EXHIBIT 1
FORM OF UNDERWRITING AGREEMENT
XXXXX/XXXXXX, INC.
Shares of Common Stock
Underwriting Agreement
_____________, 2001
X.X. Xxxxxx Securities Inc.
Xxxxxxxx Inc.
Bear, Xxxxxxx & Co., Inc.
Xxx-Xxxx, Xxxxxx Inc.
As Representatives of several underwriters
listed in Schedule I hereto
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxx/Xxxxxx, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of 3,000,000 shares and, at the election of the
Underwriters, up to 543,750 additional shares of Common Stock, par value $0.01
per share (the "Stock"), of the Company and the stockholders of the Company
named in Schedule
II hereto (the "Selling Stockholders") propose to sell to the Underwriters an
aggregate of 625,000 shares of Stock. The aggregate of 3,625,000 shares to be
sold by the Company and the Selling Stockholders is herein called the
"Underwritten Shares" and the aggregate of 543,750 additional shares to be sold
by the Company is herein called the "Option Shares". The Underwritten Shares and
the Option Shares are herein referred to as the "Shares". The Stock, including
the Shares, will have attached thereto rights (the "Rights") to purchase junior
participating preferred stock, Series A, par value $0.01 per share (the "Series
A Preferred Stock"), of the Company. The Rights are to be issued pursuant to a
Rights Agreement (the "Rights Agreement") dated as of July 10, 1998 between the
Company and The Bank of New York, as rights agent.
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 "Securities Act"), a registration
statement, including a prospectus, relating to the Shares and the Rights. The
registration statement as amended at the time when it shall become effective
including information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement", and the
prospectus in the form first used to confirm sales of Shares is referred to in
this Agreement as the "Prospectus". If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement. Any reference in this Agreement to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act, as of the effective date of the Registration Statement
or the date of such preliminary prospectus or the Prospectus, as the case may be
and any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are deemed to
be incorporated by reference therein.
The Company and each of the Selling Stockholders hereby agree with the
Underwriters as follows:
1. The Company and each of the Selling Stockholders agree, severally
and not jointly, to sell the Underwritten Shares to the several Underwriters as
hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Company and each of the Selling Stockholders at a purchase price per share of $
________ (the "Purchase Price") the number of Underwritten Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Underwritten Shares to be sold by the Company and each
of the Selling Stockholders as set forth opposite their respective names in
Schedule II hereto by a fraction, the numerator of which is the aggregate number
of Underwritten Shares to be purchased by such Underwriter as set forth opposite
the name of such Underwriter
2
in Schedule I hereto and the denominator of which is the aggregate number of
Underwritten Shares to be purchased by all the Underwriters from the Company and
all the Selling Stockholders hereunder.
In addition, the Company agrees to sell the Option Shares to the
several Underwriters and the Underwriters shall have the option to purchase at
their election up to 543,750 Option Shares for the sole purpose of covering
over-allotments in the sale of the Underwritten Shares. The Underwriters on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company at the Purchase Price that portion of the number
of Option Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Option Shares by a fraction the numerator of which is the maximum
number of Option Shares which such Underwriter is entitled to purchase and the
denominator of which is the maximum number of Option Shares that all of the
Underwriters are entitled to purchase hereunder, for the sole purpose of
covering over-allotments (if any) in the sale of the Underwritten Shares by the
several Underwriters.
The Underwriters may exercise the option to purchase the Option Shares
at any time (but not more than once) on or before the thirtieth day following
the date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as to
which the option is being exercised and the date and time when the Option Shares
are to be delivered and paid for which may be the same date and time as the
Closing Date (as hereinafter defined) but shall not be earlier than the Closing
Date nor later than the tenth full Business Day (as hereinafter defined) after
the date of such notice (unless such time and date are postponed in accordance
with the provisions of Section 9 hereof). Any such notice shall be given at
least two Business Days prior to the date and time of delivery specified
therein.
2. The Company and the Selling Stockholders understand that the
Underwriters intend (i) to make a public offering of the Shares as soon after
(A) the Registration Statement has become effective and (B) the parties hereto
have executed and delivered this Agreement, as in the judgment of the
Representatives is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified to the Representatives by the Company
with regard to payment to the Company and by the Attorneys-in-Fact (as defined
below), or any of them, with regard to payment to the Selling Stockholders in
the case of the Underwritten Shares, on , 2001 or at such other time on the same
or such other date, not later than the fifth Business Day thereafter, as the
Representatives and the Company and Attorneys-in-Fact may agree upon in writing
or, in the case of the Option Shares, on the date and time specified by the
Representatives in the written notice of the Underwriters' election to purchase
such Option Shares. The time and date of such payment for the Underwritten
Shares are referred to herein as the "Closing Date" and the time and date for
such payment for the Option Shares, if other than the Closing Date, are herein
referred to as the "Additional Closing Date". As used herein, the term "Business
Day"
3
means any day other than a day on which banks are permitted or required to be
closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company or the Selling
Stockholders, as the case may be. The certificates for the Shares will be made
available for inspection and packaging by the Representatives at the office of
X.X. Xxxxxx Securities Inc. set forth above not later than 1:00 P.M., New York
City time, on the Business Day prior to the Closing Date or the Additional
Closing Date, as the case may be.
