EXHIBIT 1
IMAGEMAX, INC.
3,100,000 Shares Common Stock(1)
UNDERWRITING AGREEMENT
November ___, 1997
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representatives of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. Introductory. ImageMAX, Inc., a Pennsylvania corporation
("Company"), has an authorized capital stock consisting of 10,000,000 shares of
Preferred Stock, no par value per share, of which _________ shares of Series A
Convertible Preferred Stock were outstanding as of ___________, 1997 and
40,000,000 shares of Common Stock, no par value per share ("Common Stock"), of
which ________ shares were outstanding as of such date. The Company proposes to
issue and sell 3,100,000 shares of its authorized but unissued Common Stock to
the several underwriters named in Schedule A as it may be amended by the Pricing
Agreement hereinafter defined ("Underwriters"), who are acting severally and not
jointly. Such total of 3,100,000 shares of Common Stock proposed to be sold by
the Company is hereinafter referred to as the "Firm Shares." In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
465,000 additional shares of Common Stock ("Option Shares") as provided in
Section 4 hereof. The Firm Shares and, to the extent such option is exercised,
the Option Shares, are hereinafter collectively referred to as the "Shares."
You have advised the Company that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representatives, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form of
Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Company and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Shares will
be governed by this Agreement, as supplemented by the Pricing Agreement.
---------------
(1) Plus an option to acquire up to 465,000 additional shares from the
Company to cover overallotments.
From and after the date of the execution and delivery of the Pricing Agreement,
this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-35567) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("Commission") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 Act;" unless indicated to
the contrary, all references herein to specific rules are rules promulgated
under the 0000 Xxx); and the Company has so prepared and has filed such
amendments thereto, if any, and such amended preliminary prospectuses as
may have been required to the date hereof. If the Company has elected not
to comply with Rule 430A, the Company has prepared and will promptly file
an amendment to the registration statement and an amended prospectus. If
the Company has elected to rely upon Rule 430A, it will prepare and file a
prospectus pursuant to Rule 424(b) that discloses the information
previously omitted from the Prospectus in reliance upon Rule 430A. There
have been or will promptly be delivered to you three signed copies of such
registration statement and amendments, three copies of each exhibit filed
therewith, and conformed copies of such registration statement and
amendments (but without exhibits) and of the related preliminary prospectus
or prospectuses and final forms of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time it
becomes effective and the prospectus constituting a part thereof (including
the information, if any, deemed to be part thereof pursuant to Rule 430A(b)
and/or Rule 434), as from time to time amended or supplemented, are
hereinafter referred to as the "Registration Statement," and the
"Prospectus," respectively, except that if any revised prospectus shall be
provided to the Underwriters by the Company for use in connection with the
offering of the Shares which differs from the Prospectus on file at the
Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer to
such revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434, all
references to "Prospectus" shall be deemed to include, without limitation,
the form of prospectus and the term sheet, taken together, provided to the
Underwriters by the Company in accordance with Rule 434 ("Rule 434
Prospectus"). Any registration statement (including any amendment or
supplement thereto or information which is deemed part thereof) filed by
the Company under Rule 462(b) ("Rule 462(b) Registration Statement") shall
be deemed to be part of the "Registration Statement" as defined herein, and
any prospectus (including any amendment or supplement thereto or
information which is
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deemed part thereof) included in such registration statement shall be
deemed to be part of the "Prospectus," as defined herein, as appropriate.
The Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder are hereinafter collectively
referred to as the "Exchange Act."
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
and, as of its date, has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein not misleading; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case
may be, the Registration Statement, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in all
material respects conformed or will in all material respects conform to the
requirements of the 1933 Act, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the Company
makes no representation or warranty as to information contained in or
omitted from any preliminary prospectus, the Registration Statement, 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 specifically for use
in the preparation thereof.
(c) The Company, its subsidiaries and the Founding Companies (as
defined in the Registration Statement) have been duly incorporated and are
validly existing as corporations in good standing under the laws of their
respective places of incorporation, with the corporate power and authority
to own their properties and conduct their business as described in the
Prospectus; the Company, each of the subsidiaries and each of the Founding
Companies are duly qualified to do business as foreign corporations under
the corporation law of, and are in good standing as such in, each
jurisdiction in which they own or lease properties, have an office, or in
which business is conducted and such qualification is required except in
any such case where the failure to so qualify or be in good standing would
not have a material adverse effect upon the condition (financial or
otherwise), business, assets or results of operations of the Company, its
subsidiaries and the Founding Companies taken as a whole, upon the
Company's ability to perform its obligations under this Agreement, upon the
Company's or any Founding Company's ability to perform its obligations
under the agreements relating to the acquisition of the Founding Companies
(the "Acquisition Agreements"), or upon the validity or consummation of the
transactions contemplated hereby or thereby (a "Material Adverse Effect");
and no proceeding of
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which the Company has knowledge has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification.
