Exhibit 1.01
6,000,000 SHARES/*/
FIREARMS TRAINING SYSTEMS, INC.
CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
November _, 1996
XXXXXXXXXX SECURITIES
LAZARD FRERES & CO. LLC
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
SECTION 1. Introductory. Firearms Training Systems, Inc., a Delaware
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corporation (the "Company"), proposes to issue and sell 6,000,000 shares of its
authorized but unissued Class A Common Stock (the "Common Stock") to the several
underwriters named in Schedule A annexed hereto (the "Underwriters"), for whom
you are acting as Representatives. Said aggregate of 6,000,000 shares are
herein called the "Firm Common Shares." In addition, THIN International N.V., a
Netherlands Antilles corporation ("THIN International" or the Selling
Stockholder"), proposes to grant to the Underwriters an option to purchase up to
900,000 additional issued and outstanding shares of Common Stock (the "Optional
Common Shares"), as provided in Section 5 hereof. The Firm Common Shares and,
to the extent such option is exercised, the Optional Common Shares are
hereinafter collectively referred to as the "Common Shares."
You have advised the Company and the Selling Stockholder that the
Underwriters propose to make a public offering of their respective portions of
the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
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/*/Plus an option to purchase an additional 900,000 Shares from THIN
International N.V. to cover over-allotments.
The Company and the Selling Stockholder hereby confirm their
respective agreements with respect to the purchase of the Common Shares by the
Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The
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Company hereby represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-13105) with
respect to the Common Shares has been prepared by the Company in conformity
in all material respects with the requirements of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Company has
prepared and has filed or proposes to file prior to the effective date of
such registration statement an amendment or amendments to such registration
statement, which amendment or amendments have been or will be similarly
prepared. There have been delivered to you two signed copies of such
registration statement and amendments, together with two copies of each
exhibit filed therewith. Conformed copies of such registration statement
and amendments (but without exhibits) and of the related preliminary
prospectus have been delivered to you in such reasonable quantities as you
have requested for each of the Underwriters. The Company will next file
with the Commission one of the following: (i) prior to effectiveness of
such registration statement, a further amendment thereto, including the
form of final prospectus, (ii) a final prospectus in accordance with Rules
430A and 424(b) of the Rules and Regulations or (iii) a term sheet (the
"Term Sheet") as described in and in accordance with Rules 434 and 424(b)
of the Rules and Regulations. As filed, the final prospectus, if one is
used, or the Term Sheet and Preliminary Prospectus, if a final prospectus
is not used, shall include all Rule 430A Information and, except to the
extent that you shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the date and
time that this Agreement was executed and delivered by the parties hereto,
or, to the extent not completed at such date and time, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company shall have
previously advised you in writing would be included or made therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date (as hereinafter defined), shall
also mean such registration statement as so amended; provided, however,
that such term shall also include (i) all Rule 430A Information deemed to
be included in such registration statement at the time such registration
statement becomes effective as provided by Rule 430A of the Rules and
Regulations and (ii) any registration statement filed pursuant to 462(b) of
the Rules and Regulations relating to the Common Shares. The term
"Preliminary Prospectus" shall mean any preliminary prospectus referred to
in the preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule
430A Information. The term "Prospectus" as used in this Agreement shall
mean either (i) the prospectus relating to the Common Shares in the form in
which it is
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first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, (ii) if a Term Sheet is not used and no filing pursuant to
Rule 424(b) of the Rules and Regulations is required, shall mean the form
of final prospectus included in the Registration Statement at the time such
registration statement becomes effective or (iii) if a Term Sheet is used,
the Term Sheet in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations, together with the
Preliminary Prospectus included in the Registration Statement at the time
it becomes effective. The term "Rule 430A Information" means information
with respect to the Common Shares and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective pursuant
to Rule 430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus has
conformed in all material respects to the requirements of the Act and the
Rules and Regulations and, as of its date, has not included any untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and at the time the Registration
Statement becomes effective, and at all times subsequent thereto up to and
including each Closing Date hereinafter mentioned, the Registration
Statement and the Prospectus, and any amendments or supplements thereto,
will contain all material statements and information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, and neither the Registration Statement nor the Prospectus, nor
any amendment or supplement thereto, will include any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, no representation or warranty contained in this
subsection 2(b) shall be applicable to information contained in or omitted
from any Preliminary Prospectus, the Registration Statement, the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by or on behalf of (i) any
Underwriter, directly or through the Representatives, or (ii) the Selling
Stockholder, specifically for use in the preparation thereof.
(c) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed
in Exhibit 21.01 to the Registration Statement. The Company and each of
its subsidiaries have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, with power and authority (corporate and
other) to own and lease their properties and conduct their respective
businesses as described in the Prospectus; except as disclosed in the
Prospectus, the Company owns all of the outstanding capital stock of its
subsidiaries free and clear of all claims, liens, charges and encumbrances;
the Company and each of its subsidiaries are in possession of and operating
in compliance with all authorizations, licenses, permits, consents,
certificates and orders material to the conduct of their respective
businesses, all of which are valid and in full force and effect; the
Company and each of its subsidiaries are duly qualified to do business and
in good standing as foreign corporations in each jurisdiction
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in which the ownership or leasing of properties or the conduct of their
respective businesses requires such qualification, except for jurisdictions
in which the failure to so qualify would not have a material adverse effect
upon the Company or the subsidiary; and no proceeding has been instituted
in any such jurisdiction, revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification, except
for proceedings, if any, which would not have a material adverse effect on
the Company and its subsidiaries. Firearms Training Systems Limited, a
United Kingdom corporation, Firearms Training Systems Netherlands, B.V., a
Netherlands corporation, and F.A.T.S. Singapore, LTD., a Singapore
corporation (collectively, the "Material Subsidiaries"), are the only
subsidiaries of the Company material to the condition (financial or
otherwise), business or results of operations of the Company and its
subsidiaries.
(d) The Company has an authorized and outstanding capital stock as
set forth under the heading "Capitalization" in the Prospectus; there are
no issued and outstanding shares of the Company's Class B Non-Voting Common
Stock; all issued and outstanding shares of Common Stock (including,
without limitation, the Common Shares to be sold hereunder by THIN
International) have been duly authorized and validly issued, are fully paid
and nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities,
and conform to the description thereof contained in the Prospectus. All
issued and outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. Except as disclosed in or contemplated by the Prospectus
and the financial statements of the Company, and the related notes thereto,
included in the Prospectus, neither the Company nor any subsidiary has
outstanding any options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares
of its capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option, stock bonus
and other stock plans or arrangements, and the options or other rights
granted and exercised thereunder, set forth in the Prospectus fairly
presents in all material respects the information required to be shown with
respect to such plans, arrangements, options and rights.
(e) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth
in this Agreement will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Common Shares
by the Company pursuant to this Agreement. No stockholder of the Company
has any right which has not been waived, to require the Company to register
the sale of any shares owned by such stockholder under the Act in the
public offering contemplated by this Agreement. No further approval or
authority of the stockholders or the Board of Directors of the Company will
be required for the transfer and sale of the Common Shares to be sold by
the Selling Stockholder or the issuance and sale of the Common Shares to be
sold by the Company as contemplated herein.
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(f) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding obligation of the Company in accordance
with its terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally. The making and
performance of this Agreement by the Company and the consummation of the
transactions herein contemplated will not violate any provisions of the
certificate of incorporation or bylaws, or other organizational documents,
of the Company or any of its subsidiaries, and will not conflict with,
result in the breach or violation of, or constitute, either by itself or
upon notice or the passage of time or both, a default under any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or
other 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 its respective
properties may be bound or affected, any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory
body, administrative agency or other governmental body applicable to the
Company or any of its subsidiaries or any of its respective properties
except in each case for such violations, conflicts or defaults which would
not have a material adverse effect on the Company and its subsidiaries or
on the consummation of the transactions contemplated hereby. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement, except for compliance with the
Act, the Blue Sky laws applicable to the public offering of the Common
Shares by the several Underwriters and the clearance of such offering with
the National Association of Securities Dealers, Inc. (the "NASD") and
except for such consents as to which the failure to have would not have a
material adverse effect on the Company and its subsidiaries or on the
consummation of the transactions contemplated hereby.
(g) Xxxxxx Xxxxxxxx LLP and Price Waterhouse LLP, who have expressed
their opinion with respect to the financial statements and schedules filed
with the Commission as a part of the Registration Statement and included in
the Prospectus and in the Registration Statement, are independent
accountants as required by the Act and the Rules and Regulations.
