EXHIBIT 1.1
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PENN NATIONAL GAMING, INC.
(a Pennsylvania corporation)
4,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: February 13, 2002
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TABLE OF CONTENTS
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PURCHASE AGREEMENT............................................................................................1
SECTION 1. Representations and Warranties....................................................................3
(a) Representations and Warranties by the Company....................................................3
(i) Compliance with Registration Requirements.............................................3
(ii) Incorporated Documents................................................................4
(iii) Independent Accountants...............................................................4
(iv) Financial Statements..................................................................4
(v) No Material Adverse Change in Business................................................5
(vi) Good Standing of the Company..........................................................5
(vii) Good Standing of Subsidiaries.........................................................5
(viii) Capitalization........................................................................6
(ix) Authorization of Agreement............................................................6
(x) Authorization and Description of Securities...........................................6
(xi) Absence of Defaults and Conflicts.....................................................6
(xii) Absence of Labor Dispute..............................................................7
(xiii) Absence of Proceedings................................................................7
(xiv) Accuracy of Exhibits..................................................................8
(xv) Possession of Intellectual Property...................................................8
(xvi) Absence of Further Requirements.......................................................8
(xvii) Possession of Licenses and Permits....................................................8
(xviii) Title to Property.....................................................................9
(xix) Compliance with Cuba Act..............................................................9
(xx) Investment Company Act................................................................9
(xxi) Environmental Laws....................................................................9
(xxii) Registration.........................................................................10
(b) Representations and Warranties by the Selling Shareholder.......................................10
(i) Authorization of Agreements..........................................................10
(ii) Good and Marketable Title............................................................11
(iii) Due Execution of Power of Attorney and Custody Agreement.............................11
(iv) Absence of Manipulation..............................................................11
(v) Absence of Further Requirements......................................................12
(vi) Restriction on Sale of Securities....................................................12
(vii) Certificates Suitable for Transfer...................................................12
(viii) Adverse Claims.......................................................................12
(c) Officer's Certificates..........................................................................12
SECTION 2. Sale and Delivery to the Underwriters; Closing...................................................13
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(a) Initial Securities..............................................................................13
(b) Option Securities...............................................................................13
(c) Payment.........................................................................................13
(d) Denominations; Registration.....................................................................14
SECTION 3. Covenants of the Company.........................................................................14
(a) Compliance with Securities Regulations and Commission Requests..................................14
(b) Filing of Amendments............................................................................15
(c) Delivery of Registration Statements.............................................................15
(d) Delivery of Prospectus..........................................................................15
(e) Continued Compliance with Securities Laws.......................................................16
(f) Blue Sky Qualifications.........................................................................16
(g) Rule 158........................................................................................16
(h) Use of Proceeds.................................................................................16
(i) Listing.........................................................................................17
(j) Restriction on Sale of Securities...............................................................17
(k) Reporting Requirements..........................................................................17
SECTION 4. Payment of Expenses..............................................................................17
(a) Expenses........................................................................................17
(b) Expenses of the Selling Shareholder.............................................................18
(c) Termination of Agreement........................................................................18
SECTION 5. Conditions of the Underwriters' Obligations.....................................................18
(a) Effectiveness of Registration Statement.........................................................18
(b) Opinion of Counsel for the Company..............................................................18
(c) Opinion of Counsel for the Selling Shareholder..................................................19
(d) Opinion of Counsel for the Underwriters.........................................................19
(e) Officers' Certificate...........................................................................19
(f) Certificate of Selling Shareholder..............................................................20
(g) Accountant's Comfort Letter.....................................................................20
(h) Bring-down Comfort Letter.......................................................................20
(i) Approval of Listing.............................................................................20
(j) Lock-up Agreements..............................................................................20
(k) Conditions to Purchase of Option Securities.....................................................20
(i) Officers' Certificate................................................................21
(iii) Opinion of Counsel for the Company...................................................21
(v) Opinion of Counsel for the Underwriters..............................................21
(vi) Bring-down Comfort Letter............................................................21
(l) Additional Documents............................................................................21
(m) Termination of Agreement........................................................................22
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SECTION 6. Indemnification..................................................................................22
(a) Indemnification of the Underwriters.............................................................22
(b) Indemnification of the Company, its Directors and Officers and the Selling
Shareholder................................................................................23
(c) Actions against Parties; Notification...........................................................24
(d) Settlement without Consent if Failure to Reimburse..............................................24
SECTION 7. Contribution.....................................................................................25
SECTION 8. Representations, Warranties and Agreements to Survive Delivery...................................26
SECTION 9. Termination of Agreement.........................................................................27
(a) Termination; General............................................................................27
(b) Liabilities.....................................................................................27
SECTION 10. Default by One or More of the Underwriters.......................................................27
SECTION 11. Default by the Selling Shareholder or the Company................................................28
SECTION 12. Notices..........................................................................................29
SECTION 13. Parties..........................................................................................29
SECTION 14. GOVERNING LAW AND TIME...........................................................................29
SECTION 15. Effect of Headings...............................................................................29
SCHEDULES
Schedule A - List of Underwriters..............................................................Sch A-1
Schedule B - List of Subsidiaries..............................................................Sch B-1
Schedule C - Pricing Information...............................................................Sch C-1
Schedule D - List of Persons subject to Lock-up................................................Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel...................................................A-1
Exhibit B - Form of Opinion of Xxxxxx Xxxxxx LLP: Mississippi.....................................B-1
Exhibit C - Form of Opinion of Xxxxxx Xxxxxx LLP: Louisiana.......................................C-1
Exhibit D - Form of Opinion of Xxxxxx Rice XxXxxxx Xxxxxx & Love PLLC: West Virginia..............D-1
Exhibit E - Form of Opinion of Xxxxx, Danzig, Scherer, Xxxxxx & Xxxxxxxx LLP: New Jersey..........E-1
Exhibit F - Form of Opinion of Blake, Xxxxxxx & Xxxxxxx LLP: Canada................................F-1
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Exhibit G - Form of Opinion of Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP: Pennslyvania...................G-1
Exhibit H - Form of Opinion of Counsel for the Selling Shareholder.................................H-1
Exhibit I - Form of Lock-up Letter.................................................................I-1
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PENN NATIONAL GAMING, INC.
