1,528,550 SHARES
AXSYS TECHNOLOGIES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED OCTOBER [___], 1997
UNDERWRITING AGREEMENT
October [___], 1997
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
XXXXXX XXXX LLC
XXXXXXXXXXX & CO., INC.
c/o NATIONSBANC XXXXXXXXXX SECURITIES, INC.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Axsys Technologies, Inc., a Delaware corporation
(the "Company"), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of 1,064,809 shares of its Common
Stock, par value $0.01 per share (the "Common Stock"); and Xxxxxx Electric Inc.
(the "Selling Stockholder") proposes to sell to the Underwriters an aggregate of
463,741 shares of Common Stock. The 1,064,809 shares of Common Stock to be
issued and sold by the Company and the 463,741 shares of Common Stock to be sold
by the Selling Stockholder are collectively called the "Firm Common Shares". In
addition, the Company has granted to the Underwriters an option to purchase up
to an additional 229,283 shares of Common Stock (the "Optional Common Shares").
The Firm Common Shares and, if and to the extent such option is exercised, the
Optional Common Shares are collectively called the "Common Shares".
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-36027), which contains a form of prospectus to be used in
connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "Securities Act"),
including any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the Securities Act, is
called the "Registration Statement". Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the "Rule
462(b) Registration Statement", and from and after the date and time of filing
of the Rule 462(b) Registration Statement the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Such prospectus, in the
form first used by the Underwriters to confirm sales of the Common Shares, is
called the "Prospectus"; provided, however, if the Company has,
with the consent of NationsBanc Xxxxxxxxxx Securities, Inc., elected to rely
upon Rule 434 under the Securities Act, the term "Prospectus" shall mean the
Company's prospectus subject to completion (each, a "preliminary prospectus")
dated September 29, 1997 (such preliminary prospectus is called the "Rule 434
preliminary prospectus"), together with the applicable term sheet (the "Term
Sheet") prepared and filed by the Company with the Commission under Rules 434
and 424(b) under the Securities Act and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. All references in
this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus, the Prospectus or the Term Sheet, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX").
The Company and the Selling Stockholder hereby confirm their
respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The Registration Statement
and any Rule 462(b) Registration Statement have been declared effective
by the Commission under the Securities Act. The Company has complied to
the Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement is in effect and no proceedings for such purpose
have been instituted or are pending or, to the best knowledge of the
Company, are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to XXXXX (except as may be
permitted by Regulation S-T under the Securities Act), was identical to
the copy thereof delivered to the Underwriters for use in connection
with the offer and sale of the Common Shares. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and
at all subsequent times, complied and will comply in all material
respects with the Securities Act and did not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as amended or supplemented, as
of its date and at all subsequent times, did not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
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Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments
or supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by the Underwriters expressly for use therein. There are no
contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement which have not
been described or filed as required.
(b) Offering Materials Furnished to Underwriters. The Company has delivered
to each Underwriter one complete manually signed copy of the
Registration Statement and of each consent and certificate of experts
filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits) and preliminary prospectuses and the
Prospectus, as amended or supplemented, in such quantities and at such
places as each Underwriter has reasonably requested.
(c) Distribution of Offering Materials By the Company. The Company has not
distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Common Shares, any offering material in connection
with the offering and sale of the Common Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except
as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(e) Authorization of the Common Shares. The Common Shares to be purchased
by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement, will be validly
issued, fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement, except for
such rights as have been duly waived.
(g) No Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information
is given in the Prospectus: (i) there has been no material adverse
change, or any development that could reasonably be expected to result
in a material adverse change in the business, financial condition or
results of operations, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries,
considered as one entity (any such change is called a "Material Adverse
Change"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or
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obligation, indirect, direct or contingent, not in the ordinary course
of business nor entered into any material transaction or agreement not
in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of
any class of capital stock.
(h) Independent Accountants. Each of Xxxxxx Xxxxxxxx LLP and McGladrey &
Xxxxxx, LLP, has expressed its opinions with respect to the financial
statements (which term as used in this Agreement includes the related
notes thereto) filed with the Commission as a part of the Registration
Statement and included in the Prospectus, are independent public or
certified public accountants as required by the Securities Act and the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (collectively, the "Exchange Act").
(i) Preparation of the Financial Statements. The financial statements of
the Company filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as
of and at the dates indicated and the results of their operations and
cash flows for the periods specified. To the best of the Company's
knowledge, the consolidated financial statements of each of Precision
Aerotech, Inc. ("PAI") and Teletrac, Inc. ("Teletrac") filed with the
Commission as a part of the Registration Statement and included in the
Prospectus present fairly the consolidated financial position of each
of such entities and their subsidiaries as of and at the dates
indicated and the results of their operations and cash flows for the
periods specified. Such financial statements and supporting schedules
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial
data set forth in the Prospectus under the captions "Prospectus
Summary--Summary Consolidated Selected Financial Data", "Selected
Consolidated Financial Data" and "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the
audited financial statements contained in the Registration Statement.
The pro forma Condensed Statement of Operations of the Company and its
subsidiaries and the related notes thereto included in the Prospectus
and in the Registration Statement present fairly the information
contained therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly presented on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(j) Incorporation and Good Standing of the Company and its Material
Subsidiaries. Each of (i) the Company and (ii) Teletrac, PAI,
Speedring, Inc. and
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Speedring Systems, Inc. (each, a "Material Subsidiary") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and, in the
case of the Company, to enter into and perform its obligations under
this Agreement. Each of the Company and each Material Subsidiary is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually
or in the aggregate, result in a Material Adverse Change. All of the
issued and outstanding capital stock of each Material Subsidiary has
been duly authorized and validly issued, and is fully paid and
nonassessable. The Company owns, directly or through subsidiaries, 100%
of the issued and outstanding capital stock of each subsidiary, except
for Teletrac, of which the Company owns 85.6% of the issued and
outstanding capital stock, in each instance free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim, except
for such security interest granted to Banque Paribas ("BP"), as agent
on behalf of various banks pursuant to that certain Credit Agreement
dated as of April 25, 1996, as amended. The Company has binding and
enforceable rights to acquire all of the remaining outstanding shares
of Teletrac in exchange for an aggregate of 100,000 shares of Common
Stock of the Company. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Registration Statement and
subsidiaries that are inactive or immaterial to the Company's business,
financial condition or results of operations.
(k) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for
subsequent issuances, if any, pursuant to employee benefit plans
described in the Prospectus or upon exercise of outstanding options or
warrants or other rights granted to the minority stockholders of
Teletrac described in the Prospectus). The Common Stock (including the
Common Shares) conforms in all material respects to the description
thereof contained in the Prospectus. All of the issued and outstanding
shares of Common Stock (including the shares of Common Stock owned by
the Selling Stockholder) have been duly authorized and validly issued,
are fully paid and nonassessable and have been issued in compliance
with federal and state securities laws. None of the outstanding shares
of Common Stock were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock
of the Company or any of its subsidiaries other than those accurately
described in the Prospectus; and, with respect to preemptive rights,
rights of first refusal or other rights to purchase any capital stock
of the Company, there are no rights which have not been duly waived.
The description of the Company's stock option, stock bonus
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and other stock plans or arrangements, and the options or other rights
granted thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such
plans, arrangements, options and rights.
(l) Stock Exchange Listing. The Common Stock (including the Common Shares)
is registered pursuant to Section 12(g) of the Exchange Act and is
listed on the Nasdaq National Market, and the Company has taken no
action designed to terminate, or likely to have the effect of
terminating, the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq National Market, nor
has the Company received any notification that the Commission or the
National Association of Securities Dealers, Inc. (the "NASD") is
contemplating terminating such registration or listing.
(m) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is
in violation of its charter or by-laws or is in default (or, with the
giving of notice or lapse of time, would be in default) ("Default")
under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be
bound (including, without limitation, the Company's (i) Senior Secured
Credit Facility, as amended, and term loan with BP, as agent for the
several banks thereunder, and (ii) the industrial development revenue
bonds issued by The Industrial Development Authority of the State of
New Hampshire or any related indentures), or to which any of the
property or assets of the Company or any of its subsidiaries is subject
(each, an "Existing Instrument"), except for such Defaults as would
not, individually or in the aggregate, result in a Material Adverse
Change. The Company's execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby and
by the Prospectus (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions
of the charter or by-laws of the Company or any subsidiary, (ii) will
not conflict with or constitute a breach of, or Default or a Debt
Repayment Triggering Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant
to, or require the consent of any other party to, any Existing
Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate,
result in a Material Adverse Change and (iii) will not result in any
violation of any law, administrative regulation or administrative or
court decree applicable to the Company or any subsidiary. No consent,
approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or
agency, is required for the Company's execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been
obtained or made by the Company and are in full force and effect under
the Securities Act, applicable state securities or blue sky laws and
from the NASD. As used herein, a "Debt Repayment Triggering Event"
means any event or condition which gives, or with the giving of notice
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or lapse of time would give, the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any of its
subsidiaries.
