1
3,500,000 Shares
WMS Industries Inc.
Common Stock
UNDERWRITING AGREEMENT
______________, 1999
CIBC World Markets Corp.
Prudential Securities Incorporated
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
WMS Industries Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement (the "Underwriters"),
for whom you are acting as representatives (the "Representatives"), an aggregate
of 3,500,000 shares (the "Firm Shares") of the Company's common stock, par value
$0.50 per share (the "Common Stock"). The respective amounts of the Firm Shares
to be purchased by each of the several Underwriters are set forth opposite their
names on Schedule I hereto. In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional 525,000 shares (the
"Option Shares") of Common Stock from it for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
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(a) The Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a price of $_____ per share (the
"Initial Price"), the number of Firm Shares set forth opposite the
name of such Underwriter on Schedule I to this Agreement, subject to
adjustment in accordance with Section 10 hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted
by the Representatives to eliminate fractions) of the total number of
Option Shares to be purchased by the Underwriters as such Underwriter
is purchasing of the Firm Shares. Such option may be exercised only to
cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on
or before 12:00 noon, New York City time, on the business day before
the Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each
case upon written or telegraphic notice, or verbal or telephonic
notice confirmed by written or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at
least two business days before the Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm
Shares Closing Date) of such purchase.
2. Delivery and Payment. Delivery by the Company of the Firm
Shares to the Representatives for the respective accounts of the Underwriters,
and payment of the purchase price by certified or official bank check or checks
payable in New York Clearing House (same day) funds drawn to the order of the
Company, against delivery of the certificate(s) therefor to the Representatives,
shall take place at the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the third
business day following the date of this Agreement, or at such time and date, not
later than 10 business days after the date of this Agreement, as shall be agreed
upon by the Company and the Representatives (such time and date of delivery and
payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is
exercised, delivery by the Company of the Option Shares to the Representatives
for the respective accounts of the Underwriters and payment of the purchase
price by certified or official bank check or checks payable in New York Clearing
House (same day) funds to the Company shall take place at the offices of Xxxxxx,
Xxxxx & Bockius LLP specified above at the time and on the date (which may be
the same date as, but in no event shall be earlier than, the Firm Shares Closing
Date) specified in the notice referred to in Section 1(b) (such time and date of
delivery and payment are called the "Option Shares Closing Date"). The Firm
Shares Closing Date and the Option Shares Closing Date are called, individually,
a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such
names and shall be in such denominations as the Representatives shall request
at least two full business days before the
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Firm Shares Closing Date or, in the case of Option Shares, on the day of
notice of exercise of the option as described in Section 1(b) and shall be made
available to the Representatives for checking and packaging, at such place as is
designated by the Representatives, on the full business day before the Firm
Shares Closing Date (or the Option Shares Closing Date in the case of the Option
Shares).
3. Registration Statement and Prospectus; Public Offering. The
Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a Registration Statement (as hereinafter
defined) on Form S-3 (No. 333-83021), including a preliminary prospectus
relating to the Shares, and such amendments thereto as may have been required to
the date of this Agreement. Copies of such Registration Statement (including all
amendments thereto) and of the related Preliminary Prospectus (as hereinafter
defined) have heretofore been delivered by the Company to you. The term
"Preliminary Prospectus" as used in this Agreement means any preliminary
prospectus (as described in Rule 430 of the Rules) included at any time as a
part of the Registration Statement or filed with the Commission by the Company
with the consent of the Representatives pursuant to Rule 424(a) of the Rules.
The term "Registration Statement" as used in this Agreement means the initial
registration statement, including all exhibits, financial schedules and
information deemed to be a part of the Registration Statement through
incorporation by reference or otherwise, as amended at the time and on the date
it became effective (the "Effective Date") and as thereafter amended by
post-effective amendments. If the Company has filed an abbreviated registration
statement to register additional Shares pursuant to Rule 462(b) under the Rules
(the "462(b) Registration Statement") then any reference herein to the
Registration Statement shall be deemed to include such 462(b) Registration
Statement. The term "Prospectus" as used in this Agreement means the prospectus
in the form included in the Registration Statement at the time of effectiveness
or, if Rule 430A of the Rule is relied on, the term Prospectus shall also
include the final prospectus filed with the Commission pursuant to Rule 424(b)
of the Rules.
The Company understands that the Underwriters propose to make a
public offering of the Shares, as set forth in and pursuant to the Prospectus,
as soon after the Effective Date and the date of this Agreement as the
Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus, and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Representatives).
4. Representations and Warranties of the Company. The Company
hereby represents and warrants to, and agrees with, each Underwriter as follows:
(a) On the Effective Date the Registration Statement complied, and
on the date of the Prospectus, the date any post-effective amendment
to the Registration Statement becomes effective, the date any
supplement or amendment to the Prospectus is filed with the Commission
and each Closing Date, the Registration Statement and the Prospectus
(and any amendment thereof or supplement thereto) will comply, in all
material respects, with the applicable provisions of the Securities
Act and the Rules and the Securities
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Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the Commission thereunder; the Registration
Statement did not, as of the Effective Date, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and on the other dates referred to
above, neither the Registration Statement nor the Prospectus nor any
amendment thereof or supplement thereto will contain any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part
of the Registration Statement or any amendment thereto or pursuant to
Rule 424(a) of the Rules) and when any amendment thereof or supplement
thereto was first filed with the Commission, such preliminary
prospectus as amended or supplemented complied in all material
respects with the applicable provisions of the Securities Act and the
Rules and did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
Notwithstanding the foregoing, none of the representations and
warranties in this paragraph 4(a) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus made in
reliance upon, and in conformity with, information herein or otherwise
furnished in writing by the Representatives on behalf of the several
Underwriters for use in the Registration Statement or the Prospectus.