(a Pennsylvania corporation)
4,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
February 13, 2002
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BEAR, XXXXXXX & CO. INC.
CIBC WORLD MARKETS CORP.
DEUTSCHE BANC ALEX. XXXXX INC.
XXXXXX BROTHERS INC.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Four World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Penn National Gaming, Inc., a Pennsylvania corporation (the "COMPANY"), and
The Xxxxxxx Family Trust (the "SELLING SHAREHOLDER") confirm their agreement
with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("XXXXXXX XXXXX"), Bear, Xxxxxxx & Co. Inc., CIBC World Market Corp., Deutsche
Bank Alex. Xxxxx Inc., Xxxxxx Brothers Inc. and each of the other Underwriters
named in SCHEDULE A hereto (collectively, the "UNDERWRITERS," which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx and Bear, Xxxxxxx & Co., Inc. are acting as
Representatives (in such capacity, the "REPRESENTATIVES"), with respect to the
issue and sale by the Company and the Selling Shareholder , and the purchase by
the Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.01 per share, of the Company ("COMMON
STOCK") set forth in said SCHEDULE A, and with respect to the grant by the
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 600,000
additional shares of Common Stock solely to cover over-allotments, if any. The
aforesaid 4,000,000 shares of
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Common Stock (the "INITIAL SECURITIES") to be purchased by the Underwriters and
all or any part of the 600,000 shares of Common Stock subject to the option
described in Section 2(b) hereof (the "OPTION SECURITIES") are hereinafter
called, collectively, the "SECURITIES."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-63780) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 ACT"), including a related prospectus, which has become effective. The
registration statement (including the exhibits thereto and schedules thereto, if
any) as amended at the time it became effective, or, if a post-effective
amendment has been filed with respect thereto, as amended by such post-effective
amendment at the time of its effectiveness (including in each case the
information (if any) deemed to be part of such registration statement at the
time of effectiveness pursuant to Rule 430A under the 1933 Act), is hereinafter
referred to as the "REGISTRATION STATEMENT." The term "EFFECTIVE DATE" shall
mean each date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective. The term "BASE PROSPECTUS"
shall mean the prospectus referred to in Section 1(a)(i) hereof contained in the
Registration Statement at the Effective Date. "PRELIMINARY PROSPECTUS" means the
preliminary prospectus supplement to the Base Prospectus used prior to the
filing of the Prospectus; the term "Prospectus" means the prospectus supplement
to the Base Prospectus first filed with the Commission pursuant to Rule 424(b)
under the Securities Act, together with the Base Prospectus.
Any reference in this Agreement to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, as of the effective date of the Registration Statement or
the date of such Preliminary Prospectus or the Prospectus, as the case may be
(it being understood that the several specific references in this Agreement to
documents incorporated by reference in the Registration Statement or the
Prospectus are for clarifying purposes only and are not meant to limit the
inclusiveness of any other definition herein). For purposes of this Agreement,
all references to the Registration Statement, any Preliminary Prospectus, or the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("XXXXX"). All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement, any
Preliminary Prospectus or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is incorporated by reference in the Registration
Statement, any Preliminary Prospectus or the Prospectus, as the case may be.
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SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each Underwriter as of the date hereof and agrees with each
Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act and has filed with the
Commission the Registration Statement on such Form, including a Base
Prospectus, for registration under the 1933 Act of the offering and sale of
the Securities, one or more amendments to such Registration Statement may
have been so filed, and the Company may have used a Preliminary Prospectus.
Such Registration Statement, as so amended, has become effective. Although
the Base Prospectus may not include all the information with respect to the
Securities and the offering thereof required by the 1933 Act and the rules
and regulations of the Commission thereunder (the "1933 ACT REGULATIONS")
to be included in the Prospectus, the Base prospectus includes all such
information required by the 1933 Act and the 1933 Act Regulations to be
included therein as of the Effective Date. After the execution of this
Agreement, the Company will file with the Commission pursuant to Rules 415
and 424(b)(2) or (5) a final supplement to the Base Prospectus included in
such Registration Statement relating to the Securities and the offering
thereof, with such information as is required or permitted by the 1933 Act
and as has been provided to and approved by the Representatives prior to
the date hereof or, to the extent not completed at the date hereof,
containing only such specific additional information and other changes
(beyond that contained in the Base Prospectus and any Preliminary
Prospectus) as the Company has advised you, prior to the date hereof, will
be included or made therein.