(d) The Company owns, directly or indirectly, 100 percent of the
issued and capital stock of each of its subsidiaries set forth in Exhibit
21 of the Registration Statement, free and clear of any claims, liens,
encumbrances or security interests and all of such capital stock has been
duly authorized and validly issued and is fully paid and nonassessable.
Except as set forth in Exhibit 21 of the Registration Statement, the
Company has no subsidiaries and does not control, directly or indirectly,
any other corporation, partnership, limited liability company, joint
venture, association or other entity.
(e) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct. The issued and outstanding shares of
capital stock of the Company as set forth in the Prospectus have been duly
authorized and validly issued, are fully paid and nonassessable, and
conform to the description thereof contained in the Prospectus in all
material respects; and except as described in the Prospectus, there is no
commitment, plan or arrangement to issue, and no outstanding option,
warrant or other right calling for the issuance of, any share of capital
stock of the Company, any subsidiary or any of the Founding Companies; and
except as described in the Prospectus, there is outstanding no security or
other instrument that by its terms is convertible into or exchangeable for
capital stock of the Company, any subsidiary or any of the Founding
Companies, and there is no commitment, plan or arrangement to issue such a
security or instrument.
(f) The Shares to be sold by the Company have been duly authorized and
when issued, delivered and paid for pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and will conform in all
material respects to the description thereof contained in the Prospectus.
(g) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and (i) will not violate any provision of the Company's charter or
bylaws and (ii) will not result in the breach, or be in contravention, of
any provision of any agreement, franchise, License (as hereinafter
defined), indenture, mortgage, deed of trust, or other instrument to which
the Company, any subsidiary or any of the Founding Companies is a party or
by which the Company, any subsidiary, any Founding Company or the property
of any of them may be bound or affected, or any order, rule or regulation
applicable to the Company, any subsidiary or any Founding Company of any
court (foreign, federal, state, local or otherwise), arbitration or other
alternative dispute forum, foreign, federal, state, local or other
government or governmental department, agency, board, commission, bureau or
instrumentality or other regulatory authority (collectively, "Governmental
Authority") having jurisdiction over the Company, any subsidiary or any
Founding Company or any of their
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respective properties, or any order of any Governmental Authority entered
in any proceeding to which the Company, any subsidiary or any Founding
Company was or is now a party or by which it is bound, except with respect
to all matters referenced in this Section 2(g)(ii), for breaches or
contraventions which either singly or in the aggregate would not have a
Material Adverse Effect. No consent, approval, authorization or other order
of any Governmental Authority is required for the execution and delivery of
this Agreement or the Pricing Agreement or the consummation of the
transactions contemplated herein or therein, except for compliance with the
1933 Act and state securities laws applicable to the public offering of the
Shares by the several Underwriters and clearance of such offering with the
National Association of Securities Dealers, Inc. ("NASD"). This Agreement
has been duly executed and delivered by the Company.
(h) The accountants who have expressed their opinions with respect to
the financial statements and schedules included in the Registration
Statement are independent accountants as required by the 1933 Act.
(i) The financial statements and schedules of the Company included in
the Registration Statement, including the notes thereto, present fairly the
financial position of the Company as of the respective dates of such
financial statements, and the results of operations and cash flows of the
Company for the respective periods covered thereby, all in conformity with
generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed in the Prospectus; the financial
statements and schedules of the Founding Companies included in the
Registration Statement, including the notes thereto, present fairly the
financial position of the Founding Companies as of the respective dates of
such financial statements, and the consolidated results of operations and
cash flows of the Founding Companies for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
in the Prospectus; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein. The financial information set forth in the Prospectus under the
captions "Summary Pro Forma Combined Financial Data," "Summary Individual
Founding Company Financial Data" and "Selected Pro Forma Combined Financial
Data" presents fairly on the basis stated in the Prospectus, the
information set forth therein; and the pro forma financial statements and
other pro forma information included in the Prospectus present fairly the
information shown therein, have been prepared in accordance with generally
accepted accounting principles and the Commission's rules and guidelines
with respect to pro forma financial statements and other pro forma
information, have been properly compiled on the pro forma basis described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate under the circumstances. The Company and each of the Founding
Companies has adopted a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general
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or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific 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.