(h) The financial statements and schedules of the Company, and the
related notes thereto, included in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of the
respective dates of such financial statements and schedules, and the
results of operations and changes in financial position of the Company for
the respective periods covered thereby. Such statements, schedules and
related notes have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis as certified by the
independent accountants named in subsection 2(g). No other financial
statements or schedules are required to be included in the Registration
Statement. The selected financial data set forth in the Prospectus under
the captions "Capitalization," "Summary Financial Data" and "Selected
Financial
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Data" fairly present the information set forth therein on the basis stated
in the Registration Statement.
(i) Except as disclosed in the Prospectus, and except as to defaults
which individually or in the aggregate would not be material to the
Company, neither the Company nor any of its subsidiaries is in violation or
default of any provision of its certificate of incorporation or bylaws, or
other organizational documents, or is in breach of or default with respect
to any provision of any agreement, judgment, decree, order, mortgage, deed
of trust, lease, franchise, license, indenture, permit or other instrument
to which it is a party or by which it or any of its properties are bound;
and there does not exist any state of facts which constitutes an event of
default on the part of the Company or any such subsidiary as defined in
such documents or which, with notice or lapse of time or both, would
constitute such an event of default.
(j) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
have not been described or filed as required. The descriptions of such
contracts and other documents set forth in the Prospectus are accurate and
complete in all material respects to the extent such contracts or other
documents are described therein; all such contracts are in full force and
effect on the date hereof; and neither the Company nor any of its
subsidiaries, nor to the best of the Company's knowledge, any other party
is in breach of or default under any of such contracts.
(k) There are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened to which the
Company or any of its subsidiaries is or may be a party or of which
property owned or leased by the Company or any of its subsidiaries is or
may be the subject, or related to environmental or discrimination matters,
which actions, suits or proceedings could reasonably be expected to,
individually or in the aggregate, prevent or materially and adversely
affect the transactions contemplated by this Agreement or result in a
material adverse change in the condition (financial or otherwise),
properties, business, results of operations or prospects of the Company and
its subsidiaries; and no labor disturbance by the employees of the Company
or any of its subsidiaries exists or is imminent which might be expected to
materially and adversely affect such condition, properties, business,
results of operations or prospects. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(l) The Company or the applicable subsidiary has good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except (i)
those, if any, reflected in such financial statements (or elsewhere in the
Prospectus), or (ii) those which are not material in amount and do not
materially and adversely affect the use made and proposed to be made of
such property by the Company and its subsidiaries. The Company or the
applicable subsidiary holds its
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leased properties under valid and binding leases, with such exceptions as
are not materially significant in relation to the business of the Company.
Except as disclosed in the Prospectus, the Company owns or leases all such
properties as are necessary to its operations as now conducted or as
proposed to be conducted, except where failure to so own or lease would not
have a material adverse effect on the Company and its subsidiaries or on
the consummation of the transactions contemplated hereby.
(m) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, and except as disclosed in or
specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary course
of business or which could reasonably be expected to result in a material
reduction in the future earnings of the Company and its subsidiaries; (ii)
the Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire,
flood, windstorm, accident or other calamity, whether or not covered by
insurance; (iii) the Company has not paid or declared any dividends or
other distributions with respect to its capital stock and the Company and
its subsidiaries are not in default in the payment of principal or interest
on any outstanding debt obligations; (iv) there has not been any change in
the capital stock (other than upon the sale of the Common Shares hereunder
and upon the exercise of options and warrants described in the Registration
Statement) or indebtedness material to the Company and its subsidiaries
(other than in the ordinary course of business); and (v) there has not been
any material adverse change in the condition (financial or otherwise),
business, properties, results of operations or prospects of the Company and
its subsidiaries.
(n) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries have sufficient trademarks,
trade names, patent rights, mask works, copyrights, licenses, approvals and
governmental authorizations to conduct their businesses as now conducted;
except as disclosed in or specifically contemplated by the Prospectus, the
expiration of any trademarks, trade names, patent rights, mask works,
copyrights, licenses, approvals or governmental authorizations would not
have a material adverse effect on the condition (financial or otherwise),
business, results of operations or prospects of the Company or its
subsidiaries; and the Company has no knowledge of any material infringement
by it or its subsidiaries of trademark, trade name rights, patent rights,
mask works, copyrights, licenses, trade secret or other similar rights of
others, and there is no claim being made against the Company or its
subsidiaries regarding trademark, trade name, patent, mask work, copyright,
license, trade secret or other infringement which could have a material
adverse effect on the condition (financial or otherwise), business, results
of operations or prospects of the Company and its subsidiaries.
(o) The Company has not been advised, and has no reason to believe,
that either it or any of its subsidiaries is not conducting business in
compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without
limitation, all applicable local, state and federal environmental laws and
regulations, except where failure to be so in compliance would not
materially
7
adversely affect the condition (financial or otherwise), business, results
of operations or prospects of the Company and its subsidiaries.
(p) The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid
all taxes shown as due thereon, and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the
Company or its subsidiaries, except for any failure to file, failure to pay
tax or deficiency which could not reasonably be expected to materially and
adversely affect the business, operations or properties of the Company and
its subsidiaries.
(q) The Company is not, and will not be following the transactions
contemplated herein, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(r) The Company has not distributed and will not distribute prior to
the First Closing Date any offering material in connection with the
offering and sale of the Common Shares other than the Prospectus, the
Registration Statement and the other materials permitted by the Act.
(s) Each of the Company and its subsidiaries maintain insurance of
the types and in the amounts customarily maintained by similarly situated
companies, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect.
(t) Except as disclosed in the Prospectus, neither the Company, any
of its subsidiaries or any of their respective officers or directors has at
any time during the last five years (i) made any unlawful contribution to
any candidate for foreign office, or failed to disclose fully any
contribution in violation of law or (ii) made any payment to any federal or
state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(u) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
SECTION 3. Representations, Warranties and Covenants of THIN
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International. The Selling Stockholder represents and warrants to, and agrees
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with, the several Underwriters that:
(a) The Selling Stockholder has and on the Second Closing Date
hereinafter mentioned will have, good and marketable title to the
Common Shares proposed to be sold by the Selling Stockholder hereunder
and full right, power and authority to enter into
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this Agreement and to sell, assign, transfer and deliver such Common
Shares hereunder, free and clear of all voting trust arrangements,
liens, encumbrances, equities, security interests, restrictions and
claims whatsoever; and upon delivery of and payment for such Common
Shares hereunder, the Underwriters will acquire good and marketable
title thereto, free and clear of all liens, encumbrances, equities,
claims, restrictions, security interests, voting trusts or other
defects of title whatsoever.
(b) The Selling Stockholder has executed and delivered a Power of Attorney
(hereinafter referred to as the "Stockholders Agreement"), and this
Agreement and the Stockholders Agreement have been duly executed and
delivered by or on behalf of the Selling Stockholder and the form of such
Stockholders Agreement has been delivered to you.
(c) The performance of this Agreement and the Stockholders Agreement and
the consummation of the transactions contemplated hereby and by the
Stockholders Agreement will not result in a breach or violation by the
Selling Stockholder of any of the terms or provisions of, or constitute a
default by the Selling Stockholder under, the charter or by-laws of the
Selling Stockholder, any indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise, license or other
agreement or instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder or any of its properties is bound, any
statute, or any judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to the Selling Stockholder or any of
its properties.
(d) The Selling Stockholder has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Common Shares and has not effected any sales of
Common Stock which, if effected by the issuer, would be required to be
disclosed in response to Item 701 of Regulation S-K.
(e) Each Preliminary Prospectus and the Prospectus, insofar as it sets
forth information furnished by or upon the authority of the Selling
Stockholder expressly for use in each of the Preliminary Prospectus and the
Prospectus, has conformed in all material respects to the requirements of
the Act and the Rules and Regulations and has not included any untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein not misleading in light of the circumstances
under which they were made; and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, insofar as it sets
forth information furnished by or upon the authority of the Selling
Stockholder expressly for use in each of the Registration Statement and the
Prospectus, will include 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. For the purposes of this clause
(e), the Underwriters and the Company agree with the Selling Stockholder
that the only information furnished by or upon the authority of the Selling
Stockholder is the
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information in the Prospectus under the section "Principal Shareholders"
regarding the Selling Stockholder (including without limitation the
information contained in footnote (6) of the section "Principal
Shareholders"). The Selling Stockholder further represents and warrants
that the information contained in the section "Principal Shareholders"
(including without limitation the information contained in footnote (6) of
the section "Principal Shareholders") includes all information required to
be disclosed in the Registration Statement and the Prospectus with respect
to the Selling Stockholder pursuant to the Act and the Rules and
Regulations.