The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. When any Preliminary Prospectus was
filed with the Commission, it (x) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations
and (y) did not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or
is declared effective, it (I) complied as to form or will comply in all
material respects with the requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 ACT"), the 1933 Act Regulations
and the rules and regulations of the Commission under the 1934 Act (the
"1934 ACT REGULATIONS") and (II) did not or will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading. When the Prospectus or any amendment or supplement to the
Prospectus is
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filed with the Commission pursuant to Rule 424(b) (or, if the Prospectus or
such amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing the Prospectus
or such amendment or supplement to the Prospectus was or is declared
effective) and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Prospectus, as amended or
supplemented at any such time, (A) complied as to form or will comply in
all material respects with the requirements of, the 1933 Act, the 1934 Act,
the 1933 Act Regulations and the 1934 Act Regulations and (B) did not or
will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph do not apply to statements or
omissions made in any Preliminary Prospectus, the Registration Statement or
any amendment thereto or the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein.
The Company has not distributed and, prior to the later of (x) the
Closing Time (and, if any Option Securities are purchased, the Date of
Delivery) and (y) the completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering
of the Securities pursuant to this Agreement other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto.
(ii) INCORPORATED DOCUMENTS. Each document, if any, filed or to be
filed pursuant to the 1934 Act and incorporated by reference in either the
Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto) complied or will comply when so filed in all material respects
with the 1934 Act and the 1934 Act Regulations.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules included in the
Registration Statement
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present fairly in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary financial
information included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement. The
pro forma financial statements and the related notes thereto included in
the Registration Statement and the Prospectus, if any, present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "MATERIAL ADVERSE EFFECT"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Pennsylvania and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each "SIGNIFICANT SUBSIDIARY" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each
a "SUBSIDIARY" and, collectively, the "SUBSIDIARIES") has been duly
organized and is validly existing as a corporation, partnership or limited
liability company, as the case may be, in good standing under the laws of
the jurisdiction of its incorporation or organization, as the case may be,
has the power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly qualified
as a
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foreign corporation, partnership or limited liability company, as the case
may be, to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding equity interests of each such
Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding equity
interests of any Subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such Subsidiary. The only
Subsidiaries of the Company are the subsidiaries listed on Schedule B of
this Agreement.
(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus). The shares of issued
and outstanding capital stock of the Company, including the Securities to
be purchased by the Underwriters from the Selling Shareholder, have been
duly authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company, including
the Securities to be purchased by the Underwriters from the Selling
Shareholder, was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Securities to be
purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued,
fully paid and non-assessable; the Common Stock conforms to all statements
relating thereto contained in the Prospectus and such description conforms
to the rights set forth in the instruments defining the same; no holder of
the Securities will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company.
(xi) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of
its subsidiaries is in violation of its charter, by-laws or limited
liability company agreement,
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as the case may be, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (collectively, "Agreements and Instruments") except for such
defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated in this Agreement and in the Registration
Statement (including the issuance and sale of the Securities and the use of
the proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company with its
obligations under this Agreement has been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant to,
the Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter, by-laws or limited liability company
agreement, as the case may be, of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court having jurisdiction
over the Company or any subsidiary or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case,
may reasonably be expected to result in a Material Adverse Effect.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any subsidiary, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially
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and adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement or the performance by
the Company of its obligations hereunder or thereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, would not reasonably be expected to result in a Material Adverse
Effect.
(xiv) ACCURACY OF EXHIBITS. There are no contracts or documents which
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, domain names, trade names or other intellectual
property (collectively, "INTELLECTUAL PROPERTY") necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations and
state securities or blue sky laws.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "GOVERNMENTAL LICENSES") issued by the
appropriate federal, state or local regulatory agencies or bodies necessary
to conduct the business now operated by them and the Company and its
subsidiaries are in compliance with the terms and conditions of
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all such Governmental Licenses, except where the failure so to possess or
comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses possessed by the Company and its
Subsidiaries are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xviii) TITLE TO PROPERTY. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xix) COMPLIANCE WITH CUBA ACT. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "CUBA ACT") or is exempt therefrom.
(xx) INVESTMENT COMPANY ACT. The Company is not, and upon the issuance
and sale of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment company"
as such terms are defined in the Investment Company Act of 1940, as amended
(the "1940 ACT").
(xxi) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, reasonably
be expected to result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries
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is in violation of any federal, state or local statute, law, rule,
regulation, ordinance, code, published policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial
or administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"ENVIRONMENTAL LAWS"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or, to the Company's knowledge, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) to the Company's knowledge,
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxii) REGISTRATION. There are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act, except as disclosed in the Registration Statement.
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDER. The Selling
Shareholder represents and warrants to each Underwriter as of the date hereof,
and agrees with each Underwriter, as follows:
(i) AUTHORIZATION OF AGREEMENTS. The Selling Shareholder has the full
right, power and authority to enter into this Agreement and a Power of
Attorney and Custody Agreement (the "POWER OF ATTORNEY AND CUSTODY
AGREEMENT") and to sell, transfer and deliver the Securities to be sold by
the Selling Shareholder hereunder. The execution and delivery of this
Agreement and the Power of Attorney and Custody Agreement and the sale and
delivery of the Securities to be sold by the Selling Shareholder and the
consummation of the transactions contemplated herein and compliance by the
Selling Shareholder with its obligations hereunder have been duly
authorized by the Selling Shareholder and do not and will not, whether with
or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default under,
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or result in the creation or imposition of any tax, lien, charge or
encumbrance upon the Securities to be sold by the Selling Shareholder or
any property or assets of the Selling Shareholder pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
license, lease or other agreement or instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder may be bound, or
to which any of the property or assets of the Selling Shareholder is
subject, nor will such action result in any violation of the provisions of
the charter or by-laws or other organizational instrument of the Selling
Shareholder, if applicable, or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Selling Shareholder or any of its properties.