(j) None of the Company, its subsidiaries or any of the Founding
Companies is in violation of its charter or bylaws or in default under any
consent decree, order, writ, judgment, award or injunction of any
Governmental Authority, or in default with respect to any material
provision of any lease, loan agreement, note, franchise, License (as
hereinafter defined), permit or other contract obligation to which it is a
party; and there does not exist any state of facts which constitutes an
event of default as defined in such documents or which, with notice or
lapse of time or both, would constitute such an event of default, in each
case, except for defaults which neither singly nor in the aggregate would
have a Material Adverse Effect.
(k) There are no material legal or governmental proceedings pending,
or to the Company's knowledge, threatened to which the Company, any
subsidiary or any Founding Company is or may be a party or of which
material property owned or leased by the Company, any subsidiary or any
Founding Company is or may be the subject, or which are related to
environmental or discrimination matters which are not disclosed in the
Prospectus, or which question the validity of this Agreement or the Pricing
Agreement or any Acquisition Agreement or any action taken or to be taken
pursuant hereto or thereto.
(l) Except as described in the Prospectus, there are no holders of
securities of the Company, any subsidiary or any Founding Company having
rights to registration thereof, preemptive rights or rights of first
refusal to purchase securities from the Company. All such holders of
registration rights have waived such rights with respect to the offering
being made by the Prospectus.
(m) The Company, each subsidiary and each Founding Company have good
and marketable title to all the properties and assets reflected as owned in
the financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or encumbrance of
any kind except those, if any, reflected in such financial statements (or
elsewhere in the Prospectus) or which are not material to the Company, its
subsidiaries and the Founding Companies taken as a whole. The Company, each
of its subsidiaries and each of the Founding Companies hold their
respective leased properties which are material to the Company, its
subsidiaries and the Founding Companies taken as a whole under valid and
binding leases.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected
6
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company, its subsidiaries and the
Founding Companies taken as a whole, have not incurred any material
liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there has
not been any material adverse change in their condition (financial or
otherwise), business, assets, or results of operations nor any material
change in their capital stock, short-term debt or long-term debt. Except as
disclosed in writing to the Representatives prior to the date hereof, none
of the Company, the subsidiaries or the Founding Companies has received
notice (either formally or informally) of the termination or anticipated
termination of one or more customer projects or relationships currently
maintained by the Company, any of its subsidiaries or any of the Founding
Companies, which termination(s) could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(p) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. No transaction has occurred between or among the Company and any
of its officers or directors or any affiliate or affiliates of any such
officer or director that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(q) The Company, its subsidiaries and the Founding Companies own and
possess all right, title and interest in and to, or has duly licensed from
third parties a valid, enforceable right to use, all patents, patent
rights, trade secrets, inventions, know-how, trademarks, trade names,
copyrights, service marks and other proprietary rights ("Trade Rights")
material to the business of the Company, its subsidiaries and the Founding
Companies taken as a whole. None of the Company, its subsidiaries or the
Founding Companies has received any notice of infringement,
misappropriation or conflict from any third party as to such material Trade
Rights which has not been resolved or disposed of and neither the Company,
its subsidiaries or the Founding Companies has infringed, misappropriated
or otherwise conflicted with material Trade Rights of any third parties,
which infringement, misappropriation or conflict would have a Material
Adverse Effect.
(r) The conduct of the business of the Company, its subsidiaries and
the Founding Companies is in compliance in all respects with applicable
foreign, federal, state, local and other laws and regulations, except where
the failure to be in compliance would not have a Material Adverse Effect.
The Company has no knowledge of, nor has the Company received notice of,
any violation or alleged
7
violation by the Company, any of its subsidiaries or any of the Founding
Companies of any such laws or regulations.
(s) All offers and sales of the Company's, each of its subsidiaries'
and each of the Founding Companies' capital stock prior to the date hereof
were at all relevant times exempt from the registration requirements of the
1933 Act and were duly registered or the subject of an available exemption
from the registration requirements of applicable state securities laws; all
offers and sales of the Company's capital stock pursuant to the Acquisition
Agreements will at all relevant times be exempt from the registration
requirements of the 1933 Act and duly registered or the subject of an
available exemption from the registration requirements of applicable state
securities laws;
(t) The Company, each of its subsidiaries and each of the Founding
Companies have filed all necessary foreign, federal and state income,
franchise, value-added, sales and use and similar tax returns and have paid
all taxes shown as due thereon, and there is no tax deficiency that has
been, or to the knowledge of the Company might be, asserted against the
Company, any of its subsidiaries, any of the Founding Companies or any of
their respective properties or assets that would or could be expected to
have a Material Adverse Effect.
