EXHIBIT 1
2,875,000 SHARES
PHOENIX FOOTWEAR GROUP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
July , 2004
WEDBUSH XXXXXX SECURITIES INC.
FIRST ALBANY CAPITAL INC.
As Representatives of the Several Underwriters
c/o Wedbush Xxxxxx Securities Inc.
0000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Gentlemen:
Phoenix Footwear Group, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you and other firms and corporations named in
Schedule A (the "Underwriters," which term shall also include any underwriter
substituted as provided in Section 9), for which you are acting as
representatives ("Representatives"), 2,500,000 shares of the Company's Common
Stock (the "Primary Shares"). In addition, the Company proposes to grant to the
Underwriters an option to purchase, for the purpose of covering over-allotments,
up to an additional 375,000 shares of the Company's Common Stock
("Over-Allotment Shares"). The Primary Shares and the Over-Allotment Shares are
collectively referred to below as the "Shares." The Company agrees with the
several Underwriters as set forth below.
1. Representations, Warranties and Certain Covenants of the Company.
The Company represents and warrants to, and the Company also covenants and
agrees with, each of the Underwriters as follows:
1.1 The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-2 (No.
333-114109), including a preliminary prospectus, relating to the Shares
and such amendments to the registration
statement and prospectus included therein as have been required to the
date hereof, each of which has been prepared by the Company in conformity
with the Act and the Rules and Regulations (each as defined below). The
Company was eligible at the time of filing of the Registration Statement
with the Commission to file the Registration Statement on Form S-2 and
will continue to be so eligible until completion of the distribution of
the Shares in the offering. The Company will file with the Commission
either: (i) prior to effectiveness of the registration statement, a
further amendment thereto, including a form of prospectus, and if required
after effectiveness of such registration statement, a final prospectus in
accordance with Rule 424(b) of the rules and regulations ("Rules and
Regulations") under the Securities Act of 1933, as amended (the "Act"), or
(ii) after effectiveness of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b) of the Rules and
Regulations. Any such preliminary prospectus and any prospectus included
in the registration statement at the time it becomes effective that omits
information pursuant to Rule 430A of the Rules and Regulations, is
referred to herein as a "preliminary prospectus"; such registration
statement, as it may have been amended at the time when it becomes
effective, including financial statements, exhibits, and the information,
if any, deemed to be a part of such registration statement by virtue of
Rule 430A of the Rules and Regulations, is referred to herein as the
"Registration Statement"; and such final form of prospectus, in the form
in which it was first filed pursuant to Rule 424(b) of the Rules and
Regulations or, if no filing pursuant to Rule 424(b) of the Rules and
Regulations is made, in the form included in the Registration Statement at
the time it becomes effective, is referred to herein as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Act
(the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include the Rule 462
Registration Statement. Any references herein to the preliminary
prospectus, Prospectus or Registration Statement shall be deemed to
include all documents incorporated by reference therein.
1.2 The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus, and no proceedings for
such purpose are pending before or, to the Company's knowledge, threatened
or contemplated by the Commission, and the Company has complied with all
requests by the Commission for additional information in connection
therewith. Each such preliminary prospectus, as of its date, has conformed
in all material respects to the requirements of the Act and the Rules and
Regulations and has not included any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each preliminary
prospectus and the Prospectus delivered to the Underwriters for use in
connection with this offering will be substantially identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T. At
the date of this Agreement, at the date the Registration Statement becomes
effective and at the Closing Date (as defined below) (i) the Registration
Statement and Prospectus and any amendments or supplements thereto will in
all material respects conform to the requirements of the Act and the Rules
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and Regulations, (ii) the Registration Statement will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, (iii) the Prospectus, as amended or supplemented,
if applicable, will not include any untrue statement of a material fact
and will not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (iv) each
document, if any, filed or to be filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and incorporated by reference
in the Prospectus was filed or will be filed in a timely manner, complied
or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder;
provided, however, that the Company makes no representations, warranties
or agreements as to information contained in or omitted from the
Registration Statement or Prospectus or any such amendment or supplement
in reliance upon, and in conformity with, written information furnished to
the Company by the Underwriters expressly for use therein, it being
understood and agreed that the only such information is that described as
such in Section 7.3.
1.3 The Prospectus includes all historical and pro forma financial
statements and schedules and financial information required by the Act to
be included or incorporated by reference into the Prospectus and the
Registration Statement, all of which fully comply with the requirements of
the Exchange Act, the Act and the Rules and Regulations. The accountants
who certified the financial statements and supporting schedules included
in the Registration Statement are, and during the periods covered by their
reports in the Registration Statement were, independent public accountants
as required by the Act and the Rules and Regulations. The historical
financial statements set forth in the Registration Statement, the
Prospectus and each preliminary prospectus, together with the related
notes and schedules thereto, and other financial information included in
the Registration Statement, the Prospectus and each preliminary prospectus
present fairly the financial condition of the entity or entities to which
they relate as of the dates indicated and the results of operations, cash
flows and statements of changes in stockholders' equity and other
information required to be stated therein of the Company and its
subsidiaries at the dates and for the periods therein specified in
conformity with United States generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved (except as
otherwise stated therein). The pro forma financial statements and
information set forth in the Registration Statement, the Prospectus and
each preliminary prospectus, together with the related notes thereto,
present fairly the information contained therein, have been prepared in
accordance with the Act and the rules and guidelines of the Commission
with respect to pro forma financial information, have been prepared on a
basis consistent with the historical financial statements of the Company
and have been compiled on the pro forma bases described therein, and (i)
the assumptions underlying the pro forma adjustments are reasonable, (ii)
such adjustments are appropriate to give effect to the transactions or
circumstances referred to therein and have been properly applied to the
historical amounts in the compilation of such statements and information
and (iii) such statements and information fairly present the pro forma
results of operations and information purported
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to be shown therein for the respective periods therein specified based on
the assumptions identified therein. The selected and summary financial
data and information included in the Registration Statement and the
Prospectus and each preliminary prospectus present fairly in all material
respects the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement. The schedules set forth in the Registration
Statement present fairly the information required to be stated therein in
conformity with GAAP. All disclosures contained in the Registration
Statement, each preliminary prospectus and the Prospectus regarding
"non-GAAP financial measures" (as that term is defined by the Rules and
Regulations) comply in all material respects with Regulation G under the
Exchange Act and Item 10 of Regulation S-K under the Act, to the extent
applicable. Except as set forth in the financial statements that are
included in the preliminary prospectus as of the execution of this
Agreement, neither the Company nor any of its subsidiaries has any
material debts, liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of any nature whatsoever, including without
limitation, any tax liabilities or deferred tax liabilities or any other
debts, liabilities or obligations except for debts, liabilities or
obligations that are specifically described in the Prospectus.
1.4 The Company is a Delaware corporation. The Company and each of
its subsidiaries have each been duly organized and are validly existing in
good standing under the laws of their respective jurisdictions of
incorporation. As used in this Agreement, the word "subsidiary" means any
corporation, partnership, limited liability company or other entity of
which the Company directly or indirectly owns 50% or more of the equity or
that the Company directly or indirectly controls, and unless otherwise
expressly stated to the contrary, also includes Altama Delta Corporation,
a Georgia corporation whose shares of outstanding capital stock the
Company proposes to acquire with the proceeds of this offering ("Altama"),
and Altama Delta (Puerto Rico) Corporation, a Delaware corporation and
wholly-owned subsidiary of Altama ("Target Sub"). Except for X.X. Xxxxx &
Co., a Montana corporation ("X.X. Xxxxx"), Royal Xxxxxxx, Inc., a
California corporation ("Royal Xxxxxxx"), Penobscot Shoe Company, a Maine
corporation ("Penobscot"), Altama and Target Sub, the Company has no
subsidiaries. The Company owns (or in the case of Altama and Target Sub
will own on the First Closing Date), 100% of the issued and outstanding
capital stock of each of the subsidiaries, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest of any
type, kind or nature, other than the security interest of Manufacturers
and Traders Trust Company ("Bank") in shares of common stock of Penobscot,
X.X. Xxxxx and Royal Xxxxxxx, and the security interest to be granted to
Bank in the shares of common stock of Altama , in each case as described
in the Prospectus. Penobscot is non-operational and neither possesses any
material assets nor is subject to any material liabilities. Except for the
shares of capital stock of the subsidiaries owned by the Company or to be
acquired by the Company at the First Closing, neither the Company nor any
subsidiary owns, or is a party to any arrangement or agreement or has any
specific plans to acquire, any shares of capital stock or any other
securities of any corporation, nor does it own and nor is it a party to
any arrangement or agreement nor does it have any specific plans to
acquire any equity interest, direct or indirect, in any firm, partnership,
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association or other entity. The Company and each of its subsidiaries has
all requisite power and authority to own, lease and operate its properties
and to conduct its business as is described in the Prospectus. The Company
and each of its subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify would:
individually or in the aggregate, not have a material adverse effect on
the business, properties, assets, liabilities, condition (financial and
other), results of operations or business prospects of the Company and its
subsidiaries, taken as a whole, and not restrict or prohibit the
consummation of any of the transactions contemplated by this Agreement
(any such effect, a "Material Adverse Effect").
