EXHIBIT 1.1
ARAMEX INTERNATIONAL LIMITED
1,000,000 shares of Common Stock, US $0.01 par value
UNDERWRITING AGREEMENT
Commonwealth Associates, New York, New York
as Representative of the Underwriters
named on Schedule A hereto December ___, 1996
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Aramex International Limited, a Bermuda corporation (the "Company"),
proposes to issue and sell to the underwriters listed on Schedule A hereto (the
"Underwriters") for whom Commonwealth Associates is acting as representative
(the "Representative") an aggregate of one million (1,000,000) shares of its
common stock, par value US $0.01 per share (the "Offered Shares"), which Offered
Shares are presently authorized but unissued shares of the Company's common
stock, par value US $0.01 per share (individually a "Common Share" and
collectively the "Common Shares"). In addition, the Underwriters, in order to
cover over-allotments in the sale of the Offered Shares, may purchase from
Xxxxxxx X. Xxxxxxx, Xxxx Xxxxxxxx and Xxxx Xxxxxxxx (the "Selling
Shareholders"), to the extent indicated on Schedule B hereto, up to an aggregate
of one hundred fifty thousand (150,000) Common Shares (the "Optional Shares";
the Offered Shares and the Optional Shares are hereinafter sometimes
collectively referred to as the "Shares").
The Company also proposes to issue and sell to the Representative, for
its own account and/or the accounts of its designees, warrants to purchase an
aggregate of one hundred thousand (100,000) Common Shares at an exercise price
of $_______ [120% of IPO price] per share (the "Representative's Warrants"),
which sale will be consummated in accordance with the terms and conditions of
the form of Representative's Warrant Agreement filed as an exhibit to the
Registration Statement (as defined below)
Prior to the date hereof, the Company consummated the Reorganization
(as defined in the Prospectus hereinafter referred to) pursuant to which all
assets and the business of Aramex International Limited, a Hong Kong company
(the "Predecessor"), were transferred to and acquired by the Company. Unless
the context otherwise requires, references herein to the "Company" shall refer
to the Predecessor.
The Company and the Selling Shareholders hereby confirm their
respective agreements with each of the Underwriters as follows:
1. PURCHASE AND SALE OF OFFERED SHARES. On the basis of the
representations and warranties herein contained, but subject to the conditions
set forth in Section 7 hereof and the other terms and conditions set forth
herein, the Company hereby agrees to sell the Offered Shares to the
Underwriters, severally, and each Underwriter agrees severally and not jointly,
to purchase from the Company, at a purchase price of $______ per share, the
number of Offered Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, plus any additional Offered Shares which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 11 hereof. The Underwriters plan to offer the Offered Shares to the
public at a public offering price of $_____ per share.
2. PAYMENT AND DELIVERY.
(a) Payment for the Offered Shares will be made to the Company by
certified or official bank check or checks payable to its order in New York
Clearing House funds, at the offices of the Representative, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, against delivery of the Offered Shares to the
Underwriters. Such payment and delivery will be made at 10:00 a.m., New York
City time, on December ___, 1996 (the date and time of such payment and
delivery being herein called the "Closing Date"). The certificates representing
the Offered Shares to be delivered will in such denominations and registered in
such names as the Underwriters may request not less than two full business days
prior to the Closing Date, and will be made available to the Underwriters for
inspection, checking and packaging at the office of _______________, the
Company's transfer agent, at __________, not less than one full business day
prior to the Closing Date.
(b) On the Closing Date, the Company will sell the Representative's
Warrants to the Representative or to its designees. The Representative's
Warrants will be in the form of, and in accordance with, the provisions of the
Representative's Warrant Agreement filed as an exhibit to the Registration
Statement. The aggregate purchase price for the Representative's Warrants is
$100. The Representative's Warrants will be restricted from sale, transfer,
assignment or hypothecation for a period of one year from the date hereof,
except to any successor, officer, director, employee or partner of the
Representative, or to officers, directors, employees or partners of any such
successor or partner. Payment for the Representative's Warrants will be made to
the Company by check or checks payable to its order on the Closing Date against
delivery of the certificates representing the Representative's Warrants. The
certificates representing the Representative's Warrants will be in such
denominations and such names as the Representative may request prior to the
Closing Date.
- 2 -
3. OPTION TO PURCHASE OPTIONAL SHARES
(a) For the purposes of covering any over-allotments in connection
with the distribution and sale of the Offered Shares as contemplated by the
Prospectus (as defined below), the Underwriters, severally and not jointly, are
hereby granted an option to purchase all or any part of the Optional Shares from
the Selling Shareholders. Any election to purchase Optional Shares from the
Selling Shareholders shall be made in proportion to the maximum number of
Optional Shares to be sold by each Selling Shareholder as set forth in Schedule
B hereto. The purchase price to be paid for the Optional Shares will be the
same price per Optional Share as the price per Offered Share set forth in
Section 1 hereof. The option granted hereby may be exercised by the
Underwriters as to all or any part of the Optional Shares at any time and from
time to time within 45 days after the Effective Date. The Underwriters will not
be under any obligation to purchase any Optional Shares prior to the exercise of
such option.
(b) The option granted hereby may be exercised by the Underwriters by
giving oral notice to the Selling Shareholders, which must be confirmed by a
letter, telefacsimile, telex or telegraph setting forth the number of Optional
Shares to be purchased, the date and time for delivery of and payment for the
Optional Shares and stating that the Optional Shares referred to therein are to
be used for the purpose of covering over-allotments in connection with the
distribution and sale of the Offered Shares. If such notice is given prior to
the Closing Date, the date set forth therein for such delivery and payment will
not be earlier than the Closing Date. If such notice is given on or after the
Closing Date, the date set forth therein for such delivery and payment will not
be earlier than three full business days thereafter. In either event, the date
so set forth will not be more than 15 full business days after the date of such
notice. The date and time set forth in such notice is herein called the "Option
Closing Date." Upon exercise of such option, the Selling Shareholders will
become obligated to convey to the Underwriters, and, subject to the terms and
conditions set forth in Section 3(d) hereof, the Underwriters, acting severally
and not jointly, will become obligated to purchase, that proportion of the total
number of Optional Shares specified in such notice which the number of Offered
Shares set forth in Schedule A hereto opposite the name of such Underwriter
bears to the total number of Offered Shares, subject in each case to such
adjustment as the Representative in its discretion shall make to eliminate any
sales or purchases of fractional shares. In the event that one or more Selling
Shareholders fails to deliver the number of Optional Shares to be purchased on
the date indicated in such notice, or if for any reason the Underwriters would
not be obligated to purchase such Optional Shares, the Underwriters shall have
the right to purchase from the Company, in lieu of any such Optional Shares, and
on the terms and conditions set forth herein, such number of additional Shares
equal to the Optional Shares not so delivered. Such additional Shares shall be
delivered together with the Optional Shares or as soon as practicable thereafter
but in no event later than one business day after the date specified in the
notice referred to above.
(c) Payment for the Optional Shares will be made to each Selling
Shareholder by certified or official bank check or checks payable to such
Selling Shareholder's order in New York Clearing House funds, at the office of
the Representative, against delivery of the Optional
- 3 -
Shares to the Underwriters. The certificates representing the Optional Shares
to be delivered will be in such denomination and registered in such names as the
Underwriters request not less than two full business days prior to the Option
Closing Date, and will be made available to the Underwriters for inspection,
checking and packaging at the aforesaid office of the Company's transfer agent
not less than one full business day prior to the Option Closing Date.
(d) The obligation of the Underwriters to purchase and pay for any of
the Optional Shares is subject to the conditions set forth in Section 7 hereof
and the other terms and conditions set forth herein.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of Bermuda, with full power and authority,
corporate and other, to own or lease and operate its properties and to conduct
its business as described in the Prospectus and to execute, deliver and perform
this Agreement and the Representative's Warrant Agreement and to consummate the
transactions contemplated hereby and thereby. The Reorganization has been
consummated as described in the Prospectus. The Company is duly qualified to do
business as a foreign corporation and is in good standing in all jurisdictions
wherein such qualification is necessary and failure to so qualify could have a
material adverse effect on the financial condition, results of operations,
business or properties of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect"). Schedule C hereto lists all subsidiaries of the
Company, including, without limitation, all entities included in the
consolidated financial statements included in the Prospectus, (the
"Subsidiaries"), their jurisdiction of incorporation and the ownership interest
of the Company therein. Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority, corporate and other, to own or
lease and operate its property and to conduct its business as described in the
Prospectus, and each is duly qualified to do business as a foreign corporation
and is in good standing in all jurisdictions wherein such qualification is
necessary and failing to so qualify could have a Material Adverse Effect. All
the issued and outstanding shares of capital stock of the Subsidiaries have been
validly authorized and issued and are fully paid and non-assessable, and, to the
extent indicated on Schedule C, are owned by the Company, directly or through
Subsidiaries, free and clear of any lien, security interest or pledge. There
are no options to purchase, warrants or other rights to subscribe for, or any
securities or obligations convertible into, exercisable or exchangeable for, or
any contracts or commitments to issue or sell shares of capital stock of any
Subsidiary or any such warrants, convertible, exercisable or exchangeable
securities or obligations.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the valid and binding obligation of the Company, and the
Representative's Warrant Agreement, when executed and delivered by the Company
on the Closing Date, will be
- 4 -
the valid and binding obligation of the Company, each enforceable against the
Company in accordance with their respective terms, except that enforceability of
the indemnification provision set forth in Section 8 hereof and the contribution
provision set forth in Section 9 hereof may be limited by the United States
federal and state security laws or the public policy underlying such laws. The
execution, delivery and performance of this Agreement and the Representative's
Warrant Agreement by the Company, the consummation by the Company of the
transactions herein and therein contemplated, the compliance by the Company with
the terms of this Agreement and the Representative's Warrant Agreement and the
consummation of the Reorganization have been duly authorized by all necessary
corporate action and do not and will not, with or without the giving of notice
or the lapse of time, or both, (i) result in any violation of the Company's
Memorandum of Association or its Bye-Laws; (ii) result in a breach of or
conflict with any of the terms or provisions of, or constitute a default under,
or result in the modification or termination of, or result in the creation or
imposition of any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or a Subsidiary pursuant to any indenture,
mortgage, note, contract, commitment or other agreement or instrument to which
the Company or a Subsidiary is a party or by which the Company or a Subsidiary
or any of their properties or assets is or may be bound or affected; (iii)
violate any existing applicable law rule, regulation, judgment, order or decree
of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or a Subsidiary or any of their properties or business; or (iv)
have any effect on any permit, certification, registration, approval, consent,
license or franchise necessary for the Company or a Subsidiary to own or lease
and operate its properties and to conduct its business or the ability of the
Company or such Subsidiary to make use thereof.