(n) No Material Actions or Proceedings. Except as otherwise disclosed in
the Prospectus, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge,
threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which has as the subject thereof any officer or
director of, or property owned or leased by, the Company or any of its
subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility
that such action, suit or proceeding might be determined adversely to
the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No
material labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is
threatened or imminent. To the best of the Company's knowledge, no
material labor dispute exists, or is threatened or imminent, between
any principal supplier of the Company and such supplier's employees.
(o) Intellectual Property Rights. The Company and its subsidiaries own or
possess sufficient trademarks, trade names, patent rights, copyrights,
licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably necessary to
conduct their businesses as now conducted; and the expected expiration
of any of such Intellectual Property Rights would not result in a
Material Adverse Change. Neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would result in a
Material Adverse Change.
(p) All Necessary Permits, etc. The Company and each subsidiary possess
such valid and current certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct their respective businesses, except where
the failure to possess any such certificates, authorizations or permits
would not result in a Material Adverse Change, and neither the Company
nor any subsidiary has received any notice of proceedings relating to
the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change.
(q) Title to Properties. The Company and each of its subsidiaries has good
and marketable title to all the properties and assets reflected as
owned in the financial statements referred to in Section 1 (A) (i)
above (or elsewhere in the Prospectus), in each case free and clear of
any security interests, mortgages, liens, encumbrances, equities,
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claims and other defects, except such as do not materially interfere
with the use made or proposed to be made of such property by the
Company or such subsidiary. The real property, improvements, equipment
and personal property held under lease by the Company or any subsidiary
are held under valid and enforceable leases, with such exceptions as do
not materially interfere with the use made or proposed to be made of
such real property, improvements, equipment or personal property by the
Company or such subsidiary.
(r) Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns
and have paid all taxes required to be paid by any of them and, if due
and payable, any related or similar assessment, fine or penalty levied
against any of them, except for taxes, assessments, fines or penalties
that are the subject of good faith disputes provided that such
disputes, which, if determined against the Company, would not result in
a Material Adverse Change. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred
to in Section 1 (A) (i) above in respect of all federal, state and
foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been
finally determined.
(s) Company Not an "Investment Company". The Company is not, and after
receipt of payment for the Common Shares will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(t) Insurance. Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies
in such amounts and with such deductibles and covering such risks as
are deemed adequate for their businesses by the Company's management in
the exercise of their reasonable commercial judgment including, but not
limited to, policies covering (i) workers' compensation claims and (ii)
real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes. The Company has no reason to believe that it or any
subsidiary will not be able (i) to renew its existing insurance
coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not
result in a Material Adverse Change. Neither the Company nor any
subsidiary has been denied any insurance coverage which it has sought
or for which it has applied.
(u) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Common Shares.
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(v) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or
any other person required to be described in the Prospectus which have
not been described therein as required.
(w) No Unlawful Contributions or Other Payments. Neither the Company nor
any of its subsidiaries nor, to the best of the Company's knowledge,
any employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Prospectus.
(x) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(y) Compliance with Environmental Laws. Except as disclosed in the
Prospectus or as would not, individually or in the aggregate, result in
a Material Adverse Change (i) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
law or regulation relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products (collectively, "Materials
of Environmental Concern"), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environment Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its
subsidiaries under applicable Environmental Laws, or noncompliance with
the terms and conditions thereof, nor has the Company or any of its
subsidiaries received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that
alleges that the Company or any of its subsidiaries is in violation of
any Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, no investigation
with respect to which the Company has received written notice, and no
written notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based on or resulting from
the presence, or
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release into the environment, of any Material of Environmental Concern
at any location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, "Environmental
Claims"), pending or, to the best of the Company's knowledge,
threatened against the Company or any of its subsidiaries or any person
or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has retained or assumed either contractually or
by operation of law; and (iii) to the best of the Company's knowledge,
there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the
release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that reasonably could result in a violation of
any Environmental Law or form the basis of a potential Environmental
Claim against the Company or any of its subsidiaries or against any
person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law.
(z) Review of Costs and Liabilities of Environmental Compliance. In the
ordinary course of its business, the Company reviews the effect of
Environmental Laws on the business, operations and properties of the
Company and its subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-
up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). Except as
disclosed in the Prospectus, on the basis of such review and the amount
of its established reserves, the Company has reasonably concluded that
such associated costs and liabilities would not, individually or in the
aggregate, result in a Material Adverse Change.
(aa) ERISA Compliance. The Company and its subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company, its subsidiaries or their "ERISA Affiliates"
(as defined below) are in compliance in all material respects with
ERISA. "ERISA Affiliate" means, with respect to the Company or a
subsidiary, any member of any group of organizations described in
Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder
(the "Code") of which the Company or such subsidiary is a member. No
"reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit
plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have
any "amount of unfunded benefit liabilities" (as defined under ERISA).
Neither the Company, its subsidiaries nor any of their ERISA Affiliates
has incurred or reasonably expects to incur any material liability
under (i) Title IV of ERISA with respect to termination of, or
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withdrawal from, any "employee benefit plan" or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of
their ERISA Affiliates that is intended to be qualified under Section
401(a) of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such
qualification.
(bb) No Brokers or Finders. Other than as contemplated by this Agreement,
there is no broker, finder or other party that is entitled to receive
from the Company any brokerage or finder's fee or other fee or
commission as a result of any of the transactions contemplated by this
Agreement.
(cc) Compliance with Florida Law. The Company confirms as of the date hereof
that it is in material compliance with all provisions of Section 1 of
Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of doing
Business with Cuba, and the Company further agrees that if it commences
engaging in business with the government of Cuba or with any person or
affiliate located in Cuba after the date the Registration Statement
becomes or has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"), whichever date is
later, the Company will provide the Department notice of such business
in a form acceptable to the Department.
(dd) Teletrac Stockholder Agreement. The stockholder agreement (the
"Stockholder Agreement") by and between the Company and Xxxxx Xxxxxx,
Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxxx and Xxxxxx Xxxxxx (the
"Teletrac Stockholders") was duly executed and delivered on May 30,
1997, and created valid and binding obligations of each of the Teletrac
Stockholders to surrender all of their retained shares of Teletrac to
the Company in exchange for an aggregate of 100,000 shares of Common
Stock of the Company; the Stockholder Agreement remains in full force
and effect and the parties thereto are in full compliance with all
material obligations thereunder and such Stockholder Agreement is
enforceable against the Teletrac Stockholders in accordance with its
terms.
(ee) Bonus Plans. The Annual Incentive Plan and the Supplemental Revenue
Growth Incentive Plan are accurately described in the Prospectus and
each of such plans has been duly adopted by all necessary corporate
action. There are no other bonus plans which are required to be
disclosed in the Prospectus.
(ff) Proxy Solicitation. The proxy statement relating to certain amendments
to the Company's Certificate of Incorporation and certain amendments to
the Long-Term Stock Incentive Plan, each as described in the
Prospectus, has been duly filed with the Commission; the related proxy
solicitation of holders of Common Stock was conducted in accordance
with the rules and regulations of the Commission and the Nasdaq Stock
Market, Inc.; the requisite vote of holders of Common Stock to approve
each such
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corporate action has been obtained; and the amendment to the Company's
Certificate of Incorporation has been duly filed with the Secretary of
State of the State of Delaware.
(gg) Repurchase of Warrants. Each of CIT Group/Credit Finance, Inc., BP,
Paribas Principal, Inc. and DLJ First ESC L.L.C. (collectively, the
"Warrantholders") and the Company have agreed that, prior to, or
concurrently with, the delivery of the Firm Common Shares on the First
Closing Date, as hereinafter defined, the Company will repurchase all
of the warrants representing an aggregate of 314,809 shares of Common
Stock at a price per share subject to the respective warrant equal to
the excess of the purchase price per Firm Common Share (as set forth in
Section 2(a)) less the exercise price of such warrant. Upon such
repurchase, the Company will cancel all of the warrants previously held
by the Warrantholders. Each Letter Agreement dated October [ ], 1997 by
and between the Company and each of the respective Warrantholders
relating to the repurchase of the warrants by the Company has been duly
authorized, executed and delivered and is enforceable in accordance
with its terms.
(hh) Amendment to Credit Agreement. The Fourth Amendment to the Credit
Agreement among the Company and various financial institutions set
forth therein (the "Banks") for which BP serves as agent, which, among
other things, sets forth the Banks' consent to the amendment to the
Long-Term Stock Incentive Plan, and the amendment to the definition of
"Change of Control" has been duly authorized, executed and delivered
and is enforceable in accordance with its terms.
