Exhibit 1.1
5,000,000 SHARES (1)
XXXXXXXXXXX.XXX, INC.
COMMON STOCK
PURCHASE AGREEMENT
June ___, 1999
U.S. BANCORP XXXXX XXXXXXX INC.
CIBC WORLD MARKETS CORP.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o U. S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Gentlemen:
Xxxxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), proposes
to sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 5,000,000 authorized but unissued shares (the
"Firm Shares") of the Company's Common Stock, $0.01 par value per share (the
"Common Stock"). The Company has also granted to the several Underwriters an
option to purchase up to 750,000 additional shares of Common Stock on the
terms and for the purposes set forth in Section 3 hereof (the "Option
Shares"). The Firm Shares and any Option Shares purchased pursuant to this
Purchase Agreement are herein collectively called the "Securities."
The Company hereby confirms its agreement with respect to the sale of
the Securities to the several Underwriters, for whom you are acting as
Representatives (the "Representatives").
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on
Form S-1 (File No. 333-77073) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the rules and regulations ("Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder and has been
filed with the Commission; one or more amendments to such registration
statement have also been so prepared and have been, or will be, so filed;
and, if the Company has elected to rely upon Rule 462(b) of the Rules and
Regulations to increase the
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(1) Plus an option to purchase up to 750,000 additional shares to cover
over-allotments.
size of the offering registered under the Act, the Company will prepare and
file with the Commission a registration statement with respect to such
increase pursuant to Rule 462(b). Copies of such registration statement(s)
and amendments and each related preliminary prospectus have been delivered to
you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to
the registration statement and an amended prospectus (including a term sheet
meeting the requirements of Rule 434 of the Rules and Regulations). If the
Company has elected to rely upon Rule 430A of the Rules and Regulations, it
will prepare and file a prospectus (or a term sheet meeting the requirements
of Rule 434) pursuant to Rule 424(b) that discloses the information
previously omitted from the prospectus in reliance upon Rule 430A. Such
registration statement as amended at the time it is or was declared effective
by the Commission, and, in the event of any amendment thereto after the
effective date and prior to the First Closing Date (as hereinafter defined),
such registration statement as so amended (but only from and after the
effectiveness of such amendment), including a registration statement (if any)
filed pursuant to Rule 462(b) of the Rules and Regulations increasing the
size of the offering registered under the Act and information (if any) deemed
to be part of the registration statement at the time of effectiveness
pursuant to Rules 430A(b) and 434(d) of the Rules and Regulations, is
hereinafter called the "Registration Statement." The prospectus included in
the Registration Statement at the time it is or was declared effective by the
Commission is hereinafter called the "Prospectus," except that if any
prospectus (including any term sheet meeting the requirements of Rule 434 of
the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the
Company with the Commission pursuant to Rule 424(b) (and Rule 434, if
applicable) of the Rules and Regulations or any other such prospectus
provided to the Underwriters by the Company for use in connection with the
offering of the Securities (whether or not required to be filed by the
Company with the Commission pursuant to Rule 424(b) of the Rules and
Regulations) differs from the prospectus on file at the time the Registration
Statement is or was declared effective by the Commission, the term
"Prospectus" shall refer to such differing prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) from and
after the time such prospectus is filed with the Commission or transmitted to
the Commission for filing pursuant to such Rule 424(b) (and Rule 434, if
applicable) or from and after the time it is first provided to the
Underwriters by the Company for such use. The term "Preliminary Prospectus"
as used herein means any preliminary prospectus included in the Registration
Statement prior to the time it becomes or became effective under the Act and
any prospectus subject to completion as described in Rule 430A or 434 of the
Rules and Regulations. The Company hereby confirms that the Underwriters and
dealers have been authorized to distribute or cause to be distributed each
preliminary prospectus and are authorized to distribute the Prospectus (as
from time to time amended or supplemented if the Company furnishes amendments
or supplements thereto to the Underwriters).
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters as follows:
(i) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission and each
Preliminary Prospectus, at the time of filing thereof, did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; except that the foregoing shall not
apply to statements in or omissions from any Preliminary Prospectus
in reliance upon, and in conformity with, written
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information furnished to the Company by you, or by any Underwriter
through you, specifically for use in the preparation thereof.
(ii) As of the time the Registration Statement (or any
post-effective amendment thereto, including a registration statement
(if any) filed pursuant to Rule 462(b) of the Rules and Regulations
increasing the size of the offering registered under the Act) is or
was declared effective by the Commission, upon the filing or first
delivery to the Underwriters of the Prospectus (or any supplement to
the Prospectus (including any term sheet meeting the requirements of
Rule 434 of the Rules and Regulations)) and at the First Closing Date
and Second Closing Date (as hereinafter defined), (A) the
Registration Statement and Prospectus (in each case, as so amended
and/or supplemented) conformed or will conform in all material
respects to the requirements of the Act and the Rules and
Regulations, (B) the Registration Statement (as so amended) did not
or will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (C) the Prospectus
(as so supplemented) did not or will not include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances in which they are or were made, not misleading;
except that the foregoing shall not apply to statements in or
omissions from any such document in reliance upon, and in conformity
with, written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation
thereof. If the Registration Statement has been declared effective
by the Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued, and to the Company's
knowledge, no proceeding for that purpose has been initiated or
threatened by the Commission.
(iii) The financial statements of the Company, together
with the notes thereto, set forth in the Registration Statement and
Prospectus comply in all material respects with the requirements of
the Act and fairly present the financial condition of the Company as
of the dates indicated and the results of operations and changes in
cash flows for the periods therein specified in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein);
and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The
selected and summary combined and consolidated financial and
operational data included in the Registration Statement present
fairly the information shown therein and have been compiled on a
basis consistent with the audited financial statements. No other
financial statements or schedules are required to be included in the
Registration Statement or Prospectus. KPMG LLP, which has expressed
its opinion with respect to the financial statements and schedules
filed as a part of the Registration Statement and included in the
Registration Statement and Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations.
(iv) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and its subsidiaries has full corporate power and
authority to own its properties and conduct its business as currently
being conducted and as described in the Registration Statement and
Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which it owns or
leases real property or in which the conduct of its business makes
such qualification necessary and in which the failure to so qualify
would have a material adverse effect upon its business, condition
(financial or otherwise) or properties, taken as a whole; and each of
the Company and its subsidiaries has all
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requisite corporate power and authority and all necessary
authorizations, approvals, consents, orders, licenses, certificates
and permits to enter into, deliver and perform this Agreement and to
issue and sell the Securities other than those required under the
Securities Act and state and foreign Blue Sky laws.
