1
EXHIBIT 1.1
_________ SHARES*
COLLECTORS UNIVERSE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_______________, 1999
XXXXXXX & COMPANY, INC.
FIRST SECURITY XXX XXXXXX
As Representatives of the several Underwriters
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Collectors Universe, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell ________ shares (the "Firm Shares") of the Company's
Common Stock, $0.001 par value per share (the "Common Stock"), to you and to the
several other Underwriters named in Schedule I hereto (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional ______
shares of Common Stock, on the terms and for the purposes set forth in Section
1(b) (the "Option Shares"). The Firm Shares and the Option Shares are referred
to collectively herein as the "Shares."
The Company confirms as follows with the Representatives and the several
other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and
conditions of this Agreement, (i) the Company agrees to issue and
sell the Firm Shares to the several Underwriters and (ii) each of
the Underwriters, severally and not jointly, agrees to purchase
from the Company the respective number of Firm Shares set forth
opposite that Underwriter's name in Schedule I hereto, at the
purchase price of $____ for each Firm Share.
(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to
purchase, severally and not jointly, up to ________ Option Shares
at the same price per share as the Underwriters shall pay for the
Firm Shares. The Option may be exercised only to cover
over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date
of this Agreement upon written or telegraphic notice (the "Option
Shares Notice") by the Representatives to the Company no later
than 12:00 noon, New York City time, at least two and no more
than five business days before the date specified for closing in
the Option Shares Notice (the
-------------------
*Plus an option to purchase up to an additional _______ shares to cover over-
allotments.
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"Option Closing Date"), setting forth the aggregate number of
Option Shares to be purchased and the time and date for such
purchase. On the Option Closing Date, the Company will issue and
sell to the Underwriters the number of Option Shares set forth in
the Option Shares Notice, and each Underwriter will purchase such
percentage of the Option Shares as is equal to the percentage of
Firm Shares that such Underwriter is purchasing, as adjusted by
the Representatives in such manner as they deem advisable to
avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to
the Representatives for the accounts of the Underwriters against
payment of the purchase price by certified or official bank checks or
by wire transfer payable in same-day funds to the order of the
Company at the office of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the
third (or, if the purchase price set forth in Section 1(b) hereof is
determined after 4:30 p.m., Washington D.C. time, the fourth)
business day following the commencement of the offering contemplated
by this Agreement, or at such time on such other date, not later than
seven business days after the date of this Agreement, as may be
agreed upon by the Company and the Representatives (such date is
hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above)
will take place at the offices specified above for the Closing Date
at the time and date (which may be the Closing Date) specified in the
Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the
Closing Date or the Option Closing Date, as the case may be, by
written notice to the Company. For the purpose of expediting the
checking and packaging of certificates for the Shares, the Company
agrees to make such certificates available for inspection at least 24
hours prior to the Closing Date or the Option Closing Date, as the
case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the
Company to the respective Underwriters shall be borne by the Company.
The Company will pay and save each Underwriter and any subsequent
holder of the Shares harmless from any and all liabilities with
respect to or resulting from any failure or delay in paying Federal
and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original
issuance or sale to such Underwriter of the Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-1 and a
registration statement (Registration No. 333-86449) on Form S-1
relating to the Shares, including a preliminary prospectus and
such amendments to such registration statement as may have been
required to the date of this Agreement, has been prepared by the
Company under the provisions of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (collectively
referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been
filed with the Commission. The term "preliminary prospectus" as
used herein means a preliminary prospectus, including the
documents incorporated by reference therein, as contemplated by
Rule 430 or Rule 430A of the Rules and Regulations included at
any time as part of the registration statement. Copies of such
registration statement and amendments and of each related
preliminary prospectus have been delivered to the
Representatives. If such registration statement has not become
effective, a further amendment to such registration statement,
including a form of final prospectus, necessary to permit such
registration statement to become effective will be filed promptly
by the Company with the Commission. If such registration
statement has become effective, a final prospectus containing
information permitted to be omitted at the time of effectiveness
by Rule 430A of the Rules and Regulations will be filed promptly
by the Company with the Commission in accordance with Rule 424(b)
of the Rules and Regulations. The term "Registration Statement"
means the registration statement as amended at the time it
becomes or became effective (the "Effective Date"), including all
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documents incorporated by reference therein, financial statements
and all exhibits and any information deemed to be included by
Rule 430A and includes any registration statement relating to the
offering contemplated by this Agreement and filed pursuant to
Rule 462(b) of the Rules and Regulations. The term "Prospectus"
means the prospectus, including the documents incorporated by
reference therein, as first filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations or, if no such filing is
required, the form of final prospectus, including the documents
incorporated by reference therein, included in the Registration
Statement at the Effective Date. Any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the filing of
any document under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") after the Effective Date, the date
of any preliminary prospectus or the date of the Prospectus, as
the case may be, and deemed to be incorporated therein by
reference.
(b) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission. On the Effective
Date, the date the Prospectus is first filed with the Commission
pursuant to Rule 424(b) (if required), at all times subsequent to
and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration
Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration
Statement and the Prospectus (as amended or as supplemented if
the Company shall have filed with the Commission any amendment or
supplement thereto), including the financial statements included
in the Prospectus, did and will comply with all applicable
provisions of the Act, the Exchange Act, the rules and
regulations under the Exchange Act (the "Exchange Act Rules and
Regulations"), and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the
Act, the Exchange Act, the Exchange Act Rules and Regulations,
and the Rules and Regulations. On the Effective Date and when any
post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement, the Prospectus
or any such amendment or supplement did or will 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. At the Effective Date, the
date the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date
and, if later, the Option Closing Date, the Prospectus did not
and 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. The foregoing representations and
warranties in this Section 3(b) do not apply to any statements or
omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company
by the Representatives specifically for inclusion in the
Registration Statement or Prospectus or any amendment or
supplement thereto. The Company acknowledges that the statements
set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement.