(ii) Compliance with Collective Bargaining Agreement. The Company is in
compliance in all material respects with the collective bargaining
agreement between the Company and the International Brotherhood of
Electrical Workers, AFL-CIO and its Local Union No. 108 (the "Union")
and the Company has no knowledge of any material dispute, either
pending, threatened, or imminent between the Company and the Union. The
Company and its subsidiaries are not subject to any other collective
bargaining agreement or similar contract with any other labor union or
organization.
(jj) Compliance with Federal Acquisition Regulations. The Company and its
subsidiaries are in compliance in all material respects with all rules
and regulations applicable to all solicitations, sales and purchases
under U.S. government contracts including, but not limited to, the
Federal Acquisition Regulations and supplements thereto.
Any certificate signed by an officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER. The Selling
Stockholder hereby represents, warrants and covenants to each
Underwriter as follows:
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(a) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by or on behalf of the Selling Stockholder and
is a valid and binding agreement of the Selling Stockholder,
enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except
as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(b) Title to Common Shares to be Sold; All Authorizations Obtained. The
Selling Stockholder has, and on the First Closing Date (as defined
below) will have, good and valid title to all of the Common Shares
which may be sold by the Selling Stockholder pursuant to this Agreement
on such date and the legal right and power, and all authorizations and
approvals required by law and under its charter or by-laws, partnership
agreement, or other governing or organizational documents, to enter
into this Agreement, to sell, transfer and deliver all of the Common
Shares which may be sold by the Selling Stockholder pursuant to this
Agreement and to comply with its other obligations hereunder and
thereunder.
(c) Delivery of the Common Shares to be Sold. Delivery of the Common Shares
which are sold by the Selling Stockholder pursuant to this Agreement
will pass good and valid title to such Common Shares, free and clear of
any security interest, mortgage, pledge, lien, encumbrance or other
claim.
(d) Non-Contravention; No Further Authorizations or Approvals Required. The
execution and delivery by the Selling Stockholder of, and the
performance by the Selling Stockholder of its obligations under, this
Agreement will not contravene or conflict with, result in a breach of,
or constitute a Default under, or require the consent of any other
party to, the charter or by-laws, partnership agreement, or other
governing or organizational documents of the Selling Stockholder or any
other agreement or instrument to which the Selling Stockholder is a
party or by which it is bound or under which it is entitled to any
right or benefit, any provision of applicable law or any judgment,
order, decree or regulation applicable to the Selling Stockholder of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Selling Stockholder. No
consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental authority or agency, is
required for the consummation by the Selling Stockholder of the
transactions contemplated in this Agreement, except such as have been
obtained or made and are in full force and effect under the Securities
Act, applicable state securities or blue sky laws and from the NASD.
(e) Disclosure Made by The Selling Stockholder in the Prospectus. All
information furnished by or on behalf of the Selling Stockholder in
writing expressly for use in the Registration Statement and Prospectus
is, and on the First Closing Date and the Second Closing Date will be,
true, correct, and complete in all material respects, and does
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not, and on the First Closing Date and the Second Closing Date will
not, contain any untrue statement of a material fact or omit to state
any material fact necessary to make such information not misleading.
The Selling Stockholder confirms as accurate the number of shares of
Common Stock set forth opposite the Selling Stockholder's name and
related footnote disclosure in the Prospectus under the caption
"Principal and Selling Shareholders" (both prior to and after giving
effect to the sale of the Common Shares). The Selling Stockholder is
not prompted to sell shares of Common Stock by any information
concerning the Company which is not set forth in the Registration
Statement and the Prospectus.
(f) No Price Stabilization or Manipulation. The Selling Stockholder has not
taken and will not take, directly or indirectly, any action designed to
or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Shares.
Any certificate signed by or on behalf of the Selling
Stockholder and delivered to the Underwriters or to counsel for the Underwriters
shall be deemed to be a representation and warranty by the Selling Stockholder
to each Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
(a) The Firm Common Shares. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an
aggregate of 1,064,809 Firm Common Shares and (ii) the Selling
Stockholder agrees to sell to the several Underwriters an aggregate of
463,741 Firm Common Shares. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but
subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Stockholder the respective number of Firm Common Shares set forth
opposite their names on Schedule A. The purchase price per Firm Common
----------
Share to be paid by the several Underwriters to the Company and the
Selling Stockholder shall be $[___] per share.
(b) The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall
be made at the offices of NationsBanc Xxxxxxxxxx Securities, Inc., 000
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such other place as
may be agreed to by the Company and the Underwriters) at 6:00 a.m. San
Francisco time, on [___],or such other time and date not later than
10:30 a.m. San Francisco time, on [___] as the Underwriters shall
designate by notice to the Company (the time and date of such closing
are called the "First Closing Date"). The Company and the Selling
Stockholder hereby acknowledge that circumstances under which the
Underwriters may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any
determination by the Company, the Selling Stockholder or the
Underwriters to recirculate
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to the public copies of an amended or supplemented Prospectus or a
delay as contemplated by the provisions of Section 10.
(c) The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set
forth, the Company hereby grants an option to the several Underwriters
to purchase, severally and not jointly, up to an aggregate of 229,283
Optional Common Shares from the Company at the purchase price per share
to be paid by the Underwriters for the Firm Common Shares. The option
granted hereunder is for use by the Underwriters solely in covering any
over-allotments in connection with the sale and distribution of the
Firm Common Shares. The option granted hereunder may be exercised at
any time (but not more than once) upon notice by the Underwriters to
the Company, which notice may be given at any time within 30 days from
the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters
are exercising the option, (ii) the names and denominations in which
the certificates for the Optional Common Shares are to be registered
and (iii) the time, date and place at which such certificates will be
delivered (which time and date may be simultaneous with, but not
earlier than, the First Closing Date; and in such case the term "First
Closing Date" shall refer to the time and date of delivery of
certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First
Closing Date, is called the "Second Closing Date" and shall be
determined by the Underwriters and shall not be earlier than three nor
later than five full business days after delivery of such notice of
exercise. If any Optional Common Shares are to be purchased, (a) each
Underwriter agrees, severally and not jointly, to purchase the number
of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Underwriters may determine) that bears the
same proportion to the total number of Optional Common Shares to be
purchased as the number of Firm Common Shares set forth on Schedule A
----------
opposite the name of such Underwriter bears to the total number of Firm
Common Shares and (b) the Company agrees to issue and sell such number
of Optional Common Shares as provided in the aforementioned notice from
the Underwriters. The Underwriters may cancel the option at any time
prior to its expiration by giving written notice of such cancellation
to the Company.
(d) Public Offering of the Common Shares. The Underwriters hereby advise
the Company and the Selling Stockholder that the Underwriters intend to
offer for sale to the public, as described in the Prospectus, their
respective portions of the Common Shares as soon after this Agreement
has been executed and the Registration Statement has been declared
effective as the Underwriters, in their sole judgment, have determined
is advisable and practicable.
(e) Payment for the Common Shares. Payment for the Common Shares to be sold
by the Company shall be made at the First Closing Date (and, if
applicable, at the Second Closing Date) by wire transfer of immediately
available funds to the order of the
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Company. Payment for the Common Shares to be sold by the Selling
Stockholder shall be made at the First Closing by wire transfer of
immediately available funds to the order of the Selling Stockholder.
It is understood that each Underwriter has been authorized,
for its own account, to accept delivery of and receipt for, and make
payment of the purchase price for, the Firm Common Shares and any
Optional Common Shares the Underwriters have agreed to purchase.
NationsBanc Xxxxxxxxxx Securities, Inc., individually and not as a
representative of the Underwriters, may (but shall not be obligated to)
make payment for any Common Shares to be purchased by any Underwriter
whose funds shall not have been received by NationsBanc Xxxxxxxxxx
Securities, Inc. by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
The Selling Stockholder hereby agrees that (i) it will pay all
stock transfer taxes, stamp duties and other similar taxes, if any,
payable upon the sale or delivery of the Common Shares to be sold by
the Selling Stockholder to the several Underwriters, or otherwise in
connection with the performance of the Selling Stockholder's
obligations hereunder and (ii) the Underwriters are authorized to
deduct for such payment any such amounts from the proceeds to the
Selling Stockholder hereunder and to hold such amounts for the account
of the Selling Stockholder.
(f) Delivery of the Common Shares. The Company and the Selling Stockholder
shall deliver, or cause to be delivered, to the Underwriters
certificates for the Firm Common Shares to be sold by them at the First
Closing Date, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price
therefor. The Company shall also deliver, or cause to be delivered, to
the Underwriters, certificates for the Optional Common Shares the
Underwriters have agreed to purchase from the Company at the First
Closing Date or the Second Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The certificates
for the Common Shares shall be in definitive form and registered in
such names and denominations as the Underwriters shall have requested
at least two full business days prior to the First Closing Date (or the
Second Closing Date, as the case may be) and shall be made available
for inspection on the business day preceding the First Closing Date (or
the Second Closing Date, as the case may be) at a location in New York
City as the Underwriters may designate. Time shall be of the essence,
and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the Common Shares are
released by the Underwriters for sale to the public, the Company shall
deliver or cause to be delivered
-16-
copies of the Prospectus in such quantities and at such places as the
Underwriters shall request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDER.