(ii) GOOD AND MARKETABLE TITLE. The Selling Shareholder has and will
at the Closing Time and, if any Option Securities are purchased, on the
Date of Delivery have good and marketable title to the Securities to be
sold by the Selling Shareholder hereunder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of
any kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any adverse
claim, each of the Underwriters will receive good and marketable title to
the Securities purchased by it from the Selling Shareholder, free and clear
of any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(iii) DUE EXECUTION OF POWER OF ATTORNEY AND CUSTODY AGREEMENT. The
Selling Shareholder has duly executed and delivered, in the form heretofore
furnished to the Representatives, the Power of Attorney and Custody
Agreement with Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx or either of them as
attorney(s)-in-fact (the "ATTORNEY(S)-IN-FACT") and Continental Stock
Transfer and Trust Company, as custodian (the "CUSTODIAN"); the Custodian
is authorized to deliver the Securities to be sold by the Selling
Shareholder hereunder and to accept payment therefor; and the
Attorney-in-Fact is authorized to execute and deliver this Agreement and
the certificate referred to in Section 5(f) or that may be required
pursuant to Section 5(l)(ii) on behalf of the Selling Shareholder, to sell,
assign and transfer to the Underwriters the Securities to be sold by the
Selling Shareholder hereunder, to determine the purchase price to be paid
by the Underwriters to the Selling Shareholder, as provided in Section 2(a)
hereof, to authorize the delivery of the Securities to be sold by the
Selling Shareholder hereunder, to accept or direct payment therefor, and
otherwise to act on behalf of the Selling Shareholder in connection with
this Agreement.
(iv) ABSENCE OF MANIPULATION. The Selling Shareholder has not taken,
and will not take, directly or indirectly, any action which is designed to
or which has constituted
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or which might reasonably be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(v) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by the Selling Shareholder of its
obligations hereunder or in the Power of Attorney and Custody Agreement, or
in connection with the sale and delivery of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement, except
such as may have previously been made or obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state securities laws.
(vi) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectus, the Selling Shareholder will not, without
the prior written consent of Xxxxxxx Xxxxx, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of, directly or indirectly, any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
the Securities to be sold hereunder.
(vii) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all of the
Securities to be sold by the Selling Shareholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the Custodian with irrevocable
conditional instructions to deliver such Securities to the Underwriters
pursuant to this Agreement.
(viii) ADVERSE CLAIMS. The Selling Shareholder is not aware of any
"adverse claim" (as defined in Section 8-102 of the Uniform Commercial Code
as in effect at the First Time of Delivery in the State of New York) with
respect to the Securities to be sold by the Selling Shareholder.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to Xxxxxxx Xxxxx, the
Representatives or to counsel
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for the Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and the Selling Shareholder agree to sell to each Underwriter, severally
and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company and the Selling Shareholder, at the price per share
set forth in SCHEDULE B, the number of Initial Securities set forth in SCHEDULE
A opposite the name of such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 525,000 shares of Common Stock at
the price per share set forth in SCHEDULE C hereto, less an amount per share
equal to any dividends or distributions, if any, declared by the Company and
payable on the Initial Securities but not payable on the Option Securities. The
option hereby granted will expire 30 days after the date of the Prospectus and
may be exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by Xxxxxxx Xxxxx to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery for the
Option Securities (a "DATE OF DELIVERY") shall be determined by Xxxxxxx Xxxxx,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time (as defined below). If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in SCHEDULE A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as Xxxxxxx Xxxxx in its discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxxx
Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other
place as shall be agreed upon by Xxxxxxx Xxxxx and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
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postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by
Xxxxxxx Xxxxx and the Company (such time and date of payment and delivery being
herein called the "CLOSING TIME").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by Xxxxxxx Xxxxx and the
Company, on each Date of Delivery as specified in the notice from Xxxxxxx Xxxxx
to the Company.
Payment shall be made to the Company and the Selling Shareholder by wire
transfer of immediately available funds to a bank account designated by the
Company and the Attorney-in-Fact pursuant to the Selling Shareholder's Power of
Attorney and Custody Agreement, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx, individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify Xxxxxxx Xxxxx
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the
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Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give Xxxxxxx Xxxxx notice
of its intention to file or prepare any amendment to the Registration
Statement or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectus, will xxxxxxx Xxxxxxx Xxxxx with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which
Xxxxxxx Xxxxx or counsel for the Underwriters shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives,
without charge, conformed copies of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUS. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
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(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or
for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities
for offering and sale under the applicable securities laws of such states
and other jurisdictions (domestic or foreign) as Xxxxxxx Xxxxx may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement; PROVIDED, HOWEVER, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
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(i) LISTING. The Company will use its reasonable best efforts to
effect the listing of the Securities on the Nasdaq National Market.