With respect to the preceding sentence, the Company acknowledges that
the only information furnished in writing by the Representatives on
behalf of the several Underwriters for use in the Registration
Statement or the Prospectus is the information referred to in Section
7(b) hereof.
(b) The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of
the Registration Statement or preventing or suspending the use of the
Prospectus has been issued and no proceedings for that purpose have
been instituted or are threatened under the Securities Act; any
required filing of the Prospectus and any supplement thereto pursuant
to Rule 424(b) of the Rules has been or will be made in the manner and
within the time period required by such Rule 424(b).
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of
the Exchange Act and, when read together and with the other
information in the Registration Statement and the Prospectus, do not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The financial statements of the Company (including all notes
and schedules thereto) included or incorporated by reference in the
Registration Statement and Prospectus present fairly the financial
position, the results of operations, the cash flows and the changes in
stockholders' equity and the other information purported to be shown
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therein of the Company at the respective dates and for the
respective periods to which they apply; and such financial statements
and related schedules and notes have been prepared in conformity with
generally accepted accounting principles in the United States applied
on a consistent basis throughout the periods involved, and all
adjustments necessary for a fair presentation of the results for such
periods have been made. The summary and selected financial data
included in the Prospectus present fairly the information shown
therein as at the respective dates and for the respective periods
specified and the summary and selected financial data have been
presented on a basis consistent with the consolidated financial
statements so set forth in the Prospectus and other financial
information.
(e) Ernst & Young LLP, whose reports are filed with the Commission
as a part of the Registration Statement, are and, during the periods
covered by their reports, were independent public accountants as
required by the Securities Act and the Rules.
(f) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Each
subsidiary of the Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of
such subsidiary's incorporation. The Company and each of its
subsidiaries is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of
the business conducted by it or location of the assets or properties
owned, leased or licensed by it requires such qualification, except
for such jurisdictions where the failure to so qualify would not have
a material adverse effect on the assets, properties, business, results
of operations or financial condition of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). Except
for its ownership of WMS Gaming (Canada) Ltd., which has no
significant assets or operations, and spare parts used to service VLTs
in Canada, the Company does not own, lease or license any asset or
property outside the United States of America. The Company and each of
its subsidiaries has all requisite corporate power and authority, and
all necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity (collectively, the "Permits"), to
own, lease and license its assets and properties and conduct its
businesses, all of which are valid and in full force and effect, as
described in the Registration Statement and the Prospectus except
where the failure to obtain or maintain such Permits would not have a
Material Adverse Effect; the Company and each of its subsidiaries has
fulfilled and performed in all material respects all of its material
obligations with respect to such Permits, and no event has occurred
that allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the Company thereunder. Except as may be required under
the Securities Act and state and foreign Blue Sky laws and gaming
laws, no other Permits are required to enter into, deliver and perform
this Agreement, and to issue and sell the Shares.
(g) All outstanding shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued and are
fully paid and nonassessable,
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and except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the subsidiaries are owned by
the Company either directly or through direct or indirect wholly owned
subsidiaries, free and clear of any security interests, claims, liens
or encumbrances.
(h) The Company and its subsidiaries own or possess adequate and
enforceable rights to use all trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications,
patents, licenses, know-how and other similar rights and proprietary
knowledge (collectively, "Intangibles") described in the Prospectus as
being owned by them, including registrations or licenses with respect
to the names "Xxxxxxxx", "WMS Gaming" and "Bally". Except as described
in the Prospectus, neither the Company nor any of its subsidiaries has
received any notice of, nor is aware of, any infringement of or
conflict with asserted rights of others with respect to any
Intangibles.
(i) The Company and its subsidiaries have good and marketable
title in fee simple to all items of real property and good and
marketable title to all personal property described in the Prospectus
as being owned by them and any real property and buildings described
in the Prospectus as being held under lease by the Company or any of
its subsidiaries are held by it under valid, existing and enforceable
leases, free and clear of all liens, encumbrances, claims, security
interests and defects, except such as are described in the
Registration Statement and the Prospectus or would not have a Material
Adverse Effect.
(j) There is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body or
board pending or, to the Company's knowledge, threatened (and the
Company does not know of any basis therefor) against, or involving the
assets, properties or business of, the Company or its subsidiaries or
to which the Company or its subsidiaries is subject which might have a
Material Adverse Effect, affect the consummation of this Agreement or
be required to be disclosed in the Registration Statement and the
Prospectus that is not so disclosed.