A. COVENANTS OF THE COMPANY. The Company further covenants and agrees with
each Underwriter as follows:
(a) Underwriters' Review of Proposed Amendments and Supplements. During
such period beginning on the date hereof and ending on the later of the
First Closing Date or such date, as in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be
delivered in connection with sales by an Underwriter or dealer (the
"Prospectus Delivery Period"), prior to amending or supplementing the
Registration Statement (including any registration statement filed
under Rule 462(b) under the Securities Act) or the Prospectus, the
Company shall furnish to the Underwriters for review a copy of each
such proposed amendment or supplement, and the Company shall not file
any such proposed amendment or supplement to which the Underwriters
reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Underwriters in writing (i) of the
receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any
filing of any post-effective amendment to the Registration Statement or
any amendment or supplement to any preliminary prospectus or the
Prospectus, (iii) of the time and date that any post-effective
amendment to the Registration Statement becomes effective and (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or of any order preventing or suspending the use of
any preliminary prospectus or the Prospectus, or of any proceedings to
remove, suspend or terminate from listing or quotation the Common Stock
from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or
initiation of any proceedings for any of such purposes. If the
Commission shall enter any such stop order at any time, the Company
will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b), 430A and 434, as
applicable, under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under such Rule
424(b) were received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities Act
Matters. If, during the Prospectus Delivery Period, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if in the opinion of the Underwriters or
-17-
counsel for the Underwriters it is otherwise necessary to amend or
supplement the Prospectus to comply with law, the Company agrees to
promptly prepare (subject to Section 3(A)(a) hereof), file with the
Commission and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to the Prospectus. The Company
agrees to furnish the Underwriters, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any
amendments and supplements thereto as the Underwriters may reasonably
request.
(e) Blue Sky Compliance. The Company shall cooperate with the Underwriters
and counsel for the Underwriters to qualify or register the Common
Shares for sale under (or obtain exemptions from the application of)
the state securities or Blue Sky laws or Canadian provincial securities
laws of those jurisdictions designated by the Underwriters, shall
comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the
distribution of the Common Shares. The Company shall not be required to
qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where
it is not presently qualified or where it would be subject to taxation
as a foreign corporation. The Company will advise the Underwriters
promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Common Shares for offering, sale or
trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at
the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Common Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall maintain, at its expense, a registrar
and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Underwriters an
earnings statement (which need not be audited) covering the
twelve-month period ending at the end of the Company's first fiscal
quarter that ends more than one year after the effectiveness of the
Registration Statement and satisfying the provisions of Section 11(a)
of the Securities Act.
-18-
(i) Periodic Reporting Obligations. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with the Commission all
reports and documents required to be filed under the Exchange Act.
(j) Agreement Not To Offer or Sell Additional Securities. During the period
of 120 days following the date of the Prospectus, the Company will not,
without the prior written consent of NationsBanc Xxxxxxxxxx Securities,
Inc. (which consent may be withheld at the sole discretion of
NationsBanc Xxxxxxxxxx Securities, Inc.), directly or indirectly, sell,
offer, contract or grant any option to sell, pledge, transfer or
establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of or transfer,
or announce the public offering of, or file any registration statement
under the Securities Act in respect of, any shares of Common Stock,
options or warrants to acquire shares of the Common Stock or securities
exchangeable or exercisable for or convertible into shares of Common
Stock (other than as contemplated by this Agreement with respect to the
Common Shares); provided, however, that the Company may register under
the Securities Act and applicable state securities laws and issue (i)
shares of its Common Stock or options to purchase its Common Stock, or
Common Stock upon exercise of options, pursuant to any stock option,
stock bonus or other stock plan or arrangement described in the
Prospectus, (ii) shares of its Common Stock or securities exchangeable
or exercisable for or convertible into shares of Common Stock pursuant
to an agreement by the Company to acquire the capital stock or assets
of another entity, but only if the holders of such shares, securities,
options, or shares issued upon the exercise of such options, or the
exchange, exercise or conversion of such securities agree in writing
not to sell, offer, dispose of or otherwise transfer any of such
securities during such 120-day period without the prior written consent
of NationsBanc Xxxxxxxxxx Securities, Inc. (which consent may be
withheld at the sole discretion of NationsBanc Xxxxxxxxxx Securities,
Inc.) or such shares, securities, options or shares issued upon
exchange, exercise or conversion are not transferable by their terms
within such 120-day period and (iii) shares of its Common Stock or
securities exchanged or exercisable for or convertible into shares of
Common Stock in connection with a merger, consolidation or other
business combination with any other person, or the acquisition of any
other person or its business, but in the case of a merger,
consolidation or business combination with any other person, where such
person does not have a class of equity securities registered under the
Exchange Act, only if the holders of such shares or securities agree in
writing not to sell, offer, dispose of or otherwise transfer any of
such securities during such 120-day period without the prior written
consent of NationsBanc Xxxxxxxxxx Securities, Inc. (which consent may
be withheld at the sole discretion of NationsBanc Xxxxxxxxxx
Securities, Inc.), or if such shares or securities issued upon
exchange, exercise or conversion are not transferable by their terms
within such 120-day period.
(k) Future Reports to the Underwriters. During the period of five years
hereafter the Company will furnish to the Underwriters at 000
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: Xxxxx XxXxxx (i)
as soon as practicable after the end of
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each fiscal year, copies of the Annual Report of the Company containing
the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the
year then ended and the opinion thereon of the Company's independent
public or certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report
on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K
or other report filed by the Company with the Commission, the NASD or
any securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of
its capital stock.
B. COVENANTS OF THE SELLING STOCKHOLDER. The Selling Stockholder further
covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. The Selling
Stockholder will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities, Inc. (which consent may be withheld in its sole
discretion), directly or indirectly, sell, offer, contract or grant any
option to sell (including without limitation any short sale), pledge,
transfer, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of any shares of Common Stock (other than the shares of Common Stock
offered hereby), options or warrants to acquire shares of Common Stock,
or securities exchangeable or exercisable for or convertible into
shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under Securities Exchange Act of
1934, as amended) by the undersigned, or publicly announce the
undersigned's intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of
trading on the date 120 days after the date of the Prospectus.
(b) Delivery of Forms W-8 and W-9. To deliver to the Underwriters prior to
the First Closing Date a properly completed and executed United States
Treasury Department Form W-8 (if the Selling Stockholder is a
non-United States person) or Form W-9 (if the Selling Stockholder is a
United States Person).
NationsBanc Xxxxxxxxxx Securities, Inc., on behalf of the
several Underwriters, may, in its sole discretion, waive in writing the
performance by the Company or the Selling Stockholder of any one or
more of the foregoing covenants.
SECTION 4. PAYMENT OF EXPENSES. The Company and the Selling Stockholder
severally agree to pay, in such proportions as they may agree upon among
themselves, all costs, fees and expenses incurred in connection with the
performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Common Shares (including all
printing and engraving costs), (ii) all fees and expenses of the registrar and
transfer agent of the Common Stock, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Common Shares
to the Underwriters, (iv) all fees and expenses of the Company's
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counsel, independent public or certified public accountants and other advisors,
(v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement
(including financial statements, exhibits, schedules, consents and certificates
of experts), each preliminary prospectus and the Prospectus, and all amendments
and supplements thereto, and this Agreement, (vi) all filing fees, attorneys'
fees and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the state securities or Blue Sky laws or the provincial securities laws of
Canada, and, if requested by the Underwriters, preparing and printing a "Blue
Sky Survey" or memorandum, and any supplements thereto, advising the
Underwriters of such qualifications, registrations and exemptions, (vii) the
filing fees incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Common
Shares, (viii) the fees and expenses associated with including the Common Shares
on the Nasdaq National Market, and (ix) all other fees, costs and expenses
referred to in Item 13 of Part II of the Registration Statement. Except as
provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Underwriters shall pay their own expenses, including the fees and disbursements
of their counsel.
The Selling Stockholder further agrees with each Underwriter
to pay (directly or by reimbursement) all fees and expenses incident to the
performance of its obligations under this Agreement which are not otherwise
specifically provided for herein, including but not limited to (i) fees and
expenses of counsel and other advisors for the Selling Stockholder, and (ii)
expenses and taxes incident to the sale and delivery of the Common Shares to be
sold by the Selling Stockholder to the Underwriters hereunder.
