer agent of the Stock; and (h) all other costs and expenses incident to
the performance of the obligations of the Company and of the Selling
Shareholders under this Agreement (including, without limitation, the fees and
expenses of the Company's counsel and
16
the Company's independent accountants); provided that, except as otherwise
provided in this Section 5 and in Section 10, the Underwriters shall pay their
own costs and expenses, including the fees and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on the
Closing Date, of the representations and warranties of the Company and the
Selling Shareholders contained herein, to the accuracy of the statements of the
Company and the Selling Shareholders made in any certificates pursuant to the
provisions hereof, to the performance by the Company and the Selling
Shareholders of their obligations hereunder, and to each of the following
additional terms and conditions:
(a) No stop order suspending the effectiveness of either of the
Registration Statements shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by the Commission,
and any request for additional information on the part of the
Commission (to be included in the Registration Statements or the
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Representatives. The Rule 462(b)
Registration Statement, if any, and the Prospectus shall have been
timely filed with the Commission in accordance with Section 4(I)(a).
(b) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Custody
Agreements, the Powers of Attorney, the Stock, the Registration
Statement and the Prospectus and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Shareholders shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx and Xxxx & Xxxxxx, LLP
shall have furnished to the Representatives such counsels' written
opinions, as counsel to the Company, addressed to the Underwriters and
dated the Closing Date, in form and substance reasonably satisfactory
to the Representatives, to the effect that:
(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective
17
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the
failure to so qualify or have such power or authority would not have,
singularly or in the aggregate, a Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company, including the Stock being delivered on the Closing Date, have
been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus.
(iii) All the outstanding shares of capital stock of each
material subsidiary of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and, except to the
extent set forth in the Prospectus, are owned by the Company directly
or indirectly through one or more wholly-owned subsidiaries, free and
clear of any claim, lien, encumbrance, security interest, restriction
upon voting or transfer or any other claim of any third party.
(iv) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel.
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel after reasonable investigation to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the Charter
or by-laws of the Company or of any of its subsidiaries or any statute
or any order, rule or regulation of any court or governmental agency or
body or court having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets.
(vii) Except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated hereby.
18
(viii) The statements in the Prospectus under the heading
"Certain Federal Income Tax Considerations", to the extent that they
constitute summaries of matters of law or regulation or legal
conclusions, have been reviewed by such counsel and fairly summarize
the matters described therein in all material respects.
(ix) The description in the Registration Statement and
Prospectus of statutes, legal or governmental proceedings and contracts
and other documents are accurate in all material respects; and to the
best of such counsel's knowledge, there are no statutes, legal or
governmental proceedings, contracts or other documents of a character
required to be described in the Registration Statement or Prospectus or
to be filed as exhibits to the Registration Statement which are not
described or filed as required.
(x) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries (i) is in violation of its charter
or by-laws, (ii) is in default, and no event has occurred, which, with
notice or lapse of time or both, would constitute a default, in the due
performance or observance of any term, covenant or condition contained
in any agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or (iii)
is in violation of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject or
has failed to obtain any license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership
of its property or to the conduct of its business except, in the case
of clauses (ii) and (iii), for those defaults, violations or failures
which, either individually or in the aggregate, would not have a
Material Adverse Effect.
(xi) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property or asset of the Company or any of its
subsidiaries is the subject which, singularly or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, might
have a Material Adverse Effect or would prevent or adversely affect the
ability of the Company to perform its obligations under this Agreement;
and, to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(xii) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion,
the Rule 462(b) Registration Statement, if any, was filed with the
Commission on the date specified therein, the Prospectus was filed with
the Commission pursuant to the subparagraph of Rule 424(b) of the Rules
and Regulations specified in such opinion on the date specified therein
and no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by the Commission.