(k) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
described therein, (i) there has not been any material adverse change
with regard to the assets or properties, business, results of
operations, or financial condition of the Company, (ii) neither the
Company nor any of its subsidiaries has sustained any loss or
interference with its assets, business or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree
which would have a Material Adverse Effect; and (iii) since the date
of the latest balance sheet included in the Registration Statement and
the Prospectus, except as reflected therein, neither the Company nor
any of its subsidiaries has (a) issued any securities except for
issuances pursuant to the Company's stock option plans made in the
ordinary course and pursuant to a settlement with a former employee or
incurred any liability or obligation, direct or contingent, for
borrowed money, except such liabilities or obligations incurred in the
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ordinary course of business, (b) entered into any transaction not
in the ordinary course of business or (c) declared or paid any
dividend or made any distribution on any shares of its stock or
redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or otherwise acquire any shares of its stock.
(l) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required by the Securities Act or
the Rules. Each description of a document, contract or other agreement
in the Registration Statement and the Prospectus accurately reflects
in all material respects the terms of the underlying document,
contract or agreement. Each agreement described in the Registration
Statement and Prospectus or listed in the Exhibits to the Registration
Statement or incorporated by reference therein is in full force and
effect and is valid and enforceable by and against the Company or any
subsidiary of the Company, as the case may be, in accordance with its
terms except (i) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles and (ii) to the extent that rights to
indemnity or contribution may be limited by Federal and state
securities laws or the public policy underlying such laws. Neither the
Company nor any subsidiary of the Company, if such subsidiary is a
party, nor to the Company's knowledge, any other party is in default
in the observance or performance of any term or obligation to be
performed by it under any such agreement, and no event has occurred
which with notice or lapse of time or both would constitute such a
default, in any such case which default or event would have a Material
Adverse Effect. No default exists, and no event has occurred which
with notice or lapse of time or both would constitute a default, in
the due performance and observance by the Company or any subsidiary of
the Company, if the subsidiary is a party thereto, of any other
agreement or instrument to which the Company or any subsidiary of the
Company is a party or by which it or its properties or business may be
bound or affected, which default or event would have a Material
Adverse Effect.
(m) None of the Company or its subsidiaries is in violation of any
term or provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation would have a Material Adverse
Effect.
(n) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due
under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require
any consent or waiver under, or result in the execution or imposition
of any lien, charge or encumbrance upon any properties or assets of
the Company or any of its subsidiaries pursuant to the terms of, any
indenture, mortgage, deed of trust or other
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agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or any of its subsidiaries, or
violate any provision of the charter or by-laws of the Company or any
of its subsidiaries, except for such consents or waivers as have
already been obtained and are in full force and effect or the absence
of which would not have a Material Adverse Effect.
(o) The Company has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the shares are in due and proper legal form
and have been duly authorized for issuance by the Company. All of the
issued and outstanding shares of Common Stock have been duly and
validly issued and are fully paid and nonassessable. There are no
statutory preemptive or other similar rights to subscribe for or to
purchase or acquire any shares of Common Stock of the Company or any
of its subsidiaries or any such rights pursuant to its Articles of
Incorporation or by-laws or any agreement or instrument to or by which
the Company or any of its subsidiaries is a party or is bound. The
Shares, when issued and sold pursuant to this Agreement, will be duly
and validly issued, fully paid and nonassessable and none of them will
be issued in violation of any preemptive or other similar right.
Except as disclosed in the Registration Statement and the Prospectus,
there is no outstanding option, warrant or other right calling for the
issuance of, and there is no commitment, plan or arrangement to issue,
any shares of stock of the Company or any security convertible into,
or exercisable or exchangeable for, such stock. The Common Stock and
the Shares conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the
Prospectus.
(p) No holder of any security of the Company has the right to have
any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such
holder during the period ending 90 days after the date of this
Agreement. Each director and executive officer of the Company has
delivered to the Representatives a written lock-up agreement in the
form attached to this Agreement (a "Lock-up Agreement").
(q) All necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company.
This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (ii) to the extent
that rights to indemnity or contribution under this Agreement may be
limited by Federal and state securities laws or the public policy
underlying such laws.
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(r) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the net proceeds thereof
as described in the Prospectus, will not be, an "investment company"
or a person directly or indirectly controlled by an "investment
company," as defined in the Investment Company Act of 1940, as
amended.
(s) None of the Company or any of its subsidiaries is involved in
any labor dispute and, to the knowledge of the Company, no such
dispute is threatened, which dispute would have a Material Adverse
Effect. The Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or
contractors which would have a Material Adverse Effect. The Company is
not aware of any threatened or pending litigation between the Company
or any of its subsidiaries and any of its executive officers which, if
adversely determined, could have a Material Adverse Effect and, has no
reason to believe that such officers will not remain in the employment
of the Company, except as described in the Prospectus.
(t) No transaction has occurred between or among the Company and
any of its officers, directors, holders of five percent or more of the
capital stock of the Company or any affiliate or affiliates of any
such officer, or director or holder that is required to be described
in and is not described in the Registration Statement and the
Prospectus.
(u) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Stock to facilitate the sale
or resale of any of the Shares.
(v) The books, records and accounts of the Company and its
subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results
of operations of, the Company and its subsidiaries. The Company and
each of its subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in accordance with
generally accepted accounting principles in the United States and to
maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific authorization
and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(w) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or the Company's or its subsidiaries' respective
businesses, assets, employees, officers and directors are in full
force and effect; the Company and each of its subsidiaries are in
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compliance with the terms of such policies and instruments in all
material respects; and neither the Company nor any such subsidiary has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect
in each case whether or not arising from transactions in the ordinary
course of business. Neither the Company nor any of its subsidiaries
has been denied any insurance coverage which it has sought or for
which it has applied during the last two fiscal years.