(u) A registration statement relating to the Common Stock has been
declared effective by the Commission pursuant to the Exchange Act and the
Common Stock is duly registered thereunder. The Shares have been approved
for listing on the Nasdaq National Market, subject to notice of issuance or
sale of the Shares, as the case may be.
(v) The Company, each of its subsidiaries and each of the Founding
Companies are not, and do not intend to conduct their respective businesses
in a manner in which any of them would become, an "investment company" as
defined in Section 3(a) of the Investment Company Act of 1940, as amended
("Investment Company Act").
(w) The Company confirms as of the date hereof that neither the
Company nor any of the Founding Companies does business with the government
of Cuba or with any person or affiliate located in Cuba within the meaning
of Section 517.075, Florida Statutes;
(x) The Company, each of its subsidiaries and each of the Founding
Companies has obtained all licenses, permits, certificates, authorizations,
approvals or consents (collectively, the "Licenses") required by any
Governmental Authority to properly and legally operate or conduct the
business in which it is engaged on the date hereof and which are necessary
or desirable for the successful conduct of its business as conducted and as
proposed to be conducted. Each License has been duly obtained, is valid and
in full force and effect, is renewable by its terms or in the
8
ordinary course of business without the need to comply with any special
qualifications or procedures or to pay any amount other than routine filing
fees. None of the Company, its subsidiaries and the Founding Companies (i)
is subject to any pending or threatened administrative or judicial
proceeding to revoke, cancel or declare any License granted to it invalid
in any respect, (ii) is acting outside the scope and authority granted to
it pursuant to any such License, or otherwise is in default or in violation
with respect to any such License, and no event has occurred which
constitutes, or with due notice or lapse of time or both may constitute, a
default by it or a violation of, any License and (iii) has permitted any
License granted to it to lapse since its original effective date, except
where such lapse did not have a Material Adverse Effect. The Company, its
subsidiaries and the Founding Companies have completed and submitted, on a
timely basis, all reports and filings associated with their businesses as
are required by any Governmental Authority.
(y) The Company, its subsidiaries and each of the Founding Companies
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as is reasonable for the conduct of
their businesses and the value of their properties and as is customary in
the businesses in which they are engaged.
(z) The consummation of the acquisitions of the Founding Companies
(the "Acquisitions") and the execution, delivery and performance of all
documents and instruments executed and delivered in connection therewith
were authorized by all necessary corporate action on the part of Company
and the Founding Companies; the Acquisition Agreements are legal, valid and
binding agreements of the Company, the Founding Companies and other parties
thereto except as enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights and by the exercise of judicial discretion in accordance
with general principles applicable to equitable and similar remedies and
except with respect to those provisions relating to indemnities for
liabilities arising under the 1933 Act; all consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations or
qualifications required to be obtained in connection with the Acquisitions
have been obtained, other than such consents, approvals, authorizations,
orders, licenses, certificates, permits, registrations or qualifications
which, individually or in the aggregate, would not have a Material Adverse
Effect; the consummation of the Acquisitions will not (i) conflict with or
result in a breach or violation of any of terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company, any of the
subsidiaries or any of the Founding Companies was or is bound or to which
any of the property or assets of the Company, any of the subsidiaries or
any of the Founding Companies was or is subject, (ii) result in any
violation of the provisions of the charter or by-laws of the Company, any
of the subsidiaries or any of the Founding Companies or (iii) result in any
violation of the provisions of any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company, the subsidiaries or any of the Founding Companies or any of their
properties, other than,
9
in the case of clauses (i) and (iii) above, such conflicts, breaches,
violations or defaults that, individually or in the aggregate, would not
have a Material Adverse Effect.