This Section 4 shall not affect or modify any separate, valid
agreement relating to the allocation of payment of expenses between the Company,
on the one hand, and the Selling Stockholder, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Stockholder set forth in Sections 1(A) and 1(B) hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Common Shares, as of the Second Closing Date as though
then made, to the timely performance by the Company and the Selling Stockholder
of their respective covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) Accountants' Comfort Letters. On the date hereof, the Underwriters
shall have received from (i) Xxxxxx Xxxxxxxx LLP, independent public or
certified public accountants for the Company and Teletrac and (ii)
either Xxxxxx Xxxxxxxx LLP or McGladrey & Xxxxxx, LLP (independent
public or certified public accountants for PAI) a
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letter dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Underwriters, containing statements and
information of the type ordinarily included in accountant's "comfort
letters" to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus
(and the Underwriters shall have received an additional five (5)
conformed copies of each such accountants' letter).
(b) Compliance with Registration Requirements; No Stop Order; No Objection
from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A
under the Securities Act) in the manner and within the time
period required by Rule 424(b) under the Securities Act; or
the Company shall have filed a post-effective amendment to the
Registration Statement containing the information required by
such Rule 430A, and such post-effective amendment shall have
become effective; or, if the Company elected to rely upon Rule
434 under the Securities Act and obtained the Underwriters'
consent thereto, the Company shall have filed a Term Sheet
with the Commission in the manner and within the time period
required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall
be in effect and no proceedings for such purpose shall have
been instituted or threatened by the Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change. For the period from and after the date of
this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, in the judgment of
the Underwriters there shall not have occurred any Material Adverse
Change.
(d) Opinion of Counsel for the Company. On each of the First Closing Date
and the Second Closing Date the Underwriters shall have received the
favorable opinion of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel
for the Company, dated as of such Closing Date, the form of which is
attached as Exhibit A (and the Underwriters shall have received an
additional five (5) conformed copies of such counsel's legal opinion).
(e) Opinion of Counsel for the Underwriters. On each of the First Closing
Date and the Second Closing Date the Underwriters shall have received
the favorable
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opinion of Xxxxxxxx Ingersoll, counsel for the Underwriters, dated as
of such Closing Date, the form of which is attached as Exhibit AA (and
the Underwriters shall have received an additional five (5) conformed
copies of such counsel's legal opinion).
(f) Officers' Certificate. On each of the First Closing Date and the Second
Closing Date the Underwriters shall have received a written certificate
executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief
Accounting Officer of the Company, dated as of such Closing Date, to
the effect set forth in subsection (b)(ii) of this Section 5, and
further to the effect that:
(i) for the period from and after the date of this Agreement and
prior to such Closing Date, there has not occurred any
Material Adverse Change;
(ii) the representations, warranties and covenants of the Company
set forth in Section 1 (A) of this Agreement are true and
correct with the same force and effect as though expressly
made on and as of such Closing Date; and
(iii) the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at
or prior to such Closing Date.
(g) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date, the Underwriters shall have received from (i)
Xxxxxx Xxxxxxxx LLP, independent public or certified public accountants
for the Company and Teletrac and (ii) either Xxxxxx Xxxxxxxx LLP or
McGladrey & Xxxxxx, LLP (independent public or certified public
accountants for PAI) a letter dated such date, in form and substance
satisfactory to the Underwriters, to the effect that they reaffirm the
statements made in the letter furnished by each of them pursuant to
subsection (a) of this Section 5, except that the specified date
referred to therein for the carrying out of procedures shall be no more
than three business days prior to the First Closing Date or Second
Closing Date, as the case may be (and the Underwriters shall have
received an additional five (5) conformed copies of each such
accountants' letter).
(h) Opinion of Counsel for the Selling Stockholder. On the First Closing
Date the Underwriters shall have received the favorable opinion of
counsel for the Selling Stockholder (Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx or such other counsel acceptable to the Underwriters), dated
as of the First Closing Date, the form of which is attached as Exhibit
B (and the Underwriters shall have received an additional five (5)
conformed copies of each of such counsel's legal opinion).
(i) Selling Stockholder's Certificate. On the First Closing Date the
Underwriters shall have received a written certificate executed by the
Selling Stockholder, dated as of such Closing Date, to the effect that:
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(i) the representations, warranties and covenants of the Selling
Stockholder set forth in Section 1(B) of this Agreement are
true and correct with the same force and effect as though
expressly made by the Selling Stockholder on and as of such
Closing Date; and
(ii) the Selling Stockholder has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied at or prior to such Closing Date.
(j) Selling Stockholder's Documents. On the date hereof, the Company and
the Selling Stockholder shall have furnished for review by the
Underwriters such information, certificates and documents as the
Underwriters may reasonably request.
(k) Lock-Up Agreements. On the date hereof, the Company shall have
furnished to the Underwriters an agreement in the form of Exhibit C
hereto from each director and executive officer of the Company, and
each such agreement shall be in full force and effect on each of the
First Closing Date and the Second Closing Date.
(l) Warrantholders' Certificate. On the First Closing Date, the Company
shall have furnished to the Underwriters a certificate executed by each
of the Warrantholders (i) representing that each Warrantholder has
received payment in full from the Company for the repurchase by the
Company of all of the warrants held by such Warrantholder and (ii)
acknowledging that such Warrantholder has no further rights, and the
Company has no further obligations, with respect to such warrants.
(m) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, the Underwriters and counsel for the
Underwriters shall have received such information, documents and
opinions as they may reasonably require for the purposes of enabling
them to pass upon the issuance and sale of the Common Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Underwriters by notice to the Company and the Selling Stockholder at any time on
or prior to the First Closing Date and, with respect to the Optional Common
Shares by notice to the Company at any time prior to the Second Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 4, Section 6, Section 8 and Section 9 shall at
all times be effective and shall survive such termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated by the Underwriters pursuant to Section 5, Section 7, Section 10,
Section 11 or Section 17, or if the sale to the Underwriters of the Common
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or the
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Selling Stockholder to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Underwriters (or such
Underwriters as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Underwriters in connection with the proposed purchase
and the offering and sale of the Common Shares, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges; provided that the Selling Stockholder shall
contribute only to the extent otherwise agreed as between the Company and the
Selling Stockholder.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not
become effective until the later of (i) the execution of this Agreement by the
parties hereto and (ii) notification by the Commission to the Company and the
Underwriters of the effectiveness of the Registration Statement under the
Securities Act.
Prior to such effectiveness, this Agreement may be terminated
by any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the
Selling Stockholder to any Underwriter, except that the Company shall be
obligated to reimburse the expenses of the Underwriters pursuant to Sections 4
and 6 hereof, (b) of any Underwriter to the Company or the Selling Stockholder,
or (c) of any party hereto to any other party except that the provisions of
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters.
(I) Indemnification by the Company. The Company
agrees to indemnify and hold harmless each Underwriter, its officers
and employees, and each person, if any, who controls any Underwriter
within the meaning of the Securities Act and the Exchange Act against
any loss, claim, damage, liability or expense, as incurred, to which
such Underwriter or such controlling person may become subject, under
the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A or Rule
434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or
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(ii) upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; or (iii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company
contained herein; or (iv) in whole or in part upon any failure of the
Company to perform its obligations hereunder or under law; or (v) any
act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the
Common 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 any matter covered by clause (i) or
(ii) above, provided that the Company shall not be liable under this
clause (v) to the extent that a court of competent jurisdiction shall
have determined by a final judgment that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its
gross negligence or willful misconduct; and to reimburse each
Underwriter and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by NationsBanc
Xxxxxxxxxx Securities, Inc.) as such expenses are reasonably incurred
by such Underwriter or such controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action; provided, however,
that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by
the Underwriters expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, that with respect to any
preliminary prospectus, the foregoing indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting
any loss, claim, damage, liability or expense purchased Common Shares,
or any person controlling such Underwriter, if copies of the Prospectus
were timely delivered to the Underwriter pursuant to Section 2 and a
copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Common Shares to such person, and if
the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage, liability or expense.
The indemnity agreement set forth in this Section 8(a)(I) shall be in
addition to any liabilities that the Company may otherwise have.