(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed
by the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may
be necessary to qualify the Shares for public offering by the
Underwriters under the state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(y) There are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company,
any holders of five percent or more of the capital stock of the
Company, except as set forth in the Registration Statement or
otherwise disclosed in writing to the Representatives of the
Underwriters and except that the Company makes no representation as to
the NASD affiliation of FMR Corp.
(z) The Company and each of its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local rules,
laws and regulations which are applicable to its business relating to
the use, treatment, disposal of toxic substances and protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses, (iii) have
not received notice of any actual or potential liability or asserted
claim under Environmental Laws, (iv) to the Company's knowledge, no
facts currently exist that would require the Company or its
subsidiaries to make future material capital expenditures to comply
with Environmental Laws and (v) no property which is or has been
owned, leased or occupied by the Company or any of its subsidiaries
has been designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation of Liability Act of 1980, as
amended (42 U.S.C. Section 9601, et. seq.) or otherwise designated as
a contaminated site under applicable state or local law. None of the
company or any of its subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(aa) The Company and each of its subsidiaries has filed all
Federal, local and foreign tax returns which are required to be filed
through the date hereof, or has received extensions thereof, and has
paid all taxes shown on such returns and all assessments received
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by it to the extent that the same are material and have become due
and there are no tax audits or investigations pending, which if
adversely determined would have a Material Adverse Effect; nor are
there any material proposed additional tax assessments against the
Company or any of its subsidiaries.
(bb) The Shares have been duly authorized for listing on the New
York Stock Exchange ("NYSE").
(cc) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or
operations of the Company or any of its subsidiaries will be affected
by the Year 2000 Problem (that is, any significant risk that computer
hardware or software applications used by the Company and its
subsidiaries will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000); as
a result of such review, (i) the Company has no reason to believe, and
does not believe, that (A) there are any issues related to the
Company's preparedness to address the Year 2000 Problem that are of a
character required to be described or referred to in the Registration
Statement or Prospectus which have not been accurately described in
the Registration Statement or Prospectus and (B) the Year 2000 Problem
will have a Material Adverse Effect, or result in any material loss or
interference with the business or operations of the Company and its
subsidiaries, taken as a whole; and (ii) the Company has no reason to
believe, after due inquiry, that the suppliers, vendors, customers or
other material third parties used or served by the Company and such
subsidiaries are not addressing or will not address the Year 2000
Problem in a timely manner, except to the extent that a failure to
address the Year 2000 by a supplier, vendor, customer or material
third party would not have a Material Adverse Effect.
(dd) The Company has complied with all provisions of Florida
Statutes Section 517.075.
(ee) Neither the Company nor any of its subsidiaries or any other
person associated with or acting on behalf of the Company or its
subsidiaries including, without limitation, any director, officer,
agent or employee of the Company or its subsidiaries has, directly or
indirectly, while acting on behalf of the Company or its subsidiaries
(i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political
activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any other unlawful payment.
(ff) Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Shares shall be deemed a
representation and warranty to each Underwriter by the Company as to
matters covered thereby.
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(gg) The Company has not distributed and, prior to the later of
(i) the Closing Dates and (ii) the completion of the distribution of
the Shares, will not distribute any offering material in connection
with the offering and sale of the Shares other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or other materials,
if any permitted by the Securities Act.
5. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 6(A)(i) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and
no order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be
pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included
in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the satisfaction of the Commission and the
Representatives. (1)
(c) The representations and warranties of the Company contained in
this Agreement and in the certificates delivered pursuant to Section
5(d) shall be true and correct when made and on and as of each Closing
Date as if made on such date, and the Company shall have performed all
covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by it at or
before such Closing Date.
(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing
Date, of the chief executive or chief operating officer and the chief
financial officer or chief accounting officer of the Company to the
effect that (i) the signers of such certificates have carefully
examined the Registration Statement, the Prospectus and this
Agreement, and that, to their knowledge, the representations and
warranties of the Company in this Agreement are true and correct on
and as of such Closing Date with the same effect as if made on such
Closing Date, (ii) to their knowledge, the Company has performed all
covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior
to such Closing Date and (iii) no stop order suspending the
effectiveness of the Registration Statement has been issued and, to
their knowledge, no proceedings for that purpose have been instituted
or are pending under the Securities Act.
