PRELIMINARY DRAFT
2,825,000 Shares
Common Stock
($.01 par value)
THE HAIN FOOD GROUP, INC.
UNDERWRITING AGREEMENT
----------------------
XXXXXXXX INC. AND
CIBC XXXXXXXXXXX CORP.
as Representatives of the
Several Underwriters November ___, 1997
c/o Stephens Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Gentlemen:
The Hain Food Group, Inc., a Delaware corporation (the "Company"), and
the stockholders of the Company whose names appear in Schedule I hereto
(collectively, the "Selling Stockholders"), propose to sell to the several
underwriters (the "Underwriters") for whom you are acting as representatives
(the "Representatives") an aggregate of 2,825,000 shares (the "Firm Shares")
of the Company's common stock, $.01 par value (such class of stock being
herein called the "Common Stock"). The Company and the Selling Stockholders
are sometimes referred to collectively herein as the "Sellers." The respective
amounts of the Firm Shares to be sold by each of the Sellers are set forth in
Schedule I hereto. In addition, to cover over-allotments in connection with
the sale of the Firm Shares, the Company proposes to grant to the Underwriters
an option to purchase up to an additional 423,750 shares (the "Option Shares")
of Common Stock.
As Representatives, you have advised the Company and the Selling
Stockholders that (a) you are authorized to enter into this Agreement on
behalf of the several Underwriters and (b) the Underwriters are willing,
acting severally and not jointly, to purchase the amounts of the Firm Shares
set forth opposite their respective names in Schedule II hereto, plus their
pro rata portion of the Option Shares if you elect to exercise the
over-allotment option in whole or in part for the accounts of the several
Underwriters. The Firm Shares and the Option Shares (to the extent the
aforementioned option is exercised) are herein called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the Company,
the Selling Stockholders and the several Underwriters hereby agree as follows:
1. Representations and Warranties.
(a) The Company represents and warrants as follows:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus
hereafter mentioned; the subsidiaries of the Company (the
"Subsidiaries") as listed in Exhibit ___ hereto are the only
subsidiaries of the Company, and have been duly organized and are
validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation with full power and
authority (corporate and other) to own their properties and conduct
their businesses as described in the Prospectus; each of the Company
and its Subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
character of the business conducted by it or the location of the
properties owned or leased by it makes such qualification necessary,
except where the failure to be so qualified would not reasonably be
expected to have a Material Adverse Effect (as defined below); and all
of the outstanding shares of capital stock of the Subsidiaries have
been validly authorized and issued, are fully paid and non-assessable,
and are owned by the Company, free and clear of any claim, lien,
encumbrance or other security interest, except for liens granted
pursuant to the Company's existing bank credit agreement.
(ii) The outstanding shares of Common Stock of the Company,
including all shares to be sold by the Selling Stockholders, are
validly authorized and issued, fully paid and non-assessable; the
portion of the Shares to be issued and sold by the Company, when issued
and paid for as contemplated herein, will be validly authorized and
issued, fully paid and non-assessable; and no preemptive rights of
stockholders exist with respect to the Shares or the issue and sale
thereof.
(iii) The Shares conform in all material respects with the
statements concerning them in the Prospectus.
(iv) A registration statement (File No. 333-38939) with respect
to the Shares has been carefully prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission under
the Securities Act on Form S-3. The Company meets the requirements for
the use of Form S-3 under the Securities Act. Copies of such
registration statement and of the related preliminary prospectus have
heretofore been delivered by the Company to you. Such registration
statement and prospectus, including exhibits, financial statements and
schedules, as finally amended and revised upon the effectiveness of the
registration statement, including information, if any, deemed to be
part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act and as filed with the
Commission pursuant to its Rule 424(b), are herein respectively
referred to as the "Registration Statement" and the "Prospectus." Each
preliminary prospectus with respect to the Shares is herein referred to
as a "Preliminary Prospectus."
(v) Neither the Commission nor any other agency, body, authority,
court or arbitrator has issued any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus relating to the
proposed offering of the Shares nor, to the knowledge of the Company,
instituted proceedings for that purpose. The Registration Statement,
the Prospectus and any Preliminary Prospectus, and any amendments or
supplements thereto will contain all statements which are required to
be stated therein by, and will in all material respects conform to the
requirements of, the Securities Act and the Rules and Regulations.
Neither the Registration Statement, nor the Preliminary Prospectus nor
any amendment thereto, and neither the Prospectus nor any supplement
thereto, contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that the Company
makes no representations or warranties as to information contained in
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or omitted from the Registration Statement or any Preliminary
Prospectus or the Prospectus, or any such amendment or supplement, in
reliance upon, and in conformity with, written information furnished to
the Company by or on behalf of any Underwriter through the
Representatives or by or on behalf of the Selling Stockholders (in
their capacity as such) specifically for use in the preparation
thereof.
(vi) The consolidated financial statements of the Company and its
Subsidiaries, together with related notes and schedules as set forth in
the Registration Statement or incorporated therein by reference,
present fairly the financial position and the results of operations of
the Company and the Subsidiaries consolidated, at the indicated dates
and for the indicated periods. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods involved, and all
adjustments for a fair presentation of results for such periods have
been made. The Selected Consolidated Financial Data included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the financial statements
from which they were derived.
(vii) Except as is disclosed in the Prospectus, there is no
action or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of the Subsidiaries before any
court or administrative agency which might be expected to (A) result in
any material adverse change in the financial condition, or in the
earnings, business, affairs, properties or results of operations of the
Company and its Subsidiaries taken as a whole ("Material Adverse
Change" or "Material Adverse Effect," as the case may be), whether or
not arising in the ordinary course of business, (B) adversely affect
the performance of this Agreement or the consummation of the
transactions herein contemplated, except as disclosed in the Prospectus
and for which the Company maintains a reserve in an amount which it
believes is adequate to cover potential liabilities, or (C) be required
to be disclosed in the Registration Statement.