(II) Indemnification by the Selling Stockholder. The
Selling Stockholder agrees to indemnify and hold harmless each
Underwriter, its officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities Act and
the Exchange Act against any loss, claim, damage, liability or expense,
as incurred, to which such Underwriter or such controlling person may
become subject, under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company) insofar
as such loss, claim, damage, liability or expense (or actions in
respect thereof) arises out of or is based
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(i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule
430A or Rule 434 under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (ii) upon
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and to reimburse each Underwriter and each such
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by NationsBanc Xxxxxxxxxx Securities,
Inc.) as such expenses are reasonably incurred by such Underwriter or
such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that such
indemnification or reimbursement shall be available in each such case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information concerning the
Selling Stockholder furnished to the Company or such Underwriter by or
on behalf of the Selling Stockholder specifically for use in the
preparation thereof; provided, further, that the Selling Stockholder
shall not be liable pursuant to this Section 8(a)(II) with respect to
any untrue statement or alleged untrue statement or omission or alleged
omission in any Preliminary Prospectus which is corrected in a
Prospectus if the person asserting such loss, claim, damage or
liability purchased Shares from an Underwriter but was not sent or
given a copy of a Prospectus at or prior to the written confirmation of
the sale of such Shares to such person; and provided, further, that the
aggregate amount of all such indemnification or reimbursement payable
by the Selling Stockholder pursuant to this Section 8(a)(II) shall in
no case exceed the net proceeds (before deducting offering expenses) to
the Selling Stockholder from the sale of Common Stock. The indemnity
agreement set forth in this Section 8(a)(II) shall be in addition to
any liabilities that the Selling Stockholder may otherwise have. The
Selling Stockholder confirms that the statements with respect to it set
forth under the caption "Principal and Selling Shareholders" in any
Preliminary Prospectus and in the Prospectus are correct and constitute
the only written information furnished by or on behalf of the Selling
Stockholder.
(b) Indemnification of the Company, its Directors and Officers and the
Selling Stockholder. Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement,
the Selling Stockholder and each person, if any, who controls the
Company or the Selling Stockholder within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company, or any such director,
officer, the Selling Stockholder or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of
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any litigation, if such settlement is effected with the written consent
of such Underwriter), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises
out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto),
or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
the Registration Statement, any preliminary prospectus, the Prospectus
(or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company and the
Selling Stockholder by the Underwriters expressly for use therein; and
to reimburse the Company, or any such director, officer, Selling
Stockholder or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer,
Selling Stockholder or controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. Each of the Company
and the Selling Stockholder, hereby acknowledges that the only
information that the Underwriters have furnished to the Company and the
Selling Stockholder expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) are the statements set forth (A) as the last two
paragraphs on the inside front cover page of the Prospectus concerning
stabilization and passive market making by the Underwriters and (B) in
the table in the first paragraph and as the second, sixth and seventh
paragraphs under the caption "Underwriting" in the Prospectus; and the
Underwriters confirm that such statements are correct. The indemnity
agreement set forth in this Section 8(b) shall be in addition to any
liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified
party for contribution or otherwise than under the indemnity agreement
contained in this Section 8 or to the extent it is not prejudiced as a
proximate result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent that it
shall elect, jointly with all other indemnifying parties similarly
notified, by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a
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conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such
indemnifying party's election so to assume the defense of such action
and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 8
for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (NationsBanc Xxxxxxxxxx
Securities, Inc. in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise
or consent includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
action, suit or proceeding.
SECTION 9. CONTRIBUTION. If the indemnification provided for in Section
8 is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each
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indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder, on the one hand, and the Underwriters, on the other hand,
from the offering of the Common Shares pursuant to this Agreement or (ii) 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 Stockholder, on the one hand, and the Underwriters, on the other
hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Common Shares pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Common Shares pursuant to this Agreement
(before deducting expenses) received by the Company and the Selling Stockholder,
and the total underwriting discount received by the Underwriters, in each case
as set forth on the front cover page of the Prospectus (or, if Rule 434 under
the Securities Act is used, the corresponding location on the Term Sheet) bear
to the aggregate initial public offering price of the Common Shares as set forth
on such cover. The relative fault of the Company and the Selling Stockholder, on
the one hand, and the Underwriters, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company or the Selling Stockholder, on
the one hand, or the Underwriters, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 9.
Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting commissions received by such
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Underwriter in connection with the Common Shares underwritten by it and
distributed to the public. 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 pursuant to this
Section 9 are several, and not joint, in proportion to their respective
underwriting commitments as set forth opposite their names in Schedule A. For
purposes of this Section 9, each officer and employee of an Underwriter and each
person, if any, who controls an Underwriter within the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act and the Exchange Act shall have
the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the non-defaulting Underwriters, to purchase the Common Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date. If, on the First Closing Date or the Second Closing
Date, as the case may be, any one or more of the Underwriters shall fail or
refuse to purchase Common Shares and the aggregate number of Common Shares with
respect to which such default occurs exceeds 10% of the aggregate number of
Common Shares to be purchased on such date, and arrangements satisfactory to the
non-defaulting Underwriters and the Company for the purchase of such Common
Shares are not made within 48 hours after such default, this Agreement shall
terminate without liability of any party to any other party except that the
provisions of Section 4, Section 6, Section 8 and Section 9 shall at all times
be effective and shall survive such termination. In any such case either the
non-defaulting Underwriters or the Company shall have the right to postpone the
First Closing Date or the Second Closing Date, as the case may be, but in no
event for longer than seven days in order that the required changes, if any, to
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date this Agreement may be terminated by the Underwriters by notice given to the
Company and the
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Selling Stockholder if at any time (i) trading or quotation in any of the
Company's securities shall have been suspended or limited by the Commission or
by the Nasdaq Stock Market, or trading in securities generally on either the
Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York,
Delaware or California authorities; (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in United States' or international political, financial or economic
conditions, as in the judgment of the Underwriters is material and adverse and
makes it impracticable to market the Common Shares in the manner and on the
terms described in the Prospectus or to enforce contracts for the sale of
securities; (iv) in the judgment of the Underwriters there shall have occurred
any Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Underwriters may interfere materially with the conduct of
the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company or the Selling Stockholder
to any Underwriter, except that the Company and the Selling Stockholder shall be
obligated to reimburse the expenses of the Underwriters pursuant to Sections 4
and 6 hereof, (b) any Underwriter to the Company or the Selling Stockholder, or
(c) of any party hereto to any other party except that the provisions of Section
8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholder and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholder, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Underwriters:
NationsBanc Xxxxxxxxxx Securities, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
-32-
with copies to:
NationsBanc Xxxxxxxxxx Securities, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
and
Xxxxxxxx Ingersoll
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to the Company:
Axsys Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
If to the Selling Stockholder:
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
-33-
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Any party hereto may change the address for receipt of
communications by giving written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and personal representatives, and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS AND OTHER MATTERS.
(a) Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(b) Consent to Jurisdiction. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts
of the United States of America located in the City and County of San
Francisco or the courts of the State of California in each case located
in the City and County of San Francisco (collectively, the "Specified
Courts"), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as
to which such jurisdiction is non-exclusive) of such courts in any such
suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be
effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit,
action or other
-34-
proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such
suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum. Each party not located in the United
States irrevocably appoints CT Corporation System, which currently
maintains a San Francisco office at 00 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America, as its agent to receive
service of process or other legal summons for purposes of any such
suit, action or proceeding that may be instituted in any state or
federal court in the City and County of San Francisco.
(c) Waiver of Immunity. With respect to any Related Proceeding, each party
irrevocably waives, to the fullest extent permitted by applicable law,
all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, service of process, attachment (both before and after
judgment) and execution to which it might otherwise be entitled in the
Specified Courts, and with respect to any Related Judgment, each party
waives any such immunity in the Specified Courts or any other court of
competent jurisdiction, and will not raise or claim or cause to be
pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any
immunity pursuant to the United States Foreign Sovereign Immunities Act
of 1976, as amended.
SECTION 17. FAILURE OF THE SELLING STOCKHOLDER TO SELL AND DELIVER
COMMON SHARES. If the Selling Stockholder shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by the selling
stockholder at the First Closing Date pursuant to this agreement, then the
Underwriters may at their option, by written notice from the Underwriters to the
Company and the Selling Stockholder, either (i) terminate this Agreement without
any liability on the part of any Underwriter or, except as provided in Sections
4, 6, 8 and 9 hereof, the Company or the Selling Stockholder, or (ii) purchase
the shares which the Company has agreed to sell and deliver in accordance with
the terms hereof. If the Selling Stockholder shall fail to sell and deliver to
the Underwriters the Common Shares to be sold and delivered by the Selling
Stockholder pursuant to this Agreement at the First Closing Date, then the
Underwriters shall have the right, by written notice from the Underwriters to
the Company and the Selling Stockholder, to postpone the First Closing Date, but
in no event for longer than seven days in order that the required changes, if
any, to the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
-35-
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
* * * * * * * * * *
-36-
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to the Company and the Selling Stockholder
the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its
terms.
Very truly yours,
AXSYS TECHNOLOGIES, INC.
By:
-----------------------------------------
Name:
Title:
SELLING STOCKHOLDER
XXXXXX ELECTRIC INC.
By:
-----------------------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Underwriters in San Francisco, California as of the date first above
written.
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
XXXXXX XXXX LLC
XXXXXXXXXXX & CO., INC.
By: NATIONSBANC XXXXXXXXXX SECURITIES, INC.