(xiii) The Registration Statements, as of the respective
effective dates and the Prospectus, as of its date, and any further
amendments or supplements thereto, as
19
of their respective dates, made by the Company prior to the Closing
Date (other than the financial statements and other financial data
contained therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the requirements of
the Securities Act and the Rules and Regulations; and the documents
incorporated by reference in the Prospectus (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion), when they were filed with the Commission complied
as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission
thereunder.
(xiv) To the best of such counsel's knowledge, no person or
entity has the right to require registration of shares of Common Stock
or other securities of the Company because of the filing or
effectiveness of the Registration Statements or otherwise, except for
persons and entities who have expressly waived such right or who have
been given proper notice and have failed to exercise such right within
the time or times required under the terms and conditions of such
right.
(xv) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
and the rules and regulations of the Commission thereunder.
Each of such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation
of the Registration Statements, (y) based on such counsel's examination of the
Registration Statements and such counsel's investigations made in connection
with the preparation of the Registration Statements and "conferences with
certain officers and employees of and with auditors for and counsel to the
Company", such counsel has no reason to believe that (I) the Registration
Statements, as of the respective effective dates, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading or (II) any document incorporated by reference in the
Prospectus, when they were filed with the Commission contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading; it being understood that such counsel need
express no opinion as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus.
The foregoing opinion and statement may be qualified by a statement to the
effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and takes no responsibility therefor except to the
extent set forth in the opinion described in clauses (viii) and (ix) above.
20
(e) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx and Xxxx & Xxxxxx, LLP
shall have furnished to the Representatives such counsel's written
opinion, as counsel to the Selling Shareholders, addressed to the
Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) Each Selling Shareholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by each
Selling Shareholder and the consummation by each Selling Shareholder of
the transactions contemplated hereby and thereby will not conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any statute, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument known to such counsel to which any Selling Shareholder is a
party or by which any Selling Shareholder is bound or to which any of
the property or assets of any Selling Shareholder is subject, nor will
such actions result in any violation of any statute or any order, rule
or regulation known to such counsel of any court or governmental agency
or body having jurisdiction over any Selling Shareholder or the
property or assets of any Selling Shareholder; and, except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement, the Power of Attorney or the Custody Agreement by any
Selling Shareholder and the consummation by any Selling Shareholder of
the transactions contemplated hereby and thereby.
(ii) This Agreement has been duly executed and delivered by or
on behalf of each Selling Shareholder.
(iii) A Power-of-Attorney and a Custody Agreement have been
duly executed and delivered by each Selling Shareholder and constitute
valid and binding agreements of each Selling Shareholder.
(iv) Upon payment for, and delivery of, the shares of Stock to
be sold by each Selling Shareholder under this Agreement in accordance
with the terms hereof, the Underwriters will acquire good and valid
title to such shares, free and clear of all liens, encumbrances,
equities or claims.
(f) The Representatives shall have received from Xxxxx Raysman
Xxxxxxxxx Xxxxxx & Xxxxxxx LLP, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date, with respect to such
matters as the Underwriters may reasonably require, and the Company and
the Selling Shareholders shall have furnished to such counsel such
documents as they request for enabling them to pass upon such matters.
21
(g) At the time of the execution of this Agreement, the Representatives
shall have received from KPMG LLP a letter, addressed to the
Underwriters and dated such date, in form and substance satisfactory to
the Representatives, (i) confirming that they are independent certified
public accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the Rules and Regulations
and (ii) stating the conclusions and findings of such firm with respect
to the financial statements and certain financial information contained
or incorporated by reference in the Prospectus.
(h) On the Closing Date, the Representatives shall have received a
letter (the "bring-down letter") from KPMG LLP addressed to the
Underwriters and dated the Closing Date confirming, as of the date of
the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus as of a date not more than three
business days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter delivered to the
Representatives concurrently with the execution of this Agreement
pursuant to Section 6(g).