(f) The Selling Stockholder is not aware that any of the representations
or warranties set forth in Section 2 above is untrue or inaccurate in any
material respect.
(g) The Selling Stockholder agrees with the Company and the
Underwriters not to, directly or indirectly, offer to sell, sell, solicit
an offer to sell, or contract or grant an option to sell or otherwise
dispose of any equity securities of the Company or securities convertible
into or exchangeable for any such securities, for a period of 180 days
after the date of the Prospectus, without the prior written consent of
Xxxxxxxxxx Securities, which consent may be withheld at the sole discretion
of Xxxxxxxxxx Securities.
SECTION 4. Representations and Warranties of the Underwriters. The
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Representatives, on behalf of the several Underwriters, represent and warrant to
the Company and to the Selling Stockholder that the information set forth (i) on
the cover page of the Prospectus with respect to price, underwriting discounts
and commissions and terms of offering and (ii) under "Underwriting" in the
Prospectus was furnished to the Company by and on behalf of the Underwriters for
use in connection with the preparation of the Registration Statement and the
Prospectus and is correct in all material respects. The Representatives
represent and warrant that they have been authorized by each of the other
Underwriters as the Representatives to enter into this Agreement on its behalf
and to act for it in the manner herein provided.
SECTION 5. Purchase, Sale and Delivery of Common Shares. On the
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basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriters 6,000,000 Firm Common Shares. The
Underwriters agree, severally and not jointly, to purchase from the Company the
number of Firm Common Shares described in Schedule A below. The purchase price
per share to be paid by the several Underwriters to the Company shall be $___
per share.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriters and payment therefor shall be made at the offices of Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx (or such other
place as may be agreed upon by the Company and the Representatives) at such time
and date, not later than the third (or, if the Firm Common Shares are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 P.M.
Washington D.C. time, the fourth) full business day following the first date
that any of the Common Shares are released by you for sale to the public, as you
shall designate by at least 48 hours prior notice to the Company (or at such
other time and date, not later than one week after such third or fourth, as the
case may be, full business day as may be agreed upon by the Company and the
Representatives) (the "First Closing Date"); provided, however, that if the
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Prospectus is at any time prior to the First Closing Date recirculated to the
public, the First Closing Date shall occur upon the later of the third or
fourth, as the case may be, full business day following the first date that any
of the Common Shares are released by you for sale to the public or the date that
is 48 hours after the date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company to you, for the respective accounts of the
Underwriters with respect to the Firm Common Shares to be sold by the Company
against payment by you, for the accounts of the several Underwriters, of the
purchase price therefor by a wire transfer of immediately available funds to an
account or accounts designated by the Company. The certificates for the Firm
Common Shares shall be registered in such names and denominations as you shall
have requested at least two full business days prior to the First Closing Date,
and shall be made available for checking and packaging on the business day
preceding the First Closing Date at a location in New York, New York, as may be
designated by you. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, THIN International hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 900,000 Optional
Common Shares at the purchase price per share to be paid for the Firm Common
Shares, for use solely in covering any over-allotments made by you for the
account of the Underwriters in the sale and distribution of the Firm Common
Shares. The option granted hereunder may be exercised at any time (but not more
than once) within 30 days after the first date that any of the Common Shares are
released by you for sale to the public, upon notice by you to said Selling
Stockholder setting forth the aggregate number of Optional Common Shares as to
which the Underwriters are exercising the option, the names and denominations in
which the certificates for such shares are to be registered and the time and
place at which such certificates will be delivered. Such time of delivery
(which may not be earlier than the First Closing Date), being herein referred to
as the "Second Closing Date," shall be determined by you, but if at any time
other than the First Closing Date shall not be earlier than one nor later than
three full business days after delivery of such notice of exercise. The number
of Optional Common Shares to be purchased by each Underwriter shall be
determined by multiplying the number of Optional Common Shares to be sold by
said Selling Stockholder pursuant to such notice of exercise by a fraction, the
numerator of which is the number of Firm Common Shares to be purchased by such
Underwriter as set forth opposite its name in Schedule A and the denominator of
which is the total number of Firm Common Shares (subject to such adjustments to
eliminate any fractional share purchases as you in your discretion may make).
Certificates for the Optional Common Shares will be made available for checking
and packaging on the business day preceding the Second Closing Date at a
location in New York, New York, as may be designated by you. The manner of
payment for and delivery of the Optional Common Shares shall be the same as for
the Firm Common Shares as specified in the two preceding paragraphs (except that
the relevant account or accounts shall be designated by the Selling
Stockholder). At any time before lapse of the option, you may cancel such
option by giving written notice of such cancellation to said Selling
Stockholder. If the option is cancelled or expires unexercised in
11
whole or in part, the Company will deregister under the Act the number of Option
Shares as to which the option has not been exercised.
You have advised the Company and the Selling Stockholder that each
Underwriter has authorized you to accept delivery of its Common Shares, to make
payment and to receipt therefor. You, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose
to make a public offering of their respective portions of the Common Shares as
soon after the effective date of the Registration Statement as in the judgment
of the Representatives is advisable and at the public offering price set forth
on the cover page of and on the terms set forth in the final prospectus, if one
is used, or on the first page of the Term Sheet, if one is used.
SECTION 6. Covenants of the Company. The Company covenants and
------------------------
agrees that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date
that this Agreement is executed and delivered by the parties hereto, to
become effective. If the Registration Statement has become or becomes
effective pursuant to Rule 430A of the Rules and Regulations, or the filing
of the Prospectus is otherwise required under Rule 424(b) of the Rules and
Regulations, the Company will file the Prospectus, properly completed, with
the Commission pursuant to the applicable paragraph of Rule 424(b) of the
Rules and Regulations within the time period prescribed and will provide
evidence satisfactory to you of such timely filing. The Company will
promptly advise you in writing (i) of the receipt of any comments of the
Commission, (ii) of any request of the Commission for amendment of or
supplement to the Registration Statement (either before or after it becomes
effective), any Preliminary Prospectus or the Prospectus or for additional
information, (iii) when the Registration Statement, or any amendment
thereto, shall have become effective, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order
at the earliest possible moment. The Company will not file any amendment
or supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus of which
you have not been furnished with a copy a reasonable time prior to such
filing or to which you reasonably object or which is not in compliance with
the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration
Statement or the Prospectus which in your reasonable judgment may be
necessary or advisable to enable the several
12
Underwriters to continue the distribution of the Common Shares and will use
its best efforts to cause the same to become effective as promptly as
possible. The Company will fully and completely comply with the provisions
of Rule 430A of the Rules and Regulations with respect to information
omitted from the Registration Statement in reliance upon such Rule.
(c) If at any time within the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the
Common Shares is required to be delivered under the Act any event occurs,
as a result of which the Prospectus, including any amendments or
supplements, would include an 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, or if it is necessary at any
time to amend the Prospectus, including any amendments or supplements, to
comply with the Act or the Rules and Regulations, the Company will promptly
advise you thereof and will promptly prepare and file with the Commission,
at its own expense, an amendment or supplement which will correct such
statement or omission or an amendment or supplement which will effect such
compliance and will use its best efforts to cause the same to become
effective as soon as possible; and, in case any Underwriter is required to
deliver a prospectus after such nine-month period, the Company upon
request, but at the expense of such Underwriter, will promptly prepare such
amendment or amendments to the Registration Statement and such Prospectus
or Prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45 days after the end
of the first quarter ending after one year following the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security
holders and to you an earnings statement (which need not be audited)
covering a period of 12 consecutive months beginning after the effective
date of the Registration Statement which will satisfy the provisions of the
last paragraph of Section 11(a) of the Act.
(e) Not later than 4:00 p.m. on the business day following the date
the Common Shares are released by the Underwriters for sale to the public,
the Company shall deliver or cause to be delivered copies of the Prospectus
in such quantities and at such places as the Representatives shall request.
During such period as a prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, the Company, at its
expense, but only for the nine-month period referred to in Section 10(a)(3)
of the Act, will furnish to you and the Selling Stockholder or mail to your
order copies of the Registration Statement, the Prospectus, the Preliminary
Prospectus and all exhibits, amendments and supplements to any such
documents in each case as soon as available and in such quantities as you
and the Selling Stockholder may request, for the purposes contemplated by
the Act. The Company will furnish or cause to be furnished to you copies of
all reports on Form SR required by Rule 463 of the Rules and Regulations.