4. (A) The Company represents and warrants to each Underwriter and the
Selling Stockholders that:
(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material respects
with the Securities Act and the Registration Statement does not and will not, as
of its effective date and the date of any amendment thereto, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Prospectus, as amended or supplemented, if applicable, as of its date and at
the Closing Date or Additional Closing Date, as the case may be, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that the foregoing
representations and warranties shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
4
(c) the documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission as the case may be
conformed in all material respects to the requirements of the Securities Act or
Exchange Act, as applicable, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and incorporated
by reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of the
Exchange Act, and will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(d) the financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates indicated and the results of their
operations and changes in their consolidated cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis, and the
supporting schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein; the pro
forma financial information, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus has
been prepared in accordance with the applicable requirements of the Securities
Act and the Exchange Act, as applicable and is based upon good faith estimates
and assumptions believed by the Company to be reasonable;
(e) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole ("Material
Adverse Change"), otherwise than as set forth or contemplated in the Prospectus;
and except as set forth or contemplated in the Prospectus neither the Company
nor any of its subsidiaries has entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the Company and
its subsidiaries taken as a whole;
(f) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the general affairs,
business, prospects, management, financial position, stockholders' equity or
5
results of operations of the Company and its subsidiaries, taken as a whole
("Material Adverse Effect");
(g) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority (corporate and other) to
own its properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a Material Adverse Effect; and all the outstanding
shares of capital stock of each subsidiary of the Company have been duly
authorized and validly issued, are fully-paid and non-assessable, and (except,
in the case of foreign subsidiaries, for directors' qualifying shares) are owned
by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) the Company has an authorized capitalization as set forth
in the Prospectus and such authorized capital stock conforms as to legal matters
to the description thereof set forth in the Prospectus, and all of the
outstanding shares of capital stock of the Company (including the Shares to be
sold by the Selling Stockholders) have been duly authorized and validly issued,
are fully-paid and non-assessable and are not subject to any pre-emptive or
similar rights; and, except as described in or expressly contemplated by the
Prospectus, there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity interest
in the Company or any of its subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the issuance of
any capital stock of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options;
(j) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and, when issued and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be duly issued
and will be fully paid and non-assessable and will conform to the descriptions
thereof in the Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights;
(k) the Rights Agreement has been duly authorized, executed
and delivered by the Company; the Rights have been duly authorized and validly
issued by the Company, and the Series A Preferred Stock has been duly authorized
by the Company and validly reserved for issuance upon the exercise of the Rights
in accordance with the terms of the Rights Agreement, and when issued in
accordance with the terms of the Rights Agreement will be validly issued, fully
paid and non-assessable;
6
(l) neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in violation of or
in default under, its Certificate of Incorporation or By-Laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or any of
them or any of their respective properties is bound, except for violations and
defaults which individually or in the aggregate are not material to the Company
and its subsidiaries taken as a whole; the issue and sale of the Shares to be
sold by the Company hereunder and the performance by the Company of its
obligations under this Agreement and the consummation of the transactions
contemplated herein will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will any such action result
in any violation of the provisions of the Certificate of Incorporation or the
By-Laws of the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company, its subsidiaries or any of their respective properties; and no
consent, approval, authorization, order, license, registration or qualification
of or with any such court or governmental agency or body is required for the
issue and sale of the Shares to be sold by the Company hereunder or the
consummation by the Company of the transactions contemplated by this Agreement,
except such consents, approvals, authorizations, orders, licenses, registrations
or qualifications as have been obtained under the Securities Act and as may be
required under state securities or Blue Sky Laws in connection with the purchase
and distribution of the Shares by the Underwriters;
(m) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its subsidiaries or any of their respective properties or to
which the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be the subject
which, if determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate have, or reasonably be expected to have, a
Material Adverse Effect, and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others; and there are no statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement that are not
described or filed as required;
(n) neither the Company nor any of its subsidiaries owns any
real property; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, existing and
enforceable leases, except for such exceptions that would not, individually or
in the aggregate, result in a Material Adverse Effect;
(o) no relationship, direct or indirect, exists between or
among the Company or any or its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the
7
Securities Act to be described in the Registration Statement and the Prospectus
which is not so described;
(p) except for ______________________________, which [has]
[have] waived [its] [their] rights, no person has the right to require the