(e) The Representatives shall have received at the time this
Agreement is executed and on each Closing Date a signed letter from
Ernst & Young LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date,
in form and substance reasonably satisfactory to the Representatives,
confirming that
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they are independent accountants within the meaning of the
Securities Act and the Rules, and stating in effect that:
(i) in their opinion, the financial statements and financial
statement schedules included or incorporated by reference in the
Registration Statement and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Rules;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 71, Interim Financial Information, on the unaudited condensed
consolidated financial statements included in the Company's quarterly
reports on Form 10-Q for the quarters ended September 30, 1997,
December 31, 1997, March 31, 1998, September 30, 1998, December 31,
1998 and March 30, 1999;
(iii) on the basis of the review referred to in clause (ii) above,
a reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(1) the unaudited condensed consolidated
financial statements included in the
Company's quarterly reports on Form
10-Q for the quarters ended
September 30, 1997, December 31,
1997, March 31, 1998, September 30,
1998, December 31, 1998 and March
30, 1999 do not comply as to form in
all material respects with the
applicable accounting requirements
of the Act and the related published
Rules and Regulations or any
material modifications should be
made to such unaudited financial
statements for them to be in
conformity with generally accepted
accounting principles;
(2) at a specified date not more than
three business days prior to the
date of the letter, there was any
change in the capital stock or any
increase in the short-term or
long-term indebtedness of the
Company and its consolidated
subsidiaries or, at the date of the
latest available balance sheet read
by such accountants, there was any
decrease in consolidated net current
assets or net assets, as compared
with amounts shown on the latest
balance sheet included in the
Prospectus; or
(3) for the period from the closing date
of the latest income statement
included in the Prospectus
to the closing date of the latest
available income statement read by
such accountants
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there were any
decreases, as compared with the
corresponding period of the prior
year and the period of corresponding
length ended the date of the latest
income statement included in the
Prospectus, in consolidated net
sales or net operating income or in
the total or per share amounts of
consolidated net income;
except in all cases set forth in clauses (2) and (3) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
(iv) they have performed certain other procedures as a result of
which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company) set forth in the Registration
Statement and the Prospectus and reasonably specified by the
Representatives agrees with the accounting records of the Company; and
(v) based upon the procedures set forth in clause (ii) above and a
reading of the amounts included in the Registration Statement under
the heading "Summary Financial Information" included in the
Registration Statement and Prospectus and a reading of the financial
statements from which certain of such data were derived, nothing has
come to their attention that gives them reason to believe that the
"Summary Financial Information" included in the Registration Statement
and Prospectus do not comply as to the form in all material respects
with the applicable accounting requirements of the Securities Act and
the Rules, or that the information set forth therein is not fairly
stated in relation to the financial statements included in the
Registration Statement or Prospectus from which certain of such data
were derived are not in conformity with generally accepted accounting
principles in the United States applied on a basis substantially
consistent with that of the audited financial statements included in
the Registration Statement and Prospectus.
References to the Registration Statement and the Prospectus in
this paragraph (e) are to such documents as amended and supplemented
at the date of the letter.
(f) The Representatives shall have received on each Closing Date
from Shack & Xxxxxx, P.C., counsel for the Company, an opinion, addressed to the
Representatives and dated such Closing Date, and stating in effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware. The Company is duly qualified and in good standing as a
foreign corporation authorized to do business in each jurisdiction as
listed on a schedule attached to the opinion.
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(ii) Each of the Company's subsidiaries has been duly incorporated
and is validly existing as a corporation, in good standing under the
laws of the jurisdiction of its incorporation. Each subsidiary of the
Company is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction as listed
on a schedule attached to the opinion. Except as otherwise set forth
in the Prospectus, all outstanding shares of capital stock of each
subsidiary are owned by the Company either directly or through wholly
owned subsidiaries.
(iii) Each of the Company and its subsidiaries has all requisite
corporate power and authority to own, lease and license its assets and
properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus; and the
Company has all requisite corporate power and authority and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits to enter into, deliver and perform this
Agreement and to issue and sell the Shares other than those required
under the Securities Act, the rules of the National Association of
Securities Dealers, Inc. ("NASD") and state and foreign Blue Sky laws.
(iv) The Company has authorized and outstanding capital stock as
set forth in the Registration Statement and the Prospectus under the
caption "Capitalization"; the certificates evidencing the Shares are
in due and proper legal form and have been duly authorized for
issuance by the Company; all of the outstanding shares of Common Stock
of the Company have been duly and validly authorized and issued and to
such counsel's knowledge, are fully paid and nonassessable, and none
of them was issued in violation of any preemptive or other similar
right. The Shares when issued and sold pursuant to this Agreement will
be duly and validly issued, outstanding, fully paid and nonassessable,
and none of them will have been issued in violation of any preemptive
or other similar right. To such counsel's knowledge, except as
disclosed in the Registration Statement and the Prospectus, there are
no preemptive rights or any restriction upon the voting or transfer of
any securities of the Company pursuant to the Company's Articles of
Incorporation or by-laws or other governing documents or any other
instrument to which the Company is a party or by which it may be
bound. To such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any shares of stock of the
Company or any security convertible into, exercisable for, or
exchangeable for stock of the Company. The Common Stock and the Shares
conform in all material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus. To such counsel's
knowledge, except as disclosed in the Prospectus, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
(v) Each of the Lock-up Agreements executed by the Company's
directors and officers has been duly and validly delivered by such
persons and constitutes the legal, valid and binding obligation of
each such person enforceable
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against each such person in accordance with its terms, except as
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles.
(vi) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement, and the issuance and sale of the
Shares. This Agreement has been duly and validly authorized, executed
and delivered by the Company, and this Agreement constitutes the
legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms except (A) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles and (B) to the extent that rights to indemnity or
contribution under this Agreement may be limited by Federal or state
securities laws or the public policy underlying such laws.