(f) The Company shall cooperate with you and your counsel in order to
qualify or register the Common Shares for sale under (or obtain exemptions
from the application of)
13
the Blue Sky laws of such jurisdictions as you designate, will comply with
such laws and will continue such qualifications, registrations and
exemptions in effect so long as reasonably required for the distribution of
the Common Shares. The Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any such jurisdiction where it is not presently qualified or where it would
be subject to taxation as a foreign corporation. The Company will advise
you promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Common Shares for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding
for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company, with
your cooperation, will use its best efforts to obtain the withdrawal
thereof.
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request of the Representatives, to
each of the other Underwriters: (i) as soon as practicable after the end
of each fiscal year, copies of the Annual Report of the Company containing
the balance sheet of the Company as of the close of such fiscal year and
statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public
accountants; (ii) as soon as practicable after the filing thereof, copies
of each proxy statement, Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, Report on Form 8-K or other report filed by the Company with the
Commission, the NASD or any securities exchange; and (iii) as soon as
available, copies of any report or communication of the Company mailed
generally to holders of its Common Stock.
(h) During the period of 180 days after the date of the Prospectus,
without the prior written consent of either Xxxxxxxxxx Securities or each
of the Representatives (which consent may be withheld at the sole
discretion of the Xxxxxxxxxx Securities or the Representatives, as the case
may be), the Company will not, directly or indirectly, other than pursuant
to outstanding stock options and warrants disclosed in the Prospectus,
issue, offer, sell, grant options to purchase or otherwise dispose of any
of the Company's equity securities or any other securities convertible into
or exchangeable with its equity securities; provided, the Company may grant
options to purchase any of the Company's equity securities to any officer
or employee of the Company who delivers to Xxxxxxxxxx Securities a letter
substantially similar to the letters described in Section 7(c)(x) hereof.
(i) The Company will apply the net proceeds of the sale of the Common
Shares sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to designate the Common
Stock for quotation on The NASDAQ National Market.
You, on behalf of the Underwriters, may, in your sole discretion,
waive in writing the performance by the Company of any one or more of the
foregoing covenants or extend the time for their performance.
14
SECTION 7. Payment of Expenses. Whether or not the transactions
-------------------
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limiting the
generality of the foregoing, (i) all expenses incident to the issuance and
delivery of the Common Shares (including all printing and engraving costs), (ii)
all fees and expenses of the registrar and transfer agent of the Common Stock,
(iii) all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel and the Company's independent accountants, (v)
all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement, each
Preliminary Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, this
Agreement, the Agreement Among Underwriters, the Selected Dealers Agreement, the
Underwriters' Questionnaire, the Underwriters' Power of Attorney and the Blue
Sky memorandum, (vi) all filing fees, attorneys' fees and expenses reasonably
incurred by the Company or the Underwriters in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Common Shares for offer and sale under the Blue Sky laws,
(vii) the filing fee of the National Association of Securities Dealers, Inc.,
and (viii) all other fees, costs and expenses referred to in Item 13 of the
Registration Statement. Except as provided in this Section 7, Section 9 and
Section 11 hereof, the Underwriters shall pay all of their own expenses,
including the fees and disbursements of their counsel (excluding those relating
to qualification, registration or exemption under the Blue Sky laws and the Blue
Sky memorandum referred to above).
The Selling Stockholder will pay (directly or by reimbursement) all
fees and expenses incident to the performance of its obligations under this
Agreement which are not otherwise specifically provided for herein, including
but not limited to (i) any fees and expenses of counsel for the Selling
Stockholder and (ii) all expenses and taxes incident to the sale and delivery of
the Optional Common Shares to be sold by the Selling Stockholder to the
Underwriters hereunder, including without limitation taxes payable under Article
12 of the New York State tax law.
This Section 7 shall not affect any agreements relating to the payment
of expenses between the Company and the Selling Stockholder.
SECTION 8. Conditions of the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the several Underwriters to purchase and pay for the Firm Common
Shares on the First Closing Date and the Optional Common Shares on the Second
Closing Date shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholder herein set
forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the statements of Company
officers and the Selling Stockholder made pursuant to the provisions hereof, to
the performance by the Company and the Selling Stockholder of their respective
obligations hereunder, and to the following additional conditions:
15
(a) The Registration Statement shall have become effective not later
than 5:00 P.M. (or, in the case of a registration statement filed pursuant
to Rule 462(b) of the Rules and Regulations relating to the Common Shares,
not later than 10 P.M.), Washington, D.C. Time, on the date of this
Agreement, or at such later time as shall have been consented to by you; if
the filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b) of the Rules and Regulations, the Prospectus shall
have been filed in the manner and within the time period required by Rule
424(b) of the Rules and Regulations; and prior to such Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or, to the knowledge of the Company, the
Selling Stockholder or you, shall be contemplated by the Commission; and
any request of the Commission for inclusion of additional information in
the Registration Statement, or otherwise, shall have been complied with to
your satisfaction.
(b) You shall be satisfied that since the respective dates as of
which information is given in the Registration Statement and Prospectus,
(i) there shall not have been any change in the capital stock other than
pursuant to the exercise of outstanding options and warrants disclosed in
the Prospectus of the Company or any of its subsidiaries or any material
increase in the indebtedness (other than in the ordinary course of
business) of the Company or any of its subsidiaries, (ii) except as set
forth or contemplated by the Registration Statement or the Prospectus, no
material verbal or written agreement or other transaction shall have been
entered into by the Company or any of its subsidiaries, which is not in the
ordinary course of business or which could reasonably be expected to result
in a material reduction in the future earnings of the Company and its
subsidiaries, (iii) no loss or damage (whether or not insured) to the
property of the Company or any of its subsidiaries shall have been
sustained which materially and adversely affects the condition (financial
or otherwise), business, results of operations or prospects of the Company
and its subsidiaries, (iv) no legal or governmental action, suit or
proceeding affecting the Company or any of its subsidiaries which is
material to the Company and its subsidiaries or which affects or could
reasonably be expected to affect the transactions contemplated by this
Agreement shall have been instituted or threatened, and (v) there shall not
have been any material change in the condition (financial or otherwise),
business, management, results of operations or prospects of the Company and
its subsidiaries which makes it impractical or inadvisable in the judgment
of the Representatives to proceed with the public offering or purchase the
Common Shares as contemplated hereby.
(c) There shall have been furnished to you, as Representatives of the
Underwriters, on each Closing Date, in form and substance satisfactory to
you, except as otherwise expressly provided below:
(i) An opinion of Sidley & Austin, counsel for the Company,
addressed to the Underwriters and dated the First Closing Date, or the
Second Closing Date, as the case may be, to the effect that:
16
(1) Each of the Company and its subsidiaries incorporated
in the United States (each a "U.S. Sub") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, is
duly qualified to do business as a foreign corporation and is in
good standing in all other jurisdictions where the ownership or
leasing of properties or the conduct of its business requires
such qualification, except for jurisdictions in which the failure
to so qualify would not have a material adverse effect on the
Company and its subsidiaries, and has the corporate power and
authority to own its properties and conduct its business as
described in the Registration Statement;
(2) The authorized capital stock of the Company conforms as
to legal matters in all material respects to the description
thereof in the Prospectus; all necessary corporate proceedings
have been taken in order to authorize validly such authorized
capital stock; all outstanding shares of Common Stock (including
the Firm Common Shares and any Optional Common Shares) have been
duly and validly issued, are fully paid and nonassessable, and
were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase any
securities and conform to the description thereof contained in
the Prospectus; without limiting the foregoing, to the knowledge
of such counsel, there are no preemptive or other rights to
subscribe for or purchase any of the Common Shares to be sold by
the Company hereunder;
(3) All of each U.S. Sub's issued and outstanding shares
have been duly and validly authorized and issued, are fully paid
and nonassessable and, except as disclosed in the Prospectus, are
owned of record and otherwise to such counsel's knowledge by the
Company free and clear of all liens, encumbrances, equities,
claims, security interests, voting trusts or other defects of
title whatsoever;
(4) The certificates evidencing the Common Shares to be
delivered hereunder are in due and proper form under Delaware
law, and when duly countersigned by the Company's transfer agent
and registrar, and delivered to you or upon your order against
payment of the agreed consideration therefor in accordance with
the provisions of this Agreement, the Common Shares represented
thereby will be duly authorized and validly issued, fully paid
and nonassessable, will not have been issued in violation of or
subject to any preemptive rights or other rights to subscribe for
or purchase securities and will conform in all material respects
to the description thereof contained in the Prospectus;
(5) Except as disclosed in or specifically contemplated by
the Prospectus, to such counsel's knowledge, there are no
outstanding options, warrants or other rights calling for the
issuance of any shares of capital
17
stock of the Company or any security convertible into or
exchangeable for capital stock of the Company;
(6)
(a) The Registration Statement has become effective
under the Act, and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the
Registration Statement or preventing the use of the
Prospectus has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated
by the Commission; any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules
and Regulations has been made in the manner and within the
time period required by such Rule 424(b);
(b) The Registration Statement, the Prospectus and
each amendment or supplement thereto (except for the
financial statements and schedules and other financial data
included therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations; and
(c) To such counsel's knowledge, there are no
franchises, leases, contracts, agreements or documents of a
character required to be disclosed in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not disclosed or filed, as
required.