(i) The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating
that (i) such officers have carefully examined the Registration
Statements and the Prospectus and, in their opinion, the Registration
Statements as of their respective effective dates and the Prospectus,
as of each such effective date, did not include any untrue statement of
a material fact and did not omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (ii) since the effective date of the Initial Registration
Statement no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statements or the
Prospectus, (iii) to the best of their knowledge after reasonable
investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct and
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, and (iv) subsequent to the date of the most
recent financial statements included or incorporated by reference in
the Prospectus, there has been no material adverse change in the
financial position or results of operation of the Company and its
subsidiaries, or any change, or any development including a prospective
change, in or affecting the condition (financial or otherwise), results
of operations, business or prospects of the Company and its
subsidiaries taken as a whole, except as set forth in the Prospectus.
(j) Each Selling Shareholder or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Shareholders) shall have
furnished to the Representatives on the Closing Date a certificate,
dated such date, signed by, or on behalf of, the Selling Shareholder
stating that the representations, warranties and agreements of the
Selling Shareholder contained herein are true and correct as of the
Closing Date and that the Selling Shareholder has complied with all
agreements contained herein to be performed by the Selling Shareholder
at or prior to the Closing Date.
22
(k) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
business, general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Stock on the terms and in the manner
contemplated in the Prospectus.
(l) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Stock; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Stock.
(m) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange
or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by
any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities, (iii) the United States shall have become
engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the sale or delivery of
the Stock on the terms and in the manner contemplated in the
Prospectus.
(n) The American Stock Exchange, Inc. shall have approved the Stock for
inclusion, subject only to official notice of issuance.
(o) XX Xxxxx shall have received the written agreements, substantially
in the form of Exhibit I hereto, of the officers, directors and
shareholders of the Company listed in Schedule C to this Agreement.
23
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification by the Company. The Company shall indemnify and
hold harmless each Underwriter, its officers, employees,
representatives and agents and each person, if any, who controls any
Underwriter within the meaning of the Securities Act (collectively the
"Underwriter Indemnified Parties" and, each an "Underwriter Indemnified
Party") against any loss, claim, damage or liability, joint or several,
or any action in respect thereof, to which that Underwriter Indemnified
Party may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of
or is based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Prospectus, either of
the Registration Statements or the Prospectus or in any amendment or
supplement thereto, (ii) the omission or alleged omission to state in
any Preliminary Prospectus, either of the Registration Statement or the
Prospectus or in any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or failure to act, or any
alleged act or failure to act, by any Underwriter in connection with,
or relating in any manner to, the Stock or the offering contemplated
hereby, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall
not be liable in the case of any matter covered by this clause (iii) to
the extent that it is determined in a final judgement by a court of
competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such act or failure to act undertaken
or omitted to be taken by such Underwriter through its gross negligence
or willful misconduct), and shall reimburse each Underwriter
Indemnified Party promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter Indemnified Party in connection
with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from the
Preliminary Prospectus, either of the Registration Statements or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
use therein, which information the parties hereto agree is limited to
the Underwriters' Information (as defined in Section 17); provided
further, however, that the foregoing indemnification agreement with
respect to the Preliminary Prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased Securities, or any officers, employees,
representatives, agents or controlling persons of such Underwriter, if
(i) a copy of the Prospectus (as then amended or supplemented) was
required by law to be delivered to such person at or prior to the
written confirmation of the sale of Securities to
24
such person, (ii) a copy of the Prospectus (as then amended or
supplemented) excluding documents incorporated by reference therein was
not sent or given to such person by or on behalf of such Underwriter
and such failure was not due to non-compliance by the Company with
Section 4(I)(d), and (iii) the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability. This indemnity agreement is not exclusive
and will be in addition to any liability which the Company might
otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to each Underwriter
Indemnified Party.