(c) No authorization, approval, consent, order, registration, license
or permit of any court or governmental agency or body, other than under the
Securities Act of 1933, as amended (the "Act"), the rules and regulations (the
"Regulations") promulgated by the Securities and Exchange Commission (the
"Commission") and applicable state securities or Blue Sky laws, is required for
the valid authorization, issuance, sale and delivery of the Shares to the
Underwriters, and the consummation by the Company of the transactions
contemplated by this Agreement and the Representative's Warrant Agreement. All
authorizations, approvals, consents, orders, registrations, licenses or permits
of any court or governmental agency or body necessary for the consummation of
the Reorganization have been obtained or effected and are in full force and
effect.
(d) The Company has prepared in conformity with the requirements of
the Act and the Regulations and filed with the Commission a registration
statement (File No. 333-15639) on Form F-1 and has filed one or more amendments
thereto, covering the registration of the Shares under the Act. Such
registration statement and any post-effective amendment thereto, each in the
form heretofore delivered to the Underwriters, have been declared effective by
the Commission in such form; no other document with respect to such registration
statement has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of such registration statement has been issued and
no proceeding for that purpose has been initiated
- 5 -
or threatened by the Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Securities Act of 1933, as
amended (the "Act"), being hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statement, including all exhibits thereto and
including the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with Section
6(c) hereof and deemed by virtue of Rule 430A under the Act to be part of the
registration statement at the time it was declared effective, each as amended at
the time such part of the registration statement at the time it was declared
effective, each as amended at the time such part of the registration statement
became effective, being hereinafter called the "Registration Statement"; the
effective date of the Registration Statement being hereinafter called the
"Effective Date"; and such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, being hereinafter called the "Prospectus").
(e) Neither the Commission nor any state regulatory authority has
issued any order preventing or suspending the use of any Preliminary Prospectus
or has instituted or, to the best of the Company's knowledge, threatened to
institute any proceedings with respect to such an order.
(f) The Registration Statement when it became effective, the
Prospectus as of its date, and both documents as of the Closing Date or the
Option Closing Date referred to below, contained or will contain all statements
which are required to be stated therein in accordance with the Act and the
Regulations, and neither the Registration Statement nor the Prospectus on such
dates, contained or will contain any untrue statement of a material fact or, in
the case of the Prospectus, omitted or will omit to state any 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 in the
case of the Registration Statement, omitted or will omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty does
not apply to statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company in connection with the
Registration Statement or Prospectus or any amendment or supplement thereto by
any Underwriter expressly for use therein.
(g) The Company had at the date or dates indicated in the Prospectus
a duly authorized and outstanding capitalization as set forth in the Prospectus.
Based on the assumptions stated in the Prospectus, the Company will have on the
Closing Date, the adjusted capitalization set forth therein.
(h) The descriptions in the Prospectus of contracts and other
documents are accurate and present fairly the information required to be
disclosed, and there are not contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the Registration
Statement under the Act or the Regulations which have not been so described or
filed as required.
- 6 -
(i) Xxxxxx Xxxxxxxx, Xxxxxx & Co., Mehta & Tengra, Xx. Xxxxxxx
Xx-Xxxx & Co., and Xxxxxx Xxxxxx & Company LLP, whose reports respecting certain
of the Company's financial statements has been filed as part of the Registration
Statement and included in the Prospectus, are each independent public
accountants with respect to the Company within the meaning of the Act and
Regulations. The financial statements and schedules and the notes thereto filed
as part of the Registration Statement and included in the Prospectus comply with
the requirements applicable to a registration statement on Form F-1, and are
complete, correct and present fairly the consolidated financial position of the
Company and the Subsidiaries as of the dates thereof, and the consolidated
results of operations and changes in financial position of the Company and the
Subsidiaries for the periods indicated therein, all in conformity with
international accounting standards, which for the purposes of such financial
statements are substantially consistent United States generally accepted
accounting principles, applied on a consistent basis throughout the periods
involved except as otherwise stated in such financial statements. The selected
financial data set forth in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the audited
and unaudited financial statements included in the Prospectus.
(j) The Company and each Subsidiary has filed with the appropriate
governmental authorities all tax returns which are required to be filed or has
duly obtained extensions of time for the filing thereof and has paid all taxes
shown on such returns and all assessments received by it to the extent that the
same have become due; and the provisions for income taxes payable, it any, shown
on the financial statements filed as part of the Registration Statement and
included in the Prospectus are sufficient for all accrued and unpaid taxes,
whether or not disputed, and for all periods to and including the dates of such
financial statements. Neither the Company nor any Subsidiary has executed or
filed with any taxing authority, any agreement extending the period for
assessment or collection of any income taxes and is not a party to any pending
action or proceeding by any foreign or domestic governmental agency for
assessment or collection of taxes; and no claims for assessment or collection of
taxes have been asserted against the Company or any Subsidiary.
(k) The outstanding Common Shares, including without limitation, the
Optional Shares, have been duly authorized, validly issued and are fully paid
and nonassessable. None of the outstanding Common Shares or options or warrants
to purchase Common Shares has been issued (including without limitation, in
connection with the Reorganization) in violation of the preemptive rights of any
shareholder of the Company. None of the holders of the outstanding Common
Shares is subject to personal liability solely by reason of being such a holder.
All offers and sales by or on behalf of the Company of Common Shares and options
and warrants to purchase Common Shares (including without limitation, in
connection with the Reorganization) were at all relevant times either registered
under the Act and the applicable state securities or Blue Sky laws or exempt
from such registration requirements. The Common Shares conform to the
description thereof contained in the Prospectus. Except as set forth in the
Prospectus, on the Effective Date and the Closing Date, there will be no
outstanding options or warrants for the purchase of, or other outstanding rights
to purchase, or securities convertible into, or exercisable
- 7 -
or exchangeable for, Common Shares. Except as set forth in the Prospectus, no
holder of any of the Company's securities has any rights, "demand," "piggyback"
or otherwise, to have such securities registered under the Act.
(l) No securities of the Company have been sold by the Company, or by
or on behalf of, or for the benefit of, any person or persons controlling,
controlled by, or under common control with the Company, within the three years
prior to the date hereof, except as disclosed in the Registration Statement.
(m) The issuance and sale of the Offered Shares have been duly
authorized and, when issued and duly delivered against payment therefor as
contemplated by this Agreement, the Offered Shares will be validly issued, fully
paid and nonassessable, and the holders thereof will not be subject to personal
liability solely by reason of being such holders. The Offered Shares are not
subject to preemptive rights of any shareholder of the Company. The Optional
Shares have been duly authorized, validly issued and are fully paid and
nonassessable, and the holders thereof are not and will not be subject to
personal liability solely by reason of being said holders.
(n) The issuance and sale of the Representative's Warrants have been
duly authorized and, when such Representative's Warrants have been issued and
duly delivered against payment therefor as contemplated by the Representative's
Warrant agreement, such Representative's Warrants will be validly issued, fully
paid and non-assessable. The issuance and sale of the Common Shares issuable
upon exercise of the Representative's Warrants have been duly authorized and,
when such Common Shares have been duly delivered against payment therefor, in
accordance with the terms of the Representative's Warrant Agreement, such Common
Shares will be validly issued, fully paid and nonassessable. Holders of
Representative's Warrants, or Common Shares issuable upon the exercise of the
Representative's Warrants, will not be subject to personal liability solely by
reason of being such holders. Neither the Representative's Warrants nor the
Common Shares issuable upon exercise thereof will be subject to preemptive
rights of any shareholder of the Company. The Common Shares issuable upon
exercise thereof will be subject to preemptive rights of any shareholder of the
Company. The Common Shares issuable upon exercise of the Representative's
Warrants have been duly reserved for issuance upon exercise of the
Representative's Warrants in accordance with the provisions of the
Representative's Warrant Agreement. The Representative's Warrants conform to
the descriptions thereof contained in the Prospectus.