(viii) The Company and each of its Subsidiaries are not in
violation of any law, ordinance, governmental rule or regulation or
court decree to which they may be subject which violation reasonably
would be expected to have a Material Adverse Effect.
(ix) The Company and the Subsidiaries have good and marketable
title to all of the real properties and valid title to all other assets
purported to be owned by any of them as reflected in the financial
statements (or as described in the Prospectus) hereinabove described,
subject to no lien, mortgage, pledge, charge or encumbrance of any kind
except those reflected in such financial statements (or as described in
the Prospectus) or which do not materially affect the present or
proposed use of such properties or assets or would not cause a Material
Adverse Effect. The Company and its Subsidiaries occupy their leased
properties under valid, subsisting and binding leases with only such
exceptions as in the aggregate are not material and do not interfere
with the conduct of the business of the Company and its Subsidiaries.
There exists no default under the provisions of any lease, contract or
other obligation to which the Company or any of the Subsidiaries is a
party which may result in a Material Adverse Change.
(x) The Company and its Subsidiaries have filed all Federal,
State and foreign tax returns which have been required to be filed and
have paid all taxes indicated by said returns and all assessments
received by them or any of them to the extent that such taxes have
become due and there is no tax deficiency that has been or, to the
Company's knowledge, might be asserted against the Company or any of
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its Subsidiaries that might have a Material Adverse Effect. All
material tax liabilities are adequately provided for on the books of
the Company and its Subsidiaries.
(xi) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, as they may be
amended or supplemented, and except as set forth in the Registration
Statement, (A) there has not been any Material Adverse Change nor, to
the knowledge of the Company, is any such change threatened, (B) there
has not been any transaction entered into by the Company or its
Subsidiaries that is material to the earnings, business, affairs,
properties or operations of the Company and its Subsidiaries taken as a
whole, other than transactions in the ordinary course of business and
changes and transactions contemplated by the Registration Statement and
the Prospectus, as they may be amended or supplemented, (C) other than
liabilities incurred in the ordinary course of business, including
changes in amounts outstanding under the Company's revolving credit
facility, there has not been any material change in the capital stock,
long term debt or material liabilities of the Company or its
Subsidiaries, and (D) there has not been any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company
or any of its Subsidiaries. Neither the Company nor any Subsidiary has
any contingent obligations or liabilities which are required to be but
are not disclosed in the Registration Statement and the Prospectus.
(xii) Neither the Company nor any of the Subsidiaries is in
default under any agreement, indenture or other instrument to which it
is a party or by which it or any of its properties is bound and which
default would reasonably be expected to have a Material Adverse Effect.
The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of
the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any of the Subsidiaries is a party, or of the
Company's or any of the Subsidiaries' articles of incorporation or
by-laws or any order, rule or regulation applicable to the Company or
the Subsidiaries of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction,
except for such breaches or defaults as would not reasonably be
expected to have a Material Adverse Effect.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body, domestic or foreign, necessary in connection
with the execution and delivery by the Company of this Agreement and
the performance of its obligations hereunder (except such additional
steps as may be necessary to make the Registration Statement effective
and to qualify the Shares for public offering by the Underwriters under
State securities or Blue Sky laws) has been obtained or made and is in
full force and effect.
(xiv) The Company and each Subsidiary hold all material licenses,
authorizations, charters, certificates and permits from governmental
authorities which are necessary to the conduct of their businesses and
neither the Company nor any Subsidiary has received notice of any
proceeding relating to the revocation or modification of any of such
licenses, authorizations, charters, certificates or permits. The
Company and its Subsidiaries own or otherwise possess rights to the
patents, patent rights, licenses, inventions, copyrights, trademarks,
service marks and trade names presently employed by them in connection
with the businesses now operated by them as described in the
Prospectus, and neither the Company nor any of its Subsidiaries has
infringed or received any notice of infringements of or conflict with
asserted rights of others with respect to any of the foregoing, except
where such infringement or conflict would not reasonably be expected to
result in a Material Adverse Effect.
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(xv) Ernst & Young LLP and Price Waterhouse LLP, who have audited
certain of the financial statements filed with the Commission as part
of the Registration Statement and Prospectus or incorporated by
reference therein, are independent public accountants within the
meaning of the Securities Act, the Rules and Regulation S-X of the
Commission and Rule 101 of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
(xvi) There are no agreements, contracts or other documents of a
character required to be described in the Registration Statement or the
Prospectus or required by Form S-3 to be filed as exhibits to the
Registration Statement or incorporated by reference in the Registration
Statement which are not described, filed or incorporated as required.
(xvii) No labor dispute is pending or, to the knowledge of the
Company, threatened by the Company's or any Subsidiary's employees
which could result in a Material Adverse Effect. No collective
bargaining agreement exists with any of the Company's employees and, to
the Company's knowledge, no agreement is imminent.
(xviii) Except as contemplated by Section 2 hereof and as
disclosed in the Prospectus and permitted by the Rules, the Company has
not (itself or through any person) taken and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to, cause or result in a violation of Section 5 of the
Securities Act or Regulation M under the Securities Act or in
stabilization or manipulation of the price of the Company's common
stock.
(xix) Without limiting the generality of any of the foregoing
representations and warranties and except to the extent no Material
Adverse Effect would reasonably be expected to occur, (a) none of the
operations of the Company or its Subsidiaries is in violation of any
material environmental law, regulation or any permit; (b) neither the
Company nor any of its Subsidiaries has been notified that it is under
investigation or under review by any governmental agency with respect
to compliance therewith or with respect to the generation, use,
treatment, storage or release of hazardous material; (c) neither the
Company nor any of its Subsidiaries have any material liability in
connection with the past generation, use, treatment, storage, disposal
or release of any hazardous material; (d) there is no hazardous
material that may reasonably be expected to pose any material risk to
safety, health, or the environment, on, under or about any property
owned, leased or operated by the Company or any of its Subsidiaries or,
to the knowledge of the Company, any property adjacent to any such
property; and (e) there has heretofore been no release of any hazardous
material on, under or about such property, or, to the knowledge of the
Company, any such adjacent property. None of the present or, to the
knowledge of the Company, past property of the Company or any of its
Subsidiaries is listed or proposed for listing on the National
Priorities List pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), or on
the Comprehensive Environmental Response Compensation Liability
Information System List ("CERCLIS") or any similar state list of sites
requiring remedial action. Neither the Company nor any of its
Subsidiaries is subject to any state Environmental Property Transfer
Act, or to the extent that any such statute is applicable to any
property, the Company and its Subsidiaries have fully complied with
their obligations under such statute(s), and neither has any
outstanding obligations or liabilities under any state Environmental
Property Transfer Act.