(d) To such counsel's knowledge, there are no legal or
governmental actions, suits or proceedings, pending or
threatened, against the Company or any of its U.S. Subs
which are required to be described in the Prospectus which
are not described as required.
(7) The Company has corporate power to enter into the
Underwriting Agreement and to perform its obligations thereunder;
this Agreement has been duly and validly authorized by all
necessary corporate action by the Company, has been duly and
validly executed and delivered by and on behalf of the Company,
and is a valid and binding agreement of the Company enforceable
in accordance with its terms, except as enforceability may be
limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors'
rights generally and except as to those provisions relating to
indemnity or contribution as to which no opinion need be
expressed; and no approval, authorization, order, consent,
registration, filing, qualification, license or permit of or with
any court, regulatory, administrative or other governmental body
is required for the execution and delivery of this
18
Agreement by the Company or the consummation of the transactions
contemplated by this Agreement, except such as have been obtained
and are in full force and effect under the Act and such as may be
required under applicable Blue Sky laws in connection with the
purchase and distribution of the Common Shares by the
Underwriters and the clearance of such offering with the NASD;
(8) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not (i)
conflict with, result in the breach of, or constitute, either by
itself or upon notice or the passage of time or both, a default
under, any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument known to such
counsel to which the Company or any U.S. Sub is a party or by
which the Company or any U.S. Sub or any of their respective
properties may be bound or affected, or (ii) violate any of the
provisions of the certificate of incorporation or bylaws, or
other organizational documents, of the Company or any U.S. Sub,
or (iii) so far as is known to such counsel, violate any statute,
judgment, decree, order, rule or regulation of any court or
governmental body having jurisdiction over the Company or any
U.S. Sub or any of their respective properties, except in the
case of clauses (i) and (iii) for any such breach, default,
conflict or violation which could not reasonably be expected to
have a material adverse effect on the Company and its
subsidiaries;
(9) To such counsel's knowledge, neither the Company nor any
U.S. Sub is in violation of its certificate of incorporation or
bylaws, or other organizational documents;
(10) To such counsel's knowledge, no holders of securities
of the Company have rights which have not been waived, to the
registration of shares of Common Stock or other securities,
because of the filing of the Registration Statement by the
Company or the offering contemplated hereby or the use of
proceeds contemplated in the Prospectus; and
(11) No transfer taxes are required to be paid in connection
with the sale and delivery of the Common Shares to the
Underwriters hereunder, except as required under Article 12 of
New York State tax law in the case of the shares being sold by
the Selling Stockholder.
In rendering such opinion, such counsel may rely as to matters of local law, on
opinions of local counsel, and as to matters of fact, on certificates of
officers of the Company or the U.S. Subs and of governmental officials, in
which case their opinion is to state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates are to be attached to the opinion. Such
counsel shall also include a statement to the effect that nothing has come to
such counsel's attention that would lead such counsel to believe that either at
the effective date of the Registration Statement or at the
19
applicable Closing Date the Registration Statement or the Prospectus, or any
such amendment or supplement, except for financial statements and schedules and
other statistical or financial data as to which such counsel need express no
belief, contains any 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 not misleading.
(ii) An opinion of Venable, Baetjer, Xxxxxx & Xxxxxxxxx, LLP,
counsel for the Company, addressed to the Underwriters and dated the
First Closing Date, or the Second Closing Date, as the case may be, to
the effect that the statements set forth under the headings "Business
- Certain Legal Proceedings" and "Business - Government Contracts and
Regulation" in the Prospectus, insofar as such statements constitute a
summary of the laws, regulations, legal matters, documents or
proceedings referred to therein, provide a fair and accurate summary
of such laws, regulations, legal matters, documents and proceedings.
(iii) With respect to each Material Subsidiary, an opinion
of local counsel acceptable to the Underwriters, addressed to the
Underwriters and dated the First Closing Date, or the Second
Closing Date, as the case may be, to the effect that:
(1) Such subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of its jurisdiction of incorporation, is duly qualified to do
business as a foreign corporation and is in good standing in all
other jurisdictions where the ownership or leasing of properties
or the conduct of its business requires such qualification,
except for jurisdictions in which the failure to so qualify would
not have a material adverse effect on the Company and its
subsidiaries, and has the corporate power and authority to own
its properties and conduct its business as described in the
Registration Statement;
(2) All of such subsidiary's issued and outstanding shares
have been duly and validly authorized and issued, are fully paid
and nonassessable and, except as disclosed in the Prospectus, are
owned of record and otherwise to such counsel's knowledge by the
Company free and clear of all liens, encumbrances, equities,
claims, security interests, voting trusts or other defects of
title whatsoever;
(3) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not (i)
conflict with, result in the breach of, or constitute, either by
itself or upon notice or the passage of time or both, a default
under, any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument known to such
counsel to which such subsidiary is a party or by which such
subsidiary or any of its property may be bound or affected, or
(ii) violate any of the provisions of the certificate of
incorporation or bylaws, or other organizational documents, of
such subsidiary, or (iii) so
20
far as is known to such counsel, violate any statute, judgment,
decree, order, rule or regulation of any court or governmental
body having jurisdiction over such subsidiary or any of its
property, except in the case of clauses (i) and (iii) for any
such breach, default, conflict or violation which could not
reasonably be expected to have a material adverse effect on the
Company and its subsidiaries; and
(4) Such subsidiary is not in violation of its certificate
of incorporation or bylaws, or other organizational documents, or
to the best of such counsel's knowledge, in breach of or default
with respect to any provision of any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other
instrument known to such counsel to which such subsidiary is a
party or by which its properties may be bound or affected, except
where such default would not materially adversely affect the
Company and its subsidiaries.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of officers of the Company or such subsidiary and of governmental
officials, in which case their opinion is to state that they are so doing and
that the Underwriters are justified in relying on such opinions or certificates
and copies of said opinions or certificates are to be attached to the opinion.
(iv) An opinion of Netherlands Intertrust (Antilles) N.V.,
counsel for THIN International, addressed to the Underwriters and
dated the First Closing Date, or the Second Closing Date, as the case
may be, to the effect that:
(1) This Agreement and the Stockholders Agreement have been
duly authorized, executed and delivered by or on behalf of the
Selling Stockholder; and to such counsel's knowledge the
performance of this Agreement and the Stockholders Agreement and
the consummation of the transactions herein contemplated by the
Selling Stockholder will not result in a breach of, or constitute
a default under, any indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise,
license or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder or any
of its properties may be bound, or violate any statute, judgment,
decree, order, rule or regulation known to such counsel of any
court or governmental body having jurisdiction over the Selling
Stockholder or any of its properties; and no approval,
authorization, order or consent of any court, regulatory body,
administrative agency or other governmental body is required for
the execution and delivery of this Agreement or the Stockholders
Agreement or the consummation by the Selling Stockholder of the
transactions contemplated by this Agreement, except such as have
been obtained and are in full force and effect under the Act and
such as may be required under the rules of the NASD and
applicable Blue Sky laws; and
21
(2) The Selling Stockholder has full right, power and
authority to sell, transfer and deliver the Common Shares to be
sold on such Closing Date by the Selling Stockholder hereunder
and good and marketable title to such Common Shares so sold, free
and clear of all liens, encumbrances, equities, claims,
restrictions, security interests, voting trusts, or other defects
of title whatsoever, has been transferred to the Underwriters
(whom counsel may assume to be bona fide purchasers) who have
purchased such Common Shares hereunder.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the Selling Stockholder and of officers of the Company and of
governmental officials, in which case their opinion is to state that they are so
doing and that the Underwriters are justified in relying on such opinions or
certificates and copies of said opinions or certificates are to be attached to
the opinion.
(v) An opinion of Cravath, Swaine & Xxxxx, counsel for THIN
International, addressed to the Underwriters and dated the First
Closing Date, or the Second Closing Date, as the case may be, to the
effect that:
(1) Assuming due authorization and execution, the
Stockholders Agreement is a valid and binding agreement of the
Selling Stockholder in accordance with its terms except as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally.