1.5 The authorized, issued and outstanding capital stock of the
Company conforms to the description thereof contained in the Prospectus
and the issued and outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable. The
information set forth under the caption "Capitalization" in the Prospectus
is true and correct as of the date set forth therein. As of the date of
this Agreement, the Company has authorized, issued and outstanding
preferred stock, common stock and additional paid-in capital as set forth
in the section of the Registration Statement and Prospectus entitled
"Capitalization" (the "Capitalization Section") and, as of each time of
purchase of Shares under this Agreement, the Company shall have
authorized, issued and outstanding preferred stock, common stock and
additional paid-in capital as set forth in the "Pro Forma As Adjusted"
column of the table in the Capitalization Section (subject, in each case,
to (i) any adjustment to the number of shares to be issued at the closing
of the Altama acquisition that results from the difference between the
estimated price and the applicable price of such shares as specifically
described in the Capitalization Section, (ii) the issuance of shares of
Common Stock upon exercise of stock options and warrants disclosed as
outstanding in the Registration Statement and Prospectus, (iii) the
issuance of shares of Common Stock upon exercise of options granted after
the date of the Prospectus under existing stock option plans described in
the Registration Statement and Prospectus, and (iv) the reduction of
outstanding shares of Common Stock due to the cancellation of shares
issued to former X.X. Xxxxx stockholders in connection with the settlement
of the Company's indemnity claim against them and payment of escrow fees
under an escrow agreement as specifically described in the Capitalization
Section). The sale of Shares by the Company has been duly authorized and,
after issuance of and payment for the Shares in accordance with this
Agreement, the Shares will be validly issued, fully paid and
nonassessable. The Underwriters will acquire good and marketable title to
the Shares to be sold by the Company, free and clear of any adverse claims
whatsoever. All of the issued and outstanding shares of the capital stock
of each of the subsidiaries of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and are owned
beneficially and of record, directly or indirectly, by the Company free
and clear of all liens, claims or encumbrances whatsoever other than the
security interests of Bank as described in Section 1.4. None of the
outstanding shares of capital stock of the Company or any of its
subsidiaries was issued in violation of the preemptive or similar rights
of any securityholder arising by operation of law, under the certificate
of incorporation or by-laws of the Company or its subsidiaries or under
any agreement or obligation to which the Company or any of its
subsidiaries is a party or by which any of them are bound. There are no
preemptive rights applicable to any shares of capital stock of the Company
or any of its subsidiaries. There are no restrictions on the voting or
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transfer of any of the Shares pursuant to the certificate of
incorporation, bylaws or other charter documents or agreements to which
the Company is a party or by which it may be bound. There are no
outstanding options, warrants or other rights calling for the issuance of,
and no commitments, agreements, specific plans or arrangements to issue,
any shares of capital stock of the Company or any security convertible
into or exchangeable for capital stock of the Company, except as disclosed
in the Prospectus. There are no outstanding options, warrants or other
rights calling for the issuance of, and no commitments, agreements,
specific plans or arrangements to issue, any shares of capital stock of
any of the Company's subsidiaries or any security convertible into or
exchangeable for capital stock of any of the Company's subsidiaries.
1.6 Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the
Company nor any of its subsidiaries has incurred any liabilities or
obligations, whether direct, indirect, absolute, accrued, contingent or
otherwise (including without limitation any off-balance sheet obligations
or any "variable interest entities" within the meaning of Financial
Accounting Standards Board Interpretation No. 46 or any tax liabilities or
deferred tax liabilities or any other debts, liabilities or obligations),
or except for the proposed consummation of the Company's acquisition of
Altama and the proposed consummation of the amendment to the Company's
credit facility, each as described in the Prospectus under the headings
"Pending Altama Acquisition," "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Pending Altama
Acquisition," "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources," and
"Business - Pending Altama Acquisition," and in exhibits 2.4, 10.20,
10.21, 10.22, 10.23 and 10.24 to the Registration Statement, entered into
any transactions, whether or not in the ordinary course of business, that
are material to the Company and its subsidiaries, taken as a whole, and
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company. Subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any Material Adverse Effect.
1.7 There are no pending actions, suits or proceedings against the
Company, any of its subsidiaries or any of their respective properties
that are required to be disclosed in the Registration Statement (other
than as adequately disclosed therein), or that if determined adversely to
the Company or its subsidiaries, could individually or in the aggregate
result in a Material Adverse Effect, or that are otherwise material in the
context of the offer, sale or purchase of the Shares by the Company or the
Underwriters; and no such actions, suits or proceedings are, to the
Company's knowledge, threatened or contemplated.
1.8 There are no agreements, contracts, licenses, leases or other
documents that are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations that have not been so described or filed as required. All
agreements, contracts, licenses and leases described in the Prospectus are
in full force and effect on the date hereof, and neither the Company nor
any of its subsidiaries nor, to the best knowledge of the Company, any
other party, is in
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breach of or default under, or intends or has threatened to breach,
default or terminate, any such contract.
1.9 The Company and its subsidiaries own or have valid leasehold
interests in or licenses to use all properties and assets used in or
required for the operation of their business as now conducted or as
proposed to be conducted, including those described in the Registration
Statement and the Prospectus as being owned or possessed by them; and each
of the Company and its subsidiaries has good title to all properties and
assets owned by it material to its business, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by the
Company or its subsidiaries. All leases and licenses to which the Company
or any of its subsidiaries is a party are valid, subsisting and
enforceable and no default by the Company or any of its subsidiaries has
occurred and is continuing thereunder; and each of the Company and its
subsidiaries enjoys peaceful and undisturbed possession under all such
leases or licenses to which it is a party as lessee or licensee.
1.10 The Company has full right, power and authority to enter into
this Agreement and to perform all of its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
1.11 Neither the Company nor any of its subsidiaries is in, and the
execution, delivery and performance of this Agreement by the Company and
the consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Shares and
the use of the proceeds from the sale of the Shares as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder do not and will not, with or
without the giving of notice or passage of time or both, result in a
violation, breach or conflict with: (i) the charter or bylaws of the
Company or any of its subsidiaries or (ii) except for such violations,
breaches or conflicts that individually or in the aggregate would not
result in a Material Adverse Effect, any agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or as to which any of their respective
properties is subject or (iii) any statute, order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties (including,
without limitation, federal and state securities laws and regulations and
the rules and regulations of the American Stock Exchange ("AMEX"))
applicable to the Company or any of its subsidiaries or by which any
property or asset of the Company or any of its subsidiaries is bound or
affected; and no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body or third party is required
in connection with the transactions contemplated hereby except as have
been obtained and made under the Act and such as may be required under
state securities or "Blue Sky" laws (except such additional steps as may
be required of the Underwriters by the National Association of Securities
Dealers, Inc. ("NASD") or as may be required and shall be taken by the
Company to notify AMEX of the official issuance of the Shares).