(xx) The Company and its Subsidiaries maintain insurance of the
types and in the amounts customary for their businesses, including, but
not limited to, insurance covering liability and real and personal
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property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect.
(xxi) Neither the Company nor any Subsidiary has at any time
during the last five years (a) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (b) made any payment to any
federal or state governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any
jurisdiction thereof.
(xxii) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act"), as applicable, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, and will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(xxii) The unissued Shares issuable upon the exercise of options
(the "Options") to be exercised by certain of the Selling Stockholders
(the "Optionholders") have been duly and validly authorized and
reserved for issuance, and at the time of delivery to the Underwriters
with respect to such Shares, such Shares will be issued and delivered
in accordance with the provisions of the Stock Option Agreements
between the Company and such Selling Stockholders pursuant to which
such Options were granted (the "Option Agreements") and will be duly
and validly issued, fully paid and non-assessable and will conform to
the description thereof in the Prospectus.
(xxiii) The Options were duly authorized and issued pursuant to
the Option Agreements and constitute valid and binding obligations of
the Company and the Optionholders are entitled to the benefits provided
by the Option Agreements; the Option Agreements were duly authorized,
executed and delivered and constitute valid and binding instruments
enforceable in accordance with the their terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Options conform to the
descriptions thereof in the Prospectus.
(b) Each Selling Stockholder, severally, represents and warrants as
follows:
(i) Such Selling Stockholders has duly executed and delivered
powers of attorney (the "Power of Attorney"), in the form heretofore
delivered to the Representatives, appointing the person named therein
as such Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact")
with authority to perform this Agreement on behalf of such Selling
Stockholder, and such Selling Stockholder has duly executed and
delivered a custody agreement (the "Custody Agreement"), in the form
heretofore delivered to the Representatives, with the Company as
custodian (the "Custodian"). Certificates, other than those
representing such Firm Shares to be issued upon the exercise of
Options, in negotiable form for the Firm Shares to be sold by such
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Selling Stockholder hereunder have been deposited with the Custodian
pursuant to the Custody Agreement for the purpose of delivery pursuant
to this Agreement and each of the Selling Stockholders who is selling
Firm Shares upon the exercise of Options has duly completed, executed
and deposited with the Custodian irrevocable Option exercise notices,
in the form specified by the relevant Option Agreement, with respect to
all of the Firm Shares to be sold upon the exercise of Options by such
Selling Stockholders hereunder. All authorizations, orders and consents
necessary for the execution and delivery by such Selling Stockholder of
this Agreement, the Power of Attorney and the Custody Agreement have
been duly and validly given, and such Selling Stockholder has full
legal right, power and authority to enter into this Agreement, the
Power of Attorney and the Custody Agreement and to sell, assign,
transfer and deliver to the several Underwriters the Firm Shares to be
sold by such Selling Stockholder hereunder. Such Selling Stockholder
agrees that such of the Firm Shares represented by the certificates on
deposit with the Custodian or the irrevocable Option exercise notice,
in either case, are for the benefit of, coupled with and subject to the
interests of the Underwriters hereunder, that the arrangements made for
such custody and the appointment of the Attorney-in-Fact are to that
extent irrevocable, and that the obligations of such Selling
Stockholder hereunder shall not be terminated, except as provided in
this Agreement, the Power of Attorney or the Custody Agreement, by any
act of such Selling Stockholder, by operation of law or otherwise,
whether by death or incapacity or by the occurrence of any other event.
If such Selling Stockholder should die or become incapacitated or if
any other event shall occur before delivery of such Firm Shares
hereunder, the certificates for such Firm Shares or the irrevocable
Option exercise notice, in either case, deposited with the Custodian
shall be delivered by the Custodian in accordance with this Agreement
as if such death, incapacity or other event had not occurred,
regardless of whether the Custodian or the Attorney-in-Fact shall have
received notice thereof.
(ii) Such Selling Stockholder has (other than the Firm Shares to
be issued upon exercise of Options) and at the Closing Date (as such
date is hereinafter defined) will have good and valid title to the
portion of the Firm Shares to be sold by such Selling Stockholder, free
of any liens, encumbrances, equities and claims, and full right, power
and authority to effect the sale and delivery of such Firm Shares; and
upon the delivery of and payment for such Firm Shares pursuant to this
Agreement, assuming due issuance of any Firm Shares to be issued upon
exercise of Options, good and valid title thereto, free of any liens,
encumbrances, equities and claims, will be transferred to the several
Underwriters.
(iii) The consummation by such Selling Stockholder of the
transactions herein contemplated and the fulfillment of the terms
hereof will not result in a breach of any of the terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust or other material agreement or instrument to which such Selling
Stockholder is a party, or of any order, rule or regulation applicable
to such Selling Stockholder of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
(iv) Such Selling Stockholder has not taken during the pendency
of the offering and will not take for a period of 120 days following
the date hereof, directly or indirectly, any action designed to, or
which has constituted, or which might reasonably be expected to cause
or result in, stabilization or manipulation of the price of the Common
Stock of the Company.