(b) Indemnification by the Selling Shareholders. The Selling
Shareholders, jointly and severally, shall indemnify and hold harmless
each Underwriter Indemnified Party, against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus or in any
amendment or supplement thereto a material fact required to be stated
therein or necessary to make the statements therein not misleading and
shall reimburse each Underwriter Indemnified Party promptly upon demand
for any legal or other expenses reasonably incurred by that Underwriter
Indemnified Party in connection with investigating or preparing to
defend or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Selling
Shareholders shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of or is
based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from the Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for use therein, which information the
parties hereto agree is limited to the Underwriters' Information;
provided further, however, that the foregoing indemnification agreement
with respect to the Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such
loss, claim, damage or liability purchased Securities, or any officers,
employees, representatives, agents or controlling persons of such
Underwriter, if (i) a copy of the Prospectus (as then amended or
supplemented) was required by law to be delivered to such person at or
prior to the written confirmation of the sale of Securities to such
person, (ii) a copy of the Prospectus (as then amended or supplemented)
excluding documents incorporated by reference therein was not sent or
given to such person by or on behalf of such Underwriter and such
failure was not due to non-compliance by the Company with Section
4(I)(d), and (iii) the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or
liability. This indemnity agreement is not exclusive and will be in
addition to any liability which the Selling Shareholders might
otherwise have and shall not limit any rights or remedies which may
25
otherwise be available at law or in equity to each Underwriter
Indemnified Party. Notwithstanding anything in this Section 7(b) to the
contrary, the liability of any Selling Shareholder under this Section
7(b) shall not exceed the amount of the net proceeds received by such
Selling Shareholder from the sale of shares of Stock pursuant to this
Agreement.
(c) Indemnification by Each Underwriter. Each Underwriter, severally
and not jointly, shall indemnify and hold harmless the Company its
officers, employees, representatives and agents, each of its directors
and each person, if any, who controls the Company within the meaning of
the Securities Act (collectively the "Company Indemnified Parties" and
each a "Company Indemnified Party") and the Selling Shareholders, their
respective officers, employees, representatives and agents and each
person, if any, who controls the Selling Shareholders within the
meaning of the Securities Act (collectively, the "Shareholder
Indemnified Parties" and each a "Shareholder Indemnified Party"),
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company Indemnified Parties or
the Selling Shareholder Indemnified Parties may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto or (ii) 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, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of
that Underwriter specifically for use therein, and shall reimburse the
Company Indemnified Parties and the Selling Shareholder Indemnified
Parties for any legal or other expenses reasonably incurred by such
parties in connection with investigating or preparing to defend or
defending against or appearing as third party witness in connection
with any such loss, claim, damage, liability or action as such expenses
are incurred; provided that the parties hereto hereby agree that such
written information provided by the Underwriters consists solely of the
Underwriters' Information. This indemnity agreement is not exclusive
and will be in addition to any liability which the Underwriters might
otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to the Company Indemnified
Parties and Selling Shareholder Indemnified Parties.
(d) Notification and Defense. Promptly after receipt by an indemnified
party under this Section 8 of notice of any claim or the commencement
of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Section
8, notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 8 except to the extent it has been
materially prejudiced by such failure; and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than
under this Section
26
8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that any indemnified party shall have
the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have
been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to
employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated
in writing by XX Xxxxx, if the indemnified parties under this Section 8
consist of any Underwriter Indemnified Party, or by the Company if the
indemnified parties under this Section 8 consist of any Company
Indemnified Parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 8(a), 8(b) and 8(c), shall
use all reasonable efforts to cooperate with the indemnifying party in
the defense of any such action or claim. Subject to the provisions of
Section 8(e) below, no indemnifying party shall be liable for any
settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld, provided that in any
event consent may be withheld, without limitation, with respect to a
settlement which (i) does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such action or (ii) contains
an admission of guilt on behalf of such indemnified party), but if
settled with its written consent or if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(e) Settlement if no Reimbursement. If at any time an indemnified party
shall have requested that an indemnifying party reimburse the
indemnified party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any
27
settlement of the nature contemplated by this Section 8 effected
without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the request
for reimbursement, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(f) Contribution. If the indemnification provided for in this Section 8
is unavailable or insufficient to hold harmless an indemnified party