(vii) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due
under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or any event which with notice
or lapse of time, or both, would constitute a default) under, or
require consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any material
properties or assets of the Company and its subsidiaries taken as a
whole pursuant to the terms of, any indenture, mortgage, deed trust,
note or other material agreement or instrument of which such counsel
is aware and to which the Company or any subsidiary of the Company is
a party or by which it or any of their material properties or
businesses is bound, or any material franchise, license, permit,
judgment, decree, order, statute, rule or regulation of which such
counsel is aware or violate any provision of the charter or by-laws of
the Company or any subsidiary of the Company.
(viii) To such counsel's knowledge, no event has occurred which
with notice or lapse of time, or both, would constitute a default, in
the due performance and observance of any term, covenant or condition
by the Company of any indenture, mortgage, deed of trust, note or any
other agreement or instrument to which the Company is a party or by
which it or any of its assets or properties or businesses may be bound
or affected, where the consequences of such default would have a
Material Adverse Effect.
(ix) To such counsel's knowledge, the Company and its subsidiaries
are not in violation of any term or provision of their respective
charters or by-laws or any
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franchise, license, permit, judgment, decree, order, statute, rule
or regulation, where the consequences of such violation would have a
Material Adverse Effect.
(x) No consent, approval, authorization or order of any court or
governmental agency or regulatory body is required for the execution,
delivery or performance of this Agreement by the Company or the
consummation of the transactions contemplated hereby or thereby,
except such as have been obtained under the Securities Act or the
rules of the NASD and such as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of
the Shares by the several Underwriters.
(xi) To such counsel's knowledge, except as described in the
Prospectus, there is no litigation or governmental or other proceeding
or investigation, before any court or before or by any public body or
board pending or threatened against, or involving the assets,
properties or businesses of, the Company which would have a Material
Adverse Effect.
(xii) The Capital Stock of the Company conforms in all material
respects to the description thereof incorporated by reference in the
Prospectus.
(xiii) The statements in the Prospectus under the captions
"Management," and "Certain Relationships and Related Transactions,"
insofar as such statements constitute a summary of documents referred
to therein or matters of law, are fair summaries in all material
respects and accurately present the information called for with
respect to such documents and matters. Accurate copies of all
contracts and other documents of which such counsel is aware required
to be filed as exhibits to, or described in, the Registration
Statement have been so filed with the Commission or are fairly
described in the Registration Statement, as the case may be.
(xiv) The Registration Statement, all preliminary prospectuses and
the Prospectus and each amendment or supplement thereto (except for
the financial statements and schedules and other financial and
statistical data included therein, as to which such counsel expresses
no opinion) comply as to form in all material respects with the
applicable requirements of the Securities Act, the Rules and the
Exchange Act. The Company meets the requirements for filing the
Registration Statement on Form S-3.
(xv) The Registration Statement is effective under the Securities
Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of such counsel, are
threatened, pending or contemplated. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under
the Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
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(xvi) The Shares have been approved for listing on the NYSE.
(xvii) The company is not 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.
Notwithstanding the foregoing, with respect to the first two sentences of
section 5(f)(ii) and the first sentence of section 5(f)(iii), such counsel
expresses no opinion regarding WMS Gaming (Canada) Ltd. and WMS Gaming (Nevada)
Inc. To the extent deemed advisable by such counsel, they may rely as to matters
of fact on certificates of responsible officers of the Company and public
officials and they shall not opine as to matters which are governed by gaming
laws or regulations or by laws other than the laws of the State of New York, the
General Corporation Law of the State of Delaware and the Federal laws of the
United States. Copies of such certificates shall be furnished to the
Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the Representatives and representatives of the independent
certified public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as specified
in the foregoing opinion), on the basis of the foregoing, no facts have come to
the attention of such counsel which lead such counsel to believe that the
Registration Statement at the time it became effective (except with respect to
the financial statements and the notes and schedules thereto and other financial
data, as to which such counsel need express no belief) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus as amended or supplemented (except with respect to the
financial statements and notes schedules thereto and other financial data, as to
which such counsel need make no statement) on the date thereof contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) The Representatives shall have received on each Closing Date from
Xxxxxxx X. Xxxxxxxx, assistant general counsel to the Company, an opinion,
addressed to the Representatives and dated such Closing Date, and stating in
effect that:
(1) The statements contained in the Prospectus under the captions
"Government Regulation"and "Risk Factors - Our gaming machine business
is heavily regulated, and we depend on our ability to obtain and
maintain regulatory approvals" insofar as such statements constitute a
summary of matters of law, are fair summaries in all material
respects.
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(ii) No consent, approval, exemption, authorization, designation,
declaration or filing by or with any governmental agency or regulatory
body having jurisdiction over the Company's business relating to
gaming laws or regulations is required for the execution, delivery or
performance of the Underwriting Agreement by the Company or the
consummation of the transactions contemplated thereby, other than
those that have been obtained or made.
(iii) The Company is currently in possession of and in compliance
in all material respects with all permits, licenses and other
approvals necessary to carry on its gaming machine business, except
where the failure to have such permits, licenses and other approvals
would not have a material adverse effect on the Company.
To the extent deemed advisable by such counsel, he may rely as to matters of
fact on certificates of responsible officers of the Company and public officials
and on the opinions of other counsel satisfactory to the Representatives;
provided that such counsel shall state that in his opinion the Underwriters and
he are justified in relying on such other opinions. Copies of such certificates
and other opinions shall be furnished to the Representatives and counsel for the
Underwriters.