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1.12 The Company, together with its subsidiaries, owns or
possesses, or can acquire on a timely basis and on commercially reasonable
terms, all material trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by it, and, except as
disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any notice or otherwise become aware of any
infringement of or conflict with asserted rights of others with respect to
any intellectual property rights, nor of any facts or circumstances that
would render any intellectual property rights invalid or inadequate to
protect the interest of the Company or any of its subsidiaries therein,
and which infringement or conflict, if determined adversely to the Company
or its subsidiaries, or invalidity or inadequacy would individually or in
the aggregate result in a Material Adverse Effect.
1.13 There are no contracts, agreements or understandings between
the Company or any of its subsidiaries and any person that would give rise
to a valid claim against the Company, any of its subsidiaries or any
Underwriter for a brokerage commission, finder's fee or other like payment
in connection with this offering.
1.14 The Company and its subsidiaries possess all material
certificates, authorities or permits issued by appropriate governmental
agencies or bodies and have made all material filings required under any
federal, state, local or foreign law, rule or regulation necessary to
conduct the business now operated by them (the "Permits") and have not
received any notice of proceedings relating to the revocation or
modification of any such Permit that, if determined adversely to the
Company or its subsidiaries, would individually or in the aggregate result
in a Material Adverse Effect.
1.15 No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company or its subsidiaries,
is imminent. The Company is not aware of any existing or imminent labor
disturbance by the employees of any of the Company's or its subsidiary's
principal suppliers, manufacturers, customers or contractors that, in any
case, would individually or in the aggregate result in a Material Adverse
Effect. No collective bargaining agreement exists with any of the
Company's employees or those of its subsidiaries and, to the best
knowledge of the Company, no such agreement is imminent.
1.16 Neither the Company nor any subsidiary is in violation of any
statute, rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "environmental laws"), owns or operates any real
property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate result in a Material Adverse
Effect; and neither the Company nor any subsidiary is aware of any pending
investigation that might lead to such a claim.
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1.17 The Company and each of its subsidiaries have duly and
properly filed or caused to be filed with the United States Patent and
Trademark Office (the "PTO") and applicable foreign and international
patent authorities all patent applications owned by the Company or its
subsidiaries (the "Company Patent Applications"). To the knowledge of the
Company, the Company and any predecessors in interest to the Company or
its subsidiaries with respect to such Company Patent Applications have
complied with the PTO's duty of candor and disclosure for the Company
Patent Applications and have made no material misrepresentation in the
Company Patent Applications. The Company is not aware of any information
material to a determination of patentability regarding the Company Patent
Applications not called to the attention of the PTO or similar foreign
authorities. The Company is not aware of any information not called to the
attention of the PTO or similar foreign authorities that would preclude
the grant of a patent for the Company Patent Applications. The Company has
no knowledge of any information that would preclude the Company from
having clear title to the Company Patent Applications.
1.18 The Company and each of its subsidiaries are in compliance
with the requirements of Section 13(b)(2) of the Exchange Act and, to the
best knowledge and belief of the Company, neither the Company nor any of
its subsidiaries, nor any employee or agent of the Company or a subsidiary
of the Company, has made any payment of funds of the Company or a
subsidiary or received or retained any funds in violation of any law, rule
or regulation. The Company and its subsidiaries maintain systems of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (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 the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company and its subsidiaries maintain
disclosure controls and procedures (as such term is defined in Rule
13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in
the rules and forms of the Commission, including, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate to allow timely decisions
regarding required disclosure. The Company and its subsidiaries, and each
of their respective officers and directors, is otherwise in compliance in
all material respects with all applicable effective provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations issued thereunder
("SOX"). All certifications required by SOX to be filed with the
Commission on or prior to the Closing Date have been, or when filed will
be, duly and timely executed and filed by the appropriate officers of the
Company and its subsidiaries and were, or when filed will be, true,
correct and complete in all respects as and when filed.
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1.19 The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the business in which they
are engaged; and the Company has no reason to believe that they will not
be able to renew their existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business, or that the cost of renewing
existing coverage or obtaining similar coverage would individually or in
the aggregate result in a Material Adverse Effect.
1.20 No relationship, direct or indirect, exists among the Company
or any of its subsidiaries, on the one hand, and the directors, officers,
customers, suppliers or, to the Company's knowledge, stockholders of the
Company or its subsidiaries, on the other, that is required by the Act to
be described in the Registration Statement and Prospectus and that is not
so described.
1.21 Nothing has come to the attention of the Company that has
caused the Company to believe that the statistical and market-related data
included in the Registration Statement and the Prospectus is not based on
or derived from sources that are reliable and accurate (in accordance with
the methodologies used to derive such statistical and market-related data
set forth in the underlying source material) in all material respects.
1.22 The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940 ("1940 Act"). The Company
has been advised concerning the 1940 Act, and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to
conduct, its affairs in a manner as to ensure that it has not and will not
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and
regulations.
1.23 Any certificate signed by any officer of the Company or any of
its subsidiaries delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company
to each Underwriter as to the matters covered thereby.
1.24 The Common Stock is listed for trading on AMEX. The Company is
not in violation of the listing requirements of AMEX, does not reasonably
anticipate that the Common Stock will be delisted or suspended by AMEX for
the foreseeable future, and has not received any notice regarding the
possible delisting or suspension of the Common Stock from AMEX. Prior to
the First Closing Date, the Company shall secure the listing of the Shares
on AMEX (subject to official notice of issuance).
1.25 The Company has confirmed, for purposes of the Underwriters'
representations to the NASD pursuant to Rule 2710 of the NASD, that
neither the Company, nor any officer, director or beneficial owner of 5%
or more of any class of the
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Company's securities, nor any person or entity who purchased any of the
Company's unregistered equity securities since October 3, 2003, nor any
affiliates of any of the foregoing, directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with any member of the NASD or
any affiliate of such member that is a participant in the distribution
contemplated hereby or any affiliate of such member. None of the proceeds
received by the Company from the sale of the Shares will be paid to or for
the benefit of a member of the NASD or any affiliate of such member.
1.26 Except as expressly set forth in the Prospectus, there are no
(i) outstanding registration or other similar rights to have any
securities registered by the Company pursuant to the Registration
Statement or otherwise under the Act, or (ii) pre-emptive, anti-dilution,
repurchase, put or other rights associated with the ownership, holding,
further issuance or disposition of the Company's common stock, and neither
the filing of the Registration Statement nor the offering or sale of the
Shares will give rise to any such rights.
1.27 Other than as permitted by the Act and the Rules and
Regulations, the Company has not distributed and will not distribute any
preliminary prospectus, the Prospectus or any other offering material in
connection with the offering and sale of the Shares. Any officer, director
or employee of the Company who participated or participates in the
offering or sale of the Shares has done or will do so in compliance with
Exchange Act Rule 3a4-1 and has not been and will not be compensated in
connection with their participation in the offering or sale of the Shares.
The Company has not taken, and will not take, directly or indirectly, any
action designed, or that might cause or result in, or that has caused or
resulted in, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares. No bid or
purchase by the Company nor any bid or purchase that could be attributed
to the Company (as a result of bids or purchases by an "affiliated
purchaser" within the meaning of Regulation M under the Exchange Act) for
or of the Common Stock, any securities of the same class or series as the
Common Stock or any securities convertible into or exchangeable for or
that represent any right to acquire the Common Stock is now pending or in
progress or will have commenced at any time prior to the completion of the
distribution of the Shares.
1.28 The Company and each of its subsidiaries is in compliance in
all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) for which the Company or any of
its subsidiaries would have any liability has occurred; neither the
Company nor any of its subsidiaries has incurred or expects to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company or any of its subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material
11
respects and nothing has occurred, whether by action or by failure to act,
that would cause the loss of such qualification.
1.29 Each of the Company and its subsidiaries has filed all
federal, state, local and foreign tax returns that are required to be
filed or has properly and timely requested extensions thereof and has paid
all taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges to the extent that the same have
become due and payable. To the best of the Company's knowledge, no tax
assessment or deficiency has been made or proposed against the Company or
any of its subsidiaries nor has the Company or any of its subsidiaries
received any notice of any proposed tax assessment or deficiency.
1.30 Neither the Company nor any of its subsidiaries has any
liability, absolute or contingent, relating to: (i) public health or
safety; (ii) worker health or safety; or (iii) product defect or warrant
(all except as would not individually or in the aggregate have a Material
Adverse Effect).