(j) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Securities registered
pursuant to the Registration Statement, (B) any options to purchase Common
Stock granted pursuant to the Company's 1994 Stock Option Plan, (C) the
exercise of the options referred to in clause (B) immediately above, or (D)
any securities issued as consideration for a merger or acquisition;
PROVIDED, HOWEVER, that any recipient of securities under clause (D)
immediately above shall be bound by the restrictions of this Section 3(j)
and shall enter into an agreement substantially in the form of EXHIBIT I
hereto.
(k) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods and rules and regulations of the
Commission thereunder.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the performance
of its and, except as provided in Section 4(b), the Selling Shareholder's
obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale and the issuance or delivery
of the Securities by the Company to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection
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therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of copies
of each preliminary prospectus, and of the Prospectus and any amendment or
supplement thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities,
(ix) the filing fees incident to, the review by the NASD of the terms of the
sale of the Securities and (x) the listing of the Securities on the Nasdaq
National Market.
(b) EXPENSES OF THE SELLING SHAREHOLDER. The Selling Shareholder will pay
all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including (i)
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the Underwriters and (ii) the fees and
disbursements of its counsel.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT; FILING OF PROSPECTUS
SUPPLEMENT. The Registration Statement has become effective and at the
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of
the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel for the Underwriters. The
Prospectus, as supplemented by the prospectus supplement relating to the
offering of the Securities shall have been filed with the Commission in
accordance with Rule 424(b) under the 1933 Act within the applicable time
period prescribed for such filing by the regulations promulgated under the
1933 Act and in accordance with Section 3(a) hereof.
(b) OPINION OF COUNSEL FOR THE COMPANY. At the Closing Time, the
Representatives shall have received the favorable opinions, dated as of the
Closing Time, of (i) Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Company,
(ii) Xxxxxx Xxxxxx LLP, Mississippi local counsel for the Company, (iii)
Xxxxxx Xxxxxx LLP, Louisiana local
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counsel for the Company, (iv) Xxxxxx Rice XxXxxxx Xxxxx & Love PLLC, West
Virginia local counsel for the Company, (v) Riker, Danzig, Xxxxxxx Xxxxxx &
Xxxxxxxx LLP, New Jersey local counsel for the Company, (vi) Blake, Xxxxxxx
& Xxxxxxx LLP, Canadian Counsel for the Company and (vii) Xxxxxxxx Xxxxxxxx
Xxxxx & Xxxxx LLP, Pennsylvania Racing counsel for the Company, all in form
and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in EXHIBITS A, B, C, D, E, F AND G,
respectively, hereto and to such further effect as counsel for the
Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDER. At the Closing
Time, the Representatives shall have received the favorable opinion, dated
as of the Closing Time, of Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP, counsel for
the Selling Shareholder, in form and substance satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters to the effect set forth in EXHIBIT H
hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(d) OPINION OF COUNSEL FOR THE UNDERWRITERS. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters, in form and substance satisfactory to the
Representatives. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(e) OFFICERS' CERTIFICATE. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the Company,
signed by the Chief Executive Officer of the Company and by the chief
financial or chief accounting officer of the Company, dated as of the
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a)
hereof that are qualified by materiality are true and correct and all other
representations and warranties in Section 1(a) hereof are true and correct
in all material
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respects with the same force and effect as though expressly made at and as
of the Closing Time, (iii) the Company has complied in all material
respects with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time, and (iv) to their
knowledge no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(f) CERTIFICATE OF SELLING SHAREHOLDER. At Closing Time, the
Representatives shall have received a certificate of the Attorney-in-Fact
on behalf of the Selling Shareholder, dated as of the Closing Time, to the
effect that (i) the representations and warranties of the Selling
Shareholder contained in Section 1(b) hereof are true and correct in all
respects with the same force and effect as though expressly made at and as
of the Closing Time and (ii) the Selling Shareholder has complied in all
material respects with all agreements and all conditions on its part to be
performed under this Agreement at or prior to Closing Time.
(g) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from BDO Xxxxxxx and
Xxxxxx Xxxxxxxx LLP, letters dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced
copies of such letters for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus.
(h) BRING-DOWN COMFORT LETTER. At the Closing Time, the
Representatives shall have received from BDO Xxxxxxx, LLP a letter, dated
as of the Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (g) of this Section,
except that the specified date referred to shall be a date not more than
five business days prior to the Closing Time.
(i) APPROVAL OF LISTING. At the Closing Time, the Securities shall
have been approved for listing on the Nasdaq National Market, subject only
to official notice of issuance.
(j) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form
of EXHIBIT G hereto signed by the persons listed on SCHEDULE D hereto.
(k) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company contained
-21-
herein and the statements in any certificates furnished by the Company or
any subsidiary of the Company hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery of the Company, signed by the President or a Vice President
of the Company and the chief financial or chief accounting officer of
the Company confirming that the certificate delivered at the Closing
Time pursuant to Section 5(e) hereof remains true and correct as of
such Date of Delivery.