(o) Neither the Company nor any Subsidiary is in violation of, or in
default under, (i) any term or provision of its constituent documents; (ii) any
term, provision or covenant of any indenture, mortgage, contract, joint venture
agreement, sponsorship agreement, agency agreement, commitment or other
agreement or instrument to which it is a party or by which it or any of its
property or business is or may be bound or affected; or (iii) any existing
applicable law, rule, regulation, judgement, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over it or any of its
properties or business. Each of the Company
- 8 -
and the Subsidiaries owns, possesses or has obtained all governmental and other
(including those obtainable from third parties) licenses, permits,
certifications, registrations, approvals and consents and other authorizations
necessary to own or lease, as the case may be, and to operate its properties,
whether tangible or intangible, and to conduct its business or operations as
presently conducted and all such licenses, permits, certifications,
registrations, approvals, consents and other authorizations are outstanding and
in good standing, and there are no proceedings pending nor, to the best of the
Company's knowledge, threatened, seeking to cancel, terminate or limit such
licenses, permits, certifications, registrations, approvals or consents or other
authorizations nor, to the best of the Company's knowledge, is there any basis
for such proceeding.
(p) Except as set forth in the Prospectus, there are no claims,
actions, suits, proceedings, arbitrations, investigations or inquiries before
any governmental agency, court or tribunal, domestic or foreign, or before any
private arbitration tribunal, pending, or to the best of the Company's
knowledge, threatened against the Company or a Subsidiary or involving its
properties or business which, if determined adversely to the Company or a
Subsidiary, could, individually or in the aggregate, result in a Material
Adverse Effect or which question the validity of the capital stock of the
Company, this Agreement or the Representative's Warrant Agreement or of any
action taken or to be taken by the Company pursuant to, or in connection with,
this Agreement or the Representative's Warrant Agreement; nor, to the best of
the Company's knowledge, is there any basis for any such claim, action, suit,
proceeding, arbitration, investigation or inquiry. There are no outstanding
orders, judgments or decrees of any court, governmental agency or other tribunal
naming the Company or a Subsidiary and enjoining the Company or such Subsidiary
from taking, or requiring the Company or such Subsidiary to take, any action, or
to which the Company or the Company's or such Subsidiary's properties or
business in bound or subject.
(q) Neither the Company nor any of its affiliates has incurred any
liability for any finder's fees or similar payments in connection with the
Reorganization or the transactions herein contemplated.
(r) Each of the Company and the Subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trade names, service
marks, copyrights, rights, trade secrets, confidential information, patents,
patent applications, processes and formulations used or proposed to be used in
the conduct of its business as described in the Prospectus (collectively the
"Intangibles"); to the best of the Company's knowledge, neither the Company nor
a Subsidiary has infringed or is infringing the rights of others with respect to
Intangibles; the Company has no notice of any conflict with the asserted rights
of others with respect to the Intangibles which could, singly or in the
aggregate, result in a Material Adverse Effect, and the Company knows of no
basis therefor; and, to the best of the Company's knowledge, no third party has
infringed upon the Intangibles.
- 9 -
(s) Since the respective dates as of which information is given in
the Prospectus, the Company and the Subsidiaries have not incurred any material
liability or obligation, direct or contingent, or entered into any material
transaction, whether or not in the ordinary course of business, and have not
sustained any material loss or interference with their business from fire,
storm, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree; and
since the respective dates as of which information is given in the Prospectus,
there have not been, and prior to the Closing Date referred to below there will
not be, or any material adverse change in or affecting the general affairs,
management, financial condition, shareholders' equity, results of operations or
prospects of the Company and the Subsidiaries, other than as set forth or
contemplated in the Prospectus.
(t) The Company and each Subsidiary has good and marketable title in
fee simple to all real property and good title to all personal property
(tangible and intangible) owned by it, free and clear of all security interests,
charges, mortgages, liens, encumbrances and defects, except such as are
described in the Prospectus or such as do not materially affect the value or
transferability of such property and do not interfere with the use of such
property made, or proposed to be made, by the Company or such Subsidiary. The
leases, licenses or other contracts or instruments under which the Company or a
Subsidiary leases, holds or is entitled to use any property, real or personal,
are valid, subsisting and enforceable, with only such exceptions as are not
material and do not interfere with the use of such property made, or proposed to
be made, by the Company or such Subsidiary, and all rentals, royalties or other
payments accruing thereunder which became due prior to the date of this
Agreement have been duly paid, and neither the Company or any Subsidiary, nor,
to the best of the Company's knowledge, any other party is in default thereunder
and, to the best of the Company's knowledge, no event has occurred which, with
the passage of time or the giving of notice, or both, would constitute a default
thereunder. The Company is not aware of any violation of any applicable law,
ordinance, regulation, order or requirement relating to its or the Subsidiaries'
owned or leased properties. The Company has adequately insured its and the
Subsidiaries' properties against loss or damage by fire or other casualty and
maintains, in adequate amounts, such other insurance as is usually maintained by
companies engaged in the same or similar businesses.
(u) Each contract or other instrument (however characterized or
described) to which the Company or a Subsidiary is a party or by which its
property or business is or may be bound or affected and to which reference is
made in the Prospectus, including, without limitation, the sponsorship
agreements, joint venture agreements and agency agreements referred to therein,
has been duly and validly executed, is in full force and effect in all material
respects and is enforceable against the parties thereto in accordance with its
terms, and neither the Company or a Subsidiary nor, to the best of the Company's
knowledge, any other party is in default thereunder and, to the best of the
Company's knowledge, no event has occurred which, with the lapse of time or the
giving of notice, or both, would constitute a default thereunder. None of the
material provisions of such contracts or instruments violates any existing
applicable
- 10 -
law, rule, regulation, judgment, order or decree of any governmental agency or
court having jurisdiction over the Company or a Subsidiary or any of their
assets or business.
(v) The employment, consulting, confidentiality and non-competition
agreements between the Company and its officers, employees and consultants,
described in the Prospectus, are binding and enforceable obligations upon the
respective parties thereto in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws or arrangements affecting creditors' rights
generally and subject to principles of equity.
(w) The Company has no employee benefit plans (including, without
limitation, profit sharing and welfare benefit plans) or deferred compensation
arrangements that are subject to the provisions of the Employee Retirement
Income Security Act of 1974.
(x) To the best of the Company's knowledge, no labor problem exists
with any of the Company's employees or is imminent which could adversely affect
the Company.
(y) Neither the Company nor any Subsidiary has, directly or
indirectly, at any time (i) made any contributions to any candidate for
political office, or failed to disclose fully any such contribution, in
violation of law or (ii) made any payment to any state, federal or foreign
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments or contributions required or allowed by
applicable law. The Company's internal accounting controls and procedures are
sufficient to cause the Company and the Subsidiary to comply in all material
respects with the Foreign Corrupt Practices Act of 1977, as amended.
(z) The Shares have been approved for listing on the Nasdaq National
Market System.
(aa) No transaction has occurred between or among the Company or any
Subsidiary, on the one hand, and any of the officers or directors thereof or an
affiliate or affiliates of any such officer or director that is required to be
described in Prospectus and that is not so described therein.
(bb) To the knowledge of the Company, no officer or director of the
Company or a Subsidiary has any affiliation or association with the National
Association of Securities Dealers, Inc. ("NASD") or any member thereof.
(cc) Neither the Company any Subsidiary is an "investment company" nor
a Company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, nor will it become such after giving
effect to the transactions contemplated herein.
- 11 -
(dd) The Company has complied and will comply with all provisions of
Florida Statutes, Section 517-075 (Chapter 92-198, Laws of Florida). Neither
the Company or any Subsidiary, nor any affiliate thereof, does business with the
government of Cuba or with any person located in Cuba.
(ee) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or which has constituted, the stabilization or
manipulation of the price of the Common Shares to facilitate the sale or resale
of the Shares.
Any certificate signed by an officer of the Company or by the Selling
Shareholders and delivered to the Underwriters Counsel shall be deemed to be a
representation and warranty by the Company or the Selling Shareholders, as the
case may be, to the Underwriters as to the matters covered thereby.
Whenever any representation and warranty is made "to the knowledge of
the Company" or such representation and warranty states that "the Company is not
aware" or "the Company has received no notice" or words of similar meaning, such
representation and warranty shall be deemed to be made to the actual knowledge
of the officers of the Company and each Subsidiary, and as to such knowledge
that such individuals would have had upon the exercise of reasonable inquiry.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each
of the Selling Shareholders represents and warrants (as to himself or herself
only) to the Underwriters that:
(a) The Optional Shares to be sold by such Selling Shareholder are,
and on the Option Closing Date will be, duly and validly authorized and validly
issued, fully paid and nonassessable; such Selling Shareholder will have on the
Option Closing Date valid, marketable title to such Optional Shares, free and
clear of all liens, encumbrances and claims whatsoever, with full right and
authority to sell and deliver such Optional Shares; and upon the delivery of and
payment for such Optional Shares as herein contemplated the Underwriters will
receive valid, marketable title thereto, free and clear of all liens,
encumbrances and claims, except any that may be created by the Underwriters' own
action.
(b) No information furnished to the Company in writing by such
Selling Shareholder for use in, or in connection with the preparation of, the
Registration Statement or the Prospectus contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. Each Selling
Shareholder hereby confirms he or she has furnished to the Company for such use
the statements with respect to such Selling Shareholder contained in the
"Principal and Selling Shareholders" section of the Prospectus.