(c) The documents that are incorporated by reference in the
preliminary prospectus and the Prospectus or from which
information is so incorporated by reference, when they became or
become effective or were or are filed with the Commission, as the
case may be, complied or will comply in all material respects
with the requirements of the Act or the Exchange Act, as
applicable, and the Rules and Regulations or the Exchange Act
Rules and Regulations, as applicable; and any documents so filed
and incorporated by reference subsequent to the Effective Date
shall, when they are filed with the Commission, comply in all
material respects with the requirements of the Act or the
Exchange Act, as applicable, and the Rules and Regulations or the
Exchange Act Rules and Regulations, as applicable.
(d) The Company does not own, and at the Closing Date and, if later,
the Option Closing Date, will not own, directly or indirectly,
any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any
corporation, firm, partnership, joint venture, association or
other entity, other than the subsidiaries listed in Exhibit 21.1
to the Registration Statement (the "Subsidiaries"). The Company
and each of its Subsidiaries is, and at the Closing Date
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and, if later, the Option Closing Date, will be, a corporation
duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation. The Company and each
of its Subsidiaries has, and at the Closing Date and, if later,
the Option Closing Date, will have, full power and authority to
conduct all the activities conducted by it, to own or lease all
the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The
Company and each of its Subsidiaries is, and at the Closing Date
and, if later, the Option Closing Date, will be, duly licensed or
qualified to do business and in good standing as a foreign
corporation in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned
or leased by it makes such license or qualification necessary,
except to the extent that the failure to be so qualified or be in
good standing would not materially and adversely affect the
Company or its business, properties, business prospects,
condition (financial or other) or results of operations. All of
the outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued and are fully paid and
nonassessable, and owned by the Company free and clear of all
claims, liens, charges and encumbrances; there are no securities
outstanding that are convertible into or exercisable or
exchangeable for capital stock of any Subsidiary. The Company is
not, and at the Closing Date and, if later, the Option Closing
Date, will not be, engaged in any discussions or a party to any
agreement or understanding, written or oral, regarding the
acquisition of an interest in any corporation, firm, partnership,
joint venture, association or other entity where such
discussions, agreements or understandings would require amendment
to the Registration Statement pursuant to applicable securities
laws. Complete and correct copies of the certificate of
incorporation and of the by-laws of the Company and each of its
Subsidiaries and all amendments thereto have been delivered to
the Representatives, and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or,
if later, the Option Closing Date.
(e) All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued and are fully paid and
nonassessable and were issued in compliance with all applicable
state and federal securities laws; the Shares have been duly
authorized and when issued and paid for as contemplated herein
will be validly issued, fully paid and nonassessable; no
preemptive or similar rights exist with respect to any of the
Shares or the issue and sale thereof. The description of the
capital stock of the Company in the Registration Statement and
the Prospectus is, and at the Closing Date and, if later, the
Option Closing Date, will be, complete and accurate in all
respects. Except as set forth in the Prospectus, the Company does
not have outstanding, and at the Closing Date and, if later, the
Option Closing Date, will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of capital stock, or any
such warrants, convertible securities or obligations. No further
approval or authority of stockholders or the Board of Directors
of the Company will be required for the issuance and sale of the
Shares as contemplated herein.
(f) The financial statements and schedules included in the
Registration Statement or the Prospectus present fairly the
financial condition of the Company and its consolidated
Subsidiaries as of the respective dates thereof and the results
of operations and cash flows of the Company and its consolidated
Subsidiaries for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire period involved,
except as otherwise disclosed in the Prospectus. No other
financial statements or schedules of the Company are required by
the Act, the Exchange Act, the Exchange Act Rules and Regulations
or the Rules and Regulations to be included in the Registration
Statement or the Prospectus. Deloitte & Touche (the
"Accountants"), who have reported on such financial statements
and schedules, are independent accountants with respect to the
Company as required by the Act and the Rules and Regulations. The
summary consolidated financial and statistical data included in
the Registration Statement present fairly the information shown
therein and have been compiled on a basis consistent with the
financial statements presented therein.
(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior
to the Closing Date and, if later, the Option Closing Date,
except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not
have been any change in the capitalization of the Company (other
than in connection with the
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exercise of options to purchase the Company's Common Stock
granted pursuant to the Company's stock option plans from the
shares reserved therefor as described in the Registration
Statement), or any material adverse change in the business,
properties, business prospects, condition (financial or
otherwise) or results of operations of the Company or any of its
Subsidiaries, arising for any reason whatsoever, (ii) neither the
Company nor any of its Subsidiaries has incurred nor will any of
them incur, except in the ordinary course of business as
described in the Prospectus, any material liabilities or
obligations, direct or contingent, nor has the Company or any of
its Subsidiaries entered into nor will it enter into, except in
the ordinary course of business as described in the Prospectus,
any material transactions other than pursuant to this Agreement
and the transactions referred to herein and (iii) the Company has
not and will not have paid or declared any dividends or other
distributions of any kind on any class of its capital stock.
(h) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct
its business in a manner that would cause it to become, an
"investment company" or 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.
(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against or
affecting the Company, and of its Subsidiaries or any of its or
their officers in their capacity as such, nor any basis therefor,
before or by any Federal or state court, commission, regulatory
body, administrative agency or other governmental body, domestic
or foreign, wherein an unfavorable ruling, decision or finding
might materially and adversely affect the Company, any of its
Subsidiaries or the business, properties, business prospects,
condition (financial or otherwise) or results of operations of
the Company or any of its Subsidiaries.