Company to register any securities for offering and sale under the Securities
Act by reason of the filing of the Registration Statement with the Commission or
the issue and sale of the Shares to be sold by the Company hereunder or, to the
best knowledge of the Company, the sale of the Shares to be sold by the Selling
Stockholders hereunder;
(q) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(r) the Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate rights to use all patents, patent
applications, trademark, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights and licenses material to the Company and
its subsidiaries taken as a whole, and have not received any notice of any claim
of conflict with, the rights of others in respect thereof except for such claims
that would not, individually or in the aggregate, result in a Material Adverse
Effect;
(s) Ernst & Young LLP who have certified certain financial
statements of the Company and its subsidiaries are independent public
accountants as required by the Securities Act;
(t) the Company and its subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be filed,
except for such failures that would not, individually or in the aggregate,
result in a Material Adverse Effect, and have paid all taxes shown thereon and
all assessments received by them or any of them to the extent that such taxes
have become due and are not being contested in good faith; and, except as
disclosed in the Registration Statement and the Prospectus, there is no tax
deficiency which has been asserted or threatened against the Company or any
subsidiary;
(u) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock;
(v) each of the Company and its subsidiaries owns, possesses
or has obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof, and
neither the Company nor any such subsidiary has received any actual notice of
any proceeding relating to revocation or modification of any such license,
8
permit, certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and its subsidiaries is in compliance with all laws and regulations
relating to the conduct of its business as conducted as of the date hereof
except, in each case where the failure to possess such licenses, permits,
certificates, consents, orders, approvals or authorizations or make such
declarations or filings, the receipt of such notice or the failure to so comply
would not, individually or in the aggregate, result in a Material Adverse
Effect;
(w) there are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company or any of
its subsidiaries which are likely to have a Material Adverse Effect;
(x) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") that is maintained, administered or contributed to by the Company or
any of its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended, ("Code"). No
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption. For
each such plan which is subject to the funding rules of Section 412 of the Code
or Section 302 of ERISA no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeded the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions; and
(y) the statements and financial information (including the
assumptions described therein) included in the Registration Statement and the
Prospectus under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Earnings Guidance") (collectively, the
"Projections") (i) are within the coverage of the safe harbor for forward
looking statements set forth in Section 27A of the Securities Act and Rule
175(b) under the Securities Act and (ii) were made by the Company with a
reasonable basis and in good faith and reflect the Company's good faith best
estimate of the matters described therein after consideration of the guidelines
set forth in Item 10(b) of Regulation S-K under the Securities Act; all
assumptions material to the Projections are set forth in the Prospectus; the
assumptions used in the preparation of the Projections are reasonable; and none
of the Company or its subsidiaries are aware of any business, economic or
industry developments inconsistent with the assumptions underlying the
Projections.
(B) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters that:
(a) all consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Stockholder of this
Agreement and the Power of Attorney (the
9
"Power of Attorney") and the Custody Agreement (the "Custody Agreement")
hereinafter referred to, and for the sale and delivery of the Shares to be sold
by such Selling Stockholder hereunder, have been obtained; and such Selling
Stockholder 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 Stockholder hereunder; this
Agreement, the Power of Attorney and the Custody Agreement have each been duly
authorized (in the case of a Selling Stockholder that is not an individual),
executed and delivered by such Selling Stockholder;
(b) the sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder with all of
the provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such Selling
Stockholder is subject, nor will such action result in any violation of the
provisions of the Partnership Agreement of such Selling Stockholder if such
Selling Stockholder is a partnership, or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Selling Stockholder or the property of such Selling Stockholder;
(c) such Selling Stockholder has good and valid title to the
Shares to be sold at the Closing Date by such Selling Stockholder hereunder,
free and clear of all liens, encumbrances, equities or adverse claims; such
Selling Stockholder will have immediately prior to the Closing Date good and
valid title to the Shares to be sold at the Closing Date by such Selling
Stockholder, free and clear of all liens, encumbrances, equities or adverse
claims; and, upon delivery of the certificates representing such Shares and
payment therefor pursuant hereto, good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or adverse claims, will pass to the
several Underwriters;
(d) such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares; and
(e) the Registration Statement does not and will not, as of
its effective date and the date of any amendment thereto and the Prospectus as
of its date and the date of any amendment or supplement thereto will not,
contain any untrue statement of a material fact regarding such Selling
Stockholder or omit to state any material fact regarding such Selling
Stockholder required to be stated therein or necessary to make the statements
therein regarding such Selling Stockholder not misleading, and the Prospectus,
as amended or supplemented, if applicable, at the Closing Date or Additional
Closing Date, as the case may be, will not contain any untrue statement of a
material fact regarding such Selling Stockholder or omit to state a material
fact regarding such Selling Stockholder necessary to make the statements therein
10
regarding such Selling Stockholder, in the light of the circumstances under
which they were made, not misleading.