(v) Except as contemplated in the Prospectus, 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 material liabilities or
obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and there
has not been any change in the capital stock (other than a change in
the number of outstanding shares of Common Stock due to the issuance
of shares upon the exercise of outstanding options or warrants), or
any material change in the short-term or long-term debt, or any
issuance of options, warrants, convertible securities or other rights
to purchase the capital stock, of the Company or any of its
subsidiaries, or any material adverse change, or to the Company's
knowledge, any development involving a prospective material adverse
change, in the general affairs, condition (financial or otherwise),
business, key personnel, property, prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole.
(vi) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or
any of its subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which (i)
might result in any material adverse change in the condition
(financial or otherwise), business, prospects, net worth or results
of operations of the Company and its subsidiaries, taken as a whole,
(ii) might prevent consummation of the transactions contemplated
hereby or (iii) is required to be disclosed in the Registration
Statement or Prospectus and is not so disclosed.
(vii) The Company is not involved in any labor dispute
nor, to the knowledge of the Company, is any such dispute threatened,
which dispute would have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(viii) There are no contracts or documents of the Company
or any of its subsidiaries that are required to be filed as exhibits
to the Registration Statement by the Act or by the Rules and
Regulations that have not been so filed. Each agreement listed in
the exhibits to the Registration Statement, other than agreements
that by their terms have expired or will expire upon the completion
of the transactions contemplated hereby, is in full force and effect
and is valid and enforceable by and against the Company or its
subsidiaries, and to the knowledge of the Company, the other parties
thereto, in accordance with its terms thereto.
(ix) This Agreement has been duly authorized, executed
and delivered by the Company, and constitutes a valid, legal and
binding obligation of the Company, enforceable in accordance with its
terms, except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting the rights of creditors generally and subject to
general principles of equity. The execution, delivery and
performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any agreement or
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instrument to which the Company is a party or by which it is bound or
to which any of its property is subject, the Company's charter or
by-laws, or any franchise, license, permit, judgment, order, rule,
regulation or decree of any court or governmental agency or body
having jurisdiction over the Company or any of its properties; no
franchise, license, permit, consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act or state
securities or blue sky laws; and the Company has full power and
authority to enter into this Agreement and to authorize, issue and
sell the Securities as contemplated by this Agreement.
(x) All of the issued and outstanding shares of capital
stock of the Company are duly authorized and validly issued, fully
paid and nonassessable, have been issued in compliance with all
applicable federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and the holders thereof are not
subject to personal liability by reason of being such holders; the
Securities which may be sold hereunder by the Company have been duly
authorized and, when issued, delivered and paid for in accordance
with the terms hereof, will have been validly issued and will be
fully paid and nonassessable, and the holders thereof will not be
subject to personal liability by reason of being such holders; and
the capital stock of the Company, including the Common Stock,
conforms to the description thereof in the Registration Statement and
Prospectus. Except as otherwise stated in the Registration Statement
and Prospectus, there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to the Company's
charter, by-laws or any agreement or other instrument to which the
Company is a party or by which the Company is bound. Neither the
filing of the Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any rights
for or relating to the registration of any shares of Common Stock or
other securities of the Company. All of the issued and outstanding
shares of capital stock of each of the Company's subsidiaries have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise described in the Registration
Statement and Prospectus and except for any directors' qualifying
shares, the Company owns of record and beneficially, free and clear
of any security interests, claims, liens, proxies, equities or other
encumbrances, all of the issued and outstanding shares of such stock.
Except as described in the Registration Statement and the
Prospectus, there are no options, warrants, agreements, contracts or
other rights in existence to purchase or acquire from the Company or
any subsidiary of the Company any shares of the capital stock of the
Company or any subsidiary of the Company. The Company has an
authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus.
(xi) Except as described in the Prospectus, the Company
and each of its subsidiaries holds, and has operated and is operating
in compliance in all material respects with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates
and orders of any governmental or self-regulatory body required for
the conduct of its business and all such franchises, grants,
authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect; and
the Company and each of its subsidiaries is in compliance in all
material respects with all applicable federal, state, local and
foreign laws, regulations, orders and decrees.
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(xii) The Company and its subsidiaries have good and
marketable title to all property described in the Registration
Statement and Prospectus as being owned by them, in each case free
and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration
Statement and the Prospectus; except as disclosed in the Registration
Statement and the Prospectus, neither the Company nor its
subsidiaries own, lease or license any asset or property or conduct
any businesses outside the United States of America; the property
held under lease by the Company and its subsidiaries is held by them
under valid, subsisting and enforceable leases with only such
exceptions with respect to any particular lease as do not interfere
in any material respect with the conduct of the business of the
Company or its subsidiaries; except as disclosed in the Registration
Statement and the Prospectus, and to the Company's knowledge, the
Company and each of its subsidiaries owns or possesses all patents,
patent applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, Internet domain names,
copyrights, licenses, inventions, trade secrets and rights necessary
for the conduct of the business of the Company and its subsidiaries
as currently carried on and as described in the Registration
Statement and Prospectus; the expiration of any patents, patent
rights, trade secrets, trademarks, service marks, Internet domain
names, trade names or copyrights would not have a material adverse
effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company or its
subsidiaries; except as stated in the Registration Statement and
Prospectus, no name which the Company or any of its subsidiaries uses
and no other aspect of the business of the Company or any of its
subsidiaries will involve or give rise to any material infringement
of, or material license or similar fees for, any patents, patent
applications, trademarks, servic marks, tradenames, trademark
registrations, service xxxx registrations, Internet domain names,
copyrights, licenses, inventions, trade secrets or other similar
rights of others material to the business or prospects of the Company
and neither the Company nor any of its subsidiaries has received any
notice alleging any such infringement or fee.
(xiii) Neither the Company nor any of its subsidiaries is
in violation of its respective charter or by-laws.
(xiv) Neither the Company nor any of its subsidiaries is
in breach of or otherwise in default in the performance of any
material obligation, agreement or condition contained in any bond,
debenture, note, indenture, loan agreement or any other material
contract, lease or other instrument to which it is subject or by
which any of them may be bound, or to which any of the material
property or assets of the Company or any of its subsidiaries is
subject, which breach or default would have a material adverse effect
on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company or its subsidiaries.