(j) The Company and each Subsidiary has, and at the Closing Date and,
if later, the Option Closing Date, will have, performed all the
obligations required to be performed by it, and is not, and at
the Closing Date, and, if later, the Option Closing Date, will
not be, in default, under any contract or other instrument to
which it is a party or by which its property is bound or
affected, which default might materially and adversely affect the
Company or the business, properties, business prospects,
condition (financial or other) or results of operations of the
Company or any of its Subsidiaries. To the best knowledge of the
Company, no other party under any contract or other instrument to
which it or any of its Subsidiaries is a party is in default in
any respect thereunder, which default might reasonably be
expected to materially and adversely affect the Company, any of
its Subsidiaries or the business, properties, business prospects,
condition (financial or other) or results of operations of the
Company or any of its Subsidiaries. Neither the Company nor any
of its Subsidiaries is, and at the Closing Date and, if later,
the Option Closing Date, will be, in violation of any provision
of its certificate or articles of organization or by-laws or
other organizational documents.
(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is
required for the consummation by the Company of the transactions
on its part contemplated herein, except such as have been
obtained under the Act or the Rules and Regulations and such as
may be required under state securities or Blue Sky laws or the
by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and
distribution by the Underwriters of the Shares.
(l) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable against the Company in
accordance with the terms hereof. The performance of this
Agreement and the consummation of the transactions contemplated
hereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company
pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, or give any party a right to terminate any of its
obligations under, or result in the acceleration of any
obligation under, the certificate or articles of incorporation or
by-laws of the Company or any of its Subsidiaries, any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or
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other evidence of indebtedness, lease, contract or other
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company, any of its
Subsidiaries or any of its or their properties is bound or
affected, or violate or conflict with any judgment, ruling,
decree, order, statute, rule or regulation of any court or other
governmental agency or body applicable to the business or
properties of the Company or any of its Subsidiaries.
(m) The Company or one of its Subsidiaries has good and marketable
title to all properties and assets described in the Prospectus as
owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Prospectus
or are not material to the business of the Company or its
Subsidiaries. The Company or its Subsidiaries has valid,
subsisting and enforceable leases for the properties described in
the Prospectus as leased by them. The Company or one of its
Subsidiaries owns or leases all such properties as are necessary
to its operations as now conducted or as proposed to be
conducted, except where the failure to so own or lease would not
materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results
of operations of the Company or its Subsidiaries.
(n) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not
described or filed as required. All such contracts to which the
Company or any of its Subsidiaries is a party have been duly
authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the
Company or such Subsidiary and are enforceable against and by the
Company or such Subsidiary in accordance with the terms thereof.
(o) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document
required by Section 4 of this Agreement to be delivered to the
Representatives was or will be, when made, inaccurate, untrue or
incorrect.
(p) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or
result, under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(q) 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, which rights have not been
waived by the holder thereof as of the date hereof.
(r) The Company has filed a registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), to register the Common Stock, has filed an
application to list the Shares on the Nasdaq National Market
("NNM"), and has received notification that the listing has been
approved, subject to notice of issuance of the Shares.
(s) Except as disclosed in or specifically contemplated by the
Prospectus (i) the Company and its Subsidiaries have sufficient
trademarks, trade names, patent rights, mask works, copyrights,
licenses, approvals and governmental authorizations to conduct
their businesses as now conducted, (ii) the Company has no
knowledge of any infringement by it or any of its Subsidiaries of
trademarks, trade name rights, patent rights, mask work rights,
copyrights, licenses, trade secrets or other similar rights of
others, where such infringement could have a material and adverse
effect on the Company, any of its Subsidiaries or the business,
properties, business prospects, condition (financial or
otherwise) or results of operations of the Company or any of its
Subsidiaries, and (iii) there is no claim being made against the
Company or any of its Subsidiaries, or to the best of the
Company's knowledge, any employee of the Company or any of its
Subsidiaries, regarding trademark, trade name, patent, mask work,
copyright, license, trade secret or other infringement which
could have a material and adverse effect on the Company, any of
its Subsidiaries or the business, properties, business prospects,
condition (financial or otherwise) or results of operations of
the Company or any of its Subsidiaries.
(t) The Company and each of its Subsidiaries has filed all federal,
state, local and foreign income tax returns which have been
required to be filed and has paid all taxes and assessments
received by it to
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the extent that such taxes or assessments have become due.
Neither the Company nor any of its Subsidiaries has any tax
deficiency which has been or, to the best knowledge of the
Company, might be asserted or threatened against it which could
have a material and adverse effect on the business, properties,
business prospects, condition (financial or otherwise) or results
of operations of the Company or its Subsidiaries.
(u) The pro forma financial information set forth in the Registration
Statement reflects, subject to the limitations set forth in the
Registration Statement as to such pro forma financial
information, the results of operations of the Company and its
consolidated Subsidiaries purported to be shown thereby for the
periods indicated and conforms to the requirements of Regulation
S-X of the Rules and Regulations and management of the Company
believes (i) the assumptions underlying the pro forma adjustments
are reasonable, (ii) that such adjustments have been properly
applied to the historical amounts in the compilation of such
statements, and (iii) that such statements present fairly, with
respect to the Company and its consolidated Subsidiaries, the pro
forma financial position and results of operations and the other
information purported to be shown therein at the respective dates
or for the respective periods therein specified.
(v) The Company or its Subsidiaries owns or possesses all
authorizations, approvals, orders, licenses, registrations, other
certificates and permits of and from all governmental regulatory
officials and bodies, necessary to conduct its business their
respective businesses as contemplated in the Prospectus, except
where the failure to own or possess all such authorizations,
approvals, orders, licenses, registrations, other certificates
and permits would not materially and adversely affect the
Company, any of its Subsidiaries or the business, properties,
business prospects, condition (financial or otherwise) or results
of operations of the Company or any of its Subsidiaries. There is
no proceeding pending or threatened (or any basis therefor known
to the Company) which may cause any such authorization, approval,
order, license, registration, certificate or permit to be
revoked, withdrawn, cancelled, suspended or not renewed; and the
Company and each of its Subsidiaries is conducting its business
in compliance with all laws, rules and regulations applicable
thereto (including, without limitation, all applicable federal,
state and local environmental laws and regulations) except where
such noncompliance would not materially and adversely affect the
Company, any of its Subsidiaries or the business, properties,
business prospects, condition (financial or otherwise) or results
of operations of the Company or any of its Subsidiaries.