Each of the Selling Stockholders represents and warrants that
certificates in negotiable form representing all of the Shares to be sold by
such Selling Stockholders hereunder have been placed in custody under a Custody
Agreement relating to such Shares, in the form heretofore furnished to you, duly
executed and delivered by such Selling Stockholder to _____, as custodian (the
"Custodian"), and that such Selling Stockholder has duly executed and delivered
Powers of Attorney, in the form heretofore furnished to you, appointing the
person or persons indicated in Schedule II hereto, and each of them, as such
Selling Stockholder's Attorneys-in-Fact (the "Attorneys-in-Fact" or any one of
them the "Attorney-in Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Stockholder, to determine the purchase price
to be paid by the Underwriters to the Selling Stockholders as provided herein,
to authorize the delivery of the Shares to be sold by such Selling Stockholder
hereunder and otherwise to act on behalf of such Selling Stockholder in
connection with the transactions contemplated by this Agreement and the Custody
Agreement.
Each of the Selling Stockholders specifically agrees that the
Shares represented by the certificates held in custody for such Selling
Stockholder under the Custody Agreement, are subject to the interests of the
Underwriters hereunder, and that the arrangements made by such Selling
Stockholder for such custody, and the appointment by such Selling Stockholder of
the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
Each of the Selling Stockholders specifically agrees that the obligations of
such Selling Stockholder hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Stockholder, 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
Stockholder or any such executor or trustee should die or become incapacitated,
or if any such estate or trust should 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 such
Shares shall be delivered by or on behalf of such Selling Stockholder 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.
5. (A) The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest practicable time and, if required,
to file the final Prospectus with the Commission within the time periods
specified by Rule 424(b) and Rule 430A under the Securities Act and to file
promptly all reports and any definitive proxy or information statements required
to be filed
11
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Shares ("Prospectus Delivery Period"); and to furnish copies of the
Prospectus to the Underwriters in New York City as soon as practicable on the
Business Day next succeeding the date of this Agreement in such quantities as
the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the
Representatives [5] signed copies of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits and documents
incorporated by reference therein, and to each other Underwriter a conformed
copy of the Registration Statement (as originally filed) and each amendment
thereto, in each case without exhibits or the documents incorporated by
reference therein and, during the period mentioned in paragraph (e) below, to
each of the Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto) and documents incorporated by reference
therein as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective but prior to the end of the Prospectus
Delivery Period, to furnish to the Representatives a copy of the proposed
amendment or supplement for review and not to file any such proposed amendment
or supplement to which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm
such advice in writing (i) when the Registration Statement has become effective,
(ii) when any amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Representatives with copies thereof, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional information,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose, (vi) of the
occurrence of any event, within the period referenced in paragraph (e) below, as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
and (vii) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the issuance of any such stop
order, or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any order suspending any such qualification
of the Shares, or notification of any such order thereof and, if issued, to
obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the Underwriters
a prospectus relating to the Shares is
12
required by law to be delivered in connection with sales by the Underwriters or
any dealer, any event shall occur as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein, in light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose names and addresses the
Representatives will furnish to the Company) to which Shares may have been sold
by the Representatives on behalf of the Underwriters and to any other dealers
upon request, such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Shares; provided that the Company
shall not be required to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of the
Company occurring after the effective date of the Registration Statement, which
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
of the Commission promulgated thereunder;
(h) so long as the Shares are outstanding, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange;
(i) for a period of 90 days after the date of the initial
public offering of the Shares not to (i) offer, pledge, announce the intention
to sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, any shares
of Stock or any securities convertible into or exercisable or exchangeable for
Stock or (ii) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences of ownership of the Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Stock or such other securities, in cash or otherwise without the
prior written consent of the Representatives, other than the Shares to be sold
by the Company hereunder and securities that the Company may issue or grant (i)
pursuant to any existing employee or director benefit or compensation plan or
(ii) in connection with investments in, acquisitions of or other strategic
relationships with other companies;
(j) to use the net proceeds received by the Company from the
sale of the Shares by the Company pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";
13
(k) to use its best efforts to list for quotation the Shares
on the National Association of Securities Dealers Automated Quotations National
Market (the "Nasdaq National Market");
(l) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all costs
and expenses (i) incident to the preparation, reregistration, transfer,
execution and delivery of the Shares, (ii) incident to the preparation, printing
and filing under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in each case all exhibits,
amendments and supplements thereto), (iii) incurred in connection with the
registration or qualification of the Shares under the laws of such jurisdictions
as the Representatives may designate (including fees of counsel for the
Underwriters and its disbursements), (iv) in connection with the listing of the
Shares on the Nasdaq National Market, (v) related to the filing with, and
clearance of the offering by, the National Association of Securities Dealers,
Inc., (vi) in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the Preliminary and
Supplemental Blue Sky Memoranda and the furnishing to the Underwriters and
dealers of copies of the Registration Statement and the Prospectus, including
mailing and shipping, as herein provided, (vii) any expenses incurred by the
Company in connection with a "road show" presentation to potential investors,
(viii) the cost of preparing stock certificates and (ix) the cost and charges of
any transfer agent and any registrar.