In rendering such opinion, such counsel may rely as to matters of
local law, on opinions of local counsel, and as to matters of fact, on
certificates of the Selling Stockholder and of officers of the Company
and of governmental officials, in which case their opinion is to state
that they are so doing and that the Underwriters are justified in
relying on such opinions or certificates and copies of said opinions
or certificates are to be attached to the opinion.
(vi) Such opinion or opinions of Cleary, Gottlieb, Xxxxx &
Xxxxxxxx, counsel for the Underwriters, dated the First Closing Date
or the Second Closing Date, as the case may be, with respect to legal
matters relating to this Agreement, the validity of the Common Shares,
the Registration Statement and the Prospectus and other related
matters as you may reasonably require, and the Company and the Selling
Stockholder shall have furnished to such counsel such documents and
shall have exhibited to them such papers and records as they may
reasonably request for the purpose of enabling them to pass upon such
matters. In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company and
governmental officials.
(vii) A certificate of the Company (executed on behalf of the
Company by the president or chief operating officer and the chief
financial or chief accounting officer of the Company), dated the First
Closing Date or the Second Closing Date, as the case may be, to the
effect that:
22
(1) The representations and warranties set forth in Section
2 of this Agreement are true and correct as of the date of this
Agreement and as of the First Closing Date or the Second Closing
Date, as the case may be, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied on or prior to such Closing Date;
(2) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any Preliminary
Prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best of
the knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated under
the Act;
(3) Neither the Registration Statement nor the Prospectus
nor any amendment or supplement thereto includes any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction
or event has occurred which should have been set forth in an
amendment to the Registration Statement or in a supplement to or
amendment of any prospectus which has not been disclosed in such
a supplement or amendment;
(5) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, there
has not been any material adverse change or a development
involving a material adverse change in the condition (financial
or otherwise), business, properties, results of operations,
management or prospects of the Company and its subsidiaries; and
no legal or governmental action, suit or proceeding is pending or
threatened against the Company or any of its subsidiaries which
is material to the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, or
which may adversely affect the transactions contemplated by this
Agreement; since such dates and except as so disclosed, neither
the Company nor any of its subsidiaries has entered into any
verbal or written agreement or other transaction which is not in
the ordinary course of business or which could reasonably be
expected to result in a material reduction in the future earnings
of the Company or incurred any material liability or obligation,
direct, contingent or indirect, made any change in its capital
stock, made any material change in its short-term debt or funded
debt or repurchased or otherwise acquired any of the Company's
capital stock; and the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding
23
capital stock payable to stockholders of record on a date prior
to the First Closing Date or Second Closing Date; and
(6) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus and except
as disclosed in or contemplated by the Prospectus, the Company
and its subsidiaries have not sustained a material loss or damage
by strike, fire, flood, windstorm, accident or other calamity
(whether or not insured).
(viii) On each Closing Date, a certificate, dated such Closing
Date and addressed to you, signed by or on behalf of THIN
International to the effect that the representations and warranties of
the Selling Stockholder in this Agreement are true and correct, as if
made at and as of such Closing Date, and the Selling Stockholder has
complied with all the agreements and satisfied all the conditions on
his part to be performed or satisfied prior to such Closing Date.
(ix) On the date that this Agreement is executed and also on the
First Closing Date and the Second Closing Date a letter addressed to
you, as Representatives of the Underwriters, from each of Xxxxxx
Xxxxxxxx LLP and Price Waterhouse, independent accountants, the first
such letter from each to be dated the date of this Agreement, the
second such letter from each to be dated the First Closing Date and
the third such letter from each (in the event of a second closing) to
be dated the Second Closing Date, in form and substance satisfactory
to you.
(x) On or before the First Closing Date, letters from each
continuing director and officer of the Company and each of the Centre
Entities (as such term is defined in the Prospectus), in form and
substance satisfactory to you, confirming that for a period of 180
days after the date of the Prospectus, each such person will not,
directly or indirectly, sell or offer to sell or otherwise dispose of
any equity securities of the Company or any right to acquire such
securities or any other securities convertible or exchangeable for
such securities without the prior written consent of either Xxxxxxxxxx
Securities or each of the Representatives, which consent may be
withheld at the sole discretion of Xxxxxxxxxx Securities or each of
the Representatives, as the case may be.
(d) The Common Stock shall have been designated for trading on The
NASDAQ National Market.
All opinions, certificates, letters and documents referred to above shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Underwriters.
The Company shall furnish you with such manually signed or conformed copies of
such opinions, certificates, letters and documents as you reasonably request.
Any certificate signed by any officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the
statements made therein.
24
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification by you as Representatives to the
Company and the Selling Stockholder without liability on the part of any
Underwriter, the Company or the Selling Stockholder except for the expenses to
be paid or reimbursed by the Company and the Selling Stockholder pursuant to
Sections 7 and 9 hereof and except to the extent provided in Section 11 hereof.
SECTION 9. Reimbursement of Underwriters' Expenses. Notwithstanding
---------------------------------------
any other provisions hereof, if this Agreement shall be terminated by you
pursuant to Section 8, or if the sale to the Underwriters of the Common Shares
at the First Closing is not consummated because of any refusal, inability or
failure on the part of the Company or the Selling Stockholder to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse you and the other Underwriters upon demand for all out-of-pocket
expenses that shall have been reasonably incurred by you and them in connection
with the proposed purchase and the sale of the Common Shares, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, telegraph charges and telephone charges relating directly to
the offering contemplated by the Prospectus. Any such termination shall be
without liability of any party to any other party except that the provisions of
this Section, Section 7 and Section 11 shall at all times be effective and shall
apply.
SECTION 10. Effectiveness of Registration Statement. You and the
---------------------------------------
Company will use all your and its best efforts to cause the Registration
Statement to become effective, to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement and, if such stop
order be issued, to obtain as soon as possible the lifting thereof.
SECTION 11. Indemnification. (a) (i) The Company and the Selling
---------------
Stockholder, jointly and severally, agree to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Underwriter, such
directors, officers, employees or agents or such controlling person may become
subject, under the Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state in any of them a material fact required to
be stated therein or necessary to make the statements in any of them not
misleading; and will reimburse each Underwriter, the directors, officers,
employees and agents of each Underwriter, and each such controlling person for
any legal and other expenses as such expenses are reasonably incurred by such
Underwriter, such directors, officers, employees or agents or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
--------
however, that neither the Company nor the Selling Stockholder shall be liable in
-------
any such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon:
25
(i) an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 4
hereof; or (ii) the failure of such Underwriter to deliver or cause to be sent
to the purchaser a copy of the Prospectus (or amendment or supplement thereto)
within the time required by the Act and the regulations thereunder, if the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact contained in any Preliminary Prospectus or Prospectus was
corrected in the Prospectus (or amendment or supplement thereto), provided that
the Company has delivered the Prospectus (or amendment or supplement thereto) to
the Underwriters in requisite quantity on a timely basis to permit such delivery
or sending. In addition to its other obligations under this Section 11(a), each
of the Company and the Selling Stockholder, jointly and severally, agree that,
as an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, or any inaccuracy in the
representations and warranties of the Company or the Selling Stockholder herein
or failure to perform obligations hereunder, all as described in this Section
11(a), it will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's or the Selling Stockholder's obligation to
reimburse each Underwriter for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, each Underwriter shall promptly return it to the
Company or the Selling Stockholder, as the case may be, together with interest,
compounded daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced from time
to time by Bank of America NT&SA, San Francisco, California (the "Prime Rate").
Any such interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement, shall bear interest at the Prime
Rate from the date of such request. This indemnity agreement will be in addition
to any liability which the Company or the Selling Stockholder may otherwise
have.