(w) The Company and each of its Subsidiaries maintains insurance of
the types and in the amounts generally deemed adequate for its
business, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and its
Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of
which insurance is in full force and effect.
(x) Neither the Company nor any of its Subsidiaries has nor, to the
best of the Company's knowledge, any of its or their respective
employees or agents at any time during the last five years (i)
made any unlawful contribution to any candidate for foreign
office, or failed to disclose fully any contribution in violation
of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any
jurisdiction thereof.
4. Agreements of the Company. The Company covenants and agrees with the
several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by
law to be delivered in connection with sales of the Shares by an
Underwriter or dealer, file any amendment or supplement to the
Registration Statement or the Prospectus, unless a copy thereof
shall first have been submitted to the Representatives within a
reasonable period of time prior to the filing thereof and the
Representatives shall not have objected thereto in good faith.
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(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the
Representatives promptly, and will confirm such advice in
writing, (i) when the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective,
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or
for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for
that purpose or the threat thereof, (iv) of the happening of any
event during the period mentioned in the second sentence of
Section 4(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus
untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the
statements therein, in the light of the circumstances in which
they are made, not misleading and (v) of receipt by the Company
or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the
Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any 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 moment. If the
Company has omitted any information from the Registration
Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will comply with the provisions of and make all requisite
filings with the Commission pursuant to said Rule 430A and notify
the Representatives promptly of all such filings.
(c) The Company will furnish to each Representative, without charge,
one signed copy of each of the Registration Statement and of any
post-effective amendment thereto, including financial statements
and schedules, and all exhibits thereto and will furnish to the
Representatives, without charge, for transmittal to each of the
other Underwriters, a copy of the Registration Statement and any
post-effective amendment thereto, including financial statements
and schedules but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge,
as many copies of the Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request. The
Company consents to the use of the Prospectus or any amendment or
supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be
delivered in connection therewith. If during such period of time
any event shall occur which in the judgment of the Company or
counsel to the Underwriters should be set forth in the Prospectus
in order to make any statement therein, in the light of the
circumstances under which it was made, not misleading, or if it
is necessary to supplement or amend the Prospectus to comply with
law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such
number of copies of such supplement or amendment to the
Prospectus as the Representatives may reasonably request. The
Company will not file any document under the Exchange Act or the
Exchange Act Rules and Regulations before the termination of the
offering of the Shares by the Underwriters, if such document
would be deemed to be incorporated by reference into the
Prospectus, that is not approved by the Representatives after
reasonable notice thereof.
(f) Prior to any public offering of the Shares, the Company will
cooperate with the Representatives and counsel to the
Underwriters in connection with the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions as the Representatives may request;
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 general
service of process in any jurisdiction where it is not now so
subject.
(g) The Company will, so long as required under the Rules and
Regulations, furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and
cash flow of the Company and its consolidated
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Subsidiaries, if any, certified by independent public
accountants) and, as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial
information of the Company and its Subsidiaries, if any, for such
quarter in reasonable detail.
(h) During the period of five years commencing on the Effective Date,
the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial
statements and other periodic and special reports as the Company
may from time to time distribute generally to the holders of any
class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a
copy of each annual or other report it shall be required to file
with the Commission.
(i) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following
the calendar quarter in which the Effective Date falls, an
earnings statement (which need not be audited but shall be in
reasonable detail) for a period of 12 months ended commencing
after the Effective Date, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(j) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will
pay or reimburse if paid by the Representatives all costs and
expenses incident to the performance of the obligations of the
Company under this Agreement and in connection with the
transactions contemplated hereby, including but not limited to
costs and expenses of or relating to (i) the preparation,
printing and filing of the Registration Statement and exhibits to
it, each preliminary prospectus, Prospectus and any amendment or
supplement to the Registration Statement or Prospectus, (ii) the
preparation and delivery of certificates representing the Shares,
(iii) the printing of this Agreement, the Agreement Among
Underwriters, any Selected Dealer Agreements, any Underwriters'
Questionnaires, any Underwriters' Powers of Attorney, and any
invitation letters to prospective Underwriters, (iv) furnishing
(including costs of shipping and mailing) such copies of the
Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the
Shares by the Underwriters or by dealers to whom Shares may be
sold, (v) the listing of the Shares on the NNM, (vi) any filings
required to be made by the Underwriters with the NASD, and the
fees, disbursements and other charges of counsel for the
Underwriters in connection therewith, (vii) the registration or
qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 4(f), including the fees, disbursements and
other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (viii) fees,
disbursements and other charges of counsel to the Company (but
not those of counsel for the Underwriters, except as otherwise
provided herein) and (ix) the transfer agent for the Shares.
(k) The Company will not at any time, directly or indirectly, take
any action designed or which might reasonably be expected to
cause or result in, or which will constitute, stabilization of
the price of the shares of Common Stock to facilitate the sale or
resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds" and shall file
such reports with the Commission with respect to the sale of the
Shares and the application of the proceeds therefrom as may be
required in accordance with Rule 463 under the Act.
(m) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the
Prospectus, without the prior written consent of Xxxxxxx &
Company, Inc., the Company will not offer, sell, contract to
sell, grant options to purchase or otherwise dispose of any of
the Company's equity securities of the Company or any other
securities convertible into or exchangeable with its Common Stock
or other equity security (other than pursuant to employee stock
option plans or the conversion of convertible securities or the
exercise of warrants outstanding on the date of this Agreement).