(ii) OPINION OF COUNSEL FOR THE COMPANY. The favorable opinion of
(i) Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Company, (ii) Xxxxxx
Xxxxxx LLP, Mississippi local counsel for the Company, (iii) Xxxxxx
Xxxxxx LLP, Louisiana local counsel for the Company, (iv) Xxxxxx Rice
XxXxxxx Xxxxxx & Love PLLC, West Virginia local counsel for the
Company, (v) Xxxxx, Danzig, Scherer, Xxxxxx & Xxxxxxxx LLP, New Jersey
local counsel for the Company, (vi) Blake, Xxxxxxx & Xxxxxxx LLP,
Canadian Counsel for the Company, and (vii) Xxxxxxxx Xxxxxxxx Xxxxx &
Xxxxx LLP, Pennsylvania Racing counsel for the Company, all in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) OPINION OF COUNSEL FOR THE UNDERWRITERS. The favorable
opinion of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(iv) BRING-DOWN COMFORT LETTER. A letter from BDO Xxxxxxx, LLP in
form and substance satisfactory to the Representatives and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section 5(h)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(l) ADDITIONAL DOCUMENTS. At the Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
-22-
Shareholder in connection with the issuance and sale of the Securities as
herein contemplated shall be reasonably satisfactory in form and substance
to the Representatives and counsel for the Underwriters.
(m) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the Option Securities,
may be terminated by the Representatives by notice to the Company and the
Selling Shareholder at any time at or prior to the Closing Time or such
Date of Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
and except that Sections 1, 6, 7 and 8 shall survive any such termination
and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS. The Company and the Selling
Shareholder agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; PROVIDED that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company and the Selling Shareholder; and
-23-
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx and Bear,
Xxxxxxx & Co. Inc.), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that the Selling Shareholder shall be obligated to indemnify
and hold harmless any Underwriter, and each person who controls any Underwriter
within meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, only
to the extent such loss, liability, claim, damage or expense arises out of an
untrue statement made in reliance upon and in conformity with written
information furnished to the Company and the Underwriters by the Selling
Shareholder expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); PROVIDED, FURTHER, HOWEVER, that notwithstanding the
foregoing provisions, the aggregate amount of the Selling Shareholder's
indemnity and contribution obligations under this Section 6 shall not exceed an
amount equal to the net cash proceeds (before deducting expenses) received by
the Selling Shareholder from the sale of common stock pursuant to this
Agreement; and PROVIDED, FURTHER, HOWEVER, that this indemnity agreement shall
not apply to any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and
PROVIDED, FURTHER, HOWEVER, that Company and the Selling Shareholder shall not
be liable to any indemnified party with respect to any preliminary prospectus
(or supplement thereto) if the Prospectus corrected any such untrue statement or
omission, was delivered to such indemnified party and such indemnified party
failed to furnish a copy of the Prospectus at or prior to the written
confirmation of the sale of Securities to the applicable purchaser.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS AND THE
SELLING SHAREHOLDER. Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, the Selling Shareholder and each person, if any, who
controls the Company or the Selling Shareholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any
-24-
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel for the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel for the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; PROVIDED,
HOWEVER, that counsel for the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel for the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance
-25-
with such request prior to the date of such settlement. Notwithstanding the
immediately preceding sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, an indemnifying party shall not be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
consent if such indemnifying party (i) reimburses the indemnified party in
accordance with such request to the extent it consider such request to be
reasonable and (ii) provides written notice to the indemnified party which fully
explains the indemnifying party's belief that any unpaid balance of such request
is unreasonable, in each case prior to the date of such settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholder on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholder on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Shareholder
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the Selling Shareholder and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Securities as
set forth on such cover.
The relative fault of the Company and the Selling Shareholder on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Selling Shareholder or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
-26-
The Company, the Selling Shareholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, 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 which such
Underwriter has otherwise been required to pay by reason of any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company or the Selling
Shareholder who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
the Selling Shareholder. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Shareholder submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholder, and shall survive delivery of the Securities to the
Underwriters.
-27-
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate this Agreement,
by notice to the Company and the Selling Shareholder, at any time at or prior to
the Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak or escalation of hostilities, acts of terrorism or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters shall fail at the Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "DEFAULTED SECURITIES"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the
-28-
proportions that their respective underwriting obligations hereunder bear
to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Date of Delivery which occurs after the Closing Time, the obligation of
the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company and the Selling
Shareholder shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. DEFAULT BY THE SELLING SHAREHOLDER OR THE COMPANY. If the
Selling Shareholder shall fail at the Closing Time to sell and deliver the
number of Securities that the Selling Shareholder is obligated to sell
hereunder, then the Underwriters may, at the option of the Representatives, by
notice from the Representatives to the Company and the Selling Shareholder,
either (a) terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8
shall remain in full force and effect or (b) elect to purchase the Securities
that the Company has agreed to sell hereunder. No action taken pursuant to this
Section 11 shall relieve the Selling Shareholder from liability, if any, in
respect of such default.
In the event of a default by the Selling Shareholder as referred to in this
Section 11, the Representatives and the Company shall have the right to postpone
the Closing Time for a period not exceeding seven days in order to effect any
required change in the Registration Statement or Prospectus or in any other
documents or arrangements.
If the Company shall fail at the Closing Time or at the Date of Delivery to
sell the number of Securities that it is obligated to sell hereunder, then this
agreement shall terminate without any liability on the part of any
non-defaulting party; PROVIDED, HOWEVER, that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect. No action taken
-29-
pursuant to this Section shall relieve the Company from liability, if any, in
respect of such default.