(ii) Notwithstanding the foregoing Section 11(a)(i), (A) no demand
for indemnification or reimbursement provided for in Section 11(a)(i) shall be
made upon the Selling Stockholder unless and until such demand has first been
made upon the Company, and the Company has failed to satisfy such demand within
a period of 30 days from the later of (x) the date of such demand and (y) the
date notice of such demand has been provided to the Selling Stockholder; and (B)
the Selling Stockholder's aggregate liability under Section 11(a)(i) shall be
limited to an amount equal to the proceeds (after deducting the underwriting
commissions, but before deducting expenses) received by the Selling Stockholder
from the sale of Optional Common Shares pursuant to this Agreement.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, the Selling Stockholder and each person, if any, who controls the
Company or the Selling Stockholder within the meaning of the Act, against any
losses, claims, damages, liabilities or expenses to which the Company, or any
such director, officer, Selling Stockholder or controlling person may
26
become subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 4
hereof; and will reimburse the Company, or any such director, officer, Selling
Stockholder or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer, Selling Stockholder or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. In addition to its other obligations under this Section 11(b), each
Underwriter severally agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 11(b) which relates to information furnished to the
Company pursuant to Section 4 hereof, it will reimburse the Company (and, to the
extent applicable, each officer, director, controlling person or Selling
Stockholder) on a quarterly basis for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director, controlling person or Selling Stockholder)
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director, controlling person or
Selling Stockholder) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company (and, to the
extent applicable, each officer, director, controlling person or Selling
Stockholder) within 30 days of a request for reimbursement, shall bear interest
at the Prime Rate from the date of such request. This indemnity agreement will
be in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section or to the
extent it is not prejudiced as a proximate result of such failure. In case any
such action is brought against any
27
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all other
indemnifying parties similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however, if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for expenses of more than one separate counsel approved by
Xxxxxxxxxx Securities in the case of Section 11(a)(i) representing the
indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 11 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, the Selling Stockholder and the Underwriters from the offering
of the Common Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company, the Selling Stockholder and the Underwriters in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations; provided, however, that (A) the Selling Stockholder will not be
required to contribute any amounts referred to in clauses (i) and (ii) above
unless and until a demand for indemnification, reimbursement or contribution has
first been made upon the Company, and the Company has failed to satisfy such
demand within a period of 30 days from the later of (x) the date of such demand
and (y) the date of notice of such demand has been provided to the Selling
Stockholder and (B) the Selling Stockholder's relative benefit under this
Section 11(d) shall be limited to an amount equal to the proceeds (after
deducting the underwriting commissions, but
28
before deducting expenses) received by the Selling Stockholder from the sale of
Optional Common Shares pursuant to this Agreement. The respective relative
benefits received by the Company, the Selling Stockholder and the Underwriters
shall be deemed to be in the same proportion, in the case of the Company and the
Selling Stockholder as the total price paid to the Company and to the Selling
Stockholder, respectively, for the Common Shares sold by them to the
Underwriters (net of underwriting commissions but before deducting expenses)
bears to the total price to the public set forth on the cover of the Prospectus,
and in the case of the Underwriters as the underwriting commissions received by
them bears to the total price to the public set forth on the cover of the
Prospectus. The relative fault of the Company, the Selling Stockholder and the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact or the inaccurate or the alleged
inaccurate representation and/or warranty relates to information supplied by the
Company, the Selling Stockholder or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in subparagraph (c) of
this Section 11, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in subparagraph (c) of this Section 11 with respect to
notice of commencement of any action shall apply if a claim for contribution is
to be made under this subparagraph (d); provided, however, that no additional
notice shall be required with respect to any action for which notice has been
given under subparagraph (c) for purposes of indemnification. The Company, the
Selling Stockholder and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined solely by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 11, (A) in the event
the Selling Stockholder is liable for any amount of contribution under this
Section 11(d), the Company agrees to indemnify and hold harmless the Selling
Stockholder against any losses, claims, damages, liabilities or expenses the
Selling Stockholder may become subject to under this Section 11(d) except to the
extent the proviso appearing in the first sentence of Section 11(e) shall be
operative, and (B) no Underwriter shall be required to contribute any amount in
excess of the amount of the total underwriting commissions received by such
Underwriter in connection with the Common Shares underwritten by it and
distributed to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 11 are several in proportion to their respective underwriting
commitments and not joint.
(e) The Company agrees to indemnify and hold harmless the Selling
Stockholder, the directors, officers, partners, employees, representatives and
agents of the Selling Stockholder and each person, if any, who controls the
Selling Stockholder within the meaning of either the Act or the Exchange Act
against any losses, claims, damages, liabilities or expenses, joint or several,
to which such directors, officers, partners, employees, representatives or
agents or such
29
controlling person may become subject, under the Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state in any of them a
material fact required to be stated therein or necessary to make the statements
in any of them not misleading; and will reimburse the Selling Stockholder, the
directors, officers, partners, employees, representatives and agents of the
Selling Stockholder, and each such controlling person for any legal and other
expenses as such expenses are reasonably incurred by the Selling Stockholder,
such directors, officers, partners, employees, representatives or agents or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company shall not be liable in any such case
-------- -------
to the Selling Stockholder or any person who controls the Selling Stockholder
within the meaning of either the Act or the Exchange Act to the extent that any
such loss, claim, damage, liability or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with the information
furnished to the Company by or on behalf of the Selling Stockholder expressly
for inclusion in the Registration Statement and Prospectus; provided, further,
-------- -------
for purposes of this clause the Company agrees with the Selling Stockholder that
the only information provided by or upon the authority of the Selling
Stockholder is the name of the Selling Stockholder and number of Common Shares
owned prior to the Offering (as such term is defined in the Prospectus) and the
number of Common Shares owned upon completion of the Offering (as such term is
defined in the Prospectus), in each case appearing in the table in the
Prospectus under the heading "Principal Shareholders" and the information in
footnote (6) to such table; provided, further, that the indemnification required
-------- -------
by this Section 11(e) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or expense if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld).
In addition to its other obligations under this Section 11(e), the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, or any inaccuracy
in the representations and warranties of the Company herein or failure to
perform obligations hereunder, all as described in this Section 11(e), it will
reimburse the Selling Stockholder on a quarterly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the Company's obligation to reimburse the Selling Stockholder for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Selling
Stockholder shall promptly return it to the Company, as the case may be,
together with interest, compounded daily, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by Bank of America NT&SA, San Francisco,
California (the "Prime Rate"). Any such
30
interim reimbursement payments which are not made to the Selling Stockholder
within 30 days of a request for reimbursement, shall bear interest at the Prime
Rate from the date of such request.
(f) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Sections 11(a) and 11(b)
hereof, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
under the provisions of the Constitution and Rules of the Board of Governors of
the New York Stock Exchange, Inc. or pursuant to the Code of Arbitration
Procedure of the NASD. Any such arbitration must be commenced by service of a
written demand for arbitration or written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 11(a) and 11(b)
hereof and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of such
Sections 11(a) and 11(b) hereof.
SECTION 12. Default of Underwriters. It shall be a condition to this
-----------------------
Agreement and the obligation of the Company and the Selling Stockholder to sell
and deliver the Common Shares hereunder, and of each Underwriter to purchase the
Common Shares in the manner as described herein, that, except as hereinafter in
this paragraph provided, each of the Underwriters shall purchase and pay for all
the Common Shares agreed to be purchased by such Underwriter hereunder upon
tender to the Representatives of all such shares in accordance with the terms
hereof. If any Underwriter or Underwriters default in their obligations to
purchase Common Shares hereunder on either the First or Second Closing Date and
the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase on such Closing Date does not exceed
10% of the total number of Common Shares which the Underwriters are obligated to
purchase on such Closing Date, the non-defaulting Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the Common Shares which such defaulting Underwriters agreed but failed
to purchase on such Closing Date. If any Underwriter or Underwriters so default
and the aggregate number of Common Shares with respect to which such default
occurs is more than the above percentage and arrangements satisfactory to the
Representatives and the Company for the purchase of such Common Shares by other
persons are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company or the Selling Stockholder except for the expenses to be paid by the
Company and the Selling Stockholder pursuant to Section 7 hereof and except to
the extent provided in Section 11 hereof.
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days in
order that the necessary changes in the Registration Statement, Prospectus and
any other documents, as well as any other arrangements, may be effected. As
used in this Agreement, the term "Underwriter" includes any person substituted
for
31
an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 13. Effective Date. This Agreement shall become effective
--------------
immediately as to Sections 7, 9, 11, 14, 16 and 21 and, as to all other
provisions, (i) if at the time of execution of this Agreement the Registration
Statement has not become effective, at 2:00 P.M., California time, on the first
full business day following the effectiveness of the Registration Statement, or
(ii) if at the time of execution of this Agreement the Registration Statement
has been declared effective, at 2:00 P.M., California time, on the first full
business day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time after the
Registration Statement becomes effective as you may determine on and by notice
to the Company or by release of any of the Common Shares for sale to the public.
For the purposes of this Section 13, the Common Shares shall be deemed to have
been so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of communications (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common Shares for sale to securities dealers, whichever may
occur first.