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(n) During the period of 180 days after the date of the Prospectus,
the Company will not, without the prior written consent of
Xxxxxxx & Company, Inc., grant options to purchase shares of
Common Stock at a price less than the initial public offering
price. During the period of 180 days after the date of the
Prospectus, the Company will not file with the Commission or
cause to become effective any registration statement relating to
any securities of the Company without the prior written consent
of Xxxxxxx & Company, Inc.
(o) The Company will cause each of its officers, directors and
certain stockholders designated by the Representatives to, enter
into lock-up agreements with the Representatives to the effect
that they will not, without the prior written consent of Xxxxxxx
& Company, Inc., sell, contract to sell or otherwise dispose of
any shares of Common Stock or rights to acquire such shares
according to the terms set forth in Schedule II hereto.
(p) The Company will not file with the Commission any registration
statement on Form S-8 relating to shares of its Common Stock
prior to 90 days after the effective date of the Registration
Statement.
5. Conditions of the Obligations of the Underwriters. The obligations of
each Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00
p.m., New York City time, on the date of this Agreement or at
such later date and time as shall be consented to in writing by
the Representatives and all filings required by Rule 424 and Rule
430A of the Rules and Regulations shall have been made.
(b) (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 threatened by the
Commission, (ii) no order suspending the effectiveness of the
Registration Statement or the qualification or registration of
the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such
purpose shall be pending before or threatened or contemplated by
the Commission or the authorities of any such jurisdiction, (iii)
any request for additional information on the part of the staff
of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission
or such authorities and (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 the Representatives and the Representatives do not object
thereto in good faith, and the Representatives shall have
received certificates, dated the Closing Date and, if later, the
Option Closing Date and signed by the Chief Executive Officer and
the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information
and belief), to the effect of clauses (i), (ii) and (iii) of this
paragraph.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall
not have been a material adverse change in the general affairs,
business, business prospects, properties, management, condition
(financial or otherwise) or results of operations of the Company
or any of its Subsidiaries, whether or not arising from
transactions in the ordinary course of business, in each case
other than as described in or contemplated by the Registration
Statement and the Prospectus, and (ii) the Company shall not have
sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether
or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or
decree, which is not described in the Registration Statement and
the Prospectus, if in the judgment of the Representatives any
such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the
Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have
been no litigation or other proceeding instituted against the
Company, any of its Subsidiaries, or any of its or their officers
or directors in their capacities as such, before or by any
Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling,
11
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decision or finding would, in the judgment of the
Representatives, materially and adversely affect the business,
properties, business prospects, condition (financial or
otherwise) or results of operations of the Company or any of its
Subsidiaries.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material
respects at the Closing Date and, with respect to the Option
Shares, at the Option Closing Date, and all covenants and
agreements contained herein to be performed on the part of the
Company and all conditions contained herein to be fulfilled or
complied with by the Company at or prior to the Closing Date and,
with respect to the Option Shares, at or prior to the Option
Closing Date, shall have been duly performed, fulfilled or
complied with.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option
Closing Date, satisfactory in form and substance to the
Representatives and counsel for the Underwriters from Xxxxxxxxx
Xxxxx Xxxxxxx & Xxxxx, counsel to the Company, with respect to
the following matters:
(i) Each of the Company and its Subsidiaries is a corporation
or limited liability company duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation or organization; has full
corporate power and authority to conduct all the
activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as
described in the Registration Statement and Prospectus;
and to the knowledge of such counsel is duly licensed or
qualified to do business and is in good standing as a
foreign corporation in all jurisdictions in which the
nature of the activities conducted by it or the character
of the assets owned or leased by it makes such license or
qualification necessary and where the failure to be
licensed or qualified would have a material and adverse
effect on the Company.
(ii) All of the outstanding shares of capital stock of the
Company have been duly authorized, validly issued and are
fully paid and nonassessable, to such counsel's knowledge,
were issued pursuant to exemptions from the registration
and qualification requirements of federal and applicable
state securities laws, and were not issued in violation of
or subject to any preemptive or, to such counsel's
knowledge, similar rights.
(iii) The specimen certificate evidencing the Common Stock filed
as an exhibit to the Registration Statement is in due and
proper form under Delaware law, the Shares have been duly
authorized and, when issued and paid for as contemplated
by this Agreement, will be validly issued, fully paid and
nonassessable; and no preemptive or similar rights exist
with respect to any of the Shares or the issue and sale
thereof.
(iv) All of the outstanding shares of capital stock or
membership units of each Subsidiary have been duly
authorized and validly issued and are fully paid and
nonassessable, and to our knowledge are owned by the
Company free of any Adverse Interests (other than
transferability restrictions under applicable securities
laws); and to such counsel's knowledge, there are no
securities outstanding that are convertible into or
exercisable or exchangeable for capital stock of any
Subsidiary.
(v) The authorized capital stock and to such counsel's
knowledge the outstanding capital stock of the Company is
as set forth in the Registration Statement and the
Prospectus in the column entitled "Actual" under the
caption "Capitalization" (except for subsequent issuances,
if any, pursuant to this Agreement or pursuant to
reservations, agreements, employee benefit plans or the
exercise of convertible securities, options or warrants
referred to in the Prospectus). To such counsel's
knowledge, except as disclosed in or specifically
contemplated by the Prospectus, there are no outstanding
options, warrants of other rights calling for the issuance
of, and no commitments, plans or arrangements to issue,
any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for
capital stock of the Company. The
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____________, 1999
Page 12 of 23
description of the capital stock of the Company in the
Registration Statement and the Prospectus conforms in all
material respects to the terms thereof.
(vi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which
the Company or any of its Subsidiaries is a party or to
which any of their respective properties is subject that
are required to be described in the Registration Statement
or the Prospectus but are not so described.