1.31 There are no outstanding contracts, loans, advances or
guaranties of indebtedness by the Company or any of its subsidiaries to or
for the benefit of any of (i) its "affiliates," as such term is defined in
the Rules and Regulations, (ii) except for immaterial advances in the
ordinary course of business, any of the officers or directors of the
Company or any of its subsidiaries, or (iii) any of the members of the
families of any of them. Neither the Company nor any of its subsidiaries
is, or at the Closing Date will be, in violation of Section 13(k) of the
Exchange Act and the rules and regulations relating thereto.
2. Sale and Purchase of the Shares.
2.1 The Company hereby agrees to sell the Primary Shares to the
several Underwriters as set forth in Schedule A, and the several
Underwriters, in reliance upon the representations, warranties and
agreements herein contained, but subject to the conditions hereinafter
stated, agree, severally and not jointly, to purchase from the Company, at
the place and the time specified below, the respective aggregate numbers
of Primary Shares set forth in Schedule A opposite their respective names,
at a price per Share set forth in Schedule A.
2.2 In addition, on the basis of the representations and
warranties herein contained, upon not less than two days' nor more than
ten days' notice (the "Notice") from the Representatives to the Company,
or its counsel, the Company agrees to sell to the Underwriters (but only
for the purpose of covering over-allotments in the sale of the Primary
Shares), all or any portion of the Over-Allotment Shares, as specified by
the Representatives in the Notice, at the price per Share set forth in
Schedule A. The Over-Allotment Shares may be purchased on the Closing Date
or at any time or times thereafter so long as the Notice to purchase is
given within a period of 45 days following the date of the Prospectus.
Each Underwriter shall purchase Over-Allotment Shares covered by a Notice
in the proportion that the aggregate number of Primary Shares set opposite
the
12
name of each Underwriter in Schedule A bears to the total number of
Primary Shares. No Over-Allotment Shares shall be delivered to or for the
accounts of the Underwriters unless the Primary Shares shall be
simultaneously delivered and paid for or shall theretofore have been
delivered and paid for as herein provided.
2.3 The respective purchase obligation of each Underwriter shall
be subject to such adjustments as the Representatives may make in their
absolute discretion, but such adjustments shall not affect the obligation
of the Underwriters to severally and not jointly purchase all of the
Primary Shares to the extent the Underwriters are otherwise obligated to
purchase the Primary Shares pursuant to this Agreement.
3. Terms of Offering and Authority to Use Prospectus. The Shares shall
initially be offered to the public at the price to the public as set forth in
the Registration Statement and the Prospectus and may be offered to dealers as
described in the Prospectus. The Representatives may from time to time
thereafter change the price to the public and other selling terms; provided,
however, that such change shall not affect the price per Share set forth in
Schedule A. The Company has authorized the Representatives to use preliminary
prospectuses and to make them available for use by prospective Underwriters and
dealers and authorize the Underwriters and all dealers acquiring Shares from an
Underwriter to use the Prospectus (as amended or supplemented, if the Company
shall have furnished any amendments or supplements thereto) in connection with
the sale of the Shares until the earlier of completion of the public offering or
the period as, in the opinion of counsel for the Underwriters, the Prospectus is
required by law to be delivered in connection with sales by an Underwriter or
dealer.
4. Payment and Delivery.
4.1 Payment for the Primary Shares that the Underwriters agree to
purchase hereunder shall be made to the Company by wire transfer of same
day federal funds to a bank account designated by the Company on Schedule
A to this Agreement, at 7:00 a.m., Pacific Time, on the third business day
after the date of this Agreement (unless postponed in accordance with the
provisions of Section 9), or at the time, date (not later than seven full
business days thereafter) and place agreed upon in writing by the
Representatives and the Company, against delivery to the Representatives
for the respective accounts of the several Underwriters of the Primary
Shares via electronic transfer. The date and time of this payment and
delivery (which may be postponed as provided in Section 9) are sometimes
referred to below as the "First Closing Date." As used in this Agreement,
"business day" means a day on which AMEX is open for trading and on which
banks in New York and California are open for business and not permitted
by law or executive order to be closed.
4.2 Payment for the Over-Allotment Shares that the Underwriters
have the right to purchase hereunder from the Company shall be made to the
Company by wire transfer of same day federal funds to a bank account
designated by the Company on Schedule A to this Agreement at the time or
times and on the date or dates specified in the Notice or Notices
delivered by the Representatives against delivery via electronic transfer
for the respective accounts of the several Underwriters of the
Over-Allotment
13
Shares. The dates and times of these payments and deliveries are herein
singularly or collectively sometimes referred to as the "Second Closing
Date." The term "Closing Date" refers to both the First Closing Date and
the Second Closing Date.
4.3 You, individually and not as Representatives of the
Underwriters, may (but shall not be obligated to) make payment to the
Company for Shares to be purchased by any Underwriter whose check shall
not have been received by you at the date of payment therefor for the
account of that Underwriter. Any payment by you shall not relieve that
Underwriter from any of its obligations hereunder.
4.4 The Shares shall be registered in the name or names and shall
be in the denominations you, as Representatives, at least one full
business day prior to the First Closing Date, in the case of the Primary
Shares, and at least one full business day prior to the Second Closing
Date, in the case of the Over-Allotment Shares, may request.
5. Conditions of the Underwriters' Obligations. The several obligations
of the Underwriters hereunder are subject to the following conditions:
5.1 The Registration Statement shall have become effective under
the Act not later than (i) 2:00 p.m., Pacific Time, on the day following
the date of this Agreement or (ii) such other time and date, but not later
than 2:00 p.m., Pacific Time, on the second day following the date of this
Agreement, as may be approved by the Underwriters (including the
Representatives) that are obligated to purchase an aggregate of more than
50% of the Shares; and, at or prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement or the
qualifications or listing of the Shares shall have been issued and no
proceedings for that purpose shall be pending before or threatened by the
Commission, AMEX, the NASD or any state securities or "Blue Sky"
commissioner or authority, or to the knowledge of the Company or the
Underwriters, shall be contemplated; and if the filing of the Prospectus
or any supplement thereto is required pursuant to Rules 424(b) or 430A
under the Act or the filing of any Rule 462 Registration Statement is
required, such Prospectus or supplement thereto and such Rule 462
Registration Statement shall have been filed in the manner and within the
time periods required by Rules 424(b), 430A and 462 under the Act; and any
request of the Commission, AMEX or the NASD for inclusion of additional
information in the Prospectus, Registration Statement or otherwise shall
have been complied with to the Representatives' satisfaction in their sole
discretion.
5.2 At each Closing Date, (a) the representations and warranties
of the Company contained in this Agreement shall be true and correct with
the same effect as if made on and as of that Closing Date, and the Company
shall have performed all of the obligations and complied with all of the
conditions hereunder on its part to be performed or complied with on or
prior to the Closing Date; (b) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all
statements required to be stated therein in accordance with the Act and
the Rules and Regulations and shall in all material respects conform to
the requirements thereof, and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto
14
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, not misleading; (c) there shall have been, subsequent
to the date of this Agreement (or, if earlier, since the respective dates
as of which information is given), no Material Adverse Effect or other
material adverse change in the business, properties or condition
(financial or otherwise), results of operations, properties, prospects,
capital stock, bank debt, long-term debt or general affairs of the
Company, and neither the Company nor any of its subsidiaries shall have
incurred any material liabilities or material obligations, direct or
contingent, or except for the proposed consummation of the Company's
acquisition of Altama and the proposed consummation of the amendment to
the Company's credit facility, each as described in the Prospectus under
the headings "Pending Altama Acquisition," "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Pending Altama
Acquisition," "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources," and
"Business - Pending Altama Acquisition," and in exhibits 2.4, 10.20,
10.21, 10.22, 10.23 and 10.24 to the Registration Statement, entered into
any material transaction, contract or agreement whether or not in the
ordinary course of business; and (d) except as set forth in the
Registration Statement as of the date of this Agreement, no action, suit
or proceeding at law or in equity shall be pending or threatened against
the Company or any of its subsidiaries that would be required to be set
forth or described in the Registration Statement, and no proceedings shall
be pending or threatened against the Company or any of its subsidiaries
before or by any commission, board or administrative agency in the United
States or elsewhere, wherein an unfavorable decision, ruling or finding
could individually or in the aggregate result in a Material Adverse
Effect; and you shall have received at each Closing Date a certificate of
the principal executive officer and the principal financial or accounting
officer of the Company, dated as of that Closing Date, evidencing
compliance with the provisions of this Section 5.2, and confirming the
accuracy of the representations of the Company set forth in Section 1 and
confirming that all covenants and conditions set forth herein to be met by
the Company have been met as of such date.