(xv) Except as described in the Prospectus, the Company
and its subsidiaries have filed all federal, state, local and foreign
income and franchise tax returns required to be filed and are not in
default in the payment of any material taxes which were payable
pursuant to said returns or any assessments with respect thereto,
other than any which the Company or any of its subsidiaries is
contesting in good faith.
(xvi) The Company has not distributed and will not
distribute any prospectus or other offering material in connection
with the offering and sale of the Securities other than any
Preliminary Prospectus or the Prospectus or other materials permitted
by the Act to be distributed by the Company.
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(xvii) The Securities have been conditionally approved for
listing on the National Association of Securities Dealers Automated
Quotation ("NASDAQ") National Market System and, on the date the
Registration Statement became or becomes effective, the Company's
Registration Statement on Form 8-A or other applicable form under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
became or will become effective.
(xviii) Other than the subsidiaries of the Company listed
in Exhibit 21 to the Registration Statement, the Company owns no
capital stock or other equity or ownership or proprietary interest in
any corporation, partnership, association, trust or other entity.
(xix) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only
in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xx) No transaction has occurred between or among the
Company and any of its officers or directors or any affiliate or
affiliates of any such officer or director that is required to be
described in and is not described in the Registration Statement and
the Prospectus.
(xxi) The Company has not taken, nor will it take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of any of the Securities.
(xxii) Each officer and director of the Company and each
person set forth on Schedule II hereto, has agreed in writing that
such person will not, for a period of 180 days from the date that the
Registration Statement is declared effective by the Commission (the
"Restricted Period"), offer to sell, contract to sell or otherwise
sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any
options or warrants to purchase any shares of Common Stock or any
securities convertible into or exchangeable for shares of Common
Stock (collectively, "Company Securities") now owned or hereafter
acquired directly by such person or with respect to which such person
has or hereafter acquires the power of disposition, otherwise than
(i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, or (ii)
with the prior written consent of U.S. Bancorp Xxxxx Xxxxxxx Inc.
The foregoing restriction has been expressly agreed to preclude the
holder of the Company Securities from engaging in any hedging or
other transaction which is designed to or reasonably expected to lead
to or result in a disposition of Company Securities during the
Restricted Period, even if such Company Securities would be disposed
of by someone other than such holder. Such prohibited hedging or
other transactions would include, without limitation, any short sale
(whether or not against the box) or any purchase, sale or grant of
any right (including, without limitation, any put or call option)
with respect to any Company Securities or with respect to any
security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value
from Company Securities. Furthermore, such person has also agreed
and consented to the entry of stop transfer instructions with the
Company's transfer agent against the transfer of the Company
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Securities held by such person except in compliance with this
restriction. The Company has provided to counsel for the
Underwriters a complete and accurate list of all securityholders of
the Company and the number and type of securities held by each
securityholder. The Company has provided to counsel for the
Underwriters true, accurate and complete copies of all of the
agreements pursuant to which its officers, directors and stockholders
have agreed to such or similar restrictions (the "Lock-up
Agreements") presently in effect or effected hereby. The Company
hereby represents and warrants that it will not release any of its
officers, directors or other stockholders from any Lock-up Agreements
currently existing or hereafter effected without the prior written
consent of U.S. Bancorp Xxxxx Xxxxxxx Inc.
(xxiii) Other than as contemplated by this Agreement, the
Company has not incurred any liability for any finder's or broker's
fee or agent's commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xxiv) The Company is not presently doing business with the
government of Cuba or to the Company's knowledge with any person or
affiliate located in Cuba.
(b) Any certificate signed by any officer of the Company and
delivered to you 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.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company agrees to issue and sell 5,000,000 Firm Shares to the several
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto. The purchase price for each
Firm Share shall be $ per share. In making this Agreement, each
Underwriter is contracting severally and not jointly; except as provided in
paragraph (c) of this Section 3 and in Section 8 hereof, the agreement of
each Underwriter is to purchase only the respective number of Firm Shares
specified in Schedule I.
The Firm Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by certified or official bank check or other next day funds payable
to the order of the Company, at the offices of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, or such other
location as may be mutually acceptable, at 9:00 a.m. Central time on the
third (or if the Securities are priced, as contemplated by Rule 15c6-1(c)
under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full
business day following the date hereof, or at such other time and date as you
and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act,
such time and date of delivery being herein referred to as the "First Closing
Date" provided, however, that if the Company has not made available to the
Representatives copies of the Prospectus within the time provided in this
Agreement, the Representative may in their sole discretion, postpone the
First Closing Date until no later than two (2) full business days following
delivery of copies of the Prospectus to the Representatives. If the
Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives. Certificates representing the Firm
Shares, in definitive form and in such denominations and registered in such
names as you may request upon at least two business days' prior notice to the
Company, will be made available for checking and packaging not later than
10:30 a.m.,
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Central time, on the business day next preceding the First Closing Date at
the offices of U.S. Bancorp Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be
mutually acceptable.
(b) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company hereby grants to the several Underwriters an option to purchase
all or any portion of the Option Shares at the same purchase price as the
Firm Shares, for use solely in covering any over-allotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option
granted hereunder may be exercised at any time (but not more than once)
within 30 days after the effective date of this Agreement upon notice
(confirmed in writing) by the Representatives to the Company setting forth
the aggregate number of Option Shares as to which the several Underwriters
are exercising the option, the names and denominations in which the
certificates for the Option Shares are to be registered and the date and
time, as determined by you, when the Option Shares are to be delivered, such
time and date being herein referred to as the "Second Closing" and "Second
Closing Date", respectively; provided, however, that the Second Closing Date
shall not be earlier than the First Closing Date nor earlier than the third
business day after the date on which the option shall have been exercised.
If the option is exercised, the obligation of each Underwriter shall be
several and not joint. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage of the total number of Option Shares
to be purchased by the several Underwriters as the number of Firm Shares to
be purchased by such Underwriter is of the total number of Firm Shares to be
purchased by the several Underwriters, as adjusted by the Representatives in
such manner as the Representatives deem advisable to avoid fractional shares.