(vii) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental
agency or body is required for the consummation by the
Company of the transactions on its part contemplated under
this Agreement, except such as have been obtained or made
under the Act or the Rules and Regulations except that
such counsel need not opine as to any such consents,
approvals, authorizations, orders, filings or declarations
required under state securities or Blue Sky laws or the
by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the
Shares.
(viii) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(ix) The execution and delivery of this Agreement, the
compliance by the Company with all of the terms hereof and
the consummation of the transactions contemplated hereby
does not contravene any provision of applicable law or the
Certificate of Incorporation or By-Laws, or Articles of
Organization, as applicable, of the Company or any of its
Subsidiaries, and to the best of such counsel's knowledge
will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the
Company pursuant to the terms and provisions of, result in
a breach or violation of any of the terms or provisions
of, or constitute a default under, or give any party a
right to terminate any of its obligations under, or result
in the acceleration of any obligation under, any lease,
contract or other agreement or instrument filed as an
exhibit to the Registration Statement, or violate or
conflict with (i) any judgment, ruling, decree or order
known to such counsel or (ii) any California or federal
statute, rule or regulation of any court or other
California or federal governmental agency or body,
applicable to the business or properties of the Company or
any of its Subsidiaries.
(x) To such counsel's knowledge, there is no document or
contract of a character required to be described in the
Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not
described or filed or incorporated by reference as
required, and each description of such contracts and
documents that is contained in the Registration Statement
and Prospectus fairly presents in all material respects
the information required under the Act and the Rules and
Regulations.
(xi) The statements under the captions "Risk Factors -- A
significant number of shares are eligible for sale and
their sale could depress our stock price," "Risk Factors
-- provisions in our charter documents may make an
acquisition of us more difficult," "Management -- Employee
Benefit Plans," "Management -- Employment Agreements,"
"Certain Relationships and Related Transactions,"
"Description of Capital Stock," and "Shares Eligible for
Future Sale" in the Prospectus, insofar as the statements
constitute a summary of documents referred to therein or
matters of law, are accurate summaries and fairly and
correctly present, in all material respects, the
information called for with respect to such documents and
matters (provided, however, that such counsel may rely on
representations of the Company with respect to the factual
matters contained in such statements, and provided further
that such counsel shall state that nothing has come to the
attention of such counsel which leads them to believe that
such representations are not true and correct in all
material respects).
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(xii) The Company is not an "investment company" or 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.
(xiii) The Shares have been duly authorized for listing on the
NNM, subject to notice of issuance.
(xiv) To such counsel's knowledge, no holder of securities of
the Company has rights, which have not been waived or
satisfied, to require the register with the Commission
shares of Common Stock or other securities, as part of the
offering contemplated hereby.
(xv) The Registration Statement has become effective under the
Act, and such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has
been instituted or is pending, threatened or contemplated.
(xvi) The Registration Statement and the Prospectus comply as to
form in all material respects with the requirement of the
Act and the Rules and Regulations (other than the
financial statements, schedules and other financial or
statistical data contained or incorporated by reference in
the Registration Statement or the Prospectus, as to which
such counsel need express no opinion).
Such counsel shall state, separately and not as a part of
its opinion, that such counsel participated in the
preparation of the Registration Statement and Prospectus
and such counsel has no reason to believe that, as of the
Effective Date the Registration Statement, or any
amendment or supplement thereto, (other than the financial
statements, schedules and other financial and statistical
data contained or incorporated by reference therein, as to
which such counsel need express no opinion) contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary
to make the statements therein, in light of the
circumstances under which they were made, not misleading,
or that the Prospectus, or any amendment or supplement
thereto, as of its date and the Closing Date and, if
later, the Option Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading (other than the financial
statements, schedules and other financial and statistical
data contained or incorporated by reference therein, as to
which such counsel need express no opinion).
In rendering such opinion, such counsel may rely upon as to matters of
local law on opinions of counsel satisfactory in form and substance to the
Representatives and counsel for the Underwriters, provided that the opinion of
counsel to the Company shall state that they are doing so, that they have no
reason to believe that they and the Underwriters are not entitled to rely on
such opinions and that copies of such opinions are to be attached to the
opinion.
(g) The Representatives shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Xxxxxx Xxxxxx
White & XxXxxxxxx, counsel to the Underwriters, with respect to
the Registration Statement, the Prospectus and this Agreement,
which opinion shall be satisfactory in all respects to the
Representatives.
(h) Concurrently with the execution and delivery of this Agreement,
the Accountants shall have furnished to the Representatives a
letter, dated the date of its delivery, addressed to the
Representatives and in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
with respect to the Company and its Subsidiaries as required by
the Act and the Exchange Act and the Rules and Regulations and
with respect to certain financial and other statistical and
numerical information contained or incorporated by reference in
the Registration Statement. At the Closing Date and, as to the
Option Shares, the Option Closing Date, the Accountants shall
have furnished to the Representatives a letter, dated the date of
its delivery, which
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shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that
nothing has come to their attention during the period from the
date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than five days prior to the
Closing Date and the Option Closing Date, as the case may be,
which would require any change in their letter dated the date
hereof if it were required to be dated and delivered at the
Closing Date and the Option Closing Date.
(i) Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, as to the Option
Shares, the Option Closing Date, there shall be furnished
to the Representatives a certificate, dated the date of
its delivery, signed by each of the Chief Executive
Officer and the Chief Financial Officer of the Company, in
form and substance satisfactory to the Representatives, to
the effect that:
(ii) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus (including any
documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus) and (A) as
of the date of such certificate, such documents are true
and correct in all material respects and do not omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein not
untrue or misleading and (B) in the case of the
certificate delivered at the Closing Date and the Option
Closing Date, since the Effective Date no event has
occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements
therein not untrue or misleading.