SECTION 12. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Xxxxxxx Xxxxx at Xxxxx Xxxxx, Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention of Xxxx Xxxxxxx and Bear,
Xxxxxxx & Co. Inc., at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of
Equity Capital Markets; and notices to the Company shall be directed to it at
000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, facsimile
no. (000) 000-0000, attention of Xxxxxx X. Xxxxxxxxx, Xx., with a copy to
Xxxxxx, Xxxxx & Xxxxxxx, LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx,
00000, facsimile no. (000) 000-0000, attention of Xxxxxx X. Xxxxxxx.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters, the Company and the Selling Shareholder and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Shareholder and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Shareholder and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters, the Company and the Selling Shareholder in accordance with its
terms.
Very truly yours,
PENN NATIONAL GAMING, INC.
By:
-----------------------------
Title:
THE XXXXXXX FAMILY TRUST
By:
-----------------------------
Title: Attorney-in-Fact
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BEAR, XXXXXXX & CO. INC.
CIBC WORLD MARKETS CORP.
DEUTSCHE BANC ALEX. XXXXX INC.
XXXXXX BROTHERS INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------------------
Authorized Signatory
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For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
SCHEDULE A
NUMBER OF
INITIAL
NAME OF UNDERWRITER SECURITIES
------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ................................ 1,332,000
Bear, Xxxxxxx & Co. Inc. ................................ 1,332,000
Xxxxxx Brothers, Inc. ................................... 378,000
Deutsche Banc Alex. Xxxxx Inc. .......................... 378,000
CIBC World Markets Corp. ................................ 378,000
Xxxxxxxxxx & Co. Inc. ................................... 132,000
Hibernia Southcoast Capital ............................. 70,000
---------
Total ................................................... 4,000,000
Initial Securities to be sold by the Company: 2,750,000 Shares
Initial Securities to be sold by the Selling Shareholder: 1,250,000 Shares
Schedule A-1
SCHEDULE B
Subsidiaries of Penn National Gaming, Inc.:
STATE OF
ORGANIZATION
NAME OR INCORPORATION
---- ----------------
Penn National Holding Company Delaware
CRC Holdings, Inc. Florida
Penn National Gaming of West Virginia, Inc. West Virginia
PNGI Pocono, Inc. Delaware
Penn National GSFR, Inc. Delaware
Louisiana Casino Cruises, Inc. Louisiana
BSL, Inc. Mississippi
BTN, Inc Mississippi
The Downs Racing, Inc. Pennsylvania
CHC Casinos Canada Limited Nova Scotia
Mountainview Thoroughbred Racing Association, Inc. Pennsylvania
Pennsylvania National Turf Club, Inc. Pennsylvania
Schedule B-1
SCHEDULE C
PENN NATIONAL GAMING, INC.
3,500,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $30.50.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $28.90, being an amount equal to the public
offering price set forth above less $1.60 per share; PROVIDED, HOWEVER, that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Schedule C-1
SCHEDULE D
Xxxxx X. Xxxxxxx
Xxxxx XxXxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxxx, Xx.
Xxxxxxx X. Xxxx
Xxxxxx Xxxxxx
Xxxxx X. Handler
Xxxx X. Xxxxxxxxx
Xxxxxx X. Xxxx
Schedule D-1
EXHIBIT A
FORM OF OPINION OF COUNSEL FOR THE COMPANY
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company is validly existing as a corporation in good standing under
the laws of the Commonwealth of Pennsylvania.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in the State of Mississippi.
(iv) The authorized capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization."
(v) The Securities to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to
the Purchase Agreement and, when issued and delivered by the Company pursuant to
the Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable. No
holder of the Securities is or will be subject to personal liability by reason
of being such a holder.
(vi) The issuance of the Securities is not subject to the preemptive or, to
our knowledge, other similar rights of any securityholder of the Company.
(vii) Each of Penn National Holding Company, a Delaware corporation, CRC
Holdings, Inc., a Florida corporation, PNGI Pocono, Inc., a Delaware
corporation, The Downs Racing, Inc., a Pennsylvania corporation, Penn National
GSFR, Inc., a Delaware corporation, Mountainview Thoroughbred Racing
Association, Inc., a Pennsylvania corporation and Pennsylvania Turf Club, Inc.,
a Pennsylvania corporation is validly existing as a corporation in good standing
under the laws of the jurisdiction of its organization, has the power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified as a foreign corporation,
to transact business and is in good standing in each jurisdiction in which it
owns any gaming or racing facility (if other than its state of incorporation);
to the best of our knowledge, all of the issued and outstanding equity interests
of each Subsidiary are owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, except as otherwise disclosed in the Registration Statement.
A-1
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Registration Statement is effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued ,no proceedings for that
purpose are pending or threatened by the Commission.
(x) The Registration Statement and each amendment thereto and the
Prospectus (in each case, including the documents incorporated by reference
therein but not including the financial statements and other financial
information contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable requirements of
the 1933 Act, the 1934 Act, the 1933 Act Regulations and the 1934 Act
Regulations.
(xi) The form of certificate used to evidence the Common Stock complies in
all material respects with the Pennsylvania Corporation Law, with any applicable
requirements of the charter and by-laws of the Company and the requirements of
the Nasdaq National Market.