(h) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives
and their counsel, and the Underwriters shall have received from
Xxxxxx, Xxxxx & Bockius LLP a favorable opinion, addressed to the
Representatives and dated each Closing Date, with respect to the
Shares, the Registration Statement and the Prospectus, and such other
related matters as the Representatives may reasonably request, and the
Company shall have furnished to Xxxxxx, Xxxxx & Xxxxxxx LLP such
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(i) If the Shares have been qualified for sale in Florida, the
Representatives shall have received on each Closing Date certificates,
addressed to the Representatives, and dated such Closing Date, of an
executive officer of the Company, to the effect that the signer of
such certificate has reviewed and understands the provisions of
Section 517.075 of the Florida Statutes, and represents that the
Company has complied, and at all times will comply, with all
provisions of Section 517.075 and further, that as of such Closing
Date, neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in
Cuba.
(j) The Representatives shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section
4(p).
2. Covenants of the Company.
(A) The Company covenants and agrees as follows:
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(i) The Company shall prepare the Prospectus in a form approved by
the Representatives and file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the Representatives in
writing (i) when any amendment to the Registration Statement shall
have become effective, (ii) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for any
additional information, (iii) of the prevention or suspension of the
use of any preliminary prospectus or the Prospectus or of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening of any
proceeding for that purpose and (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company shall not
file any amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished the Representatives a copy
for their review prior to filing and shall not file any such proposed
amendment or supplement to which the Representatives reasonably
object. The Company shall use its best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible
the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any
event occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (ii) of this Section 6(A), an amendment
or supplement which shall correct such statement or omission or an
amendment which shall effect such compliance.
(iv) The Company shall make generally available to its security
holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning at
the end of the fiscal quarter of the Company during which the
Effective Date occurs (or 90 days if such 12-month period coincides
with the Company's fiscal year), an earnings statement (which need not
be audited) of the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Securities Act or Rule
158 of the Rules.
(v) The Company shall furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and amendments
thereof) and to each other Underwriter a copy
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of the Registration Statement (without exhibits thereto) and all
amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the
Rules, as many copies of any preliminary prospectus and the Prospectus
and any amendments thereof and supplements thereto as the
Representatives may reasonably request.
(vi) The Company shall cooperate with the Representatives and
their counsel in endeavoring to qualify the Shares for offer and sale
in connection with the offering under the laws of such jurisdictions
as the Representatives may designate and shall maintain such
qualifications in effect so long as required for the distribution of
the Shares; provided, however, that the Company shall not be required
in connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing
business in any jurisdiction.
(vii) For a period of one year after the date of this Agreement,
the Company shall supply to the Representatives, and to each other
Underwriter who may so request in writing, copies of such financial
statements and other periodic and special reports as the Company may
from time to time distribute generally to the holders of any class of
its capital stock and shall furnish to the Representatives a copy of
each annual or other report it shall be required to file with the
Commission.
(viii) Without the prior written consent of CIBC World Markets
Corp., on behalf of the Underwriters, for a period of 90 days after
the date of this Agreement, the Company shall not issue, sell or
register with the Commission (other than on Form S-8 or on any
successor form), or otherwise dispose of, directly or indirectly, any
equity securities of the Company (or any securities convertible into
or exercisable or exchangeable for equity securities of the Company),
except for (i) the issuance of the Shares pursuant to the Registration
Statement; (ii) the issuance of options, or shares issuable upon
exercise of options, pursuant to the Company's existing stock option
plans as described in the Registration Statement and the Prospectus;
and (iii) the issuance of shares in connection with an acquisition
made by the Company and approved by the Company's Board of Directors.
(ix) On or before completion of this offering, the Company shall
make all filings required under applicable securities laws and by the
NYSE.
(x) The Company shall file timely and accurate reports in
accordance with the provisions of Florida Statutes Section 517.05, or
any successor provision, and any regulation promulgated thereunder, if
at any time after the Effective Date, the Company or any of its
affiliates commences engaging in business with the government of Cuba
or any person or affiliate located in Cuba.