(iii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made,
and are, at the time such certificate is delivered, true
and correct.
(iv) Each of the covenants required to be performed by the
Company herein on or prior to the date of such certificate
has been duly, timely and fully performed and each
condition herein required to be satisfied or fulfilled on
or prior to the date of such certificate has been duly,
timely and fully satisfied or fulfilled.
(j) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(o).
(k) The Shares shall be qualified for sale in such jurisdictions as
the Representatives may reasonably request and each such
qualification shall be in effect and not subject to any stop
order or other proceeding on the Closing Date or the Option
Closing Date.
(l) Prior to the Closing Date, the Shares shall have been duly
authorized for listing on the NNM upon official notice of
issuance.
(m) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein,
as the Representatives may have reasonably requested as to the
accuracy and completeness at the Closing Date and the Option
Closing Date of any statement in the Registration Statement or
the Prospectus, as to the accuracy at the Closing Date and the
Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its
obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the
Representatives.
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, liabilities,
expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and
any amount paid in settlement of, any action,
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suit or proceeding or any claim asserted), to which they, or any
of them, may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus, or the omission or
alleged omission to state in such document a material fact
required to be stated in it or necessary to make the statements
in it not misleading in the light of the circumstances in which
they were made, or arise out of or are based in whole or in part
on any inaccuracy in the representations and warranties of the
Company contained herein or any failure of the Company to perform
its obligations hereunder or under law in connection with the
transactions contemplated hereby; provided, however, that (i) the
Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares
in the public offering to any person by an Underwriter and is
based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to
the Company by the Representatives, on behalf of any Underwriter,
expressly for inclusion in the Registration Statement, the
preliminary prospectus or the Prospectus and (ii) the Company
will not be liable to any Underwriter, the directors, officers,
employees or agents of such Underwriter or any person controlling
such Underwriter with respect to any loss, claim, liability,
expense, or damage arising out of or based on any untrue
statement or omission or alleged untrue statement or omission or
alleged omission to state a material fact in the preliminary
prospectus which is corrected in the Prospectus if the person
asserting any such loss, claim, liability, charge or damage
purchased Shares from such Underwriter but was not sent or given
a copy of the Prospectus at or prior to the written confirmation
of the sale of such Shares to such person. The Company
acknowledges that the statements set forth under the heading
"Underwriting" in the preliminary prospectus and the Prospectus
constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives on
behalf of the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the
Prospectus. This indemnity agreement will be in addition to any
liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who
signs the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, as set
forth in Section 6(a), but only insofar as losses, claims,
liabilities, expenses or damages arise out of or are based on any
untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company
by the Representatives, on behalf of such Underwriter, expressly
for use in the Registration Statement, the preliminary prospectus
or the Prospectus. The Company acknowledges that the statements
set forth under the heading "Underwriting" in the preliminary
prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company
by the Representatives on behalf of the Underwriters expressly
for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. This indemnity will be in addition
to any liability that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 shall, promptly after receipt of notice of
commencement of any action against such party in respect of which
a claim is to be made against an indemnifying party or parties
under this Section 6, notify each such indemnifying party in
writing of the commencement of such action, enclosing with such
notice a copy of all papers served, but the omission so to notify
such indemnifying party will not relieve it from any liability
that it may have to any indemnified party under the foregoing
provisions of this Section 6 unless, and only to the extent that,
such omission results in the loss of substantive rights or
defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying
party of its commencement, the indemnifying party will be
entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the
indemnified party, jointly with any
16
____________, 1999
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other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense,
the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the
indemnifying party, (ii) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are
different from or in addition to those available to the
indemnifying party, (iii) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases
the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It
is understood that the indemnifying party or parties shall not,
in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements
and other charges will be reimbursed by the indemnifying party
promptly as they are incurred. Any indemnifying party will not be
liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably
withheld).
(d) If the indemnification provided for in this Section 6 is
applicable in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an
indemnified party under paragraphs (a), (b) and (c) of this
Section 6 in respect of any losses, claims, liabilities, expenses
and damages referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable (including
any investigative, legal and other expenses reasonably incurred
in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons
other than the Underwriters, such as persons who control the
Company within the meaning of the Act, officers of the Company
who signed the Registration Statement and directors of the
Company, who also may be liable for contribution) by such
indemnified party as a result of such losses, claims,
liabilities, expenses and damages in such proportion as shall be
appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other
hand. The relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, shall be deemed to
be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company 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. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative
benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, with respect to the statements
or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any
other relevant equitable considerations with respect to such
offering. Such relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Representatives on
behalf of the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined
by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified
party as a result of
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the loss claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 6(d) shall be
deemed to include, for purposes of this Section 6(d), 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 6(d), no
Underwriter shall be required to contribute any amount in excess
of the underwriting discounts received by it and no person found
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from
any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 6(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes
of this Section 6(d), any person who controls a party to this
Agreement within the meaning of the Act will have the same rights
to contribution as that party, and each officer of the Company
who signed the Registration Statement will have the same rights
to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against any
such party in respect of which a claim for contribution may be
made under this Section 6(d), will notify any such party or
parties from whom contribution may be sought, but the omission so
to notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they
may have under this Section 6(d). No party will be liable for
contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably
withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or
on behalf of the Underwriters, (ii) acceptance of any of the
Shares and payment therefor or (iii) any termination of this
Agreement.