(v) Such Selling Stockholder (except for Argosy-Hain Investment
Group, L.P. which makes no representation as to this clause (v)) has no
reason to believe that the representations and warranties of the
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Company contained in this Section 1 are not true and correct, is
familiar with the Registration Statement and has no knowledge of any
material fact, condition or information not disclosed in the Prospectus
which would reasonably be expected to have a Material Adverse Effect,
and the sale of the portion of the Firm Shares by such Selling
Stockholder pursuant hereto is not prompted by any information
concerning the Company or the Subsidiaries which is not set forth in
the Prospectus.
2. Purchase, Sale and Delivery of the Stock. On the basis of the
representations, warranties and covenants herein contained, and subject to the
conditions herein set forth, the Sellers agree to sell to the Underwriters and
each Underwriter agrees, severally and not jointly, to purchase, at a price of
$__________ per share, the amounts of the Firm Shares set forth opposite the
name of each Underwriter in Schedule II hereto. The Firm Shares to be
purchased by each Underwriter from each Seller shall be as nearly as
practicable in the same proportion as the number of Firm Shares being sold by
each Seller bears to the total number of Firm Shares to be sold hereunder.
Payment for the Firm Shares shall be made by certified or official bank
check or by wire transfer of immediately available U.S. Funds to designated
accounts of the Company and the Selling Stockholders, to the order of the
Company or the Selling Stockholders, as applicable, against delivery of
certificates for the Shares to the Representatives for the accounts of the
several Underwriters. Delivery of certificates shall be to the Representatives
c/o Stephens Inc. ("Stephens"), 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000, or at such other address as Stephens may designate in writing. Payment
will be made at the offices of Xxxxxxxx, or at such other place as shall be
agreed upon by Xxxxxxxx, the Company and the Selling Stockholders, at
approximately 9:00 a.m., central time, on ________________, 1997, such time
and date being herein referred to as the "Closing Date." The certificates for
the Firm Shares will be delivered in such denominations and in such
registrations as Xxxxxxxx reasonably requests in writing and will be made
available for inspection at such locations as Xxxxxxxx may reasonably request
at least one full business day prior to the Closing Date.
In addition, on the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase up to
an aggregate of 423,750 shares of Common Stock (the "Option Shares") at the
price per share as set forth in the first paragraph of this Section 2. The
option granted hereby may be exercised in whole or in part, but only once,
upon written notice (or oral notice, subsequently confirmed in writing) given
not more than 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company setting forth the
number of Option Shares as to which the several Underwriters are exercising
the option. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such Underwriter
bears to the total number of Firm Shares, adjusted to avoid fractional shares.
The option with respect to the Option Shares may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters. Xxxxxxxx,
on behalf of the Representatives of the several Underwriters, may cancel such
option at any time prior to expiration by giving written notice (or oral
notice, subsequently confirmed in writing) of such cancellation to the
Company. To the extent, if any, that the option is exercised, payment for the
Option Shares shall be made by wire transfer of immediately available U.S.
Funds to a designated account of the Company, to the order of the Company, at
the offices specified above and at a date and time more than five (5) business
days after the Underwriters' exercise of the option (the "Option Closing
Date") (which may be the Closing Date). Certificates for the Option Shares
shall be delivered in the same manner and upon the same terms as the
Underwritten Shares.
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3. Qualified Independent Underwriter." The Company hereby confirms its
engagement of Xxxxxxxx Inc. and Xxxxxxxx Inc. hereby confirms its agreement
with the Company to render services as a "qualified independent underwriter"
within the meaning of Section (b)(15) of Rule 2720 of the National Association
of Securities Dealers, Inc. (the "NASD") with respect to the offering and sale
of the Shares, including the recommendation of a public offering price of the
Shares. Xxxxxxxx Inc., in its capacity as qualified independent underwriter,
and not otherwise, is referred to herein as the "QIU."
4. Offering by the Underwriters. It is understood that the several
Underwriters are to make a public offering of the Firm Shares as soon as the
Representatives deem it advisable to do so after the Registration Statement
has become effective. The Firm Shares are to be initially offered to the
public at the public offering price set forth in the Prospectus. The
Representatives may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option
Shares are purchased pursuant to Section 2 hereof, the Underwriters will offer
them to the public on the foregoing terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with the
Agreement Among Underwriters, which has been entered in by you and the several
other Underwriters.
5. Covenants of the Company. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective and will not, either before or after
effectiveness, file any amendment thereto or supplement to the Prospectus of
which the Representatives shall not previously have been advised and furnished
with a copy or to which the Representatives shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations.
(b) The Company will advise the Representatives promptly of any request
of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, or of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the use of the Prospectus or of the institution
of any proceedings for that purpose, and the Company will use its best efforts
to prevent the issuance of any such stop order preventing or suspending the
use of the Prospectus and to obtain as soon as possible the lifting thereof,
if issued.
(c) The Company will cooperate with the Representatives in endeavoring
to qualify the Shares for sale under the State securities or Blue Sky laws of
such jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents and furnish such
information as may be reasonably required for that purpose; provided, however,
that the Company shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction where it
is not so qualified or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports and other documents as
are or may be required to continue such qualifications in effect for so long a
period as the Representatives may reasonably request for distribution of the
Shares.
(d) The Company will deliver to, or upon the order of, the
Representatives from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period of
time after the first date of the public offering of the Shares, and thereafter
from time to time during the period when delivery of a Prospectus is required
9
under the Securities Act, as many copies of the Prospectus in final form, or
as thereafter amended or supplemented, as the Representatives may reasonably
request. The Company will deliver to the Representatives at or before the
Closing Date four signed copies of the Registration Statement and all
amendments thereto, including all exhibits, filed therewith, and will deliver
to the Representatives such number of copies of the Registration Statement,
but without exhibits, and of all amendments thereto, as the Representatives
may reasonably request.
(e) If during the period in which a Prospectus is required by law to be
delivered by an Underwriter or dealer any event shall occur as a result of
which, in the judgment of the Company or the Underwriters or in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law or to file under the Exchange Act any
document which would be deemed to be incorporated by reference in the
Prospectus in order to comply with the Securities Act or the Exchange Act, the
Company promptly will prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus so that the Prospectus as so amended
or supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law, and
will deliver to the Representatives such number of copies of the amended or
supplemented Prospectus as the Representatives may reasonably request.