(B) Each of the Selling Stockholders covenants and agrees with each of
the several Underwriters as follows:
(a) for a period of 90 days after the date of the initial
public offering of the Shares not to (i) offer, pledge, announce to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of Stock or any
securities convertible into or exercisable or exchangeable for Stock or (ii)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Stock or such other securities, in cash or otherwise or (iii) make any demand
for or exercise any right with respect to the registration of any shares of
Stock or any security convertible into or exercisable or exchangeable for Stock
without the prior written consent of the Representatives, in each case other
than the Shares to be sold by such Selling Stockholder hereunder; and
(b) to deliver to the Representatives prior to or at the
Closing Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by the Treasury
Department regulations in lieu thereof) in order to facilitate the Underwriters'
documentation of their compliance with the reporting and
14
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated.
6. The several obligations of the Underwriters hereunder to purchase
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the performance by the Company and each of the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective) not later than 5:00
P.M., New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Representatives;
(b) the respective representations and warranties of the
Company and the Selling Stockholders contained herein are true and correct on
and as of the Closing Date or the Additional Closing Date, as the case may be,
as if made on and as of the Closing Date or the Additional Closing Date, as the
case may be, and each of the Company and the Selling Stockholders shall have
complied with all agreements and all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date or the Additional Closing
Date, as the case may be;
(c) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
Material Adverse Change, otherwise than as set forth or contemplated in the
Prospectus, the effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the Closing Date or the Additional Closing Date, as the case
may be, on the terms and in the manner contemplated in the Prospectus; and
neither the Company nor any of its subsidiaries has sustained since the date of
the latest audited financial statements included or incorporated by reference in
the Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus;
(d) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, (1) a
certificate of an executive officer of the Company, with specific knowledge
about the Company's financial matters, satisfactory to the Representatives to
the effect set forth in subsections (a) through (c) (with respect to the
respective representations, warranties, agreements and conditions of the
Company) of this
15
Section and to the further effect that there has not occurred any Material
Adverse Change from that set forth or contemplated in the Registration Statement
and (2) a certificate of the Selling Stockholders, satisfactory to the
Representatives to the effect set forth in subsection (b) of this Section 6
(with respect to the respective representations, warranties, agreements and
conditions of the Selling Stockholders);
(e) ___________, [general counsel] for the Company, shall have
furnished to the Representatives [his] written opinion, dated the Closing Date,
in form and substance satisfactory to the Representatives, to the effect that:
(i) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect;
(ii) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation with corporate power and authority to own its
properties and conduct its business as described in the Prospectus and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified and in good
standing would not have a Material Adverse Effect; and all of the outstanding
shares of capital stock of each subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable, and (except, in the case of
foreign subsidiaries, for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims;
(iii) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the best of such counsel's knowledge, threatened
against or affecting the Company or any of its subsidiaries or any of their
respective properties or to which the Company or any of its subsidiaries is or
may be a party or to which any property of the Company or its subsidiaries is or
may be the subject which, if determined adversely to the Company or any of its
subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a Material Adverse Effect; to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and such counsel does not know of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as required;
(iv) the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be sold by the Company
hereunder (including the Shares to be sold by the Selling Stockholders) have
been duly authorized and are validly issued, fully paid and non-assessable;
16
(v) the statements in the Prospectus under "Business
-- Government Regulation", insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters, documents or
proceedings;
(vi) neither the Company nor any of its subsidiaries
is, or with the giving of notice or lapse of time or both would be, in violation
of or in default under, its Certificate of Incorporation or By-Laws or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its subsidiaries
is a party or by which it or any of them or any of their respective properties
is bound, except for violations and defaults which individually and in the
aggregate are not material to the Company and its subsidiaries taken as a whole;
the issue and sale of the Shares being delivered on the Closing Date or the
Additional Closing Date, as the case may be, to be sold by the Company hereunder
and the performance by the Company of its obligations under this Agreement and