- 12 -
(c) Such Selling Shareholder has duly authorized _______________ to
act as attorney-in-fact (the "Attorney-in-Fact") for such Selling Shareholder
pursuant to a power of attorney the ("Power of Attorney") executed by such
Selling Shareholder pursuant to which the Attorney-in-Fact is authorized on
behalf of such Selling Shareholder to execute any documents necessary or
desirable in connection with the sale of the Optional Shares, to make delivery
of the certificates for the Optional Shares, to receive the proceeds of the sale
of the Shares and to give a receipt therefor and to distribute the proceeds from
the sale of such Selling Shareholder's Optional Shares to such Selling
Shareholder. Such Selling Shareholder has duly executed a custody agreement
(the "Custody Agreement") with the Attorney-in Fact, and pursuant thereto has
caused a certificate or certificates for the number of Optional Shares to be
sold by such Selling Shareholder hereunder to be delivered to the
Attorney-in-Fact with instructions and irrevocable authority to purchase all
requisite stock transfer tax stamps and to hold such certificate or certificates
in custody for delivery, or for exchange for other certificates in proper form
for delivery, pursuant to the provisions hereof on the Option Closing Date.
(d) Each of the Power of Attorney, the Custody Agreement and this
Agreement constitutes the valid and binding obligation of such Selling
Stockholder, enforceable against such Selling Shareholder in accordance with its
terms subject, as to enforcement of remedies, to applicable bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and the discretion of courts in
granting equitable remedies and except that enforceability of the
indemnification provisions set forth in Section 8 hereof and the contribution
provisions set forth in Section 9 hereof may be limited by the United States
federal securities laws or the public policy underlying such laws.
(e) All authorizations and consents necessary for the execution and
delivery by such Selling Shareholder of this Agreement and the sale and delivery
hereunder of such Selling Shareholder's Optional Shares have been obtained and
are in full force and effect on the date hereof and will be in full force and
effect at the Closing Date.
(f) The sale of such Selling Shareholder's Optional Shares by such
Selling Shareholder pursuant to this Agreement is not prompted by any material
information concerning the Company known by such Selling Shareholder which is
not set forth in the Prospectus.
6. CERTAIN COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
Each of the Company and the Selling Shareholders covenants with the Underwriters
as follows:
(a) The Company will not at any time, whether before the Effective
Date or thereafter during such period as the Prospectus is required by law to be
delivered in connection with the sales of the Shares by the Underwriters or a
dealer, file or publish any amendment or supplement to the Registration
Statement or Prospectus of which the Underwriters have not been previously
advised and furnished a copy, or to which the Underwriters shall have objected
in writing.
- 13 -
(b) The Company will advise the Underwriters immediately, and, if
requested by the Underwriters, confirm such advice in writing, (i) when any
post-effective amendment to the Registration Statement or any supplemented
Prospectus is filed with the Commission; (ii) of the receipt of any
communication from the Commission; (iii) of any request of the Commission for
amendment or supplementation of the Registration Statement or Prospectus or for
additional information; and (iv) 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 of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation of any proceedings for any of such purposes.
The Company will use its best efforts to prevent the issuance of any such stop
order or of any order preventing or suspending such use and to obtain as soon as
possible the lifting thereof, if any such order is issued.
(c) The Company will prepare the Prospectus in a form approved by the
Underwriters and, if required, filed such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than two (2) business days after the
Effective Date. The Company will deliver to each Underwriter, without charge,
such number of copies of the Prospectus (as supplemented, if the Company makes
any supplements to the Prospectus) as each Underwriter may reasonably request.
The Company has consented to the use of the Preliminary Prospectuses and
consents to the use of the Prospectus for all purposes permitted by the Act and
the Regulations. The Company has furnished or will furnish to each Underwriter
a signed copy of the Registration Statement as originally filed and of all
amendments thereto, whether filed before or after the Registration Statement
becomes effective, a copy of all exhibits filed therewith and a signed copy of
all consents, opinions and certificates of experts.
(d) The Company will comply with the Act, the Regulations, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder so as to permit the continuance of sales of and dealings
in the Offered Shares and in any Optional Shares which may be issued and sold.
If, at any time when a prospectus relating to the Shares is required to be
delivered under the Act, any event occurs as a result of which the Registration
Statement and Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend or supplement the
Registration Statement and Prospectus to comply with the Act or the Regulations,
the Company will promptly file with the Commission, subject to Section 6(a)
hereof, an amendment or supplement which will correct such statement or omission
or which will effect such compliance.
(e) The Company will use best efforts to qualify the Shares for offering
and sale under the securities or Blue Sky laws relating to the offering or for
sale in such jurisdictions as the Underwriters may reasonably designate,
provided that no such qualification will be required in any jurisdiction where,
solely as a result thereof, the Company would be subject to
- 14 -
general service of process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction.
(f) The Company will make generally available to its security holders, in
the manner specified in Rule 158(b) under the Act, and deliver to the
Underwriters as soon as practicable and in any event not later than 45 days
after the end of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs, an earning statement
meeting the requirements of Rule 158(a) under the Act covering a period of at
least 12 consecutive months beginning after the Effective Date of the
Registration Statement.
(g) For a period of five years from the Effective Date, the Company will
deliver to the Underwriters, on a timely basis (i) a copy of each report or
document, including exhibits thereto, filed or furnished to the Commission, any
securities exchange or the NASD on the date each such report or document is so
filed or furnished; (ii) as soon as practicable, copies of any reports or
communications (financial or other) of the Company mailed to its security
holders; (iii) as soon as practicable, a copy of any Schedule 13D, 13G, 14D-1 or
13E-3 received or prepared by the Company from time to time; (iv) monthly
statements setting forth such information regarding the Company's results of
operations and financial position (including balance sheet, profit and loss
statements and data regarding outstanding purchase orders) as is regularly
prepared by management of the Company; and (v) such additional information
concerning the business and financial condition of the Company as the
Underwriters may from time to time reasonably request and which can be prepared
or obtained by the Company without unreasonable effort or expense. The Company
will furnish to its shareholders annual reports containing audited financial to
its shareholders annual reports containing audited financial statements and such
other periodic reports as it may determine to be appropriate or as may be
required by law.
(h) Neither the Company nor any Selling Shareholder nor any person that
controls, is controlled by or is under common control with the Company or the
Selling Shareholders will take any action designed to or which might be
reasonably expected to cause or result in the stabilization or manipulation of
the price of the Common Shares.
(i) The Company will pay or cause to be paid the following: all costs and
expenses incident to the performance of the obligations of the Company under
this Agreement, including, but not limited to, the fees and expenses of
accountants and counsel for the Company, the preparation, printing, mailing and
filing of the Registration Statement (including financial statements and
exhibits), Preliminary Prospectuses and the Prospectus, and any amendments or
supplements thereto, the printing and mailing of this Agreement, and other
underwriting documents, the preparation of the certificates for the Shares and
the Representative's Warrants; the issuance and delivery of the Shares to the
Underwriters; all taxes, if any, on the issuance of the Shares; the fees,
expenses and other costs of qualifying the Shares for sale under the "Blue Sky"
or securities laws of those states in which the Shares are to be offered or
sold, the cost of printing and mailing the "Blue Sky Survey", and the fees and
disbursements of Underwriters'
- 15 -
counsel incurred in connection with such "Blue Sky" qualifications; the filing
fees incident to securing any required review by the NASD; the cost of
furnishing to the Underwriters copies of the Registration Statement, Preliminary
Prospectuses and the Prospectus as herein provided; the costs of placing
"tombstone advertisements" (not to exceed $40,000), and all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section 6(i). In addition, at the
Closing Date and the Option Closing Date, if any, the Company will pay to the
Representative, for its own account, an amount equal to one percent (1%) of the
gross proceeds of the offering, as payment for the Representative's
nonaccountable expense allowance relating to the transactions contemplated
hereby. In the event the sale of the Offered Shares contemplated hereby is not
consummated for any reason, the Company will pay all reasonable, accountable,
out-of-pocket expenses incurred by the Representative in connection herewith
(including fees or disbursements of counsel); provided that such expenses
(exclusive of the expenses of Underwriters' counsel incurred in connection with
"Blue Sky" qualifications) shall not exceed $75,000.
(j) On the Closing Date, and on any Option Closing Date, the Company will
pay to the Representative, for its own account, in amount equal to three percent
(3%) of the gross proceeds of the offering, as payment for the Representative's
corporate finance advisory services.
(k) The Company intends to apply the net proceeds from the sale of the
Shares for the purposes set forth in the Prospectus. The Company will file with
the Commission all required reports on Form SR in accordance with the provisions
of Rule 463 promulgated under the Act and will provide a copy of each such
report to the Underwriters and Underwriters' counsel.
(l) During the period of twelve (12) months following the date hereof,
none of the Company's officers, directors or holders of any of the outstanding
Common Shares or options or warrants to purchase Common Shares or securities
convertible into, or exercisable or exchangeable for, Common Shares, will offer
for sale or sell or otherwise dispose of, directly or indirectly, any securities
of the Company (other than the Optional Shares and securities disposed of
pursuant to private transfers in connection with which the transferees agree to
be bound by this same provision), in any manner whatsoever, whether pursuant to
Rule 144 of the Regulations or otherwise, without the prior written consent of
the Underwriters. The Company will deliver to the Underwriters the undertakings
as of the date hereof in form satisfactory to the Underwriter, of its officers,
directors and security holders to this effect.