(f) The Company will, for a period of five years from the Closing Date,
so long as the Company is subject to the reporting requirements of the
Exchange Act, deliver to the Representatives copies of annual reports and
information furnished by the Company to its stockholders or filed with any
securities exchange pursuant to the requirements of such exchange or with the
Commission pursuant to the Securities Act or the Exchange Act. The Company
will deliver to the Representatives similar reports with respect to
significant subsidiaries, as that term is defined in the Rules and
Regulations, which are not consolidated in the Company's financial statements.
(g) Promptly after the Company is advised thereof, it will advise the
Representatives, and confirm the advice in writing, that the Registration
Statement shall have become effective.
(h) The Company will use the net proceeds from the sale of the Shares
substantially in the manner set forth in the Prospectus under the caption "Use
of Proceeds."
(i) Other than as permitted by the Securities Act, the Rules and
Regulations and the Exchange Act, the Company will not distribute any
prospectus or offering materials in connection with the offering and sale of
the Shares and prior to the Closing Date or the Option Closing Date will not
issue any press releases or other communications directly or indirectly and
will hold no press conferences with respect to the Company, the financial
condition, results of operations, business, properties, assets or liabilities
of the Company, or the offering of the Shares, without the prior written
consent of Xxxxxxxx.
(j) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar for its common
stock and will use its best efforts to maintain the listing of the Shares on
The Nasdaq National Market.
(k) Except as contemplated hereby or by the Prospectus, the Company
will not, for a period of one hundred eighty (180) days after the Effective
Date of the Registration Statement, offer to sell, contract to sell, sell or
10
otherwise dispose of any shares of the Company's common stock or securities
convertible into shares of the Company's common stock without the prior
written consent of Xxxxxxxx, which consent will not be unreasonably withheld
other than pursuant to existing benefit plans, as amended from time to time.
The foregoing covenants and agreements shall apply to any successor of
the Company, including without limitation, any entity into which the Company
might consolidate or merge.
6. Costs and Expenses. Whether or not the Registration Statement
becomes effective, and except as expressly set out in this Section 6, the
Company will pay all costs, expenses and fees incident to the performance of
the obligations of the Sellers under this Agreement, including, without
limiting the generality of the foregoing, the following: the accounting fees
of the Company; the fees and disbursements of counsel for the Company and the
Selling Stockholders; the cost of printing and delivering the Agreement Among
Underwriters, the Underwriters' copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, this Agreement and the Underwriters'
Questionnaire and Power of Attorney, and the Blue Sky Survey and any
supplements thereto; the filing fees incident to securing any required review
by the NASD of the terms of the sale of the Shares on behalf of, and any
disbursements made by, the Representatives or Xxxxxxxx in its capacity as a
"qualified independent underwriter; and the expenses, including the reasonable
fees and the disbursements of counsel for the Underwriters, incurred in
connection with the qualification of the Shares under State securities or Blue
Sky laws. If, in the opinion of counsel to the Underwriters which is concurred
in by counsel for the Company and the Selling Stockholders, the qualification
of the Shares under any State securities or Blue Sky laws requires that the
Company and the Selling Stockholders share any of the costs, expenses and fees
set forth above, the Company and the Selling Stockholders agree to share pro
rata, based on the number of Shares to be sold by each, such costs, expenses
and fees as identified by counsel. Any transfer taxes imposed on the sale of
the Shares to the several Underwriters will be paid by the Company. The
Company shall not, however, be required to pay for any of the Underwriters'
expenses (other than those related to qualification under State securities or
Blue Sky laws), except that if this Agreement shall not be consummated because
the conditions in Section 8 hereof are not satisfied, or because this
Agreement is terminated by the Representatives pursuant to Section 7 hereof,
or by reason of any failure, refusal or inability on the part of the Company
or the Selling Stockholders to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure to satisfy said condition or to
comply with said terms be due to the default or omission of any Underwriter,
then the Company shall reimburse the Underwriters for reasonable out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred in
connection with investigating, marketing and proposing to market the Shares or
in contemplation of performing their obligations hereunder but the Company
shall not in any event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits from the sale by them of the
Shares.
7. Conditions of Obligations of the Underwriters. The obligations of
the Underwriters are subject to the accuracy, as of the Closing Date, of the
representations and warranties of the Company and the Selling Stockholders
contained herein, and to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 10:00 A.M. eastern time, on the date of this Agreement, unless a later
time and date be agreed to by the Representatives, and no stop order
suspending the effectiveness thereof shall have been issued and no proceedings
for that purpose shall have been taken or, to the knowledge of the Company or
the Selling Stockholders, shall be contemplated by the Commission.
11
(b) The Representatives shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Company and the Selling
Stockholders, dated the Closing Date, addressed to the Underwriters to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus; the
Subsidiaries have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation with full corporate power and authority
to own their properties and conduct their businesses as described in
the Prospectus; each of the Company and its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned or leased by it
makes such qualification necessary, except for such jurisdictions where
the failure to be so qualified would not result in a Material Adverse
Effect; and all of the outstanding shares of capital stock of the
Subsidiaries have been validly authorized and issued, are fully paid
and non-assessable, and are owned by the Company, free and clear of any
claim, lien, encumbrance or other security interest (other than with
respect to its bank credit agreement), and, to such counsel's
knowledge, no options, warrants or other rights to purchase, agreements
or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or ownership interests in
the Subsidiaries are outstanding.