No Option Shares shall be sold and delivered unless the Firm Shares
previously have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by certified or official bank check or other next day funds payable
to the order of the Company, as appropriate, at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, or
such other location as may be mutually acceptable at 9:00 a.m., Central time,
on the Second Closing Date. If the Representatives so elect, delivery of the
Option Shares may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the Representatives.
Certificates representing the Option Shares in definitive form and in such
denominations and registered in such names as you have set forth in your
notice of option exercise, will be made available for checking and packaging
not later than 10:30 a.m., Central time, on the business day next preceding
the Second Closing Date at the office of U.S. Bancorp Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
(c) It is understood that you, individually and not as
Representatives of the several Underwriters, may (but shall not be obligated
to) make payment to the Company, on behalf of any Underwriter for the
Securities to be purchased by such Underwriter. Any such payment by you
shall not relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an
unincorporated association or partner with the Company.
4. COVENANTS. The Company covenants and agrees with the several
Underwriters as follows:
(i) If the Registration Statement has not already been
declared effective by the Commission, the Company will use its best efforts
to cause the Registration Statement and any post-effective amendments thereto
to become effective as promptly as possible; the Company will notify
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you promptly of the time when the Registration Statement or any
post-effective amendment to the Registration Statement has become effective
or any supplement to the Prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) has been filed and of any
request by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or additional information; if the Company has elected
to rely on Rule 430A of the Rules and Regulations, the Company will prepare
and file a Prospectus (or term sheet within the meaning of Rule 434 of the
Rules and Regulations) containing the information omitted therefrom pursuant
to Rule 430A of the Rules and Regulations with the Commission within the time
period required by, and otherwise in accordance with the provisions of, Rules
424(b), 430A and 434, if applicable, of the Rules and Regulations; if the
Company has elected to rely upon Rule 462(b) of the Rules and Regulations to
increase the size of the offering registered under the Act, the Company will
prepare and file a registration statement with respect to such increase with
the Commission within the time period required by, and otherwise in
accordance with the provisions of, Rule 462(b); the Company will prepare and
file with the Commission, promptly upon your request, any amendments or
supplements to the Registration Statement or Prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) that, in
your reasonable opinion (after consultation with your counsel), may be
necessary or advisable in connection with the distribution of the Securities
by the Underwriters; and the Company will not file any amendment or
supplement to the Registration Statement or Prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) to which
you shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any proceeding
for any such purpose; and the Company will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.
(iii) Within the time during which a prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations)
relating to the Securities is required to be delivered under the Act, or any
of the Rules and Regulations, the Company will comply as far as it is able
with all requirements imposed upon it by the Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in the
Securities as contemplated by the provisions hereof and the Prospectus. If
during such period any event occurs as a result of which the Prospectus would
include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the Prospectus to
comply with the Act, or any of the Rules and Regulations, the Company will
promptly notify you and will amend the Registration Statement or supplement
the Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(iv) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as you
reasonably designate and to continue such qualifications in effect so long as
required for the distribution of the Securities, except that the Company
shall not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in any
state.
10
(v) The Company will furnish to the Underwriters copies of the
Registration Statement (three of which will be signed and will include all
exhibits), each Preliminary Prospectus, the Prospectus, and all amendments
and supplements (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) to such documents, in each case as soon as
available and in such quantities as you may from time to time reasonably
request.
(vi) During a period of five years commencing with the date
hereof, the Company will furnish to the Representatives, and to each
Underwriter who may so request in writing, copies of all periodic and special
reports furnished to the stockholders of the Company and all information,
documents and reports filed with the Commission, the National Association of
Securities Dealers, Inc., NASDAQ or any securities exchange.
(vii) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings statement
(which need not be audited) covering a 12-month period beginning after the
effective date of the Registration Statement that shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 9(a) hereof or is terminated, will
pay or cause to be paid (A) all expenses (including transfer taxes allocated
to the respective transferees) incurred in connection with the delivery to
the Underwriters of the Securities, (B) all expenses and fees (including,
without limitation, fees and expenses of the Company's accountants and
counsel but, except as otherwise provided below, not including fees of the
Underwriters' counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits thereto), the
Securities, each Preliminary Prospectus, the Prospectus, and any amendment
thereof or supplement thereto, and the printing, delivery, and shipping of
this Agreement and other underwriting documents, including Blue Sky
Memoranda, (C) all filing fees and fees and disbursements of the
Underwriters' counsel incurred in connection with the qualification of the
Securities for offering and sale by the Underwriters or by dealers under the
securities or blue sky laws of the states and other jurisdictions which you
shall designate in accordance with Section 4(iv) hereof, (D) the fees and
expenses of any transfer agent or registrar, (E) the filing fees incident to
any required review by the National Association of Securities Dealers, Inc.
of the terms of the sale of the Securities, (F) listing fees, if any, and (G)
all other costs and expenses incident to the performance of its obligations
hereunder that are not otherwise specifically provided for herein. If the
sale of the Securities provided for herein is not consummated by reason of
action by the Company pursuant to Section 9(a) hereof which prevents this
Agreement from becoming effective, or by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its part to
be performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled, the
Company will reimburse the several Underwriters for all out-of-pocket
disbursements (including fees and disbursements of counsel) reasonably
incurred by the Underwriters in connection with their investigation,
preparing to market and marketing the Securities or in contemplation of
performing their obligations hereunder. The Company shall not in any event
be liable to any of the Underwriters for loss of anticipated profits from the
transactions covered by this Agreement.
(ix) The Company will apply the net proceeds from the sale of
the Securities to be sold by it hereunder for the purposes set forth in the
Prospectus and will file such reports with the Commission
11
with respect to the sale of the Securities and the application of the
proceeds therefrom as may be required in accordance with Rule 463 of the
Rules and Regulations.