5.3 No Underwriter shall have discovered and disclosed to the
Company prior to either Closing Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto, contains an untrue
statement of a fact that in the opinion of the Representatives is
material, or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, not
misleading.
5.4 On each Closing Date you shall have received a signed opinion,
dated as of such date, of Xxxxx & Xxxxxx, LLP, counsel to the
Representatives, with respect to the sufficiency of all corporate
proceedings and other legal matters relating to this Agreement and the
transactions contemplated hereby, and the Company and each of the
Company's subsidiaries shall have furnished to such counsel such documents
as such counsel may have requested for the purpose of enabling them to
pass upon such matters.
5.5 On each Closing Date you shall have received a signed opinion,
dated as of such date, of Xxxxx Xxxxxx Xxxxxx LLP, counsel to the Company,
in form reasonably
15
satisfactory to counsel for the Underwriters, together with signed or
photostatic copies thereof for each of the other Underwriters, in the form
set forth in Exhibit 3 to this Agreement.
5.6 On each Closing Date, you shall have received a signed
opinion, dated as of such date, of Xxxxxx, Xxxxxxx and Xxxxxx LLP, counsel
to Altama and W. Xxxxxxx Xxxxx, in the form set forth in Exhibit 4 to this
Agreement, together with signed or photostatic copies thereof for each of
the other Underwriters.
5.7 On each Closing Date, you shall have received a signed
opinion, dated as of such date, of Holland & Knight, LLP, counsel to
Altama, in the form set forth in Exhibit 5 to this Agreement, together
with signed or photostatic copies thereof for each of the other
Underwriters.
5.8 At the time of the signing of this Agreement and on each
Closing Date, you shall have received a signed comfort letter, dated,
respectively, as of each such date, from each of the auditors whose
reports are included or incorporated by reference into the Registration
Statement, in form and substance satisfactory to the Representatives and
Xxxxx & Xxxxxx, LLP, counsel to the Representatives.
5.9 As of the effective date of the Registration Statement and on
each Closing Date, the Common Stock of the Company shall be listed on AMEX
and the Shares shall be listed on AMEX or have been approved for listing
on AMEX, subject in the case of the Primary Shares only to official notice
of issuance of the Primary Shares, and the Company shall not have received
any notice regarding the possible delisting or suspension of the Common
Stock or the Shares by AMEX and shall not reasonably anticipate that the
Common Stock or the Shares will be delisted or suspended by AMEX for the
foreseeable future.
5.10 The NASD shall have confirmed, and shall not have modified or
revoked its confirmation, that it has no objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements for
this offering.
5.11 At the date of this Agreement, the Representatives shall have
received lock-up agreements in the forms set forth in Exhibit 2 to this
Agreement signed by the persons listed on Schedule B to this Agreement,
and such agreements shall be in full force and effect on the Closing Date.
5.12 Concurrently with the delivery of the Primary Shares to the
Underwriters, , the Company shall have executed and delivered to the
Representatives the Warrant Agreements in the form attached to this
Agreement as Exhibit 1 and in the denominations set forth in Exhibit 1 to
this Agreement.
5.13 All proceedings taken at or prior to each Closing Date in
connection with the sale of the Shares shall be satisfactory in form and
substance to you and Xxxxx & Xxxxxx, LLP, counsel to the Representatives,
and at the time of signing this Agreement
16
and on the Closing Date, you and such counsel shall have received each and
every additional document, letter, opinion, certificate or other item
dated and executed in a manner satisfactory to you and such counsel, as
you or such counsel may request in connection with the Prospectus, the
Registration Statement, the offer and sale of the Shares hereunder, or
proceedings at the Closing Date.
If any of the conditions herein provided for in this Section 5 shall not
have been fulfilled as of the date indicated, all obligations of the several
Underwriters under this Agreement may be cancelled by the Representatives by
notifying the Company of such cancellation on or prior to the applicable Closing
Date. The Representatives may, in their sole discretion, waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder, whether in respect of the First Closing Date, the Second
Closing Date or otherwise.
6. Covenants of the Company.
6.1 The Company covenants and agrees as follows:
(a) To use its best efforts to bring about the effectiveness
of the Registration Statement, and the Company will not, at any
time, whether before or after the effective date, file any amendment
to the Registration Statement or Prospectus or supplement thereto of
which you and your counsel shall not previously have been advised
and furnished with a copy or to which you or your counsel shall have
objected or that is not in compliance with the Act and the Rules and
Regulations, and as soon as the Company is advised thereof, to
advise the Representatives and confirm this advice in writing (i)
when the Registration Statement has become effective and (ii) of the
issuance by the Commission, AMEX or any state securities or "Blue
Sky" commissioner or authority of any order suspending the
effectiveness of the Registration Statement, the listing of the
Common Stock or the Shares, or any qualification of the Shares, or
prohibiting the offer or sale of the Shares or the initiation or
threatening of any proceedings for any such purpose, and to use its
best efforts to cause the issuing authority to lift any such order.
(b) To deliver, on or before the effective date of the
Registration Statement and from time to time thereafter until the
earlier of completion of the offering or the period as, in the
opinion of counsel for the Underwriters, the Prospectus is required
by law to be delivered in connection with sales by an Underwriter or
dealer, without charge, to the Representatives, and to send to the
several Underwriters, at such office or offices as any
Representative may designate, as many copies of the preliminary
prospectus and Prospectus as the Representatives may reasonably
request. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be substantially
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
17
(c) To furnish each Representative and their counsel,
without charge, one executed copy of the Registration Statement
(including exhibits) and of any amendments thereto and to furnish
each Representative, without charge, a reasonable number of
conformed copies of the Registration Statement (excluding exhibits)
and of any amendments thereto.
(d) To furnish each Representative and their counsel with a
copy of each proposed amendment or supplement before amending or
supplementing the Registration Statement or the Prospectus.
(e) Until the earlier of completion of the offering or the
period as, in the opinion of counsel for the Underwriters, the
Prospectus is required by law to be delivered in connection with
sales by an Underwriter or dealer, if any event shall occur as a
result of which it shall be necessary to amend or supplement the
Prospectus in order to make the statements therein, in light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, forthwith to prepare and furnish, at its own expense, to
the Underwriters and to dealers (whose names and addresses the
Representatives will furnish to the Company) to whom Shares may have
been sold by the Representatives and to any other dealers upon
request, either amendments or supplements to the Prospectus so that
the statements in the Prospectus, as so amended or supplemented,
will not, in light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5.
(f) To make generally available to the Company's security
holders, as soon as practicable, but not later than fifteen months
after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a period of twelve
months beginning after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of
the last paragraph of Section 11(a) of the Act, including, at the
option of the Company, Rule 158.
(g) For a period of three years following the date of this
Agreement, to supply to the Representatives, and to each other
Underwriter who may so request in writing, copies of such financial
statements and other periodic and special reports as the Company may
from time to time furnish generally to holders of any class of its
securities, and to furnish the Representatives a copy of each annual
report on Form 10-K which it files with the Commission.
(h) To cooperate with the Representatives in an endeavor to
qualify the Shares for offer and sale under the "Blue Sky" laws of
such jurisdictions of the United States as the Representatives may
request, and to pay, or reimburse if paid by a Representative, fees
and disbursements of counsel for the Underwriters and all other
expenses and filing fees in connection therewith; provided, however,
that
18
the Company shall not be required to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation as doing business in any
jurisdiction.
(i) For a period of three years following the date of this
Agreement, to comply to the best of its ability with the Act, the
Rules and Regulations and the Exchange Act, as amended, and the
rules and regulations thereunder, and the rules and regulations of
AMEX so as to permit the continuance of sales and dealings in the
Common Stock of the Company on AMEX.