(ii) The Company has authorized and outstanding, to the knowledge
of such counsel, capital stock as set forth under the caption
"Description of Capital Stock" in the Prospectus, except for issuances
subsequent to the date of the prospectus, if any, pursuant to
reservations, commitments, to benefit plans or other existing
agreements; the authorized shares of its Common Stock have been validly
authorized; the outstanding shares of its Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable;
all of the Shares conform as to legal matters in all material respects
to the description thereof contained in the Prospectus; the
certificates for the Shares are in due and proper form; the Shares of
Common Stock, including the portion of the Option Shares, if any, to be
sold by the Company pursuant to this Agreement have been duly
authorized and will be validly issued, fully paid and non-assessable
when issued and paid for as contemplated by this Agreement; and no
preemptive rights of stockholders exist pursuant to applicable law, the
Company's Certificate of Incorporation, Bylaws, or, to such counsel's
knowledge, any material agreement or other material instrument to which
the Company is a party or by which it is bound with respect to any of
the Shares or the issue and sale thereof.
(iii) The Registration Statement has been declared effective
under the Securities Act and, to the knowledge of such counsel, no stop
order proceedings with respect thereto have been instituted or are
pending or threatened under the Securities Act.
(iv) The Registration Statement, all Preliminary Prospectuses,
the Prospectus and each amendment or supplement thereto, as of the
respective dates they were filed or declared effective, appeared on
their face to comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations
(except that such counsel need express no opinion as to the financial
statements and other financial or statistical information included
therein), and the conditions for use of a registration statement on
Form S-3 have been satisfied.
12
(v) The statements under the caption "Description of Capital
Stock" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are
accurate summaries in all material respects and fairly present the
information required to be shown.
(vi) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or Prospectus which are not so
filed (or incorporated by reference therein) or described as required,
and such contracts and documents as are summarized in the Registration
Statement or Prospectus are fairly summarized in all material respects.
(vii) Without having made any independent investigation and
relying solely on certificates of responsible officers of the Company,
such counsel knows of no material legal proceedings pending or
threatened against the Company or any of its Subsidiaries required to
be disclosed in the Registration Statement except as set forth or
referred to in the Prospectus.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or a default under, the articles of incorporation or
by-laws of the Company or any of its Subsidiaries, or any material
agreement or instrument known to such counsel to which the Company or
any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries may be bound.
(ix) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company.
(x) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution
and delivery of this Agreement and the consummation of the transactions
herein contemplated (other than as required by NASD regulation or State
securities and Blue Sky laws, as to which such counsel need express no
opinion), except such as have been obtained under the Securities Act,
the Exchange Act and such other approvals as have been obtained or
made, specifying the same.
(xi) Based solely on the representations of the Selling
Stockholders, this Agreement and the Custody Agreement have been duly
authorized, executed and delivered on behalf of the Selling
Stockholders and constitute the valid and binding obligations of each
of the Selling Stockholders.
(xii) The Selling Stockholders have full legal right, power and
authority, and any approval required by law (other than as required by
State securities and Blue Sky laws, as to which such counsel need
express no opinion), to sell, assign, transfer and deliver the portion
of the Shares to be sold by the Selling Stockholders.
(xiii) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code) have
acquired good and marketable title to the portion of the Shares being
sold by the Selling Stockholders on the Closing Date, free and clear of
all claims, liens, encumbrances and security interests whatsoever
(assuming, with respect to Shares being issued upon the exercise of the
Options, that payment of the exercise price therefor is made to the
Company as provided in the Custody Agreement).
13
In rendering the opinions required by this Section 7(b), such counsel
may rely (A) as to matters involving the application of laws of any
jurisdiction other than the State of Delaware or the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters' and (B) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the
Company and public officials, and with regard to the opinions in paragraphs
(xii) and (xiii), on the representations of the Selling Stockholders contained
in this Agreement and the Custody Agreement. The opinions of such counsel in
paragraphs (x), (xii) and (xiii) above are based upon their review of those
laws, rules and regulations which, in their experience, are normally
applicable to transactions of the type contemplated by this Agreement.
In addition, such counsel shall state that such counsel has
participated in conferences with representatives of the Underwriters, officers
and other representatives of the Company and representatives of the
independent certified public accountants of the Company and its subsidiaries,
at which conferences the contents of the Registration Statement and Prospectus
and related matters were discussed and, although such counsel does not pass
upon and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus, on the basis of the foregoing (relying as to materiality to a
large extent upon the discussions with, and representations and opinions of,
officers and other representatives of the Company), no facts have come to the
attention of such counsel which causes such counsel to believe that the
Registration Statement at the Effective Date contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus includes any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided, that
such counsel need express no comment with respect to the financial statements,
schedules and other statistical and financial data included in the
Registration Statement or Prospectus.
(c) The Representatives shall have received on the Closing Date an
opinion of counsel for the Company, dated the Closing Date, addressed to the
Underwriters to the effect that: the Company and its Subsidiaries own the
entire right, title and interest in and to any and all patents, trade names,
trademarks, service marks, and copyrights used in the Company's business or
licensed by the Company or its Subsidiaries for use by others; any such items
licensed to the Company or its Subsidiaries by other parties have been
licensed pursuant to a valid and enforceable license agreement and such use is
in conformity with the license agreement; and to the knowledge of such
counsel, there are no pending or threatened proceedings or litigation
affecting, challenging, or with respect to the validity or otherwise of such
patents, trademarks, trade names or copyrights, or any license for use of such
items (whether by or to the Company).
(d) The Underwriters shall have received from Xxxxxx, Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, an opinion dated the Closing Date,
substantially to the effect specified in subparagraphs (ii), (iii), and (iv)
of Paragraph (b) of this Section 7. In rendering such opinion, Xxxxxx, Xxxxxxx
& Xxxxxxxx LLP may rely as to all matters governed other than by Federal law
on the opinion of counsel referred to in Paragraph (b) of this Section 7. In
addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that the Registration Statement, the Prospectus or
any amendment or supplement thereto contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading (except that such counsel need express no
view as to financial statements and other financial information included
14
therein). With respect to such statement, Xxxxxx, Xxxxxxx & Xxxxxxxx LLP may
state that their belief is based upon the procedures set forth therein, but is
without independent check and verification.