(xii) To the best of our knowledge and except as disclosed in the
Registration Statement, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any subsidiary is
a party, or to which the property of the Company or any subsidiary is subject,
before or brought by any court or governmental agency or body which would
reasonably be expected to result in a Material Adverse Effect, or which would
reasonably be expected to materially and adversely affect the consummation of
the transactions contemplated in the Purchase Agreement or the performance by
the Company of its obligations thereunder.
(xiii) The information in the Prospectus under "Description of Capital
Stock -- Common Stock," and "Description of Capital Stock -- Preferred Stock"
and in the Registration Statement under Item 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's articles
of incorporation and bylaws, legal proceedings or legal conclusions, fairly
summarize the matters described therein.
(xiv) To the best of our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto.
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(xv) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency (other than under the 1933 Act and the 1933 Act Regulations, which have
been obtained, as may be required under the securities or blue sky laws of the
various states, as to which we need express no opinion, or under gaming and
racing laws and regulations, as to which we need express no opinion) is
necessary or required in connection with the due authorization, execution and
delivery of the Purchase Agreement or for the offering, issuance, sale or
delivery of the Securities.
(xvi) The execution, delivery and performance of the Purchase Agreement and
the consummation of the transactions contemplated in the Purchase Agreement
(including the issuance and sale of the Securities) and compliance by the
Company with its obligations under the Purchase Agreement do not and will not,
whether with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(x) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company or any subsidiary is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any subsidiary is subject (except for such conflicts, breaches
or defaults or liens, charges or encumbrances, if any, that would not have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any Subsidiary identified
in paragraph (vii) above, or any applicable New York, Pennsylvania or federal
law, statute, rule or regulation (other than gaming and racing laws, statutes,
rules or regulations, as to which we express no opinion) or any judgment, order,
writ or decree, known to us, of any government, government instrumentality or
court having jurisdiction over the Company or any subsidiary or any of their
respective properties, assets or operations.
(xvii) To the best of our knowledge, there are no persons with registration
rights or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the 0000
Xxx.
(xviii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
We have participated in conferences with officers and other representatives
of the Company, the independent auditors of the Company, the Representatives and
counsel to the Underwriters, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed.
Based on our participation in the above-referenced conferences and our review of
the Registration Statement and Prospectus, we advise
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you that nothing has come to our attention that caused us to believe that at the
time the Registration Statement became effective under the Act (but after giving
effect to any modifications incorporated therein pursuant to Rule 430A under the
Act), the Registration Statement contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that as of its date
and the date hereof, the Prospectus contained or contains, as the case may be,
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that in each such case we express no belief or statement with respect
to the financial statements, related notes and schedules, the pro forma
financial information, or the other financial, numerical or statistical data
found in or derivable from the internal accounting, financial or other records
of the Company and its subsidiaries set forth or referred to in the Prospectus).
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
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EXHIBIT B
[FORM OF OPINION OF XXXXXX XXXXXX LLP: MISSISSIPPI]
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EXHIBIT C
[FORM OF OPINION OF XXXXXX XXXXXX LLP: LOUISIANA]
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EXHIBIT D
[FORM OF OPINION OF XXXXXX RICE XXXXXXX XXXXXX & LOVE PLLC: WEST VIRGINIA]
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EXHIBIT E
[FORM OF OPINION OF XXXXX, DANZIG, SCHERER, XXXXXX & XXXXXXXX LLP: NEW JERSEY]
E-1
EXHIBIT F
[FORM OF OPINION OF BLAKE, XXXXXXX & XXXXXXX LLP: CANADA]
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EXHIBIT G
[FORM OF OPINION OF XXXXXXXX XXXXXXXX XXXXX & XXXXX LLP: PENNSLYVANIA]
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EXHIBIT H
[FORM OF OPINION OF LOCAL COUNSEL
FOR THE SELLING STOCKHOLDER]
H-1
EXHIBIT I
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS
OR OTHER STOCKHOLDERS
PURSUANT TO SECTION 5(J)
[ ], 2002
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Bear, Xxxxxxx & Co., Inc.
CIBC World Markets Corp.
Deutsche Banc Xxxx Xxxxx Inc.
Xxxxxx Brothers Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Four World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: PROPOSED PUBLIC OFFERING BY PENN NATIONAL GAMING, INC.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of Penn
National Gaming, Inc., a Pennsylvania corporation (the "COMPANY"), understands
that Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("XXXXXXX XXXXX"), Bear, Xxxxxxx & Co., Inc., CIBC World Markets Corp., Deutsche
Banc Xxxx Xxxxx Inc., and Xxxxxx Brothers Inc. propose to enter into a Purchase
Agreement (the "PURCHASE AGREEMENT") with the Company providing for the public
offering of shares (the "SECURITIES") of the Company's common stock, par value
$.01 per share (the "COMMON STOCK"). In recognition of the benefit that such an
offering will confer upon the undersigned as a stockholder of the Company, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agrees with each underwriter to be
named in the Purchase Agreement that, during a period commencing from the date
of the execution of this agreement and ending 90 days after the date of the
final Prospectus relating to the offering of the Common Stock, the undersigned
will not, without the prior written consent of Xxxxxxx Xxxxx, directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract
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to purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any shares of the
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Common
Stock, whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case, except as
expressly contemplated by the Prospectus (as defined in the Purchase Agreement).
Very truly yours,
-------------------------------
Signature:
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Print Name:
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