the consummation of the transactions contemplated herein will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will any such action result in any violation of the
provisions of the Certificate of Incorporation or the By-Laws of the Company or
any applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, its
subsidiaries or any of their respective properties;
(vii) no consent, approval, authorization, order,
license, registration or qualification of or with any court or governmental
agency or body is required for the issuance by the Company of the Shares to be
sold by it hereunder or the consummation by the Company of the transactions
contemplated by this Agreement, except such consents, approvals, authorizations,
orders, licenses, registrations or qualifications as have been obtained under
the Securities Act and as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters;
(viii) each of the Company and its subsidiaries owns,
possesses or has obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations and
all courts and other tribunals, domestic or foreign, necessary to own or lease,
as the case may be, and to operate its properties and to carry on its business
as conducted as of the date hereof, and neither the Company nor any such
subsidiary has received any actual notice of any proceeding relating to
revocation or modification of any such license, permit, certificate, consent,
order, approval or other authorization, except as described in the Registration
Statement and the Prospectus; and each of the Company and its subsidiaries is in
compliance with all laws and regulations relating to the conduct of its business
as conducted as of the date of the Prospectus.
17
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of Illinois and Delaware, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an opinion or opinions
(in form and substance reasonably satisfactory to Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel, familiar with
the applicable laws; and (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Company and
certificates or other written statements of officials of jurisdictions having
custody of documents respecting the corporate existence or good standing of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon.
The opinion described above shall be rendered to the Underwriters at
the request of the Company and shall so state therein.
(f) Vedder, Price, Xxxxxxx & Kammholz, counsel for the
Company, shall have furnished to the Representatives their written opinion,
dated the Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(ii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof contained in the
Prospectus;
(iv) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable and the issuance of the Shares is not
subject to any preemptive or similar rights;
(v) the statements in the Prospectus under "Business
-- Legal Proceedings"; "Description of Capital Stock"; and "Shares Eligible for
Future Sale", insofar as such statements constitute a summary of the terms of
the Stock, legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such terms, legal matters,
documents or proceedings;
(vi) such counsel is of the opinion that the
Registration Statement and the Prospectus and any amendments and supplements
thereto (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and believes that (other
than
18
the financial statements and related schedules [and other financial data]
therein, as to which such counsel need express no belief) the Registration
Statement and the prospectus included therein at the time the Registration
Statement became effective did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and that the Prospectus, as
amended or supplemented, if applicable, does not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(vii) the Company is not and, after giving effect to
the offering and sale of the Shares, will not be an "investment company" or
entity "controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
(viii) the documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by the Company
prior to the Closing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to believe that any of such
documents, when such documents became effective or were so filed, as the case
may be, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such documents were so filed,
not misleading;
(ix) the Rights Agreement has been duly authorized,
executed and delivered by the Company; the Rights have been duly authorized by
the Company and, when issued upon issuance of the Shares, will be validly
issued, and the Series A Preferred Stock has been duly authorized by the Company
and validly reserved for issuance upon the exercise of the Rights and, when
issued upon such exercise in accordance with the terms of the Rights Agreement,
will be validly issued, fully paid and non-assessable.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of Illinois and Delaware, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an opinion or opinions
(in form and substance reasonably satisfactory to Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel, familiar with
the applicable laws; and (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Company and
certificates or other written statements of officials of jurisdictions having
custody of documents respecting the corporate existence or good standing of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon. With respect to the matters to be covered in
subparagraph (vi) above counsel may state their opinion and belief is based upon
their participation in the preparation of the Registration
19
Statement and the Prospectus and any amendment or supplement thereto (other than
the documents incorporated by reference therein) and review and discussion of
the contents thereof (including the documents incorporated by reference therein)
but is without independent check or verification except as specified.
The opinion described above shall be rendered to the Underwriters at
the request of the Company and shall so state therein.