(e) The Representatives shall have received at or prior to the Closing
Date from Xxxxxx, Xxxxxxx & Xxxxxxxx LLP a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the
qualification for offering and sale by the Underwriters of the Shares under
the State securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably have designated to the Company.
(f) The Representatives shall have received a signed letter on or prior
to the effective date of the Registration Statement and again on and as of the
Closing Date from Ernst & Young LLP and Price Waterhouse LLP, independent
certified public accountants, with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus or incorporated therein by reference. Each such letter shall be in
form and substance satisfactory to the Representatives and their counsel.
(g) The Representatives shall have received on the Closing Date a
certificate or certificates of the President and Chief Executive Officer and
the Chief Financial Officer of the Company to the effect that, as of the
Closing Date, each of them severally represents as follows:
(i) The Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such
purpose have been taken or are, to his knowledge, contemplated by the
Commission.
(ii) He does not know of any litigation instituted or threatened
against the Company or any of its Subsidiaries of a character required
to be disclosed in the Registration Statement which is not so
disclosed; he does not know of any material contract required to be
filed as an exhibit to the Registration Statement which is not so
filed; and the representations and warranties of the Company contained
in Section 1 hereof are true and correct in all material respects as of
the Closing Date.
(iii) He has examined the Registration Statement and the
Prospectus and, in his opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement and the Prospectus were true and correct in all material
respects, and such Registration Statement and Prospectus did not omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in
which they were made, not misleading and, in his opinion, since the
effective date of the Registration Statement, no event has occurred
which should have been set forth in a supplement to or an amendment of
the Prospectus which has not been so set forth in such supplement or
amendment.
(h) The Company and the Selling Stockholders shall have furnished to
the Representatives such further certificates and documents confirming the
representations and warranties contained herein and related matters as the
Representatives may reasonably have requested.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Representatives and to Xxxxxx, Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters.
15
The several obligations of the Underwriters to purchase the Option
Shares hereunder are subject to satisfaction on and as of the Option Closing
Date of the conditions set forth in Paragraphs (a) through (g) above, except
that the opinions called for in Paragraphs (b) and (c), the letter called for
in Paragraph (e) and the certificate called for in Paragraph (f) shall be
revised to reflect the sale of the Option Shares.
If any of the conditions provided for in this Section 7 shall not have
been fulfilled when and as required by this Agreement, the obligations of the
Underwriters hereunder may be terminated by the Representatives by notifying
the Company of such termination in writing or by telegram at or prior to the
Closing Date. In such event the Company, the Selling Stockholders and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 6 and 9 hereof).
8. Conditions of the Obligations of the Sellers. The obligations of the
Sellers to sell and deliver the Shares are subject to the conditions that at
or before 10:00 A.M., eastern time, on the date of this Agreement, or such
later time and date as the Company and the Representatives may from time to
time consent to in writing or by telegram, the Registration Statement shall
have become effective; and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued or
proceedings therefor initiated or threatened.
9. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter, within the meaning of
the Securities Act, and without limiting any other indemnification available
under this Section 9, Xxxxxxxx Inc. in its capacity as QIU and each person, if
any, who controls the QIU, against any losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) which arise out of or are based
upon any breach of any representation, warranty, agreement, or covenant
contained herein, or any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, any amendment or supplement thereto or any
document incorporated by reference therein, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such
loss, claim, damage, liability, action or proceeding; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement, or alleged untrue statement, or omission or alleged omission made
in the Registration Statement, any Preliminary Prospectus, the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof and, provided, further, that
the indemnity agreement contained in this Section 9(a) shall not inure to the
benefit of any Underwriter to the extent that a prospectus relating to the
purchase of such Shares was required to be delivered by such Underwriter under
the Securities Act in connection with such purchase and any such loss, claim,
damage or liability of such Underwriter results from the fact that there was
not sent or given to such person, at or prior to the written confirmation of
the sale of such Shares to such person, a copy of the Prospectus as then
amended or supplemented (excluding any documents incorporated by reference
therein). This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Each Selling Stockholder agrees, severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter, within the meaning of the Securities Act, and without limiting
16
any other indemnification available under this Section 9, Xxxxxxxx Inc. in its
capacity as QIU and each person, if any, who controls the QIU, provided,
however, that the indemnification obligation of each Selling Stockholder shall
be limited to the net proceeds received by such Selling Stockholder with
respect to the Shares sold, from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) which arise out of
or are based upon any breach of any representation, warranty, agreement, or
covenant contained herein, or any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, any amendment or supplement thereto or any
document incorporated by reference therein, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement, any Preliminary Prospectus or the
Prospectus; provided, however, that the Selling Stockholders will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement, or alleged
untrue statement, or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically for
use in the preparation thereof and, provided, further, that the indemnity
agreement contained in this Section 9(b) shall not inure to the benefit of any
Underwriter to the extent that a prospectus relating to the purchase of such
Shares was required to be delivered by such Underwriter under the Securities
Act in connection with such purchase and any such loss, claim, damage or
liability of such Underwriter results from the fact that there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Shares to such person, a copy of the Prospectus as then amended or
supplemented (excluding any documents incorporated by reference therein). This
indemnity agreement will be in addition to any liability which each Selling
Stockholder may otherwise have.
(c) Each Underwriter severally, but not jointly, will indemnify and
hold harmless the Selling Stockholders, the Company, and each person, if any,
who controls the Company, within the meaning of the Securities Act, against
any losses, claims, damages or liabilities to which the Company or any such
director, officer, Selling Stockholder or controlling person may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any legal or
other expenses reasonably incurred by the Company or such Selling Stockholder
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability, action or proceeding; provided, however, that
each Underwriter will provide indemnity and be liable in each case only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company by or
through the Representatives specifically for use in the preparation thereof.
This indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action or proceeding, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 9, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
17
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 9, except to the extent that the
indemnifying party is substantially prejudiced by the omission of such
notification. In case any such action or proceeding is brought against any
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the extent
that it may wish, jointly with any other indemnifying party, similarly
notified, to assume the defense thereof with counsel satisfactory to such
indemnified party and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 9 is
for any reason held to be unavailable to an indemnified party under subsection
(a) or (b) above in respect to any losses, claims, damages or liabilities
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the parties in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on the one hand
and the Underwriters on the other hand shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company or the Selling Stockholders bears to the underwriting discounts and
commissions received by the Underwriters. The relative fault of a party shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by
pro-rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute shall be several in proportion to their
respective underwriting obligation and not joint.
18
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 9 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it
as an additional defendant in any such proceeding in which such other
contributing party is a party.
(g) The indemnification contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement will remain operative and in full force and effect
regardless of any investigations made by or on behalf of any Underwriters or
controlling persons thereof, or by or on behalf of the Company or its
directors or officers or the Selling Stockholders, and will survive delivery
of, and payment for, the Shares.
10. Default of Underwriters. If any Underwriter shall fail to purchase
and pay for the Firm Shares or the Option Shares, as the case may be, which
such Underwriter has agreed to purchase and pay for hereunder (otherwise than
by reason of any default on the part of the Company or the Selling
Stockholders), you, as Representatives of the Underwriters, shall use your
best efforts to procure within 24 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company and the Selling
Stockholders such amounts as may be agreed upon and upon the terms set forth
herein, the Shares which the defaulting Underwriter or Underwriters failed to
purchase. If during such 24 hours you, as such Representatives, shall not have
procured another purchaser, then (i) if the aggregate number of Shares with
respect to which such default shall occur does not exceed ten percent of the
Firm Shares or the Option Shares, as the case may be, the other Underwriters
shall be obligated, severally, in proportion to the respective number of Firm
Shares which they are obligated to purchase hereunder, to purchase the Shares
which such defaulting Underwriter or Underwriters failed to purchase, or (ii)
if the aggregate number of Shares with respect to which such default shall
occur exceeds 10 percent of the Firm Shares or the Option Shares, as the case
may be, the Company or you, as the Representatives of the Underwriters, will
have the right, by written notice given within the next 24-hour period to the
parties to this Agreement, to terminate this Agreement without liability on
the part of the non-defaulting Underwriters or of the Company or the Selling
Stockholders except to the extent provided in Section 9 hereof. In the event
of a default by any Underwriter or Underwriters as set forth in this Section
11, the Closing Date or the Option Closing Date, as the case may be, may be
postponed for such period, not exceeding seven days, as you, as
Representatives, may determine in order that the required changes in the
Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section
11 shall not relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
11. Notices. All communications hereunder shall be in writing and,
except as otherwise provided herein, will be mailed, delivered, or telegraphed
and confirmed as follows: if to the Underwriters, to Xxxxxxxx Inc., 000 Xxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: W. Xxxxx Xxxxx, with a copy to
Xxxxxx, Xxxxxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx
Xxxx, Xxxxxxxx 00000, Attention: C. Xxxxxxx Xxxxxx, Xx., and if to the Company
or the Selling Stockholders, to The Hain Food Group, Inc., 00 Xxxxxxx
Xxxxxxxxx Xxxx., Xxxxxxxxx, Xxx Xxxx 00000, Attention: President, with a copy
to Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx Xxxxxxx.
12. Termination. This Agreement may be terminated by you by notice to
the Sellers as follows:
19
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 A.M.,
central time, on the first business day following the date on which the
Registration Statement becomes effective;
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any Material Adverse Change
which would, in your reasonable judgment, materially impair the investment
quality of the Shares; (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political conditions
if the effect of such outbreak, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make the
offering or delivery of the Shares impracticable; (iii) general suspension of
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market or limitation on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such Exchange or the over-the-counter market; (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your reasonable
discretion materially and adversely affects or will materially and adversely
affect the business or operations of the Company; (v) declarations of a
banking moratorium by either federal or New York State authorities; or (vi)
the taking of any action by any federal, state or local government or agency
in respect of its monetary or fiscal affairs which in your reasonable
discretion has a material adverse effect on the securities markets in the
United States; or
(c) as provided in Sections 7 and 10 of this Agreement.
13. Successors. This Agreement has been and is made solely for the
benefit of the Underwriters, the Company, the Selling Stockholders and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Shares merely because of such purchase.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants of the Company and the Selling Stockholders in this Agreement shall
remain in full force and effect regardless of (a) any termination of this
Agreement, (b) any investigations made by or on behalf of any Underwriter or
controlling person, or (c) delivery of any payment for the Shares under this
Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Arkansas.
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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Stockholders and the several Underwriters in accordance with its terms.
Very truly yours,
THE HAIN FOOD GROUP, INC.
By__________________________________________________
Title____________________________________________
SELLING STOCKHOLDERS, as identified in
Schedule I hereto
By__________________________________________________
Attorney-in-Fact
for the Selling Stockholders
The foregoing Underwriting Agreement is hereby confirmed and accepted as of
the date first above written.
XXXXXXXX INC. and CIBC XXXXXXXXXXX CORP.
as Representatives
By: XXXXXXXX INC.
By_______________________________________
Authorized Officer
Acting severally on behalf of itself and the other several Underwriters named
in Schedule II hereto.
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SCHEDULE I
Seller No. of Firm Shares
------ ------------------
Company ............................................ 2,500,000
Selling Stockholders:
Xxxxx X. Xxxxx..................................... 125,000
Xxxx Xxxxxxx....................................... 50,000
Xxxxxxxx Xxxxxxx................................... 50,000
Xxxxx X. Xxxxx..................................... 25,000
Argosy - Hain Investment Group, L.P................ 75,000
---------
TOTAL....................................... 2,825,000
=========
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SCHEDULE II
Underwriter No. of Firm Shares
----------- ------------------
Xxxxxxxx Inc. ..............................................
Xxxxxxxxxxx & Co., Inc......................................
2,825,000
=========
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