SECTION 14. Termination. Without limiting the right to terminate
-----------
this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
and the Selling Stockholder or by you by notice to the Company and the
Selling Stockholder at any time prior to the time this Agreement shall
become effective as to all its provisions, and any such termination shall
be without liability on the part of the Company or the Selling Stockholder
to any Underwriter (except for the expenses to be paid or reimbursed by the
Company and the Selling Stockholder pursuant to Sections 7 and 9 hereof and
except to the extent provided in Section 11 hereof) or of any Underwriter
to the Company or the Selling Stockholder (except to the extent provided in
Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the First
Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum or
maximum prices shall have been generally established on the New York Stock
Exchange or on the American Stock Exchange or in the over the counter
market by the NASD, or trading in securities generally shall have been
suspended on either such Exchange or in the over the counter market by the
NASD, or a general banking moratorium shall have been established by
federal, New York or California authorities, (ii) if an outbreak of major
hostilities or other national or international calamity or any substantial
change in political, financial or economic conditions shall have occurred
or shall have accelerated or escalated to such an extent, as, in the
judgment of the Representatives, to affect adversely the marketability of
the Common Shares, (iii) if any adverse event shall have occurred or shall
exist which makes untrue or incorrect in any material respect any statement
or information contained in the Registration Statement or Prospectus or
which is not reflected in the Registration Statement or Prospectus but
should be reflected therein in order to make the statements or information
contained
32
therein not misleading in any material respect, or (iv) if there shall be
any action, suit or proceeding pending or threatened, or there shall have
been any development or prospective development involving particularly the
business or properties or securities of the Company or any of its
subsidiaries or the transactions contemplated by this Agreement, which, in
the reasonable judgment of the Representatives, may materially and
adversely affect the Company's business or earnings and makes it
impracticable or inadvisable to offer or sell the Common Shares. Any
termination pursuant to this subsection (b) shall without liability on the
part of any Underwriter to the Company or the Selling Stockholder or on the
part of the Company or the Selling Stockholder to any Underwriter (except
for expenses to be paid or reimbursed by the Company and the Selling
Stockholder pursuant to Sections 7 and, if otherwise applicable, 9 hereof
and except to the extent provided in Section 11 hereof).
SECTION 15. Representations and Indemnities to Survive Delivery. The
---------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholder and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholder, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 16. Notices. All communications hereunder shall be in
-------
writing and, if sent to the Representatives shall be mailed, delivered or
telegraphed and confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxx, Esq., with a copy to Xxxxxxx Xxxxxx,
Esq., Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000; if sent to the Company shall be mailed, delivered or telegraphed and
confirmed to the Company at 0000 XxXxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxx Xxxxxxxx, with a copy to Xxxxx X. Xxxxxx, Esq., Sidley &
Austin, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and if sent to THIN
International shall be mailed, delivered or telegraphed and confirmed to THIN
International N.V., x/x Xxxxxxxxxxx Xxxxxxxxxx (Xxxxxxxx) X.X., Xxxxxxxx
Xxxxxxx, Kaya Xxxxxxx X. Xxxxxxx z/n, X.X. Xxx 000, Xxxxxxx, Xxxxxxxxxxx
Antilles, Attention: Xxxxxxx Xxxxx, with a copy to Cravath, Swaine & Xxxxx, 00
Xxxx Xxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, Attention: Xxxxx X. Xxxxxx. The
Company, the Selling Stockholder or you may change the address for receipt of
communications hereunder by giving notice to the others.
SECTION 17. Successors. This Agreement will inure to the benefit of
----------
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 12 hereof, and to the benefit of the officers, directors,
employees, agents and controlling persons referred to in Section 11, and in each
case their respective successors, personal representatives and assigns, and no
other person will have any right or obligation hereunder. No such assignment
shall relieve any party of its obligations hereunder. The term "successors"
shall not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
33
SECTION 18. Representation of Underwriters. You will act as
------------------------------
Representatives for the several Underwriters in connection with all dealings
hereunder, and any action under or in respect of this Agreement taken by you
jointly or by Xxxxxxxxxx Securities, as Representatives, will be binding upon
all the Underwriters.
SECTION 19. Partial Unenforceability. The invalidity or
------------------------
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 20. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
--------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 21. Consent by Selling Stockholder to Jurisdiction and Service
----------------------------------------------------------
of Process. The Selling Stockholder irrevocably submits to the jurisdiction of
----------
any Federal court (and, if such court refuses to take jurisdiction, any New York
State Court) located in the Borough of Manhattan in the City of New York over
any suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby. The Selling Stockholder irrevocably
waives, to the fullest extent permitted by law, any objection which it may have
to the laying of the venue of any such suit, action or proceeding brought in
such a court and any claim that any suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. The Selling Stockholder agrees
that final judgment in any such suit, action or proceeding brought in such a
court shall be conclusive and binding upon the Selling Stockholder and may be
enforced in any court to the jurisdiction of which the Selling Stockholder is
subject by a suit upon judgment, provided that service of process is effected
upon the Selling Stockholder in the manner specified in the following paragraph
or as otherwise permitted by law; provided, however, that the Selling
Stockholder does not waive, and the foregoing provisions of this sentence shall
not constitute or be deemed to constitute a waiver of, (i) any right to appeal
any such judgment, to seek any stay or otherwise to seek reconsideration or
review of any such judgment in each case before the trial court of a United
States Federal or State court having appellate jurisdiction over such trial
court or (ii) any stay of execution or levy pending an appeal form, or a suit,
action or proceeding for reconsideration or review of, any such judgment in such
trial court.
The Selling Stockholder will at all times have an authorized agent in
the Borough of Manhattan, the City of New York upon whom process may be served
in any suit, action or proceeding arising out of or relating to this Agreement.
Service of process upon such agent and written notice of such service mailed or
delivered to the Selling Stockholder shall to the extent permitted by law be
deemed in every respect effective service of process upon the Selling
Stockholder in any such suit, action or proceeding. The Selling Stockholder
hereby irrevocably appoints CT Corporation System, whose address is, as of the
date hereof, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent for such
purpose, and covenants and agrees that service of process in any such suit,
action or proceeding may be made upon it at the office of such agent at
34
said address (or at such other address in the Borough of Manhattan, the City of
New York, as the Company may designate by written notice to the
Representatives). The Selling Stockholder hereby represents and warrants that
such agent has accepted such appointment and has agreed to act as said agent for
service of process, and the Selling Stockholder agrees to take any and all
action, including the filing of any and all documents that may be necessary to
continue such appointment in full force and effect as aforesaid.
The Selling Stockholder hereby consents to process being served in any
suit, action or proceeding of the nature referred to in the preceding paragraphs
by service upon such agent together with the mailing of a copy thereof by
registered or certified mail, postage prepaid, return receipt requested, to the
address of the Selling Stockholder set forth herein or to any other address of
which the Selling Stockholder shall have given written notice to the
Representatives. The Selling Stockholder irrevocably waives, to the fullest
extent permitted by law, all claim of error by reason of any such service (but
does not waive any right to assert lack of subject matter jurisdiction) and
agrees that such service and mailing (i) shall be deemed in every respect
effective service or process upon the Selling Stockholder in any such suit,
action or proceeding and (ii) shall, to the fullest extent permitted by law, be
taken and held to be valid personal service.
Nothing in this Section shall affect the right of the Underwriters to
serve process in any manner permitted by law or limit the right of the
Underwriters to bring proceedings against the Selling Stockholder in the courts
of any jurisdiction or jurisdictions.
SECTION 22. General. This Agreement constitutes the entire agreement
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of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Stockholder and you.
Any person executing and delivering this Agreement as Attorney-in-fact
for the Selling Stockholder represents and warrants by so doing that he has been
duly appointed as Attorney-in-fact by the Selling Stockholder pursuant to a
validly existing and binding Power of Attorney which authorizes such Attorney-
in-fact to take such action. Any action taken under this Agreement by any
Attorney-in-fact will be binding on the Selling Stockholder.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement among the Company, the Selling Stockholder and
the several Underwriters including you, all in accordance with its terms.
35
Very truly yours,
FIREARMS TRAINING SYSTEMS, INC.
By:__________________________
Name:
Title:
THIN INTERNATIONAL N.V.
By:___________________________
Name:
Title:
36
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in New York, New York as of
the date first above written.
XXXXXXXXXX SECURITIES
LAZARD FRERES & CO. LLC
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: XXXXXXXXXX SECURITIES
By:______________________________
Name:
Title:
37
SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------- ---------------
Xxxxxxxxxx Securities..................
Lazard Freres & Co. LLC................
The Xxxxxxxx-Xxxxxxxx Company, Inc.....
---------------
TOTAL................................ 6,000,000
===============
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