(m) The Company will not file any registration statement relating to the
offer or sale of any of the Company's securities, including any registration
statement on Form S-8, during the twelve (12) months following the date hereof
without Underwriters' prior written consent.
- 16 -
(n) The Company maintains and will continue to maintain a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary in order to
permit preparation of financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(o) The Company will use its best efforts to maintain the listing of the
Shares on the Nasdaq National Market system for so long as the Shares are
qualified for such listing.
(p) The Company will, concurrently with the Effective Date, register the
class of equity securities of which the Shares are a part under Section 12(g) of
the Exchange Act and the Company will maintain the registration for a minimum of
five years after the Effective Date.
(q) The Company shall retain Continental Stock Transfer and Trust Company
as its transfer agent for the Common Shares, or another transfer agent
reasonably acceptable to the Underwriters, for a period of five years following
the Effective Date. In addition, for a period of one year following the
Effective Date, the Company, at its own expense, shall cause such transfer agent
to provide the Underwriters, if so requested in writing, with copies of the
Company's quarterly transfer sheets and when requested by the Underwriters, a
current list of the Company's security holders, including a list of the
beneficial owners of securities held by a depository trust company and other
nominees.
(r) The Company shall, as of the date hereof, have applied for listing in
Standard & Poor's Corporation Records Service (including annual report
information) or Xxxxx'x Industrial Manual (Xxxxx'x OTC Industrial Manual not
being sufficient for these purposes) and shall use its best efforts to have the
Company listed in such manual at or prior to the Effective Date and shall
maintain such listing for a period of five years following the Effective Date.
(s) For a period of five years from the Effective Date, the Company shall
provide the Underwriters, on a not less than annual basis, with internal
forecasts setting forth projected results of operations for each quarterly and
annual period in the two fiscal years following the respective dates of such
forecasts. Such forecasts shall be provided to the Underwriters more frequently
than annually if prepared more frequently by management, and revised forecasts
shall be prepared and provided to the Underwriters when required to reflect more
current information, revised assumptions or actual results that differ
materially from those set forth in the forecasts.
(t) For a period of five years following the Effective Date, the Company
shall continue to retain Xxxxxx Xxxxxxxx (or such other nationally recognized
accounting firm
- 17 -
acceptable to the Underwriters; it being agreed that any member of the "Big Six"
accounting firms is acceptable) as the Company's independent public accountants.
(u) For a period of five years following the Effective Date, the Company,
at its expense, shall cause its independent certified public accountants, as
described in Section 6(t) above, to review (but not audit) the Company's
financial statements for each of the first three fiscal quarters prior to the
announcement of quarterly financial information.
(v) For a period of two years following the Effective Date, the Company
shall promptly submit to the Underwriters copies of all auditors' audit response
letters and accountants' management reports submitted to or by the Company's
accountants to or on behalf of the Company.
(w) For a period of two years following the Effective Date, the Company
will not offer or sell any of its securities pursuant to Regulation S of the Act
without the prior written consent of the Underwriters.
(x) For a period of twenty-five days following the Effective Date, neither
the Company nor any Selling Shareholder will issue press releases or engage in
any other publicity without the Underwriters' prior written consent, other than
normal and customary releases issued in the ordinary course of the Company's
business or those releases required by law.
(y) For a period of two years following the Effective Date, the Company
shall engage and retain a public relations firm reasonably acceptable to the
Underwriters as the Company's public relations firm.
(z) For a period of three years following the Effective Date, the Company
shall nominate and use best efforts to cause to be elected to, and remain a
member of, the Company's Board of Directors a designee of the Representative;
provided such individual is acceptable to the Company.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATION TO PURCHASE SHARES FROM THE
COMPANY AND THE SELLING SHAREHOLDERS. The obligation of the Underwriters to
purchase and pay for the Offered Shares on the Closing Date and any Optional
Shares on the Option Closing Date is subject (as of the date hereof and the
Closing Date or Option Closing Date) to the accuracy of and compliance in all
material respects with the representations and warranties of the Company and the
Selling Shareholders herein, to the accuracy of the statements of the Company,
its officers or the Selling Shareholders made pursuant hereto, to the
performance in all material respects by the Company and the Selling Shareholders
of their respective obligations hereunder, and to the following additional
conditions:
(a) The Registration Statement shall have become effective under the
Act; the Prospectus shall have been filed in accordance with Rule 424(b) of the
Regulation; no stop order
- 18 -
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated, shall be
pending or shall be contemplated by the Commission; and any request on the part
of the Commission for additional information shall have been complied with to
the satisfaction of the Underwriters.
(b) The Underwriters shall have received an opinion of Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP, counsel for the Company ("Company Counsel"), dated
as of the Closing Date or the Option Closing Date, as the case may be (which
opinion may rely on opinions of Bermuda, Hong Kong and other local counsel
satisfactory to the Underwriters provided copies of such other opinions are
provided to the Underwriters, and provided Company Counsel states it has no
reason to believe it is not justified in relying thereon), reasonably
satisfactory to the Underwriters Counsel, to the effect that:
(i) The Company and each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority, corporate and
other, and all licenses, permits, certifications, registrations, approvals,
consents and franchises to own or lease and operate its properties and to
conduct its business as described in the Registration Statement. The Company
and each Subsidiary is duly qualified to do business as a foreign corporation
and is in good standing in all jurisdictions wherein such qualification is
necessary and failure so to qualify could have a Material Adverse Effect. All
the issued and outstanding shares of capital stock of the Subsidiaries have been
validly authorized and issued and are fully paid and nonassessable, and to
extent indicated on a schedule annexed to such opinion, are owned by the
Company, directly or through Subsidiaries, free and clear of any lien, security
interest or pledge. The Reorganization has been consummated as described in the
Prospectus.
(ii) The Company has full power and authority, corporate and
other, to execute, deliver and perform this Agreement and the Representative's
Warrant Agreement and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and the
Representative's Warrant Agreement by the Company, the consummation by the
Company of the transactions herein and therein contemplated, the compliance by
the Company with the terms of this Agreement and the Representative's Warrant
Agreement and the consummation of the Reorganization have been duly authorized
by all necessary corporate action, this Agreement and the Representative's
Warrant Agreement have been duly executed and delivered by the Company and this
Agreement has been duly executed and delivered by each Selling Shareholder.
This Agreement and the Representative's Warrant Agreement are valid and binding
obligations of the Company, and this Agreement is a valid and binding obligation
of each Selling Shareholder, in each case enforceable in accordance with their
respective terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
rights of creditors generally and the discretion of courts in granting equitable
remedies and except that enforceability of the indemnification provisions set
forth in Section 8 hereof and the contribution provisions set forth
- 19 -
in Section 9 hereof may be limited by the federal securities laws or the public
policy underlying such laws.
(iii) The execution, delivery and performance of this Agreement
and the Representative's Warrant Agreement by the Company, the consummation by
the Company of the transactions herein and therein contemplated, the compliance
by the Company with the terms of this Agreement and the Representative's Warrant
Agreement and the consummation of the Reorganization do not, and will not, with
or without the giving of notice or the lapse of time, or both, (A) result in a
violation of the Company's Memorandum of Association or its Bye-laws, (B) result
in a breach of or conflict with any terms or provisions of, or constitute a
default under, or result in the modification or termination of, or result in the
creation or imposition of any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Company or a Subsidiary pursuant to
any indenture, mortgage, note, contract, commitment or other material agreement
or instrument to which the Company or a Subsidiary is a party or by which the
Company or a Subsidiary or any of the Company's or a Subsidiary's properties or
assets are or may be bound or affected; (C) violate any existing applicable law,
rule, regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or a Subsidiary or any
of their properties or business; or (D) have any effect on any permit,
certification, registration, approval, consent, license or franchise necessary
for the Company or a Subsidiary to own or lease and operate its properties and
to conduct its business or the ability of the Company to make use thereof.
(iv) No authorization, approval, consent, order registration,
license or permit of any court or governmental agency or body (other than under
the Act, the Regulations and applicable state securities or Blue Sky laws) is
required for the valid authorization, issuance, sale and delivery of the Shares
or the Representative's Warrants to the Underwriters, and the consummation by
the Company of the transactions contemplated hereby or by Representative's
Warrants. All authorizations, approvals, consents, orders, registrations,
licenses or permits of any court or governmental agency or body necessary for
the consummation of the Reorganization have been obtained or effected and are in
full force and effect.
(v) The Registration Statement has become effective under the
Act; to the best of Company Counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no proceedings
for that purpose have been instituted or are pending, threatened or
contemplated.
(vi) The Registration Statement and the Prospectus, as of the
Effective Date, and each amendment or supplement thereto as of its effective or
issue date (except for the financial statements and other financial data
included therein or omitted therefrom, as to which Company Counsel need not
express an opinion) comply as to form in all material respects with the
requirements of the Act and Regulations.
- 20 -
(vii) The descriptions in the Prospectus of statutes,
regulations, contracts and other documents are accurate in all material respects
and present fairly the information required to be disclosed, and there are no
material statutes or regulations or, to the best of Company Counsel's knowledge,
material contracts or documents, of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement, which are not so described or filed as required. None
of the material provisions of the contracts or instruments described above
violates any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court having jurisdiction over the Company
or a Subsidiary or any of their assets or businesses.