(g) _______, counsel for the Selling Stockholders, shall have
furnished to the Representatives their written opinion, dated the Closing Date,
in form and substance satisfactory to the Representatives, to the effect that:
(i) this Agreement has been duly authorized (in the
case of a Selling Stockholder that is not an individual), executed and delivered
by or on behalf of each of the Selling Stockholders;
(ii) a Power of Attorney and a Custody Agreement have
been duly authorized (in the case of a Selling Stockholder that is not an
individual), executed and delivered by each Selling Stockholder and constitute
valid and binding agreements of each Selling Stockholder in accordance with
their terms;
(iii) each Selling Stockholder is the record,
beneficial and lawful owner of all of the Shares to be sold by such Selling
Stockholder and has valid and marketable title to such Shares, and upon delivery
of and payment for the Shares, the Underwriters will acquire valid and
marketable title to the shares, free and clear of any mortgage, pledge, security
interest, lien, claim or other encumbrance or restriction on transferability or
any adverse claim; and
(iv) the sale of the Shares and the execution and
delivery by the Selling Shareholder of, and the performance by the Selling
Shareholder of its obligations under, this Agreement, and the consummation of
the transactions contemplated herein, (i) have been duly authorized on the part
of each of the Selling Stockholders that is not an individual, and (ii) will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which any Selling
Stockholder is a party or by which any Selling Stockholder is bound or to which
any of the property or assets of any Selling Stockholder is subject, nor will
any such action result in any violation of the provisions of the partnership
agreement if such Selling Stockholder is a partnership or any applicable law or
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or any of its properties;
and no consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the sale
of the Shares or the consummation by the Selling Stockholders of the
transactions contemplated by this Agreement, except such consents, approvals,
authorizations, registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters.
20
In rendering such opinions, such counsel may rely as to matters
involving the application of laws other than the laws of the United States and
the States of _________ and __________, to the extent such counsel deems proper
and to the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to Underwriters'
counsel) of other counsel reasonably acceptable to the Underwriters' counsel,
familiar with the applicable laws. The opinion of such counsel for the Selling
Stockholders shall state that the opinion of any such other counsel is in form
satisfactory to such counsel and, in such counsel's opinion, the Underwriters
and they are justified in relying thereon.
(h) on the effective date of the Registration Statement and
the effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date Ernst & Young LLP shall have
furnished to you letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, containing statements and information of
the type customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus;
(i) the Representatives shall have received on and as of the
Closing Date an opinion of Milbank, Tweed, Xxxxxx & XxXxxx LLP, counsel to the
Underwriters, with respect to the due authorization and valid issuance of the
Shares, the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(j) the Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved for
listing by the Nasdaq National Market, subject to official notice of issuance;
(k) on or prior to the Closing Date or Additional Closing
Date, as the case may be, the Company and the Selling Stockholders shall have
furnished to the Representatives such further certificates and documents as the
Representatives shall reasonably request;
(l) the "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and the shareholders, officers and directors of
the Company identified on Schedule ___ hereto relating to sales and certain
other dispositions of shares of Stock or certain other securities, delivered to
you on or before the date hereof, shall be in full force and effect on the
Closing Date or Additional Closing Date, as the case may be.
7. The Company agrees to indemnify and hold harmless each Underwriter,
each affiliate of any Underwriter which assists such Underwriter in the
distribution of the Shares and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement
21
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by 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 or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use therein, provided, that with respect to
any such untrue statement in or omission from any preliminary prospectus, the
indemnity agreement contained in this paragraph shall not inure to the benefit
of any Underwriter to the extent that the sale to the person asserting any such
loss, claim, damage or liability was an initial resale by such Underwriter and
any such loss, claim, damage or liability of or with respect to such Underwriter
results from the fact that both (i) to the extent required by applicable law, 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 and (ii) the
untrue statement in or omission from such preliminary prospectus was corrected
in the Prospectus, unless, in either case, such failure to deliver the
Prospectus was a result of non-compliance by the Company with the provisions of
Section 5(A) hereof.