(x) The Company will not, without your prior written consent,
offer for sale, sell, contract to sell, grant any option for the sale of or
otherwise issue or dispose of any Common Stock or any securities convertible
into or exchangeable for, or any options or rights to purchase or acquire,
Common Stock, except to the Underwriters pursuant to this Agreement, to
holders of the Company's Stock Purchase Warrants, dated as of February 16,
1999 and February 28, 1999, pursuant to the Company's 1998 Stock Plan, 1999
Stock Plan or 1999 Employee Stock Purchase Plan, in connection with the
acquisition by the Company of the business of another corporation,
partnership, limited liability company or other entity, whether by means of a
merger, stock purchase or purchase of assets, or up to an aggregate of 95,000
shares of Common Stock or warrants therefor to be issued to one hotel
management company in connection with a distribution agreement, for a period
of 180 days after the commencement of the public offering of the Securities
by the Underwriters, provided that if the Company shall issue Common Stock
(A) in connection with the acquisition by the Company of the business of
another corporation, partnership, limited liability company or other entity,
whether by means of a merger, stock purchase or purchase of assets, or to (B)
a hotel management company in connection with a distribution agreement, the
persons to whom such Common Stock is issued shall be required to deliver a
letter to the Representatives stating that such person agrees that he or she
will not, without your prior written consent, offer for sale, sell, contract
to sell or otherwise dispose of any shares of Common Stock or rights to
purchase Common Stock for a period of 180 days after commencement of the
public offering of the Securities by the Underwriters.
(xi) The Company either has caused to be delivered to you or
will cause to be delivered to you prior to the effective date of the
Registration Statement a letter from each of the Company's directors and
officers and the stockholders listed on Schedule II hereto stating that such
person agrees that he or she will not, without your prior written consent,
offer for sale, sell, contract to sell or otherwise dispose of any shares of
Common Stock or rights to purchase Common Stock for a period of 180 days
after commencement of the public offering of the Securities by the
Underwriters.
(xii) The Company shall cause to be prepared and delivered, at
its expense, not later than one day after the time a Prospectus is required
to be filed pursuant to Rule 424(b), to the Representatives an "electronic
Prospectus" to be used by the Underwriters in connection with the offering
and sale of the Securities. As used herein, the term "electronic Prospectus"
means a form of Prospectus, and any amendment or supplement thereto, that
meets each of the following conditions: (i) it shall be encoded in an
electronic format, reasonably satisfactory to the Representatives, that may
be transmitted electronically by the Representatives to offerees and
purchasers of the Securities for at least the Prospectus delivery period;
(ii) it shall disclose the same information as the paper Prospectus and
Prospectus filed pursuant to XXXXX, except to the extent that graphic and
image material cannot be disseminated electronically, in which case such
graphic and image material shall be replaced in the electronic Prospectus
with a fair and accurate narrative description or tabular representation of
such material, as appropriate; and (iii) it shall be in or convertible into a
paper format or an electronic format, reasonably satisfactory to the
Representatives, that will allow investors to store and have continuously
ready access to the Prospectus at any future time, without charge to
investors (other than any fee charged for subscription to the system as a
whole and for on-line time). Such electronic Prospectus may consist of a
Rule 434 preliminary prospectus, together with the applicable term sheet,
provided that it otherwise satisfies the format and conditions described in
the immediately preceding sentence. The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to XXXXX or
otherwise with the Commission and in the Registration Statement at the time
it was declared effective an
12
undertaking that, upon receipt of a request by an investor or his or her
representative within the Prospectus delivery period, the Company shall
transmit or cause to be transmitted promptly, without charge, a paper copy of
the Prospectus.
(xiii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities, and has not effected any sales of Common
Stock which are required to be disclosed in response to Item 701 of
Regulation S-K under the Act which have not been so disclosed in the
Registration Statement.
(xiv) The Company will not incur any liability for any finder's
or broker's fee or agent's commission in connection with the consummation of
the transactions contemplated hereby.
(xv) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Stock.
(xvi) If at any time during the twenty-five (25) day period
after the Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of which
in your opinion the market price of the Common Stock has been or is likely to
be materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus), the
Company will, after written notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you and your counsel
concerning the substance of and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on
such rumor, publication or event.
(xvii) The Company will inform the Florida Department of Banking
and Finance at any time prior to the consummation of the distribution of the
Securities by the Underwriters if it commences engaging in business directly
with the government of Cuba or to the Company's knowledge with any person or
affiliate located in Cuba. Such information will be provided within 90 days
after the commencement thereof or after a change occurs with respect to
previously reported information.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters hereunder are subject to the accuracy of, as of the date
hereof and at each of the First Closing Date and the Second Closing Date (as
if made at such Closing Date), in all material respects, all representations
and warranties of the Company contained herein, and to the compliance and
performance by the Company of its obligations and agreements hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., Central time, on the date of this Agreement, or such
later time and date as you, as Representatives of the several Underwriters,
shall approve and all filings required by Rules 424, 430A and 434 of the
Rules and Regulations shall have been timely made; no stop order suspending
the effectiveness of the Registration Statement or any amendment thereof
shall have been issued; no proceedings for the issuance of such an order
shall have been initiated or threatened; and any request of the Commission
for additional information (to be included in the Registration Statement or
the Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) [Omitted]
13
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, the Company and its subsidiaries, taken as a
whole, shall not have incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or declared
or paid any dividends or made any distribution of any kind with respect to
their capital stock; and there shall not have been any change in the capital
stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options
or warrants), or any material change in the short-term or long-term debt of
the Company, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock of the Company or any of its
subsidiaries, or any material adverse change or any development involving a
prospective material adverse change (whether or not arising in the ordinary
course of business), in the general affairs, condition (financial or
otherwise), business, key personnel, property, prospects, net worth or
results of operations of the Company and its subsidiaries, taken as a whole,
that, in your judgment, makes it impractical or inadvisable to offer or
deliver the Securities on the terms and in the manner contemplated in the
Prospectus.
(d) On each Closing Date, there shall have been furnished to you,
as Representatives of the several Underwriters, the opinions of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the Company,
and Saul, Ewing, Xxxxxx & Xxxx L.L.P., special regulatory counsel to the
Company, each dated such Closing Date and addressed to you in the forms of
Exhibit A-1 and Exhibit A-2 hereto respectively.
In rendering such opinion, such counsel may rely (i) as to matters
of law other than in the case of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., the
laws of the State of California and the General Corporation Law of the State
of Delaware, in the case of Saul, Ewing, Xxxxxx & Xxxx, L.L.P., the laws of
the State of Maryland, and, in either case, federal law, upon the opinion or
opinions of local counsel reasonably acceptable to you, provided that the
extent of such reliance is specified in such opinion and that such counsel
shall state that such opinion or opinions of local counsel are reasonably
satisfactory to them and that they believe they and you are reasonably
justified in relying thereon and (ii) as to matters of fact, upon
certificates of officers of the Company and its subsidiaries provided that
the extent of such reliance is specified in such opinion.