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7. Reimbursement of Certain Expenses. In addition to its other
obligations under Section 6(a) of this Agreement, the Company hereby
agrees to reimburse on a quarterly basis the Underwriters for all
reasonable legal and other expenses incurred in connection with
investigating or defending any claim, action, investigation, inquiry
or other proceeding arising out of or based upon, in whole or in
part, any statement or omission or alleged statement or omission, or
any inaccuracy in the representations and warranties of the Company
contained herein or failure of the Company to perform its or their
respective obligations hereunder or under law, all as described in
Section 6(a), notwithstanding the absence of a judicial determination
as to the propriety and enforceability of the obligations under this
Section 7 and the possibility that such payment might later be held
to be improper; provided, however, that, to the extent any such
payment is ultimately held to be improper, the persons receiving such
payments shall promptly refund them.
8. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time on or prior to the Closing
Date (or, with respect to the Option Shares, on or prior to the
Option Closing Date), by notice to the Company from the
Representatives, without liability on the part of any Underwriter to
the Company if, prior to delivery and payment for the Firm Shares or
Option Shares, as the case may be, in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the
Company shall have been suspended by the Commission or by The Nasdaq
Stock Market, (ii) trading in securities generally on the The Nasdaq
Stock Market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in
force on the date of this Agreement, shall have been imposed upon
trading in securities generally by such exchange, by order of the
Commission or any court or other governmental authority, or by The
Nasdaq Stock Market, (iii) a general banking moratorium shall have
been declared by either Federal or New York State authorities or (iv)
any material adverse change in the financial or securities markets in
the United States or in political, financial or economic conditions
in the United States or any outbreak or material escalation of
hostilities or other calamity or crisis shall have occurred, the
effect of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with
completion of the public offering or the delivery of and payment for
the Shares.
If this Agreement is terminated pursuant to Section 9 hereof, neither
the Company nor any Selling Stockholder shall be under any liability
to any Underwriter except as provided in Sections 7 and 8 hereof;
but, if for any other reason the purchase of the Shares by the
Underwriters is not consummated or if for any reason the Company
shall be unable to perform its obligations hereunder, the Company
will reimburse the several Underwriters for all out-of-pocket
expenses (including the fees, disbursements and other charges of
counsel to the Underwriters) incurred by them in connection with the
offering of the Shares.
9. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of
Firm 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 Firm Shares, the other Underwriters shall be
obligated, severally, to purchase the Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused
to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears
to the aggregate number of Firm Shares which all such non-defaulting
Underwriters have so agreed to purchase, or in such other proportions
as the Representatives may specify; provided that in no event shall
the maximum number of Firm Shares which any Underwriter has become
obligated to purchase pursuant to Section 1 be increased pursuant to
this Section 10 by more than one-tenth of such number of Firm Shares
without the prior written consent of such Underwriter. If any
Underwriter or Underwriters shall fail or refuse to purchase any Firm
Shares and the aggregate number of Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase
exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company 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 and the Company for the
purchase or sale of any Shares under this Agreement. In any such case
either the Representatives or the Company shall have the right to
postpone
19
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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 in any other documents or
arrangements may be effected. Any action taken pursuant to this
Section 10 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this
Agreement.
10. Miscellaneous. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall
be mailed or delivered (a) if to the Company, at the office of the
Company, 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxx, Xxxxxxxxxx 00000,
Attention: Chief Executive Officer, with a copy to Xxx X. Xxxxxxx,
Esq., Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, or (b) if to the
Underwriters, to the Representatives at the offices of Xxxxxxx &
Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department, with a copy to Xxxxxx X. Xxxxxx, Esq.,
Xxxxxx Xxxxxx White & XxXxxxxxx, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000-0000. Any such notice shall be effective
only upon receipt. Any notice under such Section 9 or 10 may be made
by telex or telephone, but if so made shall be subsequently confirmed
in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, and the controlling persons, directors and
officers referred to in Section 6, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
Any action required or permitted to be made by the Representatives under
this Agreement may be taken by them jointly or by Xxxxxxx & Company, Inc.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby waive any right they may
have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
20
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Very truly yours,
COLLECTORS UNIVERSE, INC.
By:
---------------------------------
Title: Chief Executive Officer
Confirmed as of the date first
above mentioned:
XXXXXXX & COMPANY, INC.
FIRST SECURITY XXX XXXXXX
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule I hereto.
XXXXXXX & COMPANY, INC.
By:
-----------------------------------
Title:
21
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SCHEDULE I
UNDERWRITERS
Number of
Firm
Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxx & Company, Inc.
First Security Xxx Xxxxxx
--------------
Total ______________
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Page 22 of 23
SCHEDULE II
FORM OF LOCK-UP AGREEMENT
[AND DIRECTORS, OFFICERS AND STOCKHOLDERS
OF THE COMPANY WHO SHALL SIGN SUCH AGREEMENT]
The undersigned is a holder of securities of Collectors Universe, Inc.,
a Delaware corporation (the "Company"), and wishes to facilitate the public
offering of shares of the Common Stock (the "Common Stock") of the Company (the
"Offering"). The undersigned recognizes that such Offering will be of benefit to
the undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby agrees that
he, she or it will not, without the prior written approval of Xxxxxxx & Company,
Inc., acting on its own behalf and/or on behalf of other representatives of the
underwriters, directly or indirectly, sell, contract to sell, make any short
sale, pledge, or otherwise dispose of, or enter into any hedging transaction
that is likely to result in a transfer of, any shares of Common Stock, options
to acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock of the Company which he, she or it may own,
exclusive of any shares of Common Stock purchased in connection with the
Company's public offering or purchased in the public trading market, for a
period commencing as of the date hereof and ending on the date which is one
hundred eighty (180) days after the date of the final Prospectus relating to the
Offering; provided, however, that the foregoing shall not prohibit any
distribution by a partnership to its partners so long as such partners agree to
be bound by the terms of this Agreement. The undersigned confirms that he, she
or it understands that the underwriters and the Company will rely upon the
representations set forth in this Agreement in proceeding with the Offering. The
undersigned further confirms that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of securities held by the undersigned except in compliance
with this Agreement.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.