under Section 8(a), 8(b) or 8(c), then each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Selling Shareholder on the one
hand and the Underwriters on the other from the offering of the Stock
or if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Selling Shareholder on the one
hand and the Underwriters on the other with respect to the statements
or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other
with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters with respect to
the Stock purchased under this Agreement, 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 Shareholders on the one hand or
the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission; provided that the parties
hereto agree that the written information furnished to the Company
through the Representatives by or on behalf of the Underwriters for use
in any Preliminary Prospectus, either of the Registration Statements or
the Prospectus consists solely of the Underwriter's Information. The
Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Section 8(f) were to be 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 into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 8(f) shall be deemed to include, for purposes of this Section
8(f), any legal or other expenses reasonably incurred by such
indemnified party in connection with
28
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 8(f), no Underwriter shall be required
to contribute any amount in excess of the amount by which the total
price at which the Stock underwritten by it and distributed to the
public were offered to the public less the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason
of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The Underwriters' obligations to contribute as provided in this Section
8(f) are several in proportion to their respective underwriting
obligations and not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx, in its absolute discretion by notice given to and received by the
Company and the Selling Shareholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 6(k),
or 6(m) have occurred or if the Underwriters shall decline to purchase the Stock
for any reason permitted under this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall have
been terminated pursuant to Section 9 or 11, (b) the Company or any Selling
Stockholder shall fail to tender the Stock for delivery to the Underwriters for
any reason permitted under this Agreement, or (c) the Underwriters shall decline
to purchase the Stock for any reason permitted under this Agreement, the Company
and the Selling Shareholders shall reimburse the Underwriters for the fees and
expenses of their counsel and for such other out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the
proposed purchase of the Stock, and, upon demand, the Company and the Selling
Shareholders shall pay the full amount thereof to the XX Xxxxx. If this
Agreement is terminated pursuant to Section 11 by reason of the default of one
or more Underwriters, neither the Company nor any Selling Shareholders shall be
obligated to reimburse any defaulting Underwriter on account of those expenses.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required hereby or
agree to take up all or part of the shares of Stock of a defaulting Underwriter
or Underwriters as provided in this Section 11, (i) the Company and the Selling
Shareholders shall have the right to postpone the
29
Closing Dates for a period of not more than five (5) full business days in order
that the Company and the Selling Shareholders may effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Company, the Selling Shareholders or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 11 shall be without liability on the part of
any non-defaulting Underwriter, the Selling Shareholders or the Company, except
expenses to be paid or reimbursed pursuant to Sections 5 and 10 and except the
provisions of Section 8 shall not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company and the Selling Shareholders and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the persons mentioned in the preceding sentence any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Company and the Selling Shareholders contained in this Agreement shall also be
for the benefit of the Underwriter Indemnified Parties, and the indemnities of
the several Underwriters shall also be for the benefit of the Company
Indemnified Parties and the Selling Shareholder Indemnified Parties.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company, the Selling Shareholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Shareholders, the Company or any person controlling any of them and shall
survive delivery of and payment for the Stock.
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to SG Securities Corporation, Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000-0000, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy to: Xxxxx Raysman Xxxxxxxxx
Xxxxxx & Xxxxxxx LLP, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxxx Xxxxxxxx, Esq. (Fax: 000-000-0000);
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Audiovox Corporation, 000 Xxxxxx Xxxx.,
Xxxxxxxxx, XX 00000,
30
Attention: C. Xxxxxxx Xxxxxx (Fax: 000-000-0000), with a copy to:
_________________________________;
(c) if to any Selling Shareholders, shall be delivered or sent by mail,
telex or facsimile transmission to such Selling Shareholder at the
address set forth on Schedule B hereto; provided, however, that any
notice to an Underwriter pursuant to Section 8 shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at
its address set forth in its acceptance telex to the Representatives,
which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. and the American
Stock Exchange, Inc. are open for trading and (b) "subsidiary" has the meaning
set forth in Rule 405 of the Rules and Regulations.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the "Underwriters' Information" consists
solely of the following information in the Prospectus: (i) the last paragraph on
the front cover page concerning the terms of the offering by the Underwriters;
and (ii) the statements concerning the Underwriters contained in the
________________ and ____________ paragraphs in the Prospectus under the heading
"Underwriting."
17. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives, will be binding on all the
Underwriters; and any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Shareholders.
18. 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.
19. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Shareholders and the
Representatives.
31
20. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
Any person executing and delivering this Agreement as Attorney-in-fact for the a
Selling Shareholders represents by so doing that he has been duly appointed as
Attorney-in-fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-fact to take such
action.
32
If the foregoing is in accordance with your understanding of the agreement
between the Company, the Selling Shareholders and the several Underwriters,
kindly indicate your acceptance in the space provided for that purpose below.
Very truly yours,
AUDIOVOX CORPORATION
By:
--------------------------------------
Name:
Title:
SELLING SHAREHOLDERS
By: [Attorney-in-fact]
By:
--------------------------------------
[Attorney-in-fact]
Acting on his own behalf and on
behalf of the Selling Shareholders listed
in Schedule B.
Accepted as of
the date first above written:
XX XXXXX SECURITIES CORPORATION
XXXXXX XXXXXX & COMPANY, INC.
PRUDENTIAL SECURITIES INCORPORATED
LADENBURG XXXXXXXX & CO. INC.
Acting on their own behalf and as
Representatives of the several Underwriters
referred to in the
foregoing Agreement
By: XX XXXXX SECURITIES
CORPORATION
By:
--------------------------------------
Name:
Title:
33
SCHEDULE A
Number of Firm Number of
Shares to be Optional Shares
Name Purchased to be Purchased
---- -------------- ---------------
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxx & Company, Inc.
Prudential Securities Incorporated
Ladenburg Xxxxxxxx & Co. Inc.
========== =======
Total 3,100,000 465,000
========== =======
34
SCHEDULE B
Number of
Number of Firm Optional Shares
Selling Shareholders Shares to be Sold to be Sold
-------------------- ----------------- ----------------
[Name and address]
--------- -------
Total 1,100,000 165,000
========= =======
35
SCHEDULE C
[List of shareholders subject to Section 4(h)]
36
Exhibit I
[Form of Lock-Up Agreement]
[Date]
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxx & Company, Inc.
Ladenburg Xxxxxxxx & Co. Inc.
Prudential Securities Incorporated
As representatives of the several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Audiovox Corporation - Shares of Common Stock
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Dear Sirs:
In order to induce XX Xxxxx Securities Corporation ("XX Xxxxx"), Xxxxxx Xxxxxx &
Company, Inc., Prudential Securities Incorporated and Ladenburg Xxxxxxxx & Co.
Inc. (the "Representatives"), to enter in to a certain underwriting agreement
with Audiovox corporation, a Delaware corporation (the "Company"), with respect
to the public offering of shares of the Company's Common Stock, par value $.01
per share ("Common Stock"), the undersigned hereby agrees that for a period of
90 days following the date of the final prospectus filed by the Company with the
Securities and Exchange Commission in connection with such public offering, the
undersigned will not, without the prior written consent of XX Xxxxx, directly or
indirectly, offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of, any shares of Common Stock (including, without limitation,
Common Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations promulgated under the Securities Act
of 1933, as the same may be amended or supplemented from time to time (such
shares, the "Beneficially Owned Shares")) or securities convertible into or
exercisable or exchangeable in Common Stock.
Anything contained herein to the contrary notwithstanding, any person to whom
shares of Common Stock or Beneficially Owned Shares are transferred from the
undersigned shall be bound by the terms of this Agreement.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of legends and/or stop-transfer orders with the
transfer agent of the Common Stock with respect to any shares of Common Stock or
Beneficially Owned Shares.
[Signatory]
By:
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Name:
Title:
