1,772,529 COMMON SHARES
CONTINENTAL WASTE INDUSTRIES, INC.
____________________
UNDERWRITING AGREEMENT
St. Petersburg, Florida
October ___, 1995
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
First Analysis Securities Corporation
NatWest Securities Limited
As Representatives of the Several Underwriters
c/o Raymond ▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Continental Waste Industries, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell an aggregate of 1,500,000 common shares, $0.001 par value per
share (the "Common Shares"), of the Company, to the several Underwriters named
in Schedule I hereto (the "Underwriters"), and certain shareholders of the
Company named in Schedule II hereto under the heading "Firm Shares" propose,
subject to the terms and conditions stated herein, to sell to the Underwriters
an aggregate of 272,529 Common Shares (the aggregate of such 1,772,529 Common
Shares to be sold by the Company and the shareholders of the Company named in
Schedule II hereto under the heading "Firm Shares" hereinafter referred to as
the "Firm Shares"). In addition, the Company and certain shareholders of the
Company named in Schedule II under the heading "Additional Shares" (the
shareholders named in Schedule II hereto being the "Selling Shareholders") have
agreed to sell to the Underwriters, upon the terms and conditions set forth
herein, up to an additional 265,879 Common Shares (the "Additional Shares") to
cover over-allotments by the Underwriters, if any. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "Shares".
The Company and the Selling Shareholders wish to confirm as follows their
agreement with you and the other several Underwriters, on whose behalf you are
acting, in connection with the several purchases of the Shares from the Company
and the Selling Shareholders.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form SB-2 (File No. 33-62589), as amended,
including a prospectus subject to completion, relating to the Shares. Such
registration statement, as amended at the time when it becomes or became
effective and as thereafter amended by post-effective amendment, is referred to
in this Agreement as the "Registration Statement". The prospectus in the form
included in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance upon Rule 430A under the
Act and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act or as part of a post-effective amendment
to the Registration Statement after the Registration Statement becomes
effective, the prospectus as so filed is referred to in this Agreement as the
"Prospectus". If the
Company elects to rely on Rule 434 under the Act, all references to the
Prospectus shall be deemed to include, without limitation, the form of
prospectus and the term sheet, taken together, provided to the Underwriters by
the Company in reliance on Rule 434 under the Act (the "Rule 434 Prospectus").
If the Company files a registration statement to register a portion of the
Shares and relies on Rule 462(b) under the Act for such registration statement
to become effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to "Registration Statement" herein shall be
deemed to include the registration statement on Form SB-2 (File No. 33-62589)
and the Rule 462 Registration Statement, as each such registration statement may
be amended pursuant to the Act. The prospectus subject to completion in the
form included in the Registration Statement at the time of the initial filing of
such Registration Statement with the Commission and as such prospectus is
amended or supplemented from time to time until the date of the Prospectus, are
collectively referred to in this Agreement as the "Prepricing Prospectus".
2. AGREEMENTS TO SELL AND PURCHASE. The Company and the Selling
Shareholders (as set forth on Schedule II hereof under the heading "Firm
Shares") hereby agree, severally and not jointly, to sell the Firm Shares to the
Underwriters and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Shareholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company and the Selling
Shareholders at a purchase price of $_____ per Share (the "purchase price per
Share"), the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Shares as adjusted
pursuant to Section 11 hereof).
The Company and the Selling Shareholders named in Schedule II under the
heading "Additional Shares" hereby also agree, severally and not jointly, to
sell to the Underwriters the number of Additional Shares (subject to such
adjustments as you may determine to avoid fractional shares) which bears the
same proportion to the total number of Additional Shares to be purchased by the
Underwriters as, in the case of a Selling Shareholder, the number of Additional
Shares set forth opposite the name of such Selling Shareholder in Schedule II
hereto under the heading "Additional Shares", and in the case of the Company,
245,656 Additional Shares, bears to the total number of Additional Shares. Upon
the basis of the representations, warranties and agreements of the Company and
the Selling Shareholders herein contained and subject to all the terms and
conditions set forth herein, the Underwriters shall have the right for 30 days
from the date of the Prospectus to purchase from the Company up to 245,656
Additional Shares and from certain of the Selling Shareholders (in accordance
with Schedule II hereof under the heading "Additional Shares") up to 20,223
Additional Shares, in each case at the purchase price per Share for the Firm
Shares. The Additional Shares may be purchased solely for the purpose of
covering over-allotments, if any, made in connection with the offering of the
Firm Shares. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase the number of Additional Shares
(subject to such adjustments as you may determine to avoid fractional shares)
which bears the same proportion to the total number of Additional Shares to be
purchased by the Underwriters as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I hereto (or such number of Firm Shares
as adjusted pursuant to Section 11 hereof) bears to the total number of Firm
Shares.
3. TERMS OF PUBLIC OFFERING. The Company and the Selling
Shareholders have been advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable and initially to offer the Shares upon the terms set forth
in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, at 10:00 a.m., St. Petersburg, Florida time, on October
___, 1995 (the "Closing Date"). The place of closing for the Firm Shares and
the Closing Date may be varied by agreement between you and the Company.
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Delivery to the Underwriters of and payment for any Additional Shares to
be purchased by the Underwriters shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Associates, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, at 10:00 a.m.,
St. Petersburg, Florida time, on such date or dates (the "Additional Closing
Date") (which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than three nor later than ten business
days after the giving of the notice hereinafter referred to) as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company and the Selling Shareholders that are selling Additional Shares of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. Such notice may be given to the Company and the Selling
Shareholders that are selling Additional Shares by you at any time prior to the
28th day after the date of the Prospectus. The place of closing for the
Additional Shares and the Additional Closing Date may be varied by agreement
among you and the Company.
Certificates for the Firm Shares and for any Additional Shares shall be
registered in such names and in such denominations as you shall request prior to
1:00 p.m., St. Petersburg, Florida time, not later than the second full business
day preceding the Closing Date or the Additional Closing Date, as the case may
be. Such certificates shall be made available to you in St. Petersburg, Florida
for inspection and packaging not later than 9:30 a.m., St. Petersburg, Florida
time, on the business day immediately preceding the Closing Date or the
Additional Closing Date, as the case may be. The certificates evidencing the
Firm Shares and any Additional Shares shall be delivered to you on the Closing
Date or the Additional Closing Date, as the case may be, against payment of the
purchase price therefor by wire transfer in federal (same day) funds to the
designated account(s) established on behalf of the Company at LaSalle National
Bank, N.A.
5. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants
and agrees with the several Underwriters as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective, if it has not already become effective, and will
advise you promptly and, if requested by you, will confirm such advice in
writing (i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) if Rule 430A under the
Act is employed, when the Prospectus has been timely filed pursuant to Rule
424(b) under the Act, (iii) of any request by the Commission for amendments or
supplements to the Registration Statement, any Prepricing Prospectus or the
Prospectus or for additional information, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Shares for offering or sale in any
jurisdiction or the initiation of any proceeding for such purposes and (v)
within the period of time referred to in subsection 5(e) hereof, of any change
in the Company's condition (financial or other), business, prospects,
properties, net worth or results of operations, or of any event that comes to
the attention of the Company that makes any statement made in the Registration
Statement or the Prospectus (as then amended or supplemented) untrue in any
material respect or that requires the making of any additions thereto or changes
therein in order to make the statements therein not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any other law. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time. If the
Company elects to rely on Rule 434 under the Act, the Company will provide the
Underwriters with copies of the form of Rule 434 Prospectus (including a term
sheet that complies with the requirements of Rule 434 under the Act), in such
number as the Underwriters may reasonably request, and file or transmit for
filing with the Commission in accordance with Rule 424(b) of the Act the form of
Prospectus complying with Rule 434(b)(2) of the Act by the close of business in
New York on the business day immediately following the date hereof. If the
Company elects not to rely on Rule 434 under the Act, the Company will provide
the Underwriters with copies of the form of Prospectus, in such number as the
Underwriters may reasonably request, and file or transmit for filing with the
Commission such Prospectus in accordance with Rule 424(b) of the Act by the
close of business in New York on the business day immediately following the date
hereof.
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(b) The Company will furnish to you, without charge, two signed
duplicate originals of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, and will also furnish to you, without charge, such number of
conformed copies of the Registration Statement as originally filed and of each
amendment thereto as you may reasonably request.
(c) The Company will not file any Rule 462 Registration Statement
or any amendment to the Registration Statement or make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
(with a reasonable opportunity to review such amendment or supplement) or to
which you have reasonably objected after being so advised.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have requested or may hereafter reasonably request, copies of each form
of the Prepricing Prospectus. The Company consents to the use, in accordance
with the provisions of the Act and with the securities laws of the jurisdictions
in which the Shares are offered by the several Underwriters and by dealers,
prior to the date of the Prospectus, of each Prepricing Prospectus so furnished
by the Company.
(e) As soon after the execution and delivery of this Agreement as
is practicable and thereafter from time to time for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or a dealer,
and for so long a period as you may request for the distribution of the Shares,
the Company will deliver to each Underwriter, without charge, as many copies of
the Prospectus (and of any amendment or supplement thereto) as they may
reasonably request. The Company consents to the use of the Prospectus (and of
any amendment or supplement thereto) in accordance with the provisions of the
Act and with the securities laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by all dealers to whom Shares may be
sold, both in connection with the offering and sale of the Shares and for such
period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities laws of such jurisdictions as you may reasonably designate and will
file such consents to service of process or other documents as may be reasonably
necessary in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(g) The Company will make generally available to its security
holders a consolidated earnings statement (in form complying with the Provisions
of Rule 158), which need not be audited, covering a twelve-month period
commencing after the effective date of the Registration Statement and the Rule
462 Registration Statement, if any, and ending not later than 15 months
thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section 11(a) of
the Act.
(h) During the period ending three years from the date hereof, the
Company will furnish to you and, upon your request, to each of the other
Underwriters, (i) as soon as available, a copy of each proxy statement,
quarterly or annual report or other report of the Company mailed to shareholders
or filed with the Commission, the NASD or any securities exchange and (ii) from
time to time such other information concerning the Company as you may reasonably
request.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provision hereof (except pursuant to a termination
under Section 11 hereof) or if this Agreement shall be
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terminated by the Underwriters because of any inability, failure or refusal on
the part of the Company or the Selling Shareholders to perform any agreement
herein or to comply with any of the terms or provisions hereof, the Company
agrees to reimburse you and the other Underwriters for all out-of-pocket
expenses (including travel expenses and fees and expenses of counsel for the
Underwriters but excluding wages and salaries paid by you) reasonably incurred
by you in connection herewith.
(j) The Company will apply the net proceeds payable to it from the
sale of the Shares for the purposes set forth under "Use of Proceeds" in the
Prospectus.
(k) If Rule 430A under the Act is employed, the Company will timely
file the Prospectus pursuant to Rule 424(b) under the Act.
(l) For a period of 120 days after commencement of the public
offering of the Shares by the Underwriters, the Company will not, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., sell, contract to
sell or otherwise dispose of any Common Shares or rights to purchase any Common
Shares, except (i) to the Underwriters pursuant to this Agreement, (ii) upon the
exercise of currently outstanding warrants and options, and (iii) not more than
400,000 Common Shares to be issued in connection with the acquisition of
businesses by the Company, provided that the recipients of Common Shares
referred to in clause (iii) agree that they will not sell such Common Shares
prior to 120 days after the commencement of the public offering of the Shares by
the Underwriters.
(m) Prior to the Closing Date or the Additional Closing Date, as
the case may be, the Company will furnish to you, as promptly as possible,
copies of any quarterly unaudited interim consolidated financial statements of
the Company and its subsidiaries for any period subsequent to the periods
covered by the financial statements appearing in the Prospectus.
(n) The Company will comply with all provisions of any undertakings
contained in the Registration Statement.
(o) The Company will timely file with the National Association of
Securities Dealers Automated Quotation System National Market ("Nasdaq National
Market") all documents and notices required by the Nasdaq National Market of
companies that have issued securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National Market.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter on the date hereof, and shall be
deemed to represent and warrant to each Underwriter on the Closing Date and the
Additional Closing Date, that:
(a) Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto
or filed pursuant to Rule 424(a) under the Act, complied when so filed in all
material respects with the provisions of the Act. The foregoing shall not apply
to the information contained in the last paragraph of the cover page of the
Prospectus and the information contained in paragraphs one, three, seven (the
first sentence only), eleven, twelve, and thirteen of the section of the
Prospectus captioned "Underwriting" which was furnished to the Company by any
Underwriter through the Representatives specifically for use in the Registration
Statement and Prospectus and which constitute the only written information
furnished by or on behalf of any Underwriter to the Company for such use
(collectively the "Underwriter Information"). The Commission has not issued any
order preventing or suspending the use of any Prepricing Prospectus.
(b) The Registration Statement (including any Rule 462 Registration
Statement), in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall become
effective, and the Prospectus, and any supplement or amendment thereto when
filed with
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the Commission under Rule 424(b) under the Act, will comply in all material
respects with the provisions of the Act and will not at any such times contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus (or any amendment or
supplement thereto) made in reliance upon and in conformity with the Underwriter
Information.
(c) The capitalization of the Company is and will be as set forth
in the Prospectus as of the date thereof. All the outstanding Common Shares
have been, and as of the Closing Date will be, duly authorized and validly
issued, are fully paid and nonassessable and are free of any preemptive or
similar rights; the Shares to be issued and sold to the Underwriters by the
Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and free of any preemptive or
similar rights; the capital stock of the Company conforms in all respects to the
description contained in the Prospectus (or any amendment or supplement thereto)
under the caption "Description of Capital Stock"; and the delivery of
certificates for the Shares pursuant to the terms of this Agreement and payment
for the Shares will pass valid title to the Shares, free and clear of any lien,
charge, claim, security interest, other encumbrance or defect in title to the
several Underwriters purchasing the Shares in good faith and without notice of
any lien, charge, claim, security interest, other encumbrance or defect in
title. The certificates for the Shares are in valid and sufficient form.
(d) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
power (corporate and other) and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as described
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify could not have
a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries (as defined in subsection 6(e) hereof) taken as a whole.
(e) Except for the subsidiaries set forth in Exhibit 21 to the
Registration Statement, the Company does not own an interest in or control,
directly or indirectly, any other corporation, partnership, joint venture,
association, trust or other business organization. Each of the subsidiaries set
forth on Exhibit 21 to the Registration Statement (collectively, the
"Subsidiaries") is a corporation duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of incorporation with
full power (corporate and other) and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as described
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct its
business and is in good standing in each other jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to so register or
qualify could not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole. All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized and validly
issued, are fully paid and nonassessable, and (except as indicated on Exhibit 21
to the Registration Statement) are owned by the Company directly or indirectly
through one of the other Subsidiaries, free and clear of any lien, charge,
claim, equity, security interest or other encumbrance.
(f) There are no legal or governmental actions, suits or
proceedings pending or threatened, against the Company or any Subsidiary, or to
which the Company or any Subsidiary, or to which any of their respective
properties, is subject, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) but which
are not described as required. Except as described in the Prospectus, there is
no action, suit, inquiry, proceeding, or investigation by or before any court or
governmental or other regulatory or administrative agency or commission pending
or threatened, against or involving the
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Company or any Subsidiary, which might individually or in the aggregate prevent
or adversely affect the transactions contemplated by this Agreement or result in
a material adverse change in the condition (financial or otherwise), properties,
prospects, business, net worth or results of operations of the Company and the
Subsidiaries taken as a whole, nor is there any basis for any such action, suit,
inquiry, proceeding, or investigation. There are no agreements, contracts,
indentures, leases or other instruments that are required to be disclosed in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that are not
disclosed or filed as required by the Act. All such contracts to which the
Company or any Subsidiary is a party have been duly authorized, executed and
delivered by the Company or such Subsidiary, constitute valid and legally
binding agreements of the Company or such Subsidiary and are enforceable against
the Company or such Subsidiary in accordance with the terms thereof, and neither
the Company nor any Subsidiary any other party, is in breach of or default under
any of such contracts, other than a breach or default that would not reasonably
be expected to have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth, or results of operations of
the Company and its Subsidiaries taken as a whole.
(g) Neither the Company nor any Subsidiary is in violation of its
certificate or articles of incorporation, bylaws, or other organizational
documents, or in material violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any Subsidiary or
of any decree of any court or governmental agency or body having jurisdiction
over the Company or any Subsidiary, or in default in any material respect,
except as disclosed in the Registration Statement or Prospectus, in the
performance of any obligation, agreement or condition contained in (i) any bond,
debenture, note or any other evidence of indebtedness, or (ii) any other
agreement to which the Company or any of the Subsidiaries is a party or by which
any of them or their respective properties may be bound, other than a default
that would not reasonably be expected to have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth, or
results of operations of the Company and its Subsidiaries taken as a whole; and
there does not exist any state of facts which constitutes an event of default on
the part of the Company or any Subsidiary as defined in such documents or which,
with notice or lapse of time or both, would constitute such an event of default,
other than an event of default that would not reasonably be expected to have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth, or results of operations of the Company and
its Subsidiaries taken as a whole.
(h) The execution and delivery of this Agreement and the
performance by the Company of its obligations under this Agreement have been
duly and validly authorized by the Company, and this Agreement has been duly
executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms.
(i) None of the offer, issuance, sale or delivery of the Shares,
the execution, delivery or performance of this Agreement by the Company, the
compliance by the Company with all provisions hereof, or the consummation by the
Company of the transactions contemplated hereby, including the distribution of
the Shares by the Underwriters (i) requires any consent, approval, authorization
or other order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, or official (except such as
may be required for the registration of the Shares under the Act and compliance
with the securities laws of any state or the bylaws and rules of the NASD, all
of which will be, or have been, effected in accordance with this Agreement),
(ii) conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of incorporation, bylaws, or
other organizational documents, of the Company or any Subsidiary, or any
agreement, indenture, lease or other instrument to which the Company or any
Subsidiary is a party or by which any of them or any of their respective
properties may be bound, (iii) violates any statute, law, regulation, ruling,
filing, judgment, injunction, order or decree applicable to the Company, any
Subsidiary or any of their respective properties, or (iv) results in the
creation or imposition of any lien, claim, charge, security interest or other
encumbrance upon any property or assets of the Company or any Subsidiary.
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(j) Except as set forth in the Registration Statement or the
Prospectus, the Company does not have outstanding and at the Closing Date (and
the Additional Closing Date, if applicable) will not have outstanding any
options to purchase, or any warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any Common Shares or any such warrants or convertible securities or obligations.
No holder of securities of the Company has rights to the registration of any
securities of the Company because of the filing of the Registration Statement
that have not been satisfied or heretofore waived in writing, if required.
(k) To the best knowledge of the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, KPMG
Peat Marwick LLP and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, the certified public accountants
who have audited the financial statements filed as part of the Registration
Statement and the Prospectus (or any amendment or supplement thereto) are
independent public accountants as required by the Act.
(l) The financial statements, including the pro forma financial
statements, together with related schedules and notes, included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), present fairly the consolidated financial position, results of
operations, shareholders' equity and cash flows of the Company and the
Subsidiaries on the basis stated in the Registration Statement at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Registration Statement and Prospectus (and
any amendment or supplement thereto) is accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company. No other financial statements or schedules are required to be included
in the Registration Statement.
(m) Except as set forth in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i) the
Company and the Subsidiaries have not incurred any material liabilities or
obligations, indirect, direct or contingent, or entered into any transaction
which is not in the ordinary course of business or which could result in a
material reduction in the future earnings of the Company and the Subsidiaries,
(ii) the Company and the 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 the 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 of the
Company or any Subsidiary (other than upon the sale of the Shares and upon the
exercise of options and warrants described in the Prospectus) or any material
change in the indebtedness of the Company and the Subsidiaries (other than in
the ordinary course of business), and (v) there has not been any material
adverse change, or any development involving or which would be expected to
involve a potential future material adverse change, in the condition (financial
or otherwise), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries.
(n) The Company and each Subsidiary has good and marketable title
to all property (real and personal) described in the Prospectus as being owned
by it or otherwise necessary for the conduct of its business, free and clear of
all liens, claims, charges, security interests or other encumbrances except (i)
such as are described in the Prospectus or (ii) such as could not have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole. The property (real and personal) held under
lease by the Company or the Subsidiaries is held under valid, subsisting and
enforceable leases, with only such exceptions as in the aggregate could not have
a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
-8-
(o) The Company has not distributed and will not distribute any
offering material in connection with the offering and sale of the Shares other
than the Prepricing Prospectus, the Prospectus, or other offering material, if
any, as permitted by the Act.
(p) The Company has not taken, and will not take, directly or
indirectly, any action which constituted, or any action designed, or which might
reasonably be expected to cause or result in or constitute, under the Act or
otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or otherwise.
(q) The Company is not an "investment company", an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940, as
amended.
(r) The Company and each Subsidiary has all permits, licenses,
franchises, approvals, consents and authorizations of governmental or regulatory
authorities, including authorization given by consent order, agreed order,
consent decree, letter approval, consent of conduct, formal or informal
regulatory interpretation, policy document, guidance document, internal agency
memorandum or any and all similar approvals or authorizations (each, a "Permit",
and collectively "Permits") as are necessary to own its properties and to
conduct its business in the manner described in the Prospectus, subject to such
qualifications as may be described in the Prospectus, with only such exceptions
as in the aggregate not have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole; the Company and
each Subsidiary has fulfilled and performed all of its obligations with respect
to each such Permit and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination of any such Permit or
result in any other material impairment of the rights of the holder of any such
Permit, subject in each case to such qualification as may be described in the
Prospectus, with only such exceptions as in the aggregate could not have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole; and, the Prospectus sets forth an accurate and
complete description of the restrictions related to such Permits.
(s) The Company and the Subsidiaries have complied and will comply
in all material respects with wage and hour determinations issued by the U.S.
Department of Labor under the Service Contract Act of 1965 and the Fair Labor
Standards Act in paying its employees' salaries, fringe benefits, and other
compensation for the performance of work or other duties in connection with
contracts with the federal government. The Company and the Subsidiaries have
complied and will comply in all material respects with the terms of all
certifications and representations made to the federal government in connection
with the submission of any bid or proposal or any contract. The Company and the
Subsidiaries have complied and will comply in all material respects with their
obligations under their agreements and contracts with the federal government and
agencies thereof.
(t) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(u) Neither the Company nor any Subsidiary has, directly or
indirectly, at any time during the past five years (i) made any unlawful
contribution to any candidate for political office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any federal,
state, local or foreign governmental
-9-
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 or applicable foreign jurisdictions.
(v) The Company and the Subsidiaries have obtained all Permits
required under federal, state, local and foreign statutes, ordinances and other
laws relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, chemicals, or industrial, hazardous, or toxic
materials or wastes into the environment (including, without limitation, ambient
air, surface water, ground water, land surface, or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, hazardous, or toxic materials or wastes, or any
regulation, rule, code, plan, order, decree, judgment, injunction, notice, or
demand letter issued, entered, promulgated, or approved thereunder
("Environmental Laws"). The Company and the Subsidiaries are in material
compliance with all terms and conditions of all required Permits, and with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables contained in the
Environmental Laws other than as set forth in the Prospectus. There is no
pending or threatened civil or criminal litigation, notice of violation, or
administrative proceeding relating in any way to the Environmental Laws
(including but not limited to notices, demand letters, or claims under the
Resource Conservation and Recovery Act of 1976, as amended ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), the Emergency Planning and Community Right to Know Act of
1986, as amended ("EPCRA"), the Clean Air Act, as amended ("CAA"), or the Clean
Water Act, as amended ("CWA") and similar federal, state, local, or foreign
laws) involving the Company or the Subsidiaries other than as set forth in the
Prospectus. There have not been and there are not any past, present, or
foreseeable future events, conditions, circumstances, activities, practices,
incidents, actions, or plans which may interfere with or prevent continued
compliance, in all material respects, with Environmental Laws, or which may give
rise to any material common law or legal liability, or otherwise form the basis
of any material claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling, or the emission,
discharge, release, or threatened release into the environment, of any
pollutant, contaminant, chemical, or industrial, hazardous, or toxic material or
waste, including, without limitation, any liability arising, or any claim,
action, demand, suit, proceeding, hearing, study, or investigation which may be
brought, under RCRA, CERCLA, EPCRA, CAA, CWA or similar federal, foreign, state
or local laws other than as set forth in the Prospectus.
(w) The Company and the Subsidiaries own and have full right, title
and interest in and to, or have valid licenses to use, each material trade name,
trademark or service ▇▇▇▇ under which the Company or any Subsidiary conducts its
business, and the Company and the Subsidiaries have created no lien or
encumbrance on, or granted any right or license with respect to, any such trade
name, trademark or service ▇▇▇▇; there is no claim pending against the Company
or any Subsidiary with respect to any trade name, trademark or service ▇▇▇▇ and
neither the Company nor any Subsidiary has received notice that any trade name,
trademark or service ▇▇▇▇ which it uses or has used in the conduct of its
business infringes upon or conflicts with the rights of any third party.
(x) All offers and sales by the Company and the Subsidiaries of
their securities prior to the date hereof were made in compliance with the Act
and all other applicable federal and state laws or regulations.
(y) The Shares have been duly authorized for trading on the Nasdaq
National Market subject to notice of issuance.
(z) All federal, foreign, state and local tax returns required to
be filed by or on behalf of the Company or any Subsidiary with respect to all
periods ended prior to the date of this Agreement have been filed (or are the
subject of a valid extension) with the appropriate federal, foreign, state and
local authorities and all such tax returns, as filed, are accurate in all
material respects. All federal, foreign, state and local taxes (including
estimated tax payments) required to be shown on all such tax returns or claimed
to be due from or
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with respect to the business of the Company or any Subsidiary have been paid or
reflected as a liability on the financial statements of the Company and the
Subsidiaries for appropriate periods, except for those taxes or claims therefor
which are being contested by the Company in good faith and for which appropriate
reserves are reflected in the Company's financial statements. All deficiencies
asserted as a result of any federal, foreign, state or local tax audits have
been paid or finally settled and no issue has been raised in any such audit
which, by application of the same or similar principles, reasonably could be
expected to result in a proposed deficiency for any other period not so audited.
No state of facts exists or has existed which would constitute grounds for the
assessment of any tax liability with respect to the periods which have not been
audited by appropriate federal, foreign, state or local authorities. There are
no outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, foreign, state or local tax return for any
period. On the Closing Date, and Additional Closing Date, if any, all stock
transfer and other taxes which are required to be paid in connection with the
sale of the shares to be sold by the Company to the Underwriters will have been
fully paid by the Company and all laws imposing such taxes will have been
complied with.
(aa) Except as set forth in the Prospectus, there are no
transactions with affiliates, as defined in Rule 405 promulgated under the Act,
which are required by the Act to be disclosed in the Registration Statement.
7. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each
of the Selling Shareholders hereby severally represents and warrants to each
Underwriter on the date hereof (except as otherwise set forth herein), and shall
be deemed to severally represent and warrant to each Underwriter on the Closing
Date and the Additional Closing Date, that:
(a) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Shareholder of this Agreement,
the Power of Attorney (the "Power of Attorney") and the Custody Agreement (the
"Custody Agreement") referred to in the last paragraph of this Section 7, and
for the sale and delivery of the Shares to be sold by such Selling Shareholder,
have been obtained; and such Selling Shareholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement, and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Shareholder.
(b) This Agreement, the Power of Attorney and the Custody Agreement
have been duly authorized, executed and delivered by or on behalf of each of the
Selling Shareholders and constitute valid and legally binding agreements of each
such Selling Shareholder enforceable in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization or other laws
of general application relating to or affecting enforcement of creditors' rights
generally or the availability of equitable remedies, regardless of whether such
enforcement is considered in a proceeding in equity or at law. The performance
of this Agreement, the Power of Attorney and the Custody Agreement and the
consummation of the transactions contemplated herein and therein will not result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, voting trust
agreement, note agreement, lease or other agreement or instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder or such
Selling Shareholder's properties are bound, or under any order, rule or
regulation of any court or governmental agency or body applicable to such
Selling Shareholder or the business or property of such Selling Shareholder.
(c) Such Selling Shareholder has, and immediately prior to the
Closing Date will have, good and valid title to the Shares to be sold by such
Selling Shareholder hereunder, free and clear of all liens, encumbrances,
equities, shareholder agreements, voting trusts or claims of any nature
whatsoever, and, upon delivery of such Shares and payment therefor pursuant
hereto, good and valid title to such Shares, free and clear of all liens,
encumbrances, equities, shareholder agreements, voting trusts or claims of any
nature whatsoever (other than those arising by or through the Underwriters),
will pass to the several Underwriters.
-11-
(d) Such Selling Shareholder will not directly or indirectly,
assign, transfer, offer, sell, hypothecate, or otherwise dispose of any Common
Shares (or securities convertible into or exchangeable for or any rights to
purchase or acquire Common Shares), and will not in any way reduce his, her or
its risk of ownership or investment in any Common Shares, prior to the
expiration of 120 days from the date that the Prospectus is first filed pursuant
to Rule 424(b) under the Act, without your prior written consent.
(e) Such Selling Shareholder has not taken, and will not take,
directly or indirectly, any action which constituted, or any action designed, or
which might reasonably be expected to cause or result in or constitute, under
the Act or otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares or otherwise.
(f) No consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body has been or is
required for the consummation by the Selling Shareholder of the transactions on
his part contemplated in this Agreement, the Power of Attorney or the Custody
Agreement, except such as have been duly obtained under the Act and such as may
be required under state securities laws or the bylaws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the Shares
to be sold by the Selling Shareholder.
(g) Such Selling Shareholder is familiar with the Registration
Statement, the Prepricing Prospectus and the Prospectus and has no knowledge of
any material fact or condition not set forth in the Registration Statement, the
Prepricing Prospectus or the Prospectus which has adversely affected, or may
adversely affect, the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole, and the sale of the Shares proposed to be sold by
such Selling Shareholder is not prompted by any such knowledge.
(h) All information with respect to such Selling Shareholder
contained in the Registration Statement, the Prepricing Prospectus and the
Prospectus (as amended or supplemented, if the Company shall have filed with the
Commission any amendment or supplement thereto) complied and will comply in all
material respects with all applicable provisions of the Act, contains and will
contain all statements required to be stated therein in accordance with the Act,
and does not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(i) To the best knowledge of such Selling Shareholder, the
representations and warranties of the Company contained in Section 6 hereof are
true and correct.
(j) The Selling Shareholder has not distributed and will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Prepricing Prospectus, the Prospectus or other offering
material, if any, as permitted by the Act.
(k) On the Closing Date, and Additional Closing Date, if any, all
stock transfer and other taxes (other than income taxes) which are required to
be paid in connection with the sale and transfer of the Shares to be sold by the
Selling Shareholder will have been fully paid for by such Selling Shareholder
and all laws imposing such taxes will have been fully complied with.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated, the Selling Shareholders
severally agree to deliver to you at least two days prior to the Closing or,
Additional Closing, if any, a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
-12-
Each of the Selling Shareholders represents and warrants that certificates
in negotiable form representing all of the Shares to be sold by such Selling
Shareholder have been placed in custody under a Custody Agreement, in the form
heretofore furnished to you, duly executed and delivered by such Selling
Shareholder to the Company, as custodian (the "Custodian"), and that such
Selling Shareholder has duly executed and delivered a Power of Attorney, in the
form heretofore furnished to you, appointing ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ as such Selling Shareholder's attorneys-in-fact (the "Attorneys-in-Fact")
with authority, acting individually or collectively, to execute and deliver this
Agreement on behalf of such Selling Shareholder, to determine the purchase price
to be paid by the Underwriters to the Selling Shareholders as provided in
Section 2 hereof, to authorize the delivery of the Shares to be sold by such
Selling Shareholder or otherwise to act on behalf of such Selling Shareholder in
connection with the transactions contemplated by this Agreement and the Custody
Agreement. Each of the Selling Shareholders specifically agrees that the Shares
represented by the certificates held in custody for such Selling Shareholders
under the Custody Agreement are subject to the interest of the Underwriters
hereunder, and that the arrangements made by such Selling Shareholder for such
custody, and the appointment by such Selling Shareholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
Each of the Selling Shareholders specifically agrees that the obligations of
such Selling Shareholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Shareholder or, in
the case of an estate or trust, by the death or incapacity of any executor or
trustee or the termination of such estate or trust, or in the case of a
partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event. If any individual Selling
Shareholder or any executor or trustee should die or become incapacitated, or if
any such estate or trust shall be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should occur before
the delivery of the Shares hereunder, certificates representing the Shares shall
be delivered by or on behalf of the Selling Shareholders in accordance with the
terms and conditions of this Agreement and the Custody Agreement, and actions
taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall be as
valid as if such death, incapacity, termination, dissolution or other event had
not occurred, regardless of whether or not the Custodian, the Attorneys-in-Fact,
or any of them, shall have received notice of such death, incapacity,
termination, dissolution or other event.
8. EXPENSES. Whether or not the transactions contemplated hereby
are consummated or this Agreement becomes effective or is terminated, the
Company and, unless otherwise paid by the Company, the Selling Shareholders will
pay or cause to be paid (in such proportions as they may agree among themselves)
the following: (i) the fees, disbursements and expenses of the Company's and
Selling Shareholders' counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof and of any Prepricing Prospectus to the Underwriters and
dealers, (ii) the printing and delivery (including, without limitation, postage,
air freight charges and charges for counting and packaging) of such copies of
the Registration Statement, the Prospectus, each Prepricing Prospectus, the Blue
Sky memoranda, the Power of Attorney, the Master Agreement Among Underwriters,
this Agreement, the Selected Dealer Agreement and all amendments or supplements
to any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares, (iii) all expenses in connection with the
qualification of the Shares for offering and sale under Blue Sky laws, including
the fees of the counsel for the Underwriters in connection therewith, (iv) the
filing fees incident to securing any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Shares and the
reasonable fees and disbursements of the Underwriters' counsel relating thereto,
(v) the cost of preparing stock certificates, (vi) the costs and charges of any
transfer agent or registrar, (vii) the cost of the tax stamps, if any, in
connection with the issuance and delivery of the Shares to the respective
Underwriters, (viii) all other fees, costs and expenses referred to in Item 25
of the Registration Statement, and (ix) all other costs and expenses incident to
the performance of the obligations of the Company and the Selling Shareholders
hereunder which are not otherwise specifically provided for in this Section 8.
Notwithstanding the foregoing, in the event that the proposed offering is
terminated for the reasons set forth in subsection 5(i) hereof, the Company
agrees to reimburse the Underwriters as provided in subsection 5(i) hereof.
-13-
9. INDEMNIFICATION AND CONTRIBUTION. The Company and the Selling
Shareholders severally but not jointly agree to indemnify and hold harmless you
and each other Underwriter, the directors, officers, employees and agents of
each Underwriter, and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or in
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading (except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon an untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
Underwriter Information) or arising out of or based upon any inaccuracy in the
representations and warranties of the Company or the Selling Shareholders
contained herein or any failure of the Company or the Selling Shareholders to
perform their respective obligations hereunder or under law; provided, however,
that with respect to any untrue statement or omission made in any Prepricing
Prospectus, the indemnity agreement contained in this Section 9 shall not inure
to the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any such losses, claims,
damages or liabilities purchased the Shares concerned if both (a) a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such Shares to such person as required by the Act,
and (b) the untrue statement or omission in the Prepricing Prospectus was
corrected in the Prospectus. Notwithstanding anything in this Section 9, in no
event shall any Selling Shareholder's obligation under this Section 9 exceed the
total net proceeds from the offering received by such Selling Shareholder (it
being agreed that the Company shall bear the balance).
In addition to its other obligations under this Section 9, the Company and
the Selling Shareholders 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 inaccuracy in the
representations and warranties of the Company or the Selling Shareholders herein
or failure to perform their obligations hereunder, all as set forth in this
Section 9, they 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 Shareholders' 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 together with interest, compounded daily determined on the basis of the
base lending rate announced from time to time by Chase Manhattan Bank, N.A. or
any successor entity (the "Prime Rate"). Any such interim reimbursement
payments which are not made to the Underwriters within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company or the Selling Shareholders, such Underwriter or such
controlling person shall promptly notify in writing the party or parties against
whom indemnification is being sought (an "indemnifying party", or if more than
one, the "indemnifying parties"), and such indemnifying party or indemnifying
parties shall assume the defense thereof, including the employment of counsel
reasonably acceptable to such Underwriter or such controlling person and payment
of all fees and expenses associated therewith. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the Company and the Selling
Shareholders shall not be liable for the fees and expenses of more than one
counsel unless (i) the indemnifying party or indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying party or
indemnifying parties have failed to assume the defense and employ counsel
reasonably acceptable to the Underwriter or such controlling person or (iii) the
named parties to any such action (including any impleaded parties) include both
such Underwriter or such controlling person and the indemnifying party or
indemnifying
-14-
parties, and such Underwriter or such controlling person shall have been advised
by its counsel that one or more legal defenses may be available to the
Underwriter which may not be available to the Company, or that representation of
such indemnified party and any indemnifying party or indemnifying parties by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the indemnifying party or indemnifying parties shall not have the right to
assume the defense of such action on behalf of such Underwriter or such
controlling person (notwithstanding its (their) obligation to bear the fees and
expenses of such counsel)). The indemnifying party or indemnifying parties
shall not be liable for any settlement of any such action effected without its
or their, as applicable, written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in any such action,
the indemnifying party or indemnifying parties agrees to indemnify and hold
harmless any Underwriter and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment, but in the case of a judgment only to the extent stated in the
immediately preceding paragraph.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act and the Selling Shareholders, to
the same extent as the foregoing indemnity from the Company and the Selling
Shareholders to each Underwriter, but only with respect to the Underwriter
Information. If any action or claim shall be brought or asserted against the
Company, any of its directors, any such officers, or any such controlling person
or the Selling Shareholders based on the Registration Statement, the Prospectus
or any Prepricing Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Underwriter pursuant to
this paragraph, such Underwriter shall have the rights and duties given to the
Company and the Selling Shareholders by the immediately preceding paragraph
(except that if the Company shall have assumed the defense thereof such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company, its
directors, any such officers, and any such controlling persons and the Selling
Shareholders shall have the rights and duties given to the Underwriters by the
immediately preceding paragraph.
In addition to its other obligations under this Section 9, 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 9 which relates to Underwriter Information, it will
reimburse the Company (and, to the extent applicable, each officer, director,
controlling person or Selling Shareholder) 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
Shareholder) 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 Shareholder) 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 within 30 days of a request for reimbursement shall bear interest
at the Prime Rate from the date of such request.
If the indemnification provided for in this Section 9 is unavailable or
insufficient for any reason whatsoever to an indemnified party under the first
or fourth paragraph of this Section 9 in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Shareholders on the
one hand and the Underwriters on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted
-15-
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Shareholders on the one hand and the Underwriters on
the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Shareholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus; provided that, in the event that the Underwriters
shall have purchased any Additional Shares hereunder, any determination of the
relative benefits received by the Company and the Selling Shareholders or the
Underwriters from the offering of the Shares shall include the net proceeds
(before deducting expenses) received by the Company and the Selling
Shareholders, and the underwriting discounts and commissions received by the
Underwriters, from the sale of such Additional Shares, in each case computed on
the basis of the respective amounts set forth in the notes to the table on the
cover page of the Prospectus. The relative fault of the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the Selling
Shareholders on the one hand or relates to Underwriter Information on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 was
determined by a pro rata allocation (even if the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to the respective numbers of Firm Shares set
forth opposite their names in Schedule I hereto (or such numbers of Firm Shares
increased as set forth in Section 11 hereof) and not joint.
Notwithstanding the second and fifth paragraphs of this Section 9, any
losses, claims, damages, liabilities or expenses for which an indemnified party
is entitled to indemnification or contribution under this Section 9 shall be
paid by the indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses accrue. The indemnity, contribution and
reimbursement agreements contained in Section 9 and the representations and
warranties of the Company and the Selling Shareholders, respectively, set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any person controlling the Company or the Selling Shareholders, (ii)
acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company or the Selling Shareholders, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 9.
-16-
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second and fifth paragraphs
of this Section 9, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted 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 the second and fifth paragraphs of this Section 9, and would not
resolve the ultimate propriety or enforceability of the obligation to reimburse
expenses which is created by the provisions of the second and fifth paragraphs
of this Section 9.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If the Registration Statement is not already effective, it
shall have become effective not later than 9:30 a.m., New York City time, on the
date hereof, or at such later date and time as shall be consented to in writing
by you, and all filings required by Rules 424(b), 430A, and 462 under the Act
shall have been timely made.
(b) You shall be reasonably 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 described in
the Prospectus) of the Company or any Subsidiary or any material change in the
indebtedness (other than in the ordinary course of business) of the Company or
any Subsidiary, (ii) except as described in 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 Subsidiary, 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 the Subsidiaries,
(iii) no loss or damage (whether or not insured) to the property of the Company
or any Subsidiary shall have been sustained which could reasonably be expected
to have a material adverse effect on the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations of the
Company and the Subsidiaries taken as a whole, (iv) no legal or governmental
action, suit or proceeding affecting the Company or any Subsidiary which is
material to the Company and the 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, prospects,
management, net worth or results of operations of the Company and the
Subsidiaries which makes it impractical or inadvisable in your judgment to
proceed with the public offering or purchase the Shares as contemplated hereby.
(c) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Ltd., as counsel
for the Company and the Selling Shareholders, dated the Closing Date,
satisfactory to you and your counsel, to the effect that:
(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto); and is duly registered and qualified to
conduct its business and is in good standing in each other jurisdiction or
place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure to
so register or qualify could not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth
or results of operations of the Company and the Subsidiaries taken as a
whole.
-17-
(ii) Each Subsidiary is a corporation duly incorporated,
validly existing, and in good standing under the laws of the jurisdiction
of its organization, with full corporate power and authority to own, lease
and operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto); and is duly
registered and qualified to conduct its business and is in good standing
in each other jurisdiction or place where the nature of its properties or
the conduct of its business requires such registration or qualification,
except where the failure to so register or qualify could reasonably be
expected to not have a material adverse effect on the condition (financial
or other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole; and
(except as indicated on Exhibit 21 to the Registration Statement) all of
the outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable, and are
owned by the Company directly or indirectly through one of the other
Subsidiaries, free and clear of any perfected security interest, or to the
best knowledge of such counsel after reasonable inquiry, any other
security interest, lien, charge, claim, equity or other encumbrance.
(iii) The capital stock of the Company conforms in all
respects to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock".
(iv) All the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Shareholders to
the Underwriters) have been duly authorized and validly issued, are fully
paid and nonassessable and are free of any preemptive or, to the best
knowledge of such counsel after reasonable inquiry, similar rights.
(v) To the best knowledge of such counsel, all offers and
sales by the Company and the Subsidiaries of their capital stock were made
in compliance with the registration provisions of the Act and the
registration provisions of all other applicable state and federal laws or
regulations.
(vi) The Shares to be issued and sold to the Underwriters by
the Company hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and
free of any preemptive or, to the best knowledge of such counsel after
reasonable inquiry, similar rights.
(vii) The form of certificates for the Shares conforms in all
material respects to the requirements of the applicable corporate laws of
the State of Delaware.
(viii) The Registration Statement has become effective under
the Act and, to the best knowledge of such counsel after reasonable
inquiry, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are pending
before or contemplated by the Commission.
(ix) The Company has all requisite corporate power and
authority to enter into this Agreement and to issue, sell and deliver the
Shares to be sold by it to the Underwriters as provided herein, and this
Agreement has been duly authorized, executed and delivered by the Company
and is a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting enforcement of creditors' rights
generally or the availability of equitable remedies, regardless of whether
such enforcement is considered in a proceeding in equity or at law.
(x) Neither the Company nor any Subsidiary is in violation of
its certificate or articles of incorporation, bylaws, or other
organizational documents or, to the best knowledge of such counsel after
reasonable inquiry, is in default in the performance of any material
obligation, agreement or
-18-
condition contained in (A) any bond, indenture, note or other evidence of
indebtedness, or (B) any other agreement material to the Company and the
Subsidiaries taken as a whole, except as has been set forth in the
Prospectus; and there does not exist any state of facts which constitutes
an event of default on the part of the Company or any Subsidiary as
defined in such documents or which, with notice or lapse of time or both,
would constitute such an event of default.
(xi) None of the offer, issuance, sale or delivery of the
Shares, the execution, delivery or performance of this Agreement, the
compliance by the Company with all provisions hereof, or the consummation
by the Company of the transactions contemplated hereby (A) conflicts or
will conflict with or constitutes or will constitute a breach of, or a
default under, the certificate or articles of incorporation, bylaws, or
other organizational documents, of the Company or any Subsidiary or any
agreement, indenture, lease or other instrument to which the Company or
any Subsidiary is a party or by which any of them or any of their
respective properties is bound that is known to such counsel after
reasonable inquiry, (B) results or will result in the creation or
imposition of any lien, claim, charge, security interest, or other
encumbrance upon any property or assets of the Company or any Subsidiary,
or (C) violates or will violate any statute, law, regulation, ruling,
(assuming compliance with all applicable state securities laws) filing,
judgment, injunction, order or decree known to such counsel after
reasonable inquiry, applicable to the Company, the Subsidiaries or any of
their respective properties.
(xii) No consent, approval, authorization or other order of,
or registration or filing with, any court, regulatory body, administrative
agency or other governmental body, or official (except such as may be
required for the registration of the Shares under the Act or compliance
with state securities laws) is required on the part of the Company or the
Selling Shareholders in connection with the purchase and distribution by
the Underwriters of the Shares.
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial and statistical
data included therein, as to which such counsel need not express any
opinion) comply as to form in all material respects with the requirements
of the Act. Without limiting the generality of the foregoing, any Rule
434 Prospectus conforms in all material respects with the requirements of
Rule 434 under the Act.
(xiv) To the best knowledge of such counsel after reasonable
inquiry, there are no legal or governmental actions, suits or proceedings
pending or threatened against the Company or any Subsidiary, or to which
the Company or any Subsidiary, or any of their respective properties, is
subject, that are required to be described in the Registration Statement
or Prospectus (or any amendment or supplement thereto) that are not
described as required therein.
(xv) To the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any Subsidiary is in violation of any
law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any Subsidiary or of any decree of any court
or governmental agency or body having jurisdiction over the Company or any
Subsidiary except (A) where such violation does not and could not be
reasonably expected to have a material adverse effect on the condition
(financial or other), business, properties, prospects, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole, and (B) as to violations concerning the storage, disposal,
generation, transportation, handling or treatment of waste material or
hazardous substances.
(xvi) The property described in the Prospectus held under
lease by the Company or any Subsidiary is held under valid, subsisting and
enforceable leases, with only such exceptions as in the aggregate could
not reasonably be expected to have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth
or results of operations of the Company and the Subsidiaries taken as a
whole.
-19-
(xvii) Such counsel has reviewed all agreements, contracts,
indentures, leases or other documents or instruments referred to in the
Registration Statement and the Prospectus (other than routine contracts
entered into by the Company or any Subsidiary for the purchase of
materials or the sale of products, entered into in the normal course of
business) and such agreements, contracts, indentures, leases or other
documents or instruments are fairly summarized, or disclosed therein, and
filed as exhibits thereto as required, and such counsel does not know,
after reasonable inquiry, of any agreements, contracts, indentures, leases
or other documents or instruments required to be so summarized or
disclosed or filed which have not been so summarized or disclosed or
filed.
(xviii) Such counsel has no reason to believe that the
descriptions in the Prospectus of statutes, regulations or legal or
governmental proceedings, insofar as they purport to describe certain of
the provisions thereof, are other than accurate or fail to fairly present
the information required to be shown.
(xix) The Company is not an "investment company", an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company
Act of 1940, as amended.
(xx) This Agreement, the Power of Attorney and the Custody
Agreement have been duly authorized, executed and delivered by or on
behalf of each of the Selling Shareholders and constitute valid and
legally binding agreements of each such Selling Shareholder enforceable in
accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting enforcement of creditors' rights
generally or the availability of equitable remedies, regardless of whether
such enforcement is considered in a proceeding in equity or at law. The
performance of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions contemplated herein and
therein will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, voting trust agreement, note agreement, lease or
other agreement or instrument of which such counsel is aware and to which
such Selling Shareholder is a party or by which such Selling Shareholder
or such Selling Shareholder's properties are bound, or under any order,
rule or regulation, known to such counsel after reasonable inquiry, of any
court or governmental agency or body applicable to such Selling
Shareholder or the business or property of such Selling Shareholder.
(xxi) Immediately prior to the Closing Date each of the
Selling Shareholders has good and valid title to the Shares to be sold by
such Selling Shareholder hereunder, free and clear of all liens,
encumbrances, equities, shareholder agreements, voting trusts or claims of
any nature whatsoever, and full right, power and authority to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Shareholder hereunder.
(xxii) Good and valid title to the Shares, free and clear of
all liens, encumbrances, equities, shareholder agreements, voting trusts
or claims of any nature whatsoever (other than those arising by or through
the Underwriters) has been transferred to each of the several
Underwriters.
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, upon an opinion or opinions, each dated the Closing
Date, of other counsel as to matters governed by the laws of jurisdictions
other than the United States or the General Corporation Law of the State
of Delaware provided that (1) each such local counsel is acceptable to you
and your counsel, (2) counsel shall state in their opinion that they
believe that they and you are justified in relying thereon, and (3) such
reliance is expressly authorized by each opinion so relied upon and a copy
of each such opinion is delivered to you and is in form and substance
satisfactory to you. In rendering such opinion, counsel may rely, to the
extent they deem such reliance proper, as to matters of fact upon
certificates of officers
-20-
of the Company and of government officials. Copies of all such
certificates shall be furnished to you and your counsel on the Closing
Date.
In rendering such opinion, in each case where such opinion is
qualified by "the best knowledge of such counsel after reasonable inquiry"
or "known to such counsel after reasonable inquiry", such counsel may rely
as to matters of fact upon certificates of executive and other officers
and employees of the Company or the Subsidiaries as you and such counsel
shall deem are appropriate and such other procedures as you and such
counsel shall mutually agree; provided, however, in each such case, such
counsel shall state that it has no knowledge contrary to the information
contained in such certificates or developed by such procedures and knows
of no reason why you should not reasonably rely upon the information
contained in such certificates or developed by such procedures.
In rendering such opinion, such counsel may rely upon a certificate
of the Selling Shareholders as to matters of fact (i) with respect to
ownership of and liens, encumbrances, equities or claims on the Shares
sold by the Selling Shareholders, and (ii) with respect to any agreements,
mortgages, deeds of trust, voting trusts, notes, leases or other
instruments provided that such counsel shall state that they believe that
both you and they are justified in relying upon such certificates.
In addition to the opinion set forth above, such counsel shall state
that during the course of their participation in the preparation of the
Registration Statement and the Prospectus and the amendments thereto,
nothing has come to the attention of such counsel which has caused them to
believe that the Registration Statement and the Prospectus or any
amendment thereto (except for the financial statements and other financial
and statistical information contained therein or omitted therefrom as to
which no opinion need be expressed), at the date thereof, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Registration Statement and the Prospectus as of
the date of the opinion (except as aforesaid), contains an untrue
statement of a material fact or omits to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(d) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of Varnum, Riddering, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
satisfactory to you and your counsel, to the effect that:
(i) To the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any Subsidiary is in violation of any
law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any Subsidiary or of any decree of any court
or governmental agency or body having jurisdiction over the Company or any
Subsidiary except where such violation does not and could not be
reasonably expected to have a material adverse effect on the condition
(financial or other), business, properties, prospects, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole.
(ii) To the best knowledge of such counsel after reasonable
inquiry, the Company and each Subsidiary has all Permits necessary to own
its properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be described in the
Prospectus, with only such exceptions as in the aggregate could not
reasonably be expected to have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole; the Company and each Subsidiary has fulfilled and performed all of
its obligations with respect to each such Permit and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination of any such Permit or result in any other material impairment
of the rights of the holder of any such Permit, subject in each case to
such qualification as may be described in the Prospectus, with only such
exceptions as in the aggregate could not reasonably be expected to have a
material adverse effect on the
-21-
condition (financial or other), business, prospects, properties, net worth
or results of operations of the Company and the Subsidiaries taken as a
whole; and, except as described in the Prospectus, such Permits contain no
restrictions that are materially burdensome to the Company or any
Subsidiary.
(iii) The descriptions in the Prospectus of environmental,
health or safety statutes, regulations or legal or governmental
proceedings, insofar as they purport to describe certain of the provisions
thereof, are accurate and do not fail to fairly present the information
required to be shown.
In rendering such opinion, in each case where such opinion is
qualified by "the best knowledge of such counsel after reasonable inquiry"
or "known to such counsel after reasonable inquiry", such counsel may rely
as to matters of fact upon certificates of executive and other officers
and employees of the Company or the Subsidiaries as you and such counsel
shall deem are appropriate and such other procedures as you and such
counsel shall mutually agree; provided, however, in each such case, such
counsel shall state that such counsel has no knowledge contrary to the
information contained in such certificates or developed by such procedures
and knows of no reason why you should not reasonably rely upon the
information contained in such certificates or developed by such
procedures.
In addition to the opinion set forth above, such counsel shall state
that during the course of such counsel's participation in the preparation
of the Registration Statement and the Prospectus and the amendments
thereto, nothing has come to the attention of such counsel which has
caused such counsel to believe that the Registration Statement and the
Prospectus or any amendment thereto (except for the financial statements
and other financial and statistical information contained therein or
omitted therefrom as to which no opinion need be expressed), at the date
thereof, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Registration Statement
and the Prospectus as of the date of the opinion (except as aforesaid),
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, satisfactory to you
and your counsel.
(f) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion satisfactory to you and your
counsel of Mexican counsel satisfactory to you and your counsel.
(g) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, as counsel for the Underwriters, dated the Closing Date
with respect to the issuance and sale of the Shares, the Registration Statement
and other related matters as you may reasonably request and the Company and its
counsel shall have furnished to your counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(h) You shall have received letters addressed to you and dated the
date hereof and the Closing Date from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, KPMG Peat Marwick LLP
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, independent certified public accountants,
substantially in the forms heretofore approved by you.
(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or, to the knowledge of the Company, shall be threatened or contemplated
by the Commission at or prior to the Closing Date, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities laws of any jurisdiction shall be in effect
and no proceeding for such purpose shall be pending or, to the knowledge of the
Company, threatened or contemplated by the Commission or the authorities of any
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities
-22-
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities, (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not object thereto in good faith,
and (v) all of the representations and warranties of the Company contained in
this Agreement shall be true and correct in all respects on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company (or such other officers as are acceptable to you) to the effect set
forth in this subsection 10(i) and subsection 10(j) hereof.
(j) The Company shall not have failed in any respect at or prior to
the Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(k) You shall have received a certificate, dated on and as of the
Closing Date, by or on behalf of each of the Selling Shareholders to the effect
that as of such Closing Date such Selling Shareholder's representations and
warranties in this Agreement are true and correct as if made on and as of such
Closing Date, and that such Selling Shareholder has performed all such Selling
Shareholder's obligations and satisfied all the conditions on such Selling
Shareholder's part to be performed or satisfied at or prior to the Closing Date.
(l) The Company and the Selling Shareholders shall have furnished
or caused to have been furnished to you such further certificates and documents
as you shall have reasonably requested.
(m) At or prior to the Closing Date, you shall have received the
written commitment of each of the Company's officers and directors and each of
the shareholders of the Company who own Common Shares that have not been
registered under the Act (with the exception of shareholders owning not more
than 150,000 Common Shares) that they will not directly or indirectly, assign,
transfer, offer, sell, hypothecate, or otherwise dispose of any Common Shares
(or securities convertible into or exchangeable for or any rights to purchase or
acquire Common Shares), and will not in any way reduce his, her or its risk of
ownership or investment in any Common Shares, prior to the expiration of 120
days from the date that the Prospectus is first filed pursuant to Rule 424(b)
under the Act, without your prior written consent.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of the Additional Closing
Date of the conditions set forth in this Section 10, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 10 shall be dated as of the
Additional Closing Date and the opinions called for by this Section 10 shall be
revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 10 shall
not have been satisfied when and as required by this Agreement, this Agreement
may be terminated by you by notifying the Company of such termination in writing
or by telegram at or prior to such Closing Date, but you shall be entitled to
waive any of such conditions.
11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective upon the later of (a) the execution and delivery hereof by the parties
hereto; (b) release of notification of the effectiveness of the Registration
Statement by the Commission; and (c) if a post-effective amendment is required
to be filed pursuant to Rule 430A under the Act, the effectiveness of such
post-effective amendment.
If any one or more of the Underwriters shall fail or refuse to purchase
Firm Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Firm Shares which such defaulting Underwriter or
-23-
Underwriters agreed but failed or refused to purchase is not more than 15% of
the aggregate number of the Firm Shares, each non-defaulting Underwriter shall
be obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in the Master Agreement Among
Underwriters, to purchase the Firm Shares which such defaulting Underwriter or
Underwriters agreed, but failed or refused to purchase. If any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than 15%
of the aggregate number of Firm Shares and arrangements satisfactory to you, the
Company and the Selling Shareholders for the purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Shareholders. In any such case which does not result in termination
of this Agreement, either you or the Company and the Selling Shareholders shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement.
12. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or the Selling Shareholders by notice to the Company
and the Selling Shareholders, if prior to the Closing Date or the Additional
Closing Date (if different from the Closing Date and then only as to the
Additional Shares), as the case may be, in your sole judgment, (i) trading in
the Common Shares shall have been suspended by the Commission or the Nasdaq
National Market, (ii) trading in securities generally on the New York Stock
Exchange, or Nasdaq National Market shall have been suspended or materially
limited, or minimum or maximum prices shall have been generally established on
such exchange or market, or additional material governmental restrictions, not
in force on the date of this Agreement, shall have been imposed upon trading in
securities generally by any such exchange or market or by order of the
Commission or any court or other governmental authority, (iii) a general
moratorium on commercial banking activities shall have been declared by either
federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions or
other material event the effect of which on the financial markets of the United
States is such as to make it, in your judgment, impracticable or inadvisable to
market the Shares or to enforce contracts for the sale of the Shares. Notice of
such cancellation shall be promptly given to the Company and its counsel by
telegraph, telecopy or telephone and shall be subsequently confirmed by letter.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (i) if to the Company or Selling
Shareholders, to the office of the Company at Continental Waste Industries,
Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Ltd., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or
(ii) if to you, as Representatives of the Underwriters, to ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Associates, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers, and the other controlling
persons referred to in Section 9 hereof, the Selling Shareholders and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither of the terms "successor" and "successors and assigns" as used in this
Agreement shall include a purchaser from you of any of the Shares in his status
as such purchaser.
-24-
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
The Company, the Selling Shareholders and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect to any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
* * * * *
-25-
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Shareholders and the several Underwriters.
Very truly yours,
CONTINENTAL WASTE INDUSTRIES, INC.
By:
-------------------------------
Name:
Title:
SELLING SHAREHOLDERS
By:
-------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf
of each of the Selling Shareholders
named in Schedule II hereto.
CONFIRMED as of the date first above
mentioned, on behalf of itself and the
other several Underwriters named in
Schedule I hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
By:
--------------------------------
Name:
Title:
FIRST ANALYSIS SECURITIES CORPORATION
By:
--------------------------------
Name:
Title:
NATWEST SECURITIES LIMITED
By:
--------------------------------
Name:
Title:
-26-
SCHEDULE I
Number
of
Name Shares
---- ------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.....................................__________
First Analysis Securities Corporation...............................__________
NatWest Securities Limited..........................................__________
Total.............................................................1,772,529
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---------
SCHEDULE II
I. FIRM SHARES
Number
of Firm
Selling Shareholders Shares
-------------------- ------
Environmental Venture Fund Limited Partnership..................... 94,660
Apex Investment Fund, L.P.......................................... 59,620
The Productivity Fund Limited Partnership.......................... 45,720
▇▇▇▇▇▇ Case......................................................... 733
▇▇▇▇▇▇▇ ▇▇▇▇▇....................................................... 567
▇▇▇▇▇▇ ▇▇▇▇▇........................................................ 400
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ (as joint tenants)......................... 167
▇▇▇▇▇▇ ▇▇▇▇▇........................................................ 5,033
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇ (as joint tenants)..................... 3,333
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.................................................... 400
▇▇▇▇▇ ▇▇▇▇▇▇▇....................................................... 148
▇▇▇▇▇▇▇ ▇▇▇▇▇▇..................................................... 40,862
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇................................................... 9,700
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.................................................. 803
JJB ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, Inc.......................................... 383
▇▇▇▇▇ ▇▇▇▇▇▇▇▇...................................................... 3,000
▇▇▇▇▇▇ ▇▇▇▇▇........................................................ 7,000
Total.............................................................. 272,529
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II. ADDITIONAL SHARES
Number of
Additional
Selling Shareholders Shares
-------------------- ------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇................................................... 10,223
▇▇▇▇ ▇▇▇▇▇......................................................... 10,000
Total.............................................................. 20,223
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------