(xi) The Company will apply the net proceeds from the offering of
the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
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(B) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement, including all
exhibits thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus, and the
printing, filing and distribution of this Agreement; (ii) the preparation and
delivery of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in Section
6(A)(vi), including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such registration and qualification and the
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs of
shipping and mailing) to the Representatives and to the Underwriters of copies
of each preliminary prospectus, the Prospectus and all amendments or supplements
to the Prospectus, and of the several documents required by this Section to be
so furnished, as may be reasonably requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom Shares
may be sold; (v) the filing fees of the NASD in connection with its review of
the terms of the public offering and reasonable fees and disbursements of
counsel for the Underwriters in connection with such review; (vi) the furnishing
(including costs of shipping and mailing) to the Representatives and to the
Underwriters of copies of all reports and information required by Section
6(A)(vii); (vii) inclusion of the Shares for listing on the NYSE; and (viii) all
transfer taxes, if any, with respect to the sale and delivery of the Shares by
the Company to the Underwriters. Subject to the provisions of Section 9, the
Underwriters agree to pay, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses incident
to the performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence, including,
without limitation, the fees and disbursements of counsel for the Underwriters.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which it may become subject under the Securities Act,
the Exchange Act or other Federal or state laws or regulations, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus
or any amendment thereof or supplement thereto or in any audio or
visual materials prepared by the Company or in any written information
furnished by or on behalf of the Company in any format, including,
without limitation, slides, videos, films, tape recordings used in
connection with the marketing of the Shares, including, without
limitation, statements communicated to
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securities analysts employed by the Underwriters, or arise out of
or are based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) in whole or in part upon any
breach of the representations and warranties set forth in Section 4
hereof, or (iii) in whole or in part upon any failure of the Company
to perform any of its obligations hereunder or under law; provided,
however, that such indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on account of
any losses, claims, damages or liabilities arising from the sale of
the Shares to any person by such Underwriter if such untrue statement
or omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus,
or such amendment or supplement, in reliance upon and in conformity
with information furnished in writing to the Company by the
Representatives on behalf of any Underwriter specifically for use
therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as
such in Section 7(b) below. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each director of the
Company, and each officer of the Company who signs the Registration
Statement, to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which
was made in any preliminary prospectus, the Registration Statement or
the Prospectus, or any amendment thereof or supplement thereto,
contained in (i) the number of shares to be purchased by each
Underwriter; (ii) the concession and reallowance figures and the first
sentence appearing in the 3rd paragraph under the caption
"Underwriting" and (iii) the stabilization and penalty bid information
contained in the 11th paragraph under the caption "Underwriting";
provided, however, that the obligation of each Underwriter to
indemnify the Company (including any controlling person, director or
officer thereof) shall be limited to the net proceeds received by the
Company from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party
or parties under this Section, notify each such indemnifying party of
the commencement of such action, suit or proceeding, enclosing a copy
of all papers served. No indemnification provided for in Section 7(a)
or 7(b) shall be available to any party who shall fail to give notice
as provided in this Section 7(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have
related and was prejudiced by the failure to give such notice but the
omission so to notify such indemnifying party of any such action, suit
or proceeding shall not relieve it from any liability that it may have
to any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
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entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof and the approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for
any legal or other expenses, except as provided below and except for
the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the
indemnifying parties and the indemnified party in the conduct of the
defense of such action (in which case the indemnifying parties shall
not have the right to direct the defense of such action on behalf of
the indemnified party) or (iii) the indemnifying parties shall not
have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of
which cases the fees and expenses of counsel shall be at the expense
of the indemnifying parties. An indemnifying party shall not be liable
for any settlement of any action, suit, proceeding or claim effected
without its written consent, which consent shall not be unreasonably
withheld or delayed.
8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, (i) in no case shall any Underwriter (except as may be provided
in the Agreement Among Underwriters) be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder; and (ii) the Company shall be liable and responsible for
any amount in excess of such underwriting discount; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as such Underwriter, and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to
clauses (i) and (ii) in the immediately preceding sentence of this Section 8.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section, notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriter's obligations to contribute
pursuant to this Section 8 are several in proportion to their respective
underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to
the Shares to be purchased on a Closing Date by the Representatives by
notifying the Company at any time
(a) in the absolute discretion of the Representatives at or before
any Closing Date: (i) if, on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or
in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such
a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of
the Representatives, inadvisable or impracticable to market the
Shares; (iv) if trading in the Shares has been suspended by the
Commission or trading generally on the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. or the NASDAQ National Market has
been suspended or limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities shall have been required, by said exchanges or by order of
the Commission, the National Association of Securities
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Dealers, Inc., or any other governmental or regulatory authority;
(v) if a banking moratorium has been declared by any state or Federal
authority; or (vi) if, in the judgment of the Representatives, there
has occurred a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to any Underwriter, and
no Underwriter shall be under any liability to the Company, except that (y) if
this Agreement is terminated by the Representatives or the Underwriters because
of any failure, refusal or inability on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, the Company
will reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in contemplation
of performing their obligations hereunder and (z) no Underwriter who shall have
failed or refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, shall be relieved of
liability to the Company or to the other Underwriters for damages occasioned by
its failure or refusal.
10. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 9) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable, or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated
to purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section
10 by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to one additional business day
within which it may, but is not obligated to, find one or more
substitute underwriters reasonably satisfactory to the Representatives
to purchase such Shares upon the terms set forth in this Agreement.
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In any such case, either the Representatives or the Company
shall have the right to postpone the applicable Closing Date for a period of not
more than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(B),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(B), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or sent by telephone or facsimile if subsequently
confirmed in writing, (a) if to the Representatives, c/o CIBC World Markets
Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention:
_______________ with a copy to Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq., and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the Registration Statement with a copy to Shack & Xxxxxx, P.C., 000 0xx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxxxx X. Xxxxxx,
Esq.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflict
of laws.
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This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
[signature page to follow]
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Please confirm that the foregoing correctly sets forth the agreement among us.
Very truly yours,
WMS INDUSTRIES INC.
By
-------------------------
Name:
Title:
Confirmed:
CIBC World Markets Corp.
Prudential Securities Incorporated
Acting severally on behalf of themselves
and as representative of the several
Underwriters named in Schedule I
annexed hereto.
By CIBC World Markets Corp.
By
-----------------------------------
Name:
Title:
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SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
---- ---------------
CIBC World Markets Corp.
Prudential Securities Incorporated
---------------
Total 3,500,000
===============
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