By:
------------------------------------
-37-
SCHEDULE A
NUMBER OF FIRM COMMON
UNDERWRITERS SHARES TO BE PURCHASED
NationsBanc Xxxxxxxxxx Securities, Inc. ............... [___]
Xxxxxx Xxxx LLC........................................ [___]
Xxxxxxxxxxx & Co., Inc................................. [___]
---------
Total......................................... 1,528,550
EXHIBIT (1)(a)
OPINION OF FRIED, FRANK, HARRIS, XXXXXXX & XXXXXXXX
AS COUNSEL TO THE COMPANY
Opinion of counsel for the Company to be delivered to the Underwriters
pursuant to Section 5(d) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
---------
thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has the corporate power and authority to own or lease
its properties and to conduct its business substantially as described in the
Prospectus, and to enter into and perform its obligations under the Underwriting
Agreement.
(iii) The Company is qualified to transact business and is in good
standing in each of the following jurisdictions: California, Florida, New
Hampshire, New Jersey, New York and Texas.
(iv) Each of Precision Aerotech, Inc., Speedring, Inc., Speedring
Systems, Inc. and Teletrac, Inc., is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation in the jurisdictions set forth on Annex A hereto.
(v) All of the issued and outstanding capital stock of Precision
Aerotech, Inc. has been duly authorized and validly issued and is fully paid and
non-assessable. All of the issued and outstanding capital stock of each of
Precision Aerotech, Inc., Speedring, Inc. and Speedring Systems, Inc. is owned
of record by the Company directly or through subsidiaries, to our knowledge,
free and clear of all security interests, liens, encumbrances, equities or other
adverse claim except for the security interest of the lenders under the
Company's Senior Secured Credit Facility.
(vi) All of the issued and outstanding capital stock of Teletrac,
Inc., which consists of 207,815 shares of common stock, no par value, has been
duly authorized and validly issued and is fully paid and non-assessable.
177,935 shares of the issued and outstanding capital stock of Teletrac, Inc., is
owned of record by the Company directly or through subsidiaries, to our
knowledge, free and clear of all security interests, liens, encumbrances,
equities or other adverse claim except for the security interest of the lenders
under the Company's Senior Secured Credit Facility.
(vii) The Company has authorized capital stock as set forth under the
caption "Capitalization" in the Prospectus. The outstanding shares of Common
Stock issued pursuant to the Company's exchange of its outstanding Preferred
Stock consummated in March 1997 have been duly authorized and validly issued,
and are fully paid and nonassessable.
(viii) The certificates for the Common Stock to be delivered to the
Underwriters under the Underwriting Agreement are in due and proper form and
comply with the applicable requirements of the Company's Certificate of
Incorporation (the "Certificate"), the Company's Bylaws (the "Bylaws"), and the
Delaware General Corporation Law (the "DGCL").
(ix) Neither the DGCL, the Certificate nor the Bylaws creates any
preemptive or similar rights in favor of stockholders with respect to the
issuance or sale of the Common Stock. To the best of our knowledge, no
stockholder of the Company or any other person has any such preemptive or
similar rights which have not been waived.
(x) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
(xi) The Primary Shares (and the Optional Shares to be sold by the
Company if the over-allotment option is exercised) have been duly authorized for
issuance and sale pursuant to the Underwriting Agreement and, when issued,
delivered and paid for in accordance with the terms of the Underwriting
Agreement, will be validly issued, fully paid and non-assessable. The Secondary
Shares are validly issued, fully paid and non-assessable.
(xii) Each of the Registration Statement [and the Rule 462(b)
Registration Statement], has become effective under the Securities Act of 1933,
as amended (the "Act"); to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or threatened by the Commission. Any
required filing of the Prospectus [and any supplement thereto] pursuant to Rule
424(b) under the Act has been made in the manner and within the time period
required by Rule 424(b).
(xiii) The Registration Statement, [including any Rule 462(b)
Registration Statement] and the Prospectus [and each amendment or supplement to
the Registration Statement and the Prospectus] (except for the financial
statements, schedules, and notes thereto and other financial and statistical
data included therein or omitted therefrom, as to which we do not express any
opinion), as of their respective effective or issue date, as the case may be,
appeared on their face to be responsive as to form in all material respects to
the requirements of the Act.
(xiv) The Primary Shares and Optional Shares have been approved for
listing on the Nasdaq National Market.
(xv) The statements made in the Prospectus under the captions
"Description of Capital Stock" (other than under the subheadings " Warrants," "
Registration Rights" and " Transfer Agent and Registrar") to the extent such
statements constitute summaries of documents referred to therein or summaries of
legal matters or legal conclusions, fairly present the information disclosed
therein in all material respects, provided, however, that we express no opinion
-------- -------
as to the number of shares of Common Stock outstanding following the Offering,
the number of shares of Common Stock issuable upon exercise of outstanding
options following the Offering, the number of holders of the Company's Common
Stock prior to the consummation of the Offering, and, except as provided in
paragraph 11 above, whether upon consummation of the Offering all of the then
outstanding shares of Common Stock will be validly issued, fully paid and non-
assessable.
(xvi) No consent, approval, authorization or order of, or registration
or filing with, any United States Federal, New York or Delaware court or
governmental agency is required on the part of the Company for the delivery of
the Underwriting Agreement and for the valid issuance and sale of the Primary
Shares and the Optional Shares (if the over-allotment option is exercised) to
the Underwriters as contemplated by the Underwriting Agreement, except (a) as
have been obtained, filed or made under the Act, the Securities Exchange Act of
1934, as amended, or the DGCL or (b) as may be required by the NASD or under
state securities or blue sky laws.
(xvii) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting Agreement
(other than performance by the Company of its obligations under the
indemnification and contribution provisions of the Underwriting Agreement, as to
which we do not express any opinion), do not violate (i) any material provision
of present law or present regulation of any governmental agency or authority of
the United States or the State of New York or the DGCL; (ii) any provision of
the Certificate or the Bylaws of the Company; (iii) any agreement or other
instrument binding upon the Company or its subsidiaries that is filed as an
exhibit to or incorporated by reference in the Registration Statement; or (iv)
any judgment, order or decree of any governmental body, agency or court of the
United States or Delaware (as it relates to the DGCL) binding upon the Company
or its properties and set forth in the Officer's Certificate attached hereto as
Annex B; provided, however, that we express no opinion with respect to any
------- -------- -------
violation, conflict, breach or default not ascertainable from the text of any
such agreement, instrument, judgment, order or decree, or arising under or based
upon any cross-default provision insofar as such violation relates to a default
under an agreement that is not an exhibit to the Registration Statement or such
violation arises under or is based upon any covenant of a financial or numerical
nature or which requires arithmetic computation and provided, further, that we
-------- -------
express no opinion in this paragraph with respect to the federal securities laws
or any state securities or blue sky laws.
(xviii) The Company is not, and will not be, as a result of the
transactions contemplated by the Underwriting Agreement, and application of the
net proceeds therefrom as
described in the Prospectus, required to register as an investment company
under the Investment Company Act of 1940, as amended.
(xix) Except as disclosed in the Prospectus under the captions
"Description of Capital Stock" and "Shares Eligible for Future Sale" to our
knowledge, there are no persons with registration or other similar rights to
have any equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by the Underwriting
Agreement, except for such rights as have been duly waived.
(xx) Assuming that the Underwriters purchase the Secondary Shares to
be delivered at the First Closing Date for value and without notice of any
adverse claim as such term is used in Section 8-105 of the Uniform Commercial
Code as currently in effect in the State of New York, the delivery of
certificates representing such Secondary Shares either registered in the name of
the Underwriters or effectively endorsed to the Underwriters or in blank will
pass to the Underwriters all rights that the transferor has in such Secondary
Shares, free and clear of all adverse claims.
(xxi) Assuming that the stockholder agreement dated May 30, 1997
between and among the Company and certain minority shareholders of Teletrac (the
"Stockholder Agreement"), including any spousal consents, were duly authorized
and validly executed by the parties thereto (other than the Company), the
Stockholder Agreement constitutes a legal, valid and binding obligation of the
parties thereto, enforceable in accordance with its terms.
The opinions expressed in paragraphs (x) and (xxi) are subject to the
effect of bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or similar laws from time to time in effect affecting creditors'
rights generally and subject to the effect of general principles of equity
(including, without limitation, standards of materiality, good faith, fair
dealing, reasonableness, equitable defenses and limits as to the availability of
equitable defenses), whether applied by a court of law or equity, and except as
rights to indemnity and contribution thereunder may be limited by applicable
law, statutory duties or public policy.