(viii) The outstanding Common Shares, including, without
limitation, the Optional Shares, have been duly authorized, validly issued and
are fully paid and nonassessable. None of the outstanding Common Shares or
options or warrants to purchase Common Shares has been issued (including without
limitation, in connection with the Reorganization) in violation of the
preemptive rights of any shareholder of the Company. None of the holders of the
outstanding Common Shares is subject to personal liability solely by reason of
being such a holder. All offers and sales of the outstanding Common Shares
(including without limitation, in connection with the Reorganization) were at
all relevant times either registered under the Act and the applicable state
securities or Blue Sky laws or exempt from such registration requirements. The
Common Shares conform to the description thereof contained in the Prospectus.
(ix) The issuance and sale of the Offered Shares has been duly
authorized and, when the Offered Shares have been issued and duly delivered
against payment therefor as contemplated by this Agreement, the Offered Shares
will be validly issued, fully paid and nonassessable, and the holders thereof
will not be subject to personal liability solely by reason of being such
holders. The Offered Shares are not subject to preemptive rights of any
shareholder of the Company. The Optional Shares are duly and validly authorized
and issued, fully paid and nonassessable; each Selling Shareholder has valid,
marketable title to the Optional Shares purported to be owned thereby, free and
clear of all liens, encumbrances and claims whatsoever, with full right and
authority to sell and deliver such Optional Shares. The certificates
representing the Shares are in proper legal form. Upon delivery of the Shares
to the Underwriters against payment therefor as provided in this Agreement, the
Underwriters (assuming each is a bona fide purchaser within the meaning of the
Uniform Commercial Code) will acquire good title to the Shares, free and clear
of all liens, encumbrances, equities, security interests and claims.
(x) The issuance and sale of the Representative's Warrants
have been duly authorized and, when such Representative's Warrants have been
issued and duly delivered against payment therefor as contemplated by the
Representative's Warrant Agreement, such Representative's Warrants will be
validly issued, fully paid and non-assessable. The issuance and sale of the
Common Shares issuable upon exercise of the Representative's Warrants have been
duly authorized and, when such Common Shares have been duly delivered against
payment
- 21 -
therefor, in accordance with the terms of the Representative's Warrants, such
Common Shares will be validly issued, fully paid and nonassessable. Holders of
the Representative's Warrants, or the Common Shares issuable upon exercise of
the Representative's Warrants, will not be subject to personal liability solely
by reason of being such holders. Neither the Representative's Warrants nor the
Common Shares issuable upon exercise thereof will be subject to preemptive
rights of any shareholder of the Company. The Common Shares issuable upon
exercise of the Representative's Warrants have been duly reserved for issuance
upon exercise of the Representative's Warrants in accordance with the provisions
of the Representative's Warrant Agreement.
(xi) To the best of Company Counsel's knowledge, there are no
claims, actions, suits, proceedings, arbitrations, investigations or inquiries
before any governmental agency, court or tribunal, foreign or domestic, or
before any private arbitration tribunal, pending or threatened against the
Company or any Subsidiary, or involving the Company's or any Subsidiary's
properties or business, other than as described in the Prospectus, such
description being accurate, and other than litigation incident to the kind of
business conducted by the Company which, individually and in the aggregate, is
not material.
In such opinion Company Counsel shall state that it has
participated in reviews and discussions with representatives of the Company in
connection with the preparation of the Registration Statement and the
Prospectus, and in the course of such reviews and discussions and such other
investigation as Company Counsel deemed necessary, no facts came to its
attention which lead it to believe that (A) the Registration Statement (except
as to the financial statements and other financial data contained therein, as to
which Company Counsel need not express an opinion), on the Effective Date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that (B) the Prospectus (except as to the financial
statements and other financial data contained therein, as to which Company
Counsel need not express an opinion) contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering its opinion, Company Counsel may rely upon the
certificates of government officials and officers of the Company as to matters
of fact, provided that Company Counsel shall state that they have no reason to
believe, and do not believe, that they are not justified in relying upon such
certificates of government officials and officers of the Company as to matters
of fact.
The opinion letter delivered pursuant to this Section 7(b) shall
state that any opinion given therein qualified by the phrase "to the best of our
knowledge" is being given by Company Counsel after due investigation of the
matters therein discussed.
- 22 -
(c) There shall have been delivered to the Underwriters an opinion of
Xxxxxx, Xxxxx & Xxxxxxx LLP, dated as of the Closing Date or the Optional
Closing Date, as the case may be, with respect to the incorporation and legal
existence of the Company, the validity of the Shares, the validity of this
Agreement (subject, as to the enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the rights of
creditors generally and the discretion of courts in granting equitable remedies
and except that enforceability of the indemnification provisions set forth in
Section 8 hereof and the contribution provisions set forth in Section 9 hereof
may be limited by the federal securities laws or the public policy underlying
such laws) and such other related matters as the Underwriters may require. As
to matters of Bermuda law, such opinion may rely on the opinion of the Company's
Bermuda counsel.
(d) Since the respective dates as of which information is given in
the Prospectus, there shall not have been any material adverse change in the
financial condition, results of operations or general affairs of the Company
from that set forth or contemplated in the Prospectus.
(e) There shall have been delivered to the Underwriters a certificate
signed by the Chairman and the Chief Executive Officer of the Company, dated the
Closing Date or the Option Closing Date, as the case may be, stating that the
representations and warranties of the Company set forth in Section 4 hereof were
accurate and complete in all material respects when made and are accurate and
complete in all material respects on such date as if then made; that the Company
has performed all covenants and complied with all conditions required by this
Agreement to be performed or complied with by the Company prior to or as of such
date; and that, as of such date, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been initiated or, to the best of his knowledge, are contemplated or
threatened. In addition, the Underwriters will have received such other and
further certificates of officers of the Company and the Subsidiaries, as the
Underwriters may reasonably request. On the Option Closing Date, there shall
have been delivered to the Underwriters a certificate signed by each Selling
Shareholder dated such Option Closing Date stating that the representations and
warranties of such Selling Shareholder set forth in Section 5 were accurate and
complete in all material respects when made and are accurate and complete in all
material respects on such date as if then made.
(f) At the time that this Agreement is executed and at the Closing
Date and the Option Closing Date, the Underwriters shall have received a signed
letter from Xxxxxx Xxxxxxxx, dated the date such letter is to be received by the
Underwriters and addressed to them, confirming that it is a firm of independent
public accountants within the meaning of the Act and Regulations and stating
that: (i) insofar as reported on by it, in its opinion, the financial statements
of the Company included in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the
applicable Regulations; (ii) on the basis of procedures and inquiries (not
constituting an examination in accordance with generally accepted auditing
standards) consisting of a reading of the unaudited interim financial statements
- 23 -
of the Company, if any, appearing in the Registration Statement and the
Prospectus and the latest available unaudited interim financial statements of
the Company, if more recent than that appearing in the Registration Statement
and the Prospectus, inquiries of officers of the Company responsible for
financial and accounting matters as to the transactions and events subsequent to
the date of the latest audited financial statements of the Company, and a
reading of the minutes of meetings of the shareholders, the Board of Directors
of the Company and any committees of the Board of Directors, as set forth in the
minute books of the Company, nothing has come to its attention which, in its
judgment, would indicate that (A) during the period from the date of the latest
financial statements of the Company appearing in the Registration Statement and
Prospectus to a specified date not more than three business days prior to the
date of such letter, there have been any decreases in net current assets or net
assets as compared with amounts shown in such financial statements or decreases
in net sales or decreases in total or per share net income compared with the
corresponding period in the preceding year or any change in the capitalization
or long-term debt of the Company, except in all cases as set forth in or
contemplated by the Prospectus, and (B) the unaudited interim financial
statements of the Company, if any, appearing in the Registration Statement and
the Prospectus, do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Regulations or are not
fairly presented in conformity with generally accepted accounting principles and
practices on a basis substantially consistent with the audited financial
statements included in the Registration Statement or the Prospectus; and (iii)
it has compared specific dollar amounts, numbers of shares, numerical data,
percentages of revenues and earnings, and other financial information pertaining
to the Company set forth in the Prospectus (with respect to all dollar amounts,
numbers of shares, percentages and other financial information contained in the
Prospectus, to the extent that such amounts, numbers, percentages and
information may be derived from the general accounting records of the Company,
and excluding any questions requiring an interpretation by legal counsel) with
the results obtained from the application of specified readings, inquiries and
other appropriate procedures (which procedures do not constitute an examination
in accordance with generally accepted auditing standards) set forth in the
letter, and found them to be in agreement.
(g) No action shall have been taken by the Commission or the NASD the
effect of which would make it improper, at any time prior to the Closing Date or
the Option Closing Date, as the case may be, for any member firm of the NASD to
execute transactions (as principal or as agent) in the Shares, and no
proceedings for the purpose of taking such action shall have been instituted or
shall be pending, or, to the best of the Underwriters or the Company's
knowledge, shall be contemplated by the Commission or the NASD.
(h) All proceedings taken at or prior to the Closing Date or the
Option Closing Date, as the case may be, in connection with the authorization,
issuance and sale of the Shares shall be reasonably satisfactory in form and
substance to the Underwriters and the Underwriters shall have been furnished
with all such documents, certificates and opinions as they may request in order
to evidence the accuracy and completeness of any of the representations,
warranties or
- 24 -
statements of the Company, the performance of any covenants of the Company, or
the compliance by the Company with any of the conditions herein contained.