Each of the Selling Stockholders severally and not jointly agrees to
indemnify and hold harmless each Underwriter, each affiliate of any Underwriter
which assists such Underwriter in the distribution of the Shares and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) caused by any untrue statement
or alleged untrue statement of a material fact regarding such Selling
Stockholder contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact regarding such Selling
Stockholder required to be stated therein or necessary to make the statements
therein regarding such Selling Stockholder not misleading. In no event, however,
shall the liability of any Selling Stockholder for indemnification under this
Agreement exceed the proceeds received by such Selling Stockholder in the
offering.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act and each of the
Selling Stockholders to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to the preceding
paragraphs of this Section 7, such person (the
22
"Indemnified Person") shall promptly notify the person or persons against whom
such indemnity may be sought (each an "Indemnifying Person") in writing, and
such Indemnifying Persons, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Persons may designate in such
proceeding and shall pay the fees and expenses of such counsel related to such
proceeding. In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person and not the Indemnifying Persons unless
(i) the Indemnifying Persons and the Indemnified Person shall have mutually
agreed to the contrary, (ii) the Indemnifying Persons has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both an Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that no Indemnifying Person shall, in connection with any proceeding
or related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Indemnified Persons, and that all such fees and expenses shall be reimbursed
as they are incurred. Any such separate firm for the Underwriters, each
affiliate of any Underwriter which assists such Underwriter in the distribution
of the Shares and such control persons of Underwriters shall be designated in
writing by X.X. Xxxxxx Securities Inc. and any such separate firm for the
Company, its directors, its officers who sign the Registration Statement and
such control persons of the Company shall be designated in writing by the
Company and any such separate firm for the Selling Stockholders shall be
designated in writing by the Attorney-in-Fact. No Indemnifying Person shall be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, each Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, such Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the indemnification provided for in the first four paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such
23
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders 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 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 Stockholders 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 or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the Selling Stockholders and the total
underwriting discounts and the commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Shares. The relative fault of the Company
and the Selling Stockholders 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 Stockholders or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Selling Stockholders or the
Underwriters were treated as one entity for such purposes) 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 Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section ll(f) of the Securities 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 7 are several in proportion to the respective number of Shares set forth
opposite their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company and the Selling
Stockholders set forth in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of
24
this Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter or by or on behalf of the Company, its
officers or directors or any other person controlling the Company or the Selling
Stockholders and (iii) acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company and the Selling Stockholders, if after the execution and delivery
of this Agreement and prior to the Closing Date (or, in the case of the Option
Shares, prior to the Additional Closing Date) (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange or the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York 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 any change in financial markets or any
calamity or crisis that, in the judgment of the Representatives, is material and
adverse and which, in the judgment of the Representatives, makes it
impracticable to market the Shares being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-tenth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representatives, the Company
and the Selling Stockholders for the purchase of such Shares are not made within
36 hours after such default, this Agreement (or the obligations of the several
25
Underwriters to purchase the Option Shares, as the case may be) shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholder. In any such case either you or the Company and the
Selling Stockholders shall have the right to postpone the Closing Date (or, in
the case of the Option Shares, the Additional Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in 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 default of
such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company or the
Selling Stockholders to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason any of the Company or the
Selling Stockholders shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company and the Selling Stockholders agree to reimburse the Underwriters or
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all reasonable and appropriately documented
out-of-pocket expenses (including the fees and expenses of its counsel)
reasonably incurred by the Underwriter in connection with this Agreement or the
offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Selling Stockholders and the Underwriters, each affiliate of
any Underwriter which assists such Underwriter in the distribution of the
Shares, any controlling persons referred to herein and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. No purchaser of Shares from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by X.X. Xxxxxx Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
X.X. Xxxxxx Securities Inc. shall be binding upon the Underwriters. All notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (telefax:______); Attention: Syndicate Department. Notices to the
Company shall be given to it at ____________, _____________, ____________,
(telefax:________); Attention:____________. Notices to the Selling Stockholders
shall be given to the Attorneys-in-Fact at _________, ___________, ____________,
(telefax: ___________________); Attention: _______________________________.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
26
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
27
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
XXXXX/XXXXXX, INC.
By:
------------------------------
Name:
Title:
Selling Stockholders
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
As Attorneys-in-Fact acting on
behalf of each of the Selling
Stockholders named in
Schedule II to this Agreement.
28
Accepted:_________, 2001
X.X. Xxxxxx Securities Inc.
Xxxxxxxx Inc.
Bear, Xxxxxxx & Co., Inc.
Xxx-Xxxx, Xxxxxx Inc.
Acting severally on behalf
of themselves and the
several Underwriters listed
in Schedule I hereto.
By: X.X. Xxxxxx Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By:
----------------------------------
Title:
29
SCHEDULE I
Maximum Number of
Number of Underwritten Option Shares
Underwriter Shares To Be Purchased To Be Purchased
----------- ---------------------- ------------------
X.X. Xxxxxx Securities Inc.
Xxxxxxxx Inc.
Bear, Xxxxxxx & Co., Inc.
Xxx-Xxxx, Xxxxxx Inc.
--------- -------
Total 3,625,000 543,750
========= =======
SCHEDULE II
Selling Stockholder Number of Underwritten Shares
------------------- -----------------------------
SCHEDULE III
Number of Shares
Stockholder Subject to Lockup
----------- -----------------