(e) On each Closing Date, there shall have been furnished to you,
as Representatives of the several Underwriters, such opinion or opinions from
Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the several Underwriters, dated such
Closing Date and addressed to you, with respect to the formation of the
Company, the validity of the Securities, the Registration Statement, the
Prospectus and other related matters as you reasonably may request, and such
counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
(f) On each Closing Date you, as Representatives of the several
Underwriters, shall have received a letter of KPMG LLP, dated such Closing
Date and addressed to you, confirming that they are independent public
accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under
Rule 2-01 of Regulation S-X of the Commission, and setting forth their
opinion with respect to their examination of the balance sheet of the Company
as of December 31, 1997 and 1998 and related statements of operations,
stockholders' equity, and cash flows for the twelve (12) months ended
December 31, 1996, 1997 and 1998, stating that they have performed the
procedures set out in Statement on Auditing Standards No. 71 ("SAS 71") for a
review of interim financial information and providing the report of KPMG LLP
as described in SAS 71 on the financial statements for the first-quarter
period ended March 31, 1999 (the "Quarterly Financial Statements"), and
stating, as of the date of such letter (or, with respect to matters involving
changes or
14
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date of such letter), the conclusions and findings of said firm
with respect to the financial information and other matters covered by its
letter delivered to you concurrently with the execution of this Agreement,
and the effect of the letter so to be delivered on such Closing Date shall be
to confirm the conclusions and findings set forth in such prior letter.
(g) On each Closing Date, there shall have been furnished to you,
as Representatives of the Underwriters, a certificate, dated such Closing
Date and addressed to you, signed by the chief executive officer and by the
chief financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in
this Agreement are true and correct, in all material respects, as if
made at and as of such Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof
or the qualification of the Securities for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
their knowledge, is contemplated by the Commission or any state or
regulatory body; and
(h) The Company shall have furnished to you and counsel for the
Underwriters such additional documents, certificates and evidence as you or
they may have reasonably requested.
(i) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and their counsel.
(j) The Company shall have made all filings required under
applicable securities laws and by the Nasdaq National Market (including any
required registration under the Exchange Act), and the Securities shall have
been approved for quotation upon notice of issuance.
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to you and counsel for the Underwriters. The Company will
furnish you with such conformed copies of such opinions, certificates,
letters and other documents as you shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the
information deemed to be a part of the Registration Statement at the time of
effectiveness pursuant to Rules 430A and 434(d) of the Rules and Regulations,
if applicable, any Preliminary Prospectus, the Prospectus, or any amendment
or supplement thereto (including any term sheet within the meaning of Rule
434 of the Rules and Regulations), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
15
stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending
against such loss, claim, damage, liability or action; provided, however,
that (i) the Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by you, or by
any Underwriter through you, specifically for use in the preparation thereof
and (ii) the indemnity agreement contained in this paragraph (a) with respect
to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Securities which are the subject
thereof (or to the benefit of any person controlling such Underwriter) if
copies of the Prospectus were timely delivered to the Underwriters by the
Company pursuant to Section 4(v) and at or prior to the written confirmation
of the sale of such Securities a copy of the Prospectus (or the Prospectus as
amended or supplemented) was not sent or delivered to such person, if
required by law so to have been delivered, and the untrue statement or
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented)
unless the failure is the result of noncompliance by the Company with
paragraph (c) of Section 6 hereof.
In addition to its other obligations under this Section 6(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based
upon any statement or omission, or any alleged statement or omission,
described in this Section 6(a), it will reimburse each Underwriter on a
monthly basis for all reasonable legal fees or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Company's obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter that
received such payment shall promptly return it to the Company, together with
interest, compounded daily, determined on the basis of the prime rate (or
other commercial lending rate for borrowers of the highest credit standing)
announced from time to time by Norwest Bank (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter within 30
days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement shall be in addition
to any liabilities which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto (including any term sheet within the meaning
of Rule 434 of the Rules and Regulations), 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,
in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by you, or by
such Underwriter through you, specifically for use in the preparation
thereof, and will reimburse the Company for any legal or other expenses
reasonably incurred
16
by the Company in connection with investigating or defending against any such
loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any
liability that it may have to any indemnified party unless, and only to the
extent that, such omission has materially prejudiced the rights or defenses
available to the indemnifying party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party under such subsection for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that if, the Representatives, have been advised by their
counsel that it is advisable for the Underwriters to be represented as a
group by separate counsel because there exists an actual or potential
material conflict of interest between the indemnifying party and the
indemnified party, the Representatives shall have the right to employ a
single counsel to represent the Representatives and all Underwriters who may
be subject to liability arising from any claim in respect of which indemnity
may be sought by the Underwriters under subsection (a) of this Section 6, in
which event the reasonable fees and expenses of such separate counsel shall
be borne by the indemnifying party or parties and reimbursed to the
Underwriters as incurred (in accordance with the provisions of the second
paragraph in subsection (a) above). An indemnifying party shall not be
obligated under any settlement agreement relating to any action under this
Section 6 to which it has not agreed in writing, such consent not to be
unreasonably withheld.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand
and the Underwriters on the other 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 Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bears to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relevant intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection
(d) were to be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method
17
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), subject to the limitations set forth
in paragraph (c), above, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Securities 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 or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 6 shall be in addition to any
liability that the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Company
(including any person who, with his consent, is named in the Registration
Statement as about to become a director of the Company), to each officer of
the Company who has signed the Registration Statement and to each person, if
any, who controls the Company within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of any Underwriter or any controlling person thereof or the
Company or any of its officers, directors, or controlling persons, and shall
survive delivery of, and payment for, the Securities to and by the
Underwriters hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Firm Shares agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Firm Shares in accordance with
the terms hereof, and the amount of Firm Shares not purchased does not
aggregate more than 10% of the total amount of Firm Shares set forth in
Schedule I hereto, the remaining Underwriters shall be obligated to take up
and pay for (in proportion to their respective underwriting obligations
hereunder as set forth in Schedule I hereto except as may otherwise be
determined by you) the Firm Shares that the withdrawing or defaulting
Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Firm Shares agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Firm Shares in accordance with
the terms hereof, and the amount of Firm Shares not purchased aggregates more
than 10% of the total amount of Firm Shares set forth in Schedule I hereto,
and arrangements satisfactory to you for the purchase of such Firm Shares by
other persons are not made within 36 hours thereafter, this Agreement shall
terminate. In the event of any such termination the Company shall not be
under any liability to any Underwriter (except to the extent provided in
18
Section 4(a)(viii) and Section 6 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the amount of Firm Shares agreed
by such Underwriter to be purchased hereunder) be under any liability to the
Company (except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by
the non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, Prospectus and any other
documents, as well as any other arrangements, may be effected. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 8:30 a.m., Eastern
time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of
the Registration Statement as you in your discretion shall first release the
Securities for sale to the public; provided, that if the Registration
Statement is effective at the time this Agreement is executed, this Agreement
shall become effective at such time as you in your discretion shall first
release the Securities for sale to the public. For the purpose of this
Section, the Securities shall be deemed to have been released for sale to the
public upon release by you of the publication of a newspaper advertisement
relating thereto or upon release by you of telexes offering the Securities
for sale to securities dealers, whichever shall first occur. By giving
notice as hereinafter specified before the time this Agreement becomes
effective, you, as Representatives of the several Underwriters, or the
Company may prevent this Agreement from becoming effective without liability
of any party to any other party, except that the provisions of Section
4(a)(viii) and Section 6 hereof shall at all times be effective.