If any of the conditions specified in this Section 7 have not been
fulfilled, this Agreement may be terminated by the Underwriters by notice to the
Company or the Selling Shareholders.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless (i) each
Underwriter, (including specifically any person that may be substituted for an
Underwriter as provided in Section 11 hereof) each officer, director, partner,
employee and agent of any Underwriter, and each person, if any, who controls any
of the Underwriters within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, and (ii) each Selling Shareholder, from and against any and
all losses, claims, damages, expenses or liabilities, joint or several (and
actions in respect thereof), to which they or any of them may become subject
under the Act or under any other statute or at common law or otherwise, and,
except as hereinafter provided, will reimburse each of the Underwriters and each
such person, if any, for any legal or other expenses incurred by them or any of
them in connection with investigating or defending any actions, whether or not
resulting in any liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained (i) in the Registration
Statement, in any Preliminary Prospectus or in the Prospectus or (ii) in any
application or other document executed by the Company, or based upon written
information furnished by or on behalf of the Company, filed in any jurisdiction
in order to qualify the Shares under the securities laws thereof (hereinafter
"application"), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, unless such
untrue statement or omission was made in such Registration Statement,
Preliminary Prospectus, Prospectus or application in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith and expressly for use therein by: (i) in the case of the Underwriters
or any person entitled to indemnification as a result of such person's
affiliation with an Underwriter, any Underwriter, and (ii) in the case of a
Selling Shareholder, such Selling Shareholder; provided, however, that the
indemnity agreement contained in this Section 8(a) with respect to any
Preliminary Prospectus will not inure to the benefit of an Underwriter (or to
the benefit of any other person that may be indemnified pursuant to this Section
8(a) as a result of such person's affiliation with such Underwriter) if (A) the
person asserting any such losses, claims, damages, expenses or liabilities
purchased the Shares which are the subject thereof from such Underwriter; (B)
such Underwriter failed to send or give a copy of the Prospectus to such person
at or prior to the written confirmation of the sale of such Shares to such
person; and (C) the Prospectus did not contain any untrue statement or alleged
untrue statement or omission or alleged omission giving rise to such cause,
claim, damage, expense or liability.
- 25 -
(b) Each of the Selling Shareholders, severally and not jointly,
agrees to indemnify and hold harmless (i) each Underwriter (including
specifically any person that may be substituted for an Underwriter as provided
in Section 11 hereof), each officer, director, partner, employee and agent of
any Underwriter, and each person, if any, who controls any of the Underwriters
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, and (ii) the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, from and against any and all losses, claims, damages, expenses or
liabilities, joint or several (and actions in respect thereof), to which they or
any of them may become subject under the Act or under any other statute or at
common law or otherwise, and, except as hereinafter provided, will reimburse
each such indemnified persons for any legal or other expenses incurred by them
or any of them in connection with investigating or defending any actions,
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon (A) any
action taken by such Selling Shareholder in connection with the offering of the
Optional Shares (including, without limitation, the dissemination of any written
materials or the making of any oral statement); or (B) any untrue statement or
alleged untrue statement of a material fact contained (i) in the Registration
Statement, in any Preliminary Prospectus or in the Prospectus or (ii) in any
application (including any applicable for registration of the Shares under state
securities or Blue Sky laws), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by such Selling Shareholder expressly for use therein; provided,
however, that the indemnity agreement contained in this Section 8(b)(B) with
respect to any Preliminary Prospectus will not inure to the benefit of the
Underwriter (or to the benefit of any other person that may be indemnified
pursuant to this Section 8(b) as a result of such person's affiliation with such
Underwriter) if (1) the person asserting any such losses, claims, damages,
expenses or liabilities purchased the Shares which are the subject thereof from
such Underwriter or other indemnified person; (2) such Underwriter or other
indemnified person failed to send or give a copy of the Prospectus to such
person at or prior to the written confirmation of the sale of such Shares to
such person; and (3) the Prospectus did not contain any untrue statement or
alleged untrue statement or omission or alleged omission giving rise to such
cause, claim, damage, expense or liability.
(c) Each Underwriter (including specifically each person that may be
substituted for an Underwriter as provided in Section 11 hereof) severally and
not jointly, agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the Registration Statement, each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, and each Selling Shareholder, from and
against any and all losses, claims, damages, expenses or liabilities, joint or
several (and actions in respect thereof), to which they or any of them may
become subject under the Act or under any other statute or at common law or
otherwise, and, except as hereinafter
- 26 -
provided, will reimburse the Company or such other persons for any legal or
other expenses incurred by them or any of them in connection with investigating
or defending any actions, whether or not resulting in any liability, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained (i) in the Registration Statement, in any Preliminary Prospectus
or in the Prospectus or (ii) in any application (including any application for
registration of the Shares under state securities or Blue Sky laws), or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, in light of the circumstances under which
they were made, but only insofar as any such statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by such Underwriter expressly for use therein.
(d) Promptly after receipt of notice of the commencement of any
action in respect of which indemnity may be sought against any indemnifying
party under this Section 8, the indemnified party will notify the indemnifying
party in writing of the commencement thereof, and the indemnifying party will,
subject to the provisions hereinafter stated, assume the defense of such action
(including the employment of counsel satisfactory to the indemnified party and
the payment of expenses) insofar as such action relates to an alleged liability
in respect of which indemnity may be sought against the indemnifying party.
After notice from the indemnifying party of its election to assume the defense
of such claim or action, the indemnifying party shall no longer be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
if, in the reasonable judgment of the indemnified party or parties, it is
advisable for the indemnified party or parties to be represented by separate
counsel, the indemnified party or parties shall have the right to employ a
single counsel to represent the indemnified parties who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the indemnified parties thereof against the indemnifying party, in which
event the fees and expenses of such separate counsel shall be borne by the
indemnifying party. Any party against whom indemnification may be sought under
this Section 8 shall not be liable to indemnify any person that might otherwise
be indemnified pursuant hereto for any settlement of any action effected without
such indemnifying party's consent, which consent shall not be unreasonably
withheld.
9. CONTRIBUTION. To provide for just and equitable contribution, if
(i) an indemnified party makes a claim for indemnification pursuant to Section 8
hereof (subject to the limitations thereof) and it is finally determined, by a
judgment, order or decree not subject to further appeal, that such claim for
indemnification may not be enforced, even though this Agreement expressly
provides for indemnification in such case; or (ii) any indemnified or
indemnifying party seeks contribution under the Act, the Exchange Act, or
otherwise, then the Company (including, for this purpose, any contribution made
by or on behalf of any Selling Shareholder, any director of the Company, any
officer of the Company who signed the Registration Statement and any controlling
person of the Company) as one entity and the
- 27 -
Underwriters (including, for this purpose, any contribution by or on behalf of
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act and each officer, director,
partner, employee and agent of any of the Underwriters) as a second entity,
shall contribute to the losses, liabilities, claims, damages and expenses
whatsoever to which any of them may be subject, so that the Underwriters are
responsible for the proportion thereof equal to the percentage which the
underwriting discount per Share set forth on the cover page of the Prospectus
represents of the initial public offering price per Share set forth on the cover
page of the Prospectus and the Company is responsible for the remaining portion;
provided, however, that if applicable law does not permit such allocation, then,
if applicable law permits, other relevant equitable considerations such as the
relative fault of the Company and the Underwriters in connection with the facts
which resulted in such losses, liabilities, claims, damages and expenses shall
also be considered. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission or alleged omission, shall be determined by,
among other things, whether such statement, alleged statement, omission or
alleged omission relates to information supplied by a Selling Shareholder or the
Company or by the Underwriters, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement,
alleged statement, omission or alleged omission. The Company and the Selling
Shareholders, on one hand, and the Underwriters, on the other hand, agree that
it would be unjust and inequitable if the respective obligations of the Company,
the Selling Shareholders and the Underwriters for contribution were determined
by PRO RATA or PER CAPITA allocation of the aggregate losses, liabilities,
claims, damages and expenses or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section 9. No person
guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) will be entitled to contribution from any person who is not guilty of
such fraudulent misrepresentation. For purposes of this Section 9, each person,
if any, who controls any of the Underwriters within the meaning of Section 15 of
the Act or Section 29(a) of the Exchange Act and each officer, director,
partner, employee and agent of any of the Underwriters will have the same rights
to contribution as the Underwriters, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 29(a) of the
Exchange Act, each officer of the Company who has signed the Registration
Statement and each director of the Company will have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 9. Anything in this Section 9 to the contrary notwithstanding, no party
will be liable for contribution with respect to the settlement of any claim or
action effected without its written consent. This Section 9 is intended to
supersede, to the extent permitted by law, any right to contribution under the
Act or the Exchange Act or otherwise available.
10. SURVIVAL OF INDEMNITIES, CONTRIBUTION, WARRANTIES AND
REPRESENTATIONS. The respective indemnity and contribution Company, the Selling
Shareholders and the Underwriters contained in Sections 8 and 9 hereof, and the
representations and warranties of the Company and the Selling Shareholders
contained in this Agreement shall remain operative and in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of the Underwriters, the Company or any of
its directors and
- 28 -
officers, the Selling Shareholders or any controlling person referred to in said
Sections, and shall survive the delivery of, and payment for, the Shares.