(j) To apply the net proceeds from the sale of the Shares in
accordance with the statements made under "Use of Proceeds" in the
Prospectus and to comply with Rule 463 under the Act.
(k) To promptly supply the Representatives and their counsel
with copies of all correspondence to and from and all documents
issued to and by the Commission and AMEX in connection with the
registration of the Shares under the Act and the listing of the
Shares on AMEX.
6.2 The Company covenants and agrees to pay, or reimburse if paid
by the Representatives, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, all costs and
expenses incident to the entry into and performance under this Agreement
by the Company, and without limiting the generality of the foregoing, all
costs and expenses incident to (a) the issuance, purchase, sale and
delivery of the Shares to the Underwriters, (b) the registration of the
Shares and preparing, printing and shipping the Registration Statement and
the underwriting documents, (c) the filing fees of the Commission, the
NASD, AMEX (including AMEX listing fees for the Shares) and state
securities and "Blue Sky" commissioners and authorities in connection with
the Registration Statement and this Agreement, and the fees, disbursements
and expenses of counsel in connection with state securities or "Blue Sky"
matters and review by the NASD, (d) the fees and disbursements of counsel
and accountants for the Company and its subsidiaries, (e) the furnishing
to the Representatives and the other Underwriters of copies of the
Registration Statement, any preliminary prospectus, the Prospectus, this
Agreement, the Blue Sky Survey (preliminary and final), and of the
documents required by paragraphs (b), (c), (d) and (e) of Section 6.1, to
be so furnished, including costs of preparing, printing and shipment, (f)
the preparation, printing, mailing, delivery, filing and distribution by
the Company of all supplements and amendments to the Prospectus required
by paragraph (e) of Section 6.1, and (g) the furnishing to the
Representatives and the other Underwriters of all reports and financial
statements required by paragraphs (f) and (g) of Section 6.1. Except as
provided below, and except as otherwise provided in Section 7, except for
the $40,000 that the Company paid directly to Xxxxx & Xxxxxx, LLP, which
amount covers fees and expenses of counsel that have actually been
incurred by the Underwriters prior to the date of this Agreement, the
Representatives will pay the fees and costs of their counsel. If the sale
of any of the Shares to the several Underwriters pursuant to this
Agreement is not
19
consummated for any reason other than as set forth in clauses (ii) through
(viii) of Section 8.2 or Section 9, the Company will reimburse the several
Underwriters for all of their out-of-pocket expenses (including fees and
expenses of counsel) actually incurred by the Underwriters in connection
with this Agreement or in investigating, preparing to market or marketing
the Shares.
6.3 The Company covenants and agrees that except as expressly
contemplated hereby, it will not, directly or indirectly, (a) offer,
pledge, sell, offer to sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of any
of the shares of Common Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock, or (b) enter into
any swap or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of the shares of Common Stock or
such other securities convertible into, or exercisable or exchangeable
for, shares of Common Stock (whether any such transaction described in
clause (a) or (b) above is to be settled by delivery of the shares of
Common Stock or such other securities, in cash or otherwise), in each
case, beneficially owned (within the meaning of Rule 13d-3 under the
Exchange Act) or otherwise controlled by the Company on the date hereof or
hereafter acquired or otherwise controlled, for a period beginning from
the date hereof and continuing to and including the date 180 days after
the date of the Prospectus; provided, however, that the Company may,
without the prior written consent of the Representatives on behalf of the
Underwriters, (i) issue stock options not exercisable during such 180-day
period pursuant to equity incentive plans described in the Registration
Statement and the Prospectus to employees, directors and consultants of
the Company, (ii) issue shares upon the exercise of options and warrants
and the conversion of preferred stock and convertible debentures, in each
case as described in the Registration Statement and the Prospectus, (iii)
as described in the Registration Statement and Prospectus, issue and
deposit into escrow at the First Closing shares of Common Stock of the
Company valued at $2.5 million in connection with the Company's
acquisition of Altama and Target Sub, and (iv) issue shares of Common
Stock or other securities convertible into or exercisable or exchangeable
for shares of Common Stock in connection with any acquisition by the
Company of another entity, provided that the Company ensures that the
recipient(s) of such securities shall not transfer such securities during
the 180-day period following the date of the Prospectus. In addition, the
Company will not, during such 180-day period, register any shares of
Common Stock or any securities convertible into, or exercisable or
exchangeable for, Common Stock.
7. Indemnification and Contribution.
7.1 The Company will indemnify and hold harmless each Underwriter
(including specifically each person who may be substituted for an
Underwriter as provided in Section 9), its partners, members, directors,
officers and employees and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, from and against
any and all losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them may become subject under the Act or
any other statute or at common law or otherwise, and except as provided
below, will reimburse
20
each of the Underwriters and each such controlling person, if any, for all
reasonable legal or other expenses incurred by them or any of them in
connection with investigating or defending any actions whether or not
resulting in any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, in any preliminary prospectus or in the
Prospectus or 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, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the Prospectus or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, or (iii)
any untrue statement or alleged untrue statement of any material fact
contained in any written or electronic materials, if any, used in
connection with the marketing of the Shares, including, without
limitation, slides, videos, films and tape recordings that are provided by
the Company or based upon information furnished by or on behalf of the
Company, unless the untrue statement or omission or alleged untrue
statement or omission was made in such Registration Statement, preliminary
prospectus or Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives or
any Underwriter through the Representatives expressly for use therein.
Promptly after receipt by any Underwriter or any person controlling the
Underwriter of notice of the commencement of any action in respect of
which indemnity may be sought against the Company under this Section 7,
the Underwriter will notify the Company in writing of the commencement
thereof, and, subject to the provisions stated below, the Company shall
assume the defense of the action (including the employment of counsel, who
shall be counsel reasonably satisfactory to such Underwriter or such
person, as the case may be, and the payment of expenses) insofar as such
action shall relate to any alleged liability in respect of which indemnity
may be sought against it, provided that the failure to notify the Company
shall not relieve the Company from any liability that it may have under
this Section 7.1 except to the extent that the Company has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by
such failure; and provided further that the failure to notify the Company
shall not relieve the Company from any liability that it may have to an
indemnified party otherwise than under this Section 7.1. Any Underwriter
or any controlling person shall have the right to employ separate counsel
in the action and to participate in the defense thereof, but the fees and
expenses of its counsel shall not be at the expense of the Company unless
the employment of that counsel has been specifically authorized by the
Company or the Company has not, within a reasonable time period, employed
counsel or such Underwriter has reasonably concluded that there may be
defenses available to it that are different from, additional to or in
conflict with those available to the Company (in which case the Company
shall not have the right to direct the defense on behalf of the
Underwriters), in any of which events such reasonable fees and expenses
shall be borne by the Company, it being understood, however, that the
Company shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one proceeding or series
of related proceedings.
21
7.2 Each Underwriter will severally, and not jointly, indemnify
and hold harmless the Company, each of its directors, each of its officers
who have signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, from and
against any and all losses, claims, damages, expenses or liabilities,
joint or several, to which they or any of them may become subject under
the Act or any other statute or at common law or otherwise, and, except as
provided below, will reimburse the Company and each such director, officer
or controlling person for all reasonable legal or other expenses incurred
by them or any of them in connection with investigating or defending any
actions whether or not resulting in any liability, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, in any preliminary
prospectus or in the Prospectus or arise out of or are 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, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus or
the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only insofar
as any such untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with information
furnished in writing to the Company by the Representatives or any
Underwriter through the Representatives expressly for use therein.