(b) You, as Representatives of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as hereinafter
specified at any time at or prior to the First Closing Date, and the option
referred to in Section 3(b), if exercised, may be canceled at any time prior
to the Second Closing Date, if (i) the Company shall have failed, refused or
been unable, at or prior to such Closing Date, to perform any agreement on
its part to be performed hereunder, (ii) any other condition of the
Underwriters' obligations hereunder is not fulfilled, (iii) trading on the
New York Stock Exchange or the American Stock Exchange shall have been wholly
suspended, (iv) minimum or maximum prices for trading shall have been fixed,
or maximum ranges for prices for securities shall have been required, on the
New York Stock Exchange or the American Stock Exchange, by such Exchange or
by order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by Federal,
New York or Nevada authorities, (vi) if on or prior to such date, any
domestic or international event or act or occurrence has materially disrupted
the securities markets, (vii) if there shall be such a material adverse
change in general financial, political or economic conditions or the effect
of international conditions on the financial markets in the United States is
such as to make it, in the judgment of the Representatives, inadvisable or
impracticable to market the Securities, or (viii) there has occurred any
material adverse change in the financial markets in the United States or an
outbreak of major hostilities (or an escalation thereof) in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a
similar character shall have occurred since the execution of this Agreement
that, in your judgment, makes it impractical or inadvisable to proceed with
the completion of the sale of and payment for the Securities. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 4(a)(viii) and Section 6 hereof shall at all
times be effective.
19
(c) If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section, the Company shall
be notified promptly by you by telephone or telegram, confirmed by letter.
If the Company elects to prevent this Agreement from becoming effective you
shall be notified by the Company by telephone or telegram, confirmed by
letter.
10. DEFAULT BY THE COMPANY. If the Company shall fail at the First
Closing Date to sell and deliver the number of Securities that it is
obligated to deliver hereunder, then this Agreement shall terminate without
any liability on the part of any non-defaulting party.
No action taken pursuant to this Section shall relieve the Company
from liability, if any, in respect of such default.
11. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in
the last paragraph of the cover page and under the caption "Underwriting" in
any Preliminary Prospectus and in the Prospectus constitute the only written
information furnished by or on behalf of the Underwriters referred to in
Section 2 and Section 6 hereof.
12. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed or delivered to the Representatives c/o U.S.
Bancorp Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, except that notices given to an Underwriter
pursuant to section 6 hereof shall be sent to such Underwriter at the address
stated in the Underwriters' Questionnaire furnished by such Underwriter in
connection with this offering; if to the Company, shall be mailed,
telegraphed or delivered to it at 0000 X. Xxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx
00000 Attention: Chief Executive Officer; or in each case to such other
address as the person to be notified may have requested in writing. All
notices given by telegram shall be promptly confirmed by letter. Any party
to this Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such purpose.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal
or equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Securities
from any of the several Underwriters.
14. GOVERNING LAW. This agreement shall be governed by and construed
in accordance with the laws of the State of New York.
[Signature Page Follows]
20
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXXXXX.XXX, INC.
By:__________________________
President
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
U.S. BANCORP XXXXX XXXXXXX INC.
By_____________________________
Managing Director
CIBC WORLD MARKETS CORP.
By_____________________________
Managing Director
SCHEDULE I
Underwriter Number of Firm Shares (1)
----------- -------------------------
-------------------------
Total . . . . . . . . . . . . .
-------------------------
-------------------------
--------------
(1) The Underwriters may purchase up to an additional 750,000 Option Shares, to
the extent the option described in Section 3(b) of the Agreement is
exercised, in the proportions and in the manner described in the Agreement.
SCHEDULE II
Stockholders
All of the Company's Stockholders and each holder of options and warrants
exercisable within 180 days of the date of this Agreement
EXHIBIT A-1
OPINION TO BE DELIVERED BY XXXXXX XXXXXXX XXXXXXXX & XXXXXX
(i) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. To our
knowledge, the Company has no subsidiary and does not control,
directly or indirectly, any corporation, partnership, joint venture,
association or other business organization other than the subsidiaries
set forth in Exhibit 21 to the Registration Statement. Each of the
Company and its subsidiaries has full corporate power and authority to
own its properties and conduct its business as currently being carried
on and as described in the Registration Statement and Prospectus, and
is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which it owns or leases real
property or to our knowledge in which the conduct of its business
makes such qualification necessary and in which the failure to so
qualify would have a material adverse effect upon the business,
condition (financial or otherwise) or properties of the Company and
its subsidiaries, taken as a whole.
(ii) The Company has authorized and issued capital stock
as set forth in the Registration Statement and the Prospectus; the
certificates evidencing the Securities are in due and proper legal
form and have been duly authorized for issuance by the Company; all of
the capital stock of the Company conforms as to legal matters to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock." All of the issued and outstanding
shares of the capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable, and the
holders thereof are not subject to personal liability by reason of
being such holders. The Securities to be issued and sold by the
Company hereunder have been duly authorized and, when issued,
delivered and paid for in accordance with the terms of the Purchase
Agreement, will have been validly issued and will be fully paid and
nonassessable, and the holders thereof will not be subject to personal
liability by reason of being such holders. Except as otherwise stated
in the Registration Statement and Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company's charter, by-laws or any agreement or other
instrument known to us to which the Company is a party or by which the
Company is bound. To our knowledge, neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by the Purchase Agreement gives rise to any rights for or
relating to the registration of any shares of Common Stock or other
securities of the Company.