11. SUBSTITUTION OF UNDERWRITERS.
(a) If one Underwriter should default in its obligation to purchase
and pay for any Shares which it is obligated to purchase on such date hereunder
and if the aggregate number of such Shares which the Underwriter so defaulting
has agreed to purchase does not exceed 10% of the total number of the Shares to
be purchased on such date, the non-defaulting Underwriters will be obligated to
purchase and pay for (in addition to the number of Shares set forth opposite
their names in Schedule A attached hereto, or proportionate number in the case
of the Optional Shares) the full number of Shares agreed to be purchased by the
defaulting Underwriter, and not so purchased. In such event the nondefaulting
Underwriters, may take up and pay for all or any part of such additional Shares
to be purchased by such Underwriter under this Section 11(a), and may postpone
the Closing Date or Option Closing Date, as the case might be, to a time not
exceeding three full business days after the Closing Date or Option Closing
Date, as the case might be. Such Shares shall be allocated to each
non-defaulting Underwriter based upon the proportion of the Offered Shares or
Optional Shares otherwise to be purchased by such non-defaulting Underwriter to
the aggregate number of Offered Shares or Optional Shares, as the case may be,
otherwise to be purchased by all non-defaulting Underwriters.
(b) If one Underwriter should default in its obligation to purchase
and pay for any Shares which it is obligated to purchase on such date hereunder
and if the aggregate number of such Shares exceeds 10% of the total number of
Shares to be purchased on such date, or if one Underwriter for any reason
permitted hereunder should cancel its obligation to purchase and pay for Shares
which it is obligated to purchase on such date hereunder, the non-canceling and
non-defaulting Underwriters (hereinafter called the "remaining Underwriters")
will have the right to purchase such Shares at the Closing Date or Option
Closing Date, as the case might be, in accordance with the procedures set forth
in Section 11(a). If the remaining Underwriters do not purchase and pay for all
such Shares at such Closing Date or Option Closing Date, as the case might be,
the Closing Date or Option Closing Date, as the case might be, will be postponed
for 24 hours and the remaining Underwriters will have the right to purchase such
Shares, or to substitute another person or persons to purchase the same, or
both, at such postponed Closing Date or Option Closing Date, as the case might
be. If purchasers have not been found for such Shares by such postponed Closing
Date, or Option Closing Date, as the case might be, the Closing Date or Option
Closing Date, as the case might be, will be postponed for a further 24 hours,
and the Company will have the right to substitute another person or persons,
reasonably satisfactory to the remaining Underwriters to purchase such Shares at
such second postponed Closing Date or Option Closing Date, as the case might be.
If the Company has not found such purchasers for such Shares by such second
postponed Closing Date or Option Date, as the case might be, then this Agreement
will automatically terminate, and neither the Company nor the remaining
Underwriters will be under any obligation under this Agreement (except that the
Company and the Underwriters will remain liable to the extent provided in
Sections 8 and 9
- 29 -
hereof and the Company will also remain liable to the extent provided in Section
6(j) hereof). As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 11(b). Nothing in
Section 11(b) will obligate any Underwriter to purchase or find purchasers for
any Shares in excess of those agreed to be purchased by such Underwriter under
the terms of Section 2 or Section 3 hereof, as the case may be.
12. TERMINATION OF AGREEMENT.
(a) This Agreement, including without limitation, the obligation to
purchase the Shares and the obligation to purchase the Optional Shares after
exercise of the option referred to in Section 3 hereof, are subject to
termination in the absolute discretion of the Underwriters, by notice given to
the Company and the Selling Shareholders prior to delivery of and payment for
all the Offered Shares or the Optional Shares, as the case may be, if, prior to
such time, any of the following shall have occurred: (i) the Company withdraws
the Registration Statement from the Commission or the Company does not or cannot
expeditiously proceed with the public offering; (ii) the representations and
warranties in Section 4 or Section 5 hereof are not materially correct or cannot
be complied with; (iii) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange shall have been suspended; (iv) limited
or minimum prices shall have been established on either such Exchange; (v) a
banking moratorium shall have been declared either by federal or New York State
authorities; (vi) any other restrictions on transactions in securities
materially affecting the free market for securities or the payment for such
securities, including the Offered Shares or the Optional Shares, shall be
established by either of such Exchanges, by the Commission, by any other federal
or state agency, by action of the Congress or by Executive Order (vii) trading
in any securities of the Company shall have been suspended or halted by any
national securities exchange, the NASD or the Commission; (viii) there shall
have been a materially adverse change in the condition (financial or otherwise),
prospects or obligations of the Company; (ix) the Company shall have sustained a
material loss, whether or not insured, by reason of fire, flood, accident or
other calamity; (x) any action shall have been taken by the government of the
United States or any department or agency thereof which, in the judgment of the
Underwriters, has had a material adverse effect upon the market or potential
market for securities in general; or (xi) the market for securities in general
or political, financial or economic conditions shall have so materially
adversely changed that, in the judgment of the Underwriters, it would be
impracticable to offer for sale, or to enforce contracts made by the
Underwriters for the resale of, the Offered Shares or the Optional Shares, as
the case may be.
(b) If this Agreement is terminated pursuant to Section 7 hereof or
this Section 12 or if the purchases provided for herein are not consummated
because any condition of the Underwriters' obligations hereunder is not
satisfied or because of any refusal, inability or failure on the part of the
Company or the Selling Shareholders to comply with any of the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company or the Selling Shareholders shall be unable to or do not perform all of
their obligations under this Agreement, the Company or the Selling Shareholders
will remain liable to the extent provided in Sections 6(i), 8, 9 and 10 of this
Agreement.
- 30 -
13. INFORMATION FURNISHED BY THE UNDERWRITER TO THE COMPANY. It is
hereby acknowledged and agreed by the parties hereto that for the purposes of
this Agreement, including, without limitation, Sections 4(f), 8(a), 8(b) and 9
hereof, the only information given by the Underwriters to the Company for use in
the Prospectus are the statements set forth in the last sentence of the last
paragraph on the cover page, the statement appearing in the last paragraph on
page 2 with respect to stabilizing the market price of Shares, the information
in the third paragraph on page [56] with respect to concessions and
reallowances, and the information in the fifth paragraph on page [57] with
respect to the determination of the public offering price, as such information
appears in any Preliminary Prospectus and in the Prospectus.
14. NOTICES AND GOVERNING LAW. All communications hereunder will be
in writing and, except as otherwise provided, will be delivered by hand against
written receipt at, or mailed by certified mail, return receipt requested, to
the following addresses: if to the Underwriters, to Commonwealth Associates, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxxxx X. Xxxxxx, Xx.
with a copy to Xxxxxx, Xxxxx & Bockius LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx X. Xxxxxxxxxxx III, Esq.; if to the Company or the
Selling Shareholders, to the Company, at 2 Badr Shaker Alsayyab Street, Um
Uthayna, Amman, Jordon, with a copy to Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X. Xxxxxx, Esq.
This Agreement shall be deemed to have been made and delivered in New
York City and shall be governed as to validity, interpretation, construction,
effect and in all other respects by the internal laws of the State of New York.
The Company and the Selling Shareholders (i) agree that any legal suit, action
or proceeding arising out of or relating to this Agreement shall be instituted
exclusively in New York State Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York, (ii) waive
any objection which any of them may have now or hereafter to the venue of any
such suit, action or proceeding, and (iii) irrevocably consent to the
jurisdiction of the New York State Supreme Court, County of New York, and the
United States District Court for the Southern District of New York in any suit,
action or proceeding. The Company and the Selling Shareholders further agree to
accept and acknowledge service of any and all process which may be served in any
such suit, action or proceeding in the New York State Supreme Court, County of
New York, or in the United States District Court for the Southern District of
New York agree that service of process upon the Company or the Selling
Shareholders mailed by certified mail to the Company's address shall be deemed
in every respect effective service of process upon the Company and the Selling
Shareholder, as the case may be, in any such suit, action or proceeding.
15. PARTIES IN INTEREST. This Agreement is made solely for the
benefit of the Underwriters, the Representative, the Company and the Selling
Shareholders and, to the extent expressed, any person controlling the Company or
the Underwriters, each officer, director, partner, employee and agent of the
Underwriters, the directors of the Company, its officers who have signed the
Registration Statement, and their respective executors, administrators,
successors and assigns, and, no other person will acquire or have any right
under or by virtue of this
- 31 -
Agreement. The term "successors and assigns" will not include any purchaser of
the Shares from any of the Underwriters, as such purchaser.
- 32 -
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company, the Selling Shareholders and the
Underwriters in accordance with its terms.
Very truly yours,
ARAMEX INTERNATIONAL LIMITED
By:
---------------------------
Name:
Title:
------------------------------
Xxxxxxx X. Xxxxxxx
------------------------------
Xxxx Xxxxxxxx
------------------------------
Xxxx Xxxxxxxx
Confirmed and accepted in New York,
New York as of the date first above
written:
COMMONWEALTH ASSOCIATES
By: Commonwealth Associates
Management Company, Inc.,
General Partner
By:
---------------------------------
- 33 -
SCHEDULE A
TO THE UNDERWRITING AGREEMENT
UNDERWRITERS
Number of Offered
Name of Underwriter Shares to be Purchased
------------------- ----------------------
Commonwealth Associates. . . . . . . . . . . . . . .
TOTAL. . . . . . . . . . . . . . . . . . . . . . . 1,000,000
- 34 -
SCHEDULE B
SELLING STOCKHOLDERS
Name Maximum Option Shares
---- ---------------------
Xxxxxxx X. Xxxxxxx 75,000
Xxxx Xxxxxxxx 37,500
Xxxx Xxxxxxxx 37,500
-------
Total 150,000
- 35 -
SCHEDULE C
SUBSIDIARIES
- 36 -