Promptly after receipt of notice of the commencement of any action in
respect of which indemnity may be sought against one or more Underwriters
under this Section 7, the indemnified party will notify the
Representatives in writing of the commencement thereof, and the
Underwriter or Underwriters against whom indemnity may be sought shall,
subject to the provisions stated below, assume the defense of the action
(including the employment of counsel, who shall be counsel reasonably
satisfactory to the Company, and the payment of expenses) insofar as such
action shall relate to any alleged liability in respect to which indemnity
may be sought against the Underwriter or Underwriters, provided that the
failure to notify the Representatives shall not relieve the Underwriter
from any liability that it may have under this Section 7.3 except to the
extent that the Underwriter has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and
provided further that the failure to notify the Representatives shall not
relieve the Underwriter from any liability that it may have to an
indemnified party otherwise than under this Section 7.3. The Company and
each director, officer or controlling person shall have the right to
employ separate counsel in any action and to participate in the defense
thereof, but the fees and expenses of their counsel shall not be at the
expense of any Underwriter unless the employment of that counsel has been
specifically authorized by the Underwriter or Underwriters obligated to
defend the action or the Underwriter or Underwriters obligated to defend
shall not, within a reasonable time period, employ counsel or the Company,
director, officer or controlling person shall have reasonably concluded
that there may be defenses available to it that are different from,
additional to or in conflict with those available to the Underwriter or
Underwriters obligated to defend the action (in which case the Underwriter
or Underwriters obligated to defend the action
22
shall not have the right to direct the defense on behalf of the Company,
director, officer or controlling person), in any of which events such
reasonable fees and expenses shall be borne by the Underwriter or
Underwriters obligated to defend the action, it being understood, however,
that the Underwriter or Underwriters obligated to defend the action shall
not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one proceeding or series of related
proceedings.
7.3 It is agreed that the only information supplied by the
Underwriters in writing for use in the Registration Statement, the
preliminary prospectus or the Prospectus is set forth (i) in the second
paragraph following the first table under the heading "Underwriting" in
the Prospectus, which paragraph begins "Shares sold by the managing
underwriters . . ."; (ii) under the heading "Underwriting - Stabilization,
Short Sales and Penalty Bids" in the Prospectus; and (iii) in the first
sentence under the heading "Underwriting - Electronic Distribution" in the
Prospectus. It is further agreed that no information has been omitted from
the Registration Statement in reliance on information supplied by the
Underwriters in writing.
7.4 No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional
release of such indemnified party from all liability on any claims that
are the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act
by or on behalf of such indemnified party.
7.5 In order to provide for just and equitable contribution under
the Act in any case in which (i) any indemnified party makes claim for
indemnification pursuant to this Section 7, but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial
of the last right of appeal) that such indemnification may not be enforced
in such case notwithstanding the fact that the express provisions of this
Section 7 provide for indemnification in such case, or (ii) contribution
under the Act may be required on the part of any indemnified party; then
the Company and any such Underwriter shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (which
shall, for all purposes of this Agreement, include, but not be limited to,
all costs of defense and investigation and all attorneys' fees) in either
such case (after contribution from others) (A) in such proportions as is
appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriter on the other hand from the offering of
the Shares or (B) if the allocation provided by clause (A) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (A) but also
the relative fault of the Company, on the one hand, and of the
Underwriter, on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriter, on the
other hand, in connection with
23
the offering of Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriter, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate
public offering price of the Shares. The relative fault of the Company, on
the one hand, and the Underwriter, on the other hand, shall be determined
by reference to, among other things, whether the untrue or allegedly
untrue statement of a material fact or the omission or alleged omission to
state a material fact related to information supplied by the Company or by
the Underwriter 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,
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any action.
7.6 The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 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 that does not take account
of the equitable considerations referred to in Section 7.6.
Notwithstanding the provisions of this Section 7, the contribution of each
contributing Underwriter shall not be in excess of its proportionate share
(based on the ratio of the number of Shares purchased by such Underwriter
to the number of Shares purchased by all contributing Underwriters) of the
portion of such losses, claims, damages or liabilities for which the
Underwriters are responsible and shall not exceed the amount by which the
total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such
untrue statement or alleged untrue statement or omission or alleged
omission and the contribution of the Company shall not be in excess of the
portion of such losses, claims, damages or liabilities for which the
Company is responsible. No person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. The foregoing contribution agreement shall in no way
affect the contribution liabilities of any person having liability under
Section 11 of the Act other than the Company and the Underwriters. If the
full amount of the contribution specified in this Section 7 is not
permitted by law, then the Company and any Underwriter, as the case may
be, shall be entitled to contribution from the Company and/or the
Underwriters, as the case may be, to the full extent permitted by law.
24
8. Effective Date and Termination.
8.1 This Agreement shall become effective at 10:00 a.m., Pacific
Time, on the first full business day following the day on which the
Registration Statement becomes effective or at the time of the initial
public offering of any of the Shares by the Underwriters after the
Registration Statement becomes effective, whichever time shall first
occur. The time of the initial public offering shall mean the time of the
release by you, for publication, of the first newspaper advertisement,
which is subsequently published, relating to the Shares, or the time at
which the Shares are first generally offered by the Underwriters to
dealers by letter or telegram, whichever occurs first. You may prevent
this Agreement from becoming effective without liability of any party to
any other party, except as otherwise provided in Sections 8.2 and 8.3, by
giving notice as indicated below in Section 8.2 prior to the time when
this Agreement would otherwise become effective as herein provided.
8.2 This Agreement, except for Sections 6.2, 7, 10, 11 and 12, may
be terminated by the Representatives by notifying the Company at any time
at or prior to the First Closing Date, and the option referred to in
Section 2.2, if exercised, may be cancelled at any time prior to the
Second Closing Date, if, in the Representatives' judgment, payment for and
delivery of the Shares is rendered impracticable or inadvisable by reason
of (i) the Company having sustained a material loss, whether or not
insured, by reason of fire, earthquake, flood, accident or other calamity,
or from any labor dispute or court or government action, order or decree,
(ii) trading in securities on the New York Stock Exchange, AMEX or Nasdaq
having been suspended or limited, (iii) material governmental restrictions
having been imposed on trading in securities generally, (iv) a banking
moratorium having been declared by federal or California or New York state
authorities, (v) any material adverse change in the financial markets in
the United States, (vi) any major disruption of settlements of securities
or clearance services in the United States, (vii) any attack on, outbreak
or escalation of hostilities or act of terrorism involving the United
States, any declaration of war by Congress or any other national or
international calamity or emergency or any change or development in
national or international political, financial or economic conditions if,
in the judgment of a majority in interest of the Underwriters including
the Representatives, the effect of any such attack, outbreak, escalation,
act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the sale
of and payment for the Shares, (viii) the passage by the Congress of the
United States or by any state legislative body, of any act or measure, or
the adoption or proposed adoption of any orders, rules, legislation or
regulations by any governmental body or any authoritative accounting
institute or board, or any governmental executive, which is believed
likely by the Representatives to adversely impact the business, financial
condition or financial statements of the Company or the market for the
securities offered hereby, (ix) any material adverse change having
occurred, since the respective dates as of which information is given in
the Registration Statement and Prospectus, in the condition of the
Company, financial or otherwise, or in the earnings, affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business which, in the Representatives' judgment, makes it impracticable
or inadvisable to offer or deliver the
25
Shares on the terms contemplated by the Prospectus, or (x) any of the
conditions specified in Section 5 not having been fulfilled or waived in
writing by the Representatives, at or prior to the Closing Date, when and
as required by this Agreement to be fulfilled.
8.3 If this Agreement is terminated pursuant to any of the
provisions hereof, except as provided in Sections 6.2 and 7, the Company
shall not be under any liability to any Underwriter nor shall any
Underwriter be under any liability to the Company, except that no
Underwriter which shall have failed or refused to purchase the Shares
agreed to be purchased by it hereunder, without some reason sufficient
hereunder to justify its cancellation or termination of its obligations
hereunder, shall be relieved of liability to the Company or to the other
Underwriters for damages occasioned by its default.
9. Default of Underwriters.
9.1 If one or more of the Underwriters fails or refuses (other
than for a reason sufficient to justify the termination of this Agreement)
to purchase on the First Closing Date or the Second Closing Date the
aggregate number of Primary Shares or Over-Allotment Shares agreed to be
purchased by such Underwriter or Underwriters and the aggregate number of
Primary Shares or Over-Allotment Shares agreed to be purchased by the
Underwriter or Underwriters shall not exceed 10% of the total number of
Primary Shares or Over-Allotment Shares (as the case may be) to be sold
hereunder to the Underwriters, then each of the non-defaulting
Underwriters shall be obligated to purchase these Primary Shares or
Over-Allotment Shares on the terms herein set forth in proportion to their
respective obligations hereunder. In that case, the Representatives and
the Company shall have the right to postpone the First Closing Date or the
Second Closing Date (as the case may be) for a period of not more than
seven days in order that necessary changes and arrangements may be
effected.