(iii) All offers and sales of the Company's outstanding
capital stock by or on behalf of the Company of which we have
knowledge were at the time of issuance exempt from the registration
requirements of the Securities Act and were duly registered or the
subject of any available exemption from the requirements of the
applicable state securities or Blue Sky laws.
(iv) To our knowledge, no person has any registration or
other similar rights to have any securities registered by the Company
under the Securities Act.
(v) All of the issued and outstanding shares of capital
stock of each of the Company's subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, to
our knowledge, except as otherwise described in the Registration
Statement and Prospectus, the Company owns of record and beneficially,
free and clear of any
security interests, claims, liens, proxies, equities or other
encumbrances, all of the issued and outstanding shares of such stock.
To our knowledge, except as described in the Registration Statement
and Prospectus, there are no options, warrants, agreements, contracts
or other rights in existence to purchase or acquire from the Company
or any subsidiary any shares of the capital stock of the Company or
any subsidiary of the Company.
(vi) The Registration Statement has become effective
under the Act and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to our knowledge,
threatened by the Commission.
(vii) Other than with respect to "Risk Factors - Evolving
government rules and regulations may negatively affect us," "Risk
Factors - There are uncertainties regarding taxes that could have a
negative effect on us if unfavorable changes or determinations are
made," and "Business - Government Regulation" to which we express no
opinion, the descriptions in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings, contracts and other
documents are accurate and fairly present the information required to
be shown; and we do not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that are not
described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus
or included as exhibits to the Registration Statement that are not
described or included as required.
(viii) The Company has full corporate power and authority
to enter into the Purchase Agreement, to issue and sell the Securities
and to otherwise consummate the transactions contemplated by the
Purchase Agreement. All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery and
performance of the Purchase Agreement and the issuance and sale of the
Securities. The Purchase Agreement has been duly and validly
authorized, executed and delivered by the Company and assuming the
Purchase Agreement is enforceable under New York law constitutes a
valid, legal and binding obligation of the Company enforceable in
accordance with its terms (except as rights to indemnity may be
limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity);
(ix) The execution, delivery and performance of the
Purchase Agreement and the consummation of the transactions
contemplated therein will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, (1) any
statute, rule or regulation known to us, (2) any indenture, mortgage,
deed of trust, note or other agreement or instrument known to us to
which the Company is a party or by which it is bound or to which any
of its property is subject, (3) the Company's charter or by-laws, or
(4) any franchise, license, permit, judgment, order or decree known to
us of any court or governmental agency or body having jurisdiction
over the Company or any of its respective properties. No consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery
and performance of the Purchase Agreement or for the consummation of
the transactions contemplated hereby, including the issuance or sale
of the Securities by the Company, except such as may be required under
the Act or state securities laws.
(x) To our knowledge, the Company and each of its
subsidiaries holds, and is operating in compliance in all material
respects with, all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders of any
governmental or self-regulatory body required for the conduct of its
business and all such franchises, grants, authorizations, licenses,
permits, easements, consents, certifications and orders are valid and
in full force and effect.
(xi) To our knowledge, neither the Company nor any of its
subsidiaries is in violation of its respective charter or by-laws. To
our knowledge, neither the Company nor any of its subsidiaries is in
breach of or otherwise in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture,
note, indenture, loan agreement or any other material contract, lease
or other instrument to which it is subject or by which any of them may
be bound, or to which any of the material property or assets of the
Company or any of its subsidiaries is subject.
(xii) To our knowledge, there is no litigation or
governmental or other proceeding or investigation before any court or
before or by any public body or board pending or threatened against,
or involving the assets, properties or businesses of, the Company or
its subsidiaries which would have a material adverse effect upon the
assets or properties, business, results of operations or condition
(financial or otherwise) of the Company or its subsidiaries.
(xiii) The statements in the Prospectus under the captions
"Management-Incentive Stock Plans," "Management-Change in Control
Arrangements," ," "Management-Employment Agreements,"
"Management-Limitations on Directors' Liability and Indemnification,"
"Certain Transactions," "Description of Capital Stock," "Shares
Eligible for Future Sale," insofar as such statements constitute a
summary of documents referred to therein or matters of law, are fair
summaries in all material respects and accurately present the
information called for with respect to such documents and matters. To
our knowledge, all contracts and other documents required to be filed
as exhibits to, or described in, the Registration Statement have been
so filed with the Commission or are fairly described in the
Registration Statement, as the case may be.
We have participated in conferences with officers and other
representatives of the Company, representatives of the Representatives and
representatives of the independent certified public accountants of the
Company, at which conferences the contents of the Registration Statement and
the Prospectus and related matters were discussed and, although we are not
passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (except as specified in the foregoing opinion),
on the basis of the foregoing, no facts have come to our attention which lead
us to believe that the Registration Statement at the time it became effective
(except with respect to the financial statements and notes and schedules
thereto and other financial data, as to which we express no belief) contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus as amended or supplemented (except with
respect to the financial statements and notes schedules thereto and other
financial data, as to which we express no opinion) on the date thereof
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
EXHIBIT A-2
OPINION TO BE DELIVERED BY SAUL, EWING, XXXXXX & XXXX LLP, SPECIAL REGULATORY
COUNSEL
(i) The statements in the Prospectus under the captions
"Risk Factors-Evolving government rules and regulations may negatively
affect us" and "Business-Government Regulation," insofar as such
statements constitute a summary of matters of law, are fair summaries
in all material respects, accurately present the information called
for with respect to such matters by the Securities Act of 1933 with
respect thereto, and do not contain any untrue statement of any
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(ii) The execution and delivery of the Purchase Agreement
by the Company and the consummation of the transactions contemplated
thereby does not, and the conduct of the Company's business as
described in the Prospectus does not and will not, violate or conflict
with any law or administrative regulation or ruling relating to travel
agents, sellers of travel related products and services or sellers of
products and services via the Internet. Other than the registrations
under various state seller of travel acts listed on Schedule 1 to this
opinion, no other licenses, permits, registrations, qualifications or
authorizations are required by any law or administrative regulation or
ruling relating to travel agents, sellers of travel related products
and services or sellers of products and services via the Internet.