In addition, in the course of the preparation by the Company of the
Registration Statement and the Prospectus, we participated in conferences with
certain of the officers and representatives of, and the independent public
accountants for, the Company, at which the Registration Statement and the
Prospectus were discussed. Between the date of effectiveness of the
Registration Statement and the time of delivery of this letter, we participated
in additional conferences with certain of the officers and representatives of,
and the independent public accountants for, the Company, at which the contents
of the Prospectus were discussed to a limited extent. Given the limitations
inherent in the independent verification of factual matters and the character of
determinations involved in the registration process, we are not passing upon or
assuming any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, except to
the extent set forth in the opinion in paragraphs 7 and 15 above. Subject to
the foregoing and on the basis of the information gained in the performance of
the services referred to above, including information obtained from officers and
other representatives of, and the independent public accountants for, the
Company, no facts have come to our attention that cause us to believe that the
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading or
that the Prospectus, as of its date, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Also, subject to the foregoing, no facts have come to our
attention in the course of proceedings described in the second sentence of this
paragraph that cause us to believe that the Prospectus, as of the date and time
of delivery of this letter, contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading. We express no view or belief, however, with
respect to financial statements, schedules or notes thereto or other financial
and statistical data included in or omitted from the Registration Statement or
Prospectus.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the laws of the State of New York or
the federal law of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion (which shall be dated the First
Closing Date or the Second Closing Date, as the case may be, shall be
satisfactory in form and substance to the Underwriters, shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to them
and shall be furnished to the Underwriters) of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall further state that they
believe that they and the Underwriters are justified in relying upon such
opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.
EXHIBIT AA
OPINION OF XXXXXXXX XXXXXXXXX
AS COUNSEL TO THE UNDERWRITERS
Opinion of counsel for the Underwriters to be delivered to the
Underwriters pursuant to Section 5(e) of the Underwriting Agreement.
References to the Prospectus in this Exhibit AA include any
----------
supplements thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Delaware.
(ii) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar
right to subscribe for or purchase securities of the Company
arising by operation of the charter or by-laws of the Company
or the General Corporation Law of the State of Delaware.
(iii) The Underwriting Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms, except as
rights to indemnification thereunder may be limited by
applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles.
(iv) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale
pursuant to the Underwriting Agreement and, when issued and
delivered by the Company pursuant to the Underwriting
Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable.
(v) Each of the Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by
the Commission under the Securities Act. To the best knowledge
of such counsel, no stop order suspending the effectiveness of
either of the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued under the
Securities Act and no proceedings for such purpose have been
instituted or are pending or are contemplated or threatened by
the Commission. Any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus, and each amendment or
supplement to the Registration Statement and the Prospectus,
as of their respective effective or issue dates (other than
the financial statements and supporting schedules included
therein or in exhibits to or excluded from the Registration
Statement, as to which no opinion need be rendered) comply as
to form in all material respects with the applicable
requirements of the Securities Act.
(vii) The Common Shares have been approved for listing on the Nasdaq
National Market.
(viii) The statements in the Prospectus under the captions "Risk
Factors--Control of Company", "--Effect of Certain Anti-
Takeover Provisions," "Business--Environmental Regulations",
"Business--Legal Proceedings", "Management--401(k) Plan," "--
Stock Incentive Plan," "Description of Capital Stock," "Shares
Eligible for Future Sale" and "Underwriting," insofar as such
statements constitute matters of law, summaries of legal
matters, the Company's charter or by-law provisions, documents
or legal proceedings, or legal conclusions, has been reviewed
by such counsel and fairly present and summarize, in all
material respects, the matters referred to therein.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public or certified public
accountants for the Company and with the Underwriters at which the contents of
the Registration Statement and the Prospectus, and any supplements or amendments
thereto, and related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than as specified above), and any supplements
or amendments thereto, on the basis of the foregoing, nothing has come to their
attention which would lead them to believe that either the Registration
Statement or any amendments thereto, at the time the Registration Statement or
such amendments became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus,
as of its date or at the First Closing Date or the Second Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief as to the financial
statements or schedules or other financial or statistical data derived
therefrom, included in the Registration Statement or the Prospectus or any
amendments or supplements thereto).
AA-2
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
General Corporation Law of the State of Delaware, the laws of the State of New
York or the federal law of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion (which shall be dated the First
Closing Date or the Second Closing Date, as the case may be, shall be
satisfactory in form and substance to the Underwriters, shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to them
and shall be furnished to the Underwriters) of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall further state that they
believe that they and the Underwriters are justified in relying upon such
opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.
AA-3
EXHIBIT B
OPINION OF COUNSEL TO THE SELLING STOCKHOLDER
The opinion of such counsel pursuant to Section 5(h) shall be
rendered to the Underwriters at the request of the Company and shall so state
therein. References to the Prospectus in this Exhibit B include any supplements
thereto at the Closing Date.
(i) The Underwriting Agreement has been duly authorized, executed
and delivered by or on behalf of, and is a valid and binding
agreement of, the Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification
thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general
equitable principles.
(ii) The execution and delivery by the Selling Stockholder of, and
the performance by the Selling Stockholder of its obligations
under, the Underwriting Agreement and its Power of Attorney,
if any, will not contravene or conflict with, result in a
breach of, or constitute a default under, the charter or by-
laws, partnership agreement, trust agreement or other
organizational documents, as the case may be, of the Selling
Stockholder, or, to the best of such counsel's knowledge,
violate or contravene any provision of applicable law or
regulation, or violate, result in a breach of or constitute a
default under the terms of any other agreement or instrument
to which the Selling Stockholder is a party or by which it is
bound, or any judgment, order or decree applicable to the
Selling Stockholder of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Selling Stockholder.
(iii) The Selling Stockholder has good and valid title to all of the
Common Shares which may be sold by the Selling Stockholder
under the Underwriting Agreement and has the legal right and
power, and all authorizations and approvals required under its
charter and by-laws, partnership agreement, trust agreement or
other organizational documents, as the case may be, to enter
into the Underwriting Agreement and its Power of Attorney (if
any), to sell, transfer and deliver all of the Common Shares
which may sold by the Selling Stockholder under the
Underwriting Agreement and to comply with its other
obligations under the Underwriting Agreement and its Power of
Attorney (if any).
(iv) The Power of Attorney of the Selling Stockholder (if any) has
been duly authorized, executed and delivered by the Selling
Stockholder and is a valid and binding agreement of the
Selling Stockholder, enforceable in accordance with
B-1
its terms, except as rights to indemnification thereunder may
be limited by applicable law and except as the enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general
equitable principles.
(v) Assuming that the Underwriters purchase the Common Shares
which are sold by the Selling Stockholder pursuant to the
Underwriting Agreement for value, in good faith and without
notice of any adverse claim, the delivery of such Common
Shares pursuant to the Underwriting Agreement will pass good
and valid title to such Common Shares, free and clear of any
security interest, mortgage, pledge, lieu encumbrance or other
claim.
(vi) To the best of such counsel's knowledge, no consent, approval,
authorization or other order of, or registration or filing
with, any court or governmental authority or agency, is
required for the consummation by the Selling Stockholder of
the transactions contemplated in the Underwriting Agreement,
except as required under the Securities Act, applicable state
securities or blue sky laws, and from the NASD.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
General Corporation Law of the State of Delaware, the laws of the State of New
York or the federal law of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion (which shall be dated the First
Closing Date or the Second Closing Date, as the case may be, shall be
satisfactory in form and substance to the Underwriters, shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to them
and shall be furnished to the Underwriters) of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall further state that they
believe that they and the Underwriters are justified in relying upon such
opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of the Selling Stockholder and public officials.
B-2
EXHIBIT C
[Date]
NationsBanc Xxxxxxxxxx Securities, Inc.
Xxxxxx Xxxx LLC
Xxxxxxxxxxx & Co., Inc.
c/x Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: (the "Company")
--------------------------------------------------
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
underwriters. The undersigned recognizes that the Offering will be of benefit to
the undersigned and will benefit the Company [by, among other things, raising
additional capital for its operations]. The undersigned acknowledges that you
and the other underwriters are relying on the representations and agreements of
the undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities, Inc. (which consent may be withheld in its sole
discretion), directly or indirectly, sell, offer, contract or grant any option
to sell (including without limitation any short sale), pledge, transfer,
establish an open "put equivalent position" within the meaning of Rule 16a-1(h)
under the Securities Exchange Act of 1934, or otherwise dispose of any shares of
Common Stock, options or warrants to acquire shares of Common Stock, or
securities exchangeable or exercisable for or convertible into shares of Common
Stock currently or hereafter owned either of record or beneficially (as defined
in Rule 13d-3 under Securities Exchange Act of 1934, as amended) by the
undersigned, or publicly announce the undersigned's intention to do any of the
foregoing, for a period commencing on the date hereof and continuing through the
close of trading on the date 120 days after the date of the Prospectus. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock held by the undersigned except in compliance with the foregoing
restrictions.
C-1
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
-------------------------------------------
Printed Name of Holder
By:
----------------------------------------
Signature
------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf of an entity)
C-2