9.2 If one or more of the Underwriters fails or refuses (other
than for a reason sufficient to justify the termination of this Agreement)
to purchase on the First Closing Date or the Second Closing Date the
aggregate number of Primary Shares or Over-Allotment Shares agreed to be
purchased by such Underwriter or Underwriters and the aggregate number of
Primary Shares or Over-Allotment Shares agreed to be purchased by such
Underwriter or Underwriters exceeds 10% of the total number of Primary
Shares or Over-Allotment Shares (as the case may be) to be sold hereunder
to the Underwriters, then the non-defaulting Underwriters shall have the
right to purchase, or procure one or more Underwriters reasonably
acceptable to the Company, to purchase, in such proportions as they may
agree upon and upon the terms herein set forth, the Primary Shares or
Over-Allotment Shares which the defaulting Underwriter or Underwriters
agreed to purchase, and this Agreement shall be carried out accordingly.
If the other Underwriters do not exercise this right within thirty-six
hours after receiving notice of the default, then the Company shall be
entitled to an additional period of twenty-four hours within which to
procure another party or parties satisfactory to the Representatives to
purchase or agree to purchase these Primary Shares or Over-Allotment
Shares on the terms herein set forth. In any such case, the
Representatives and the Company shall have the right to postpone the First
Closing Date or the Second Closing Date (as the case may
26
be) for a period of not more than seven days in order that necessary
changes and arrangements may be effected. If this Section 9.2 becomes
applicable and neither the non-defaulting Underwriters nor the Company
shall make arrangements within the period stated for the purchase of the
Primary Shares or Over-Allotment Shares that the defaulting Underwriter or
Underwriters agreed to purchase, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter to the Company and
without liability on the part of the Company except as provided in
Sections 6.2 and 7. The provisions of this Section 9 shall not in any way
affect the liability of any defaulting Underwriter to the Company arising
out of the default.
9.3 The respective purchase obligation of each Underwriter shall
be subject to such adjustments as the Representatives may make in their
absolute discretion.
10. Representations and Agreement to Remain in Effect. The expense,
reimbursement and indemnification agreements contained in Sections 6, 7 and 8
shall survive any termination of this Agreement; and the representations,
warranties and covenants of the Company set forth in this Agreement shall remain
operative and in full force and effect regardless of (i) any investigation made
by or on behalf of any of the Underwriters, the Company, any controlling person,
director or officer of the Company or the Underwriters, and (ii) delivery,
acceptance of and payment for the Shares under this Agreement.
11. Parties in Interest. This Agreement has been and is made solely for
the benefit of the Underwriters, the Company and their respective successors and
assigns, to the extent expressed herein, for the benefit of persons controlling
any of the Company or any of the Underwriters, directors and officers of the
Company and their respective successors and assigns, and no other person,
partnership, association or corporation shall acquire or have any right under or
by virtue of this Agreement. The term "successors and assigns" shall not include
any purchaser of Shares from any Underwriter merely because of such purchase.
12. Notices, Headings, Etc. Except as otherwise provided in this
Agreement, all statements, requests, notices and other communications hereunder
shall be in writing and shall be mailed, delivered, telegraphed or sent by
facsimile transmission and confirmed to the Representatives at the address set
forth above, (i) in the case of Wedbush Xxxxxx Securities Inc., attention:
Corporate Finance (facsimile number: (000) 000-0000), and (ii) in the case of
First Albany Capital Inc., attention: Investment Banking (facsimile number:
(000) 000-0000); and if to the Company, to Phoenix Footwear Group, Inc., 0000
Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000, attention: Chief Executive
Officer (facsimile number: (000) 000-0000). Notices shall be effective upon
receipt. Any party may change the address at which it is to receive
communications hereunder upon notice to the other parties as provided above.
This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers and directors and
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement. Signatures
delivered by facsimile or other electronic means will be valid and enforceable.
The headings in this
27
Agreement have been inserted as a matter of convenience and reference and are
not a part of this Agreement.
13. Applicable Law, Jurisdiction and Venue. In all respects, including
all matters of construction, validity and performance, this Agreement and the
rights and obligations arising hereunder, shall be governed by, and construed
and enforced in accordance with, the laws of the State of California applicable
to contracts made and performed in such state, without regard to principles
thereof regarding conflicts of laws. The parties hereby consent, in any dispute,
action, litigation or other proceeding concerning this Agreement (including
arbitration) to the jurisdiction of the courts of California, with the County of
Orange being the sole venue for the bringing of the action or proceeding, and
waive any right to object to such jurisdiction, including without limitation,
any objection based on a claim of improper venue or forum non conveniens.
14. Amendments and Waiver. This Agreement may be amended only in
writing, signed by each party hereto. No provision of this Agreement may be
waived except in writing, signed by the party against whom waiver is sought.
15. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION AND UNDERSTANDING THEY ARE WAIVING A CONSTITUTIONAL RIGHT, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO, THIS
AGREEMENT, THE SECURITIES AND/OR ANY RELATED AGREEMENT OR THE TRANSACTIONS
COMPLETED HEREBY OR THEREBY.
28
Please confirm that the foregoing correctly sets forth the agreement among
us.
Sincerely yours,
PHOENIX FOOTWEAR GROUP, INC.
By:
-----------------------------------------
Xxxxxxx X. Xxxxx, Chief Executive Officer
Confirmed and accepted as of the date first above written.
WEDBUSH XXXXXX SECURITIES INC.
FIRST ALBANY CAPITAL INC.
For themselves and as the Representatives
of the several Underwriters named in
Schedule A hereto.
By: Wedbush Xxxxxx Securities Inc.
By:
----------------------------------------
Xxxxxxx X. Xxxxxxx, Managing Director
29
SCHEDULE A
UNDERWRITERS
Number of
Underwriter Primary Shares
----------- --------------
Wedbush Xxxxxx Securities Inc. ......................
First Albany Capital Inc. ...........................
[OTHERS]
Total........................................... 2,500,000
Price Per Share: $
-----------
Bank Account Information:
SCHEDULE B
LIST OF SHAREHOLDERS, OFFICERS AND DIRECTORS
SUBJECT TO LOCK-UP AGREEMENTS
Name
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxx
Xxxxxxx Xxxxxxx
Xxxxxx X. XxXxxxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxxxxxxx X. Port
Xxxxxxx X. Xxxxx
Xxxxxxx Corporation
Retirement Committee of Phoenix Footwear Group, Inc. Retirement Savings and
Partnership Plan (Xxxxx X. Xxxxxxx and Xxxxxx X. XxXxxxxxx - Retirement
Committee members)
EXHIBIT 1
FORM OF WARRANT AGREEMENT
See form of Warrant Agreement delivered concurrently with the execution of this
Agreement. Concurrently with the delivery of the Primary Shares to the
Underwriters, the Warrant Agreements shall be issued as follows:
Representative Name/Holder Number of Underlying Shares
-------------------------- ---------------------------
Wedbush Xxxxxx Securities Inc. 32,500
First Albany Capital Inc. 17,500
EXHIBIT 2
FORMS OF LOCK-UP AGREEMENTS
See forms of lock-up agreements for shareholders, officers and directors listed
on Schedule B, which forms were filed as exhibits 10.25, 10.26 and 10.27 to the
Registration Statement.
EXHIBIT 3
FORM OF OPINION OF XXXXX XXXXXX XXXXXX LLP
See form of opinion delivered concurrently with the execution of this agreement.
EXHIBIT 4
FORM OF OPINION OF XXXXXX, XXXXXXX AND XXXXXX LLP
See form of opinion attached as Exhibit F to the Stock Purchase Agreement by and
among the Company, W. Xxxxxxx Xxxxx and Altama dated June 15, 2004.
EXHIBIT 5
FORM OF OPINION OF HOLLAND & KNIGHT, LLP
See form of opinion attached as Exhibit G to the Stock Purchase Agreement by and
among the Company, W. Xxxxxxx Xxxxx and Altama dated June 15, 2004.