SECTION 3. Representations and Warranties of the Underwriters. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) under "Underwriting" in the Prospectus was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
SECTION 4. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters named in Schedule A hereto, and the Underwriters agree, severally
and not jointly, to purchase 3,100,000 Firm Shares from the Company at the price
per share set forth in the Pricing Agreement. The obligation of each Underwriter
to the Company shall be to purchase from the Company that number of Shares set
forth opposite the name of such Underwriter in Schedule A hereto. The initial
public offering price and the purchase price shall be set forth in the Pricing
Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act, (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section 12) following the date the Registration Statement becomes
effective (or, if the Company has elected to rely upon Rule 430A, the fourth
business day, if permitted under Rule 15c6-1 under the Exchange Act, (or the
third business day if required under Rule 15c6-1 under the Exchange Act) after
execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company, the Company will deliver to you at the offices of counsel for the
Underwriters or through the facilities of The Depository Trust Company for the
accounts of the several Underwriters, certificates representing the Firm Shares
to be sold by it, against payment of the purchase price therefor by delivery of
federal or other immediately available funds, by wire transfer, to the Company.
Such time of delivery and payment is herein referred to as the "First Closing
Date." The certificates for the Firm Shares so to be delivered will be in such
denominations and registered in such names as you request by notice to the
Company prior to 10:00 A.M., Chicago Time, on the second business day preceding
the First Closing Date, and will be made available at the Company's expense for
checking and packaging by the Representatives at 10:00 A.M., Chicago Time, on
the business day preceding the First Closing Date. Payment for the Firm Shares
so to be delivered shall be made at the time and in the manner described above
at the offices of counsel for the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby
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grants an option to the several Underwriters to purchase, severally and not
jointly, up to an aggregate of 465,000 Option Shares, at the same purchase price
per share to be paid for the Firm Shares, for use solely in covering any
overallotments made by the Underwriters in the sale and distribution of the Firm
Shares. The option granted hereunder may be exercised at any time (but not more
than once) within 30 days after the date of the initial public offering upon
notice by you to the Company setting forth the aggregate number of Option Shares
as to which the Underwriters are exercising the option, the names and
denominations in which the certificates for such shares are to be registered and
the time and place at which such certificates will be delivered. Such time of
delivery (which may not be earlier than the First Closing Date), being herein
referred to as the "Second Closing Date," shall be determined by you, but if at
any time other than the First Closing Date, shall not be earlier than three nor
later than 10 full business days after delivery of such notice of exercise. The
number of Option Shares to be purchased by each Underwriter shall be determined
by multiplying the number of Option Shares to be sold by the Company pursuant to
such notice of exercise by a fraction, the numerator of which is the number of
Firm Shares to be purchased by such Underwriter as set forth opposite its name
in Schedule A and the denominator of which is the total number of Firm Shares
(subject to such adjustments to eliminate any fractional share purchases as you
in your absolute discretion may make). Certificates for the Option Shares will
be made available at the Company's expense for checking and packaging at 10:00
A.M., Chicago time, on the business day preceding the Second Closing Date. The
manner of payment for and delivery of the Option Shares shall be the same as for
the Firm Shares as specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by you by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any obligation hereunder.
SECTION 5. Covenants of the Company. The Company covenants and agrees that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose, and will also advise you promptly of any
request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for
additional information.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any
post-effective amendment) or any Rule 462(b) Registration Statement or any
amendment or supplement to the
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Prospectus (including any revised prospectus which the Company proposes for
use by the Underwriters in connection with the offering of the Shares which
differs from the prospectus on file at the Commission at the time the
Registration Statement became or becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) and any
term sheet as contemplated by Rule 434) and will furnish you with copies of
any such amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to which you or counsel
for the Underwriters shall reasonably object.
(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements of
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or
supplement the Prospectus, including any amendments or supplements thereto
and including any revised prospectus which the Company proposes for use by
the Underwriters in connection with the offering of the Shares which
differs from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
(in form and substance satisfactory to counsel for the Underwriters) which
will correct such statement or omission or an amendment which will effect
such compliance; and, in case any Underwriter is required to deliver a
prospectus nine months or more after the effective date of the Registration
Statement, the Company upon request, but at the expense of such
Underwriter, will prepare promptly such prospectus or prospectuses as may
be necessary to permit compliance with the requirements of Section 10(a)(3)
of the 1933 Act.
(e) None of the Company, any of its subsidiaries or any of the
Founding Companies will, prior to the earlier of the Second Closing Date or
termination or
12
expiration of the option relating to the Option Shares, incur any liability
or obligation, direct or contingent, or enter into any material
transaction, other than in the ordinary course of business, except as
contemplated by the Prospectus.
(f) None of the Company, any of its subsidiaries or any of the
Founding Companies will acquire any capital stock of the Company prior to
the earlier of the Second Closing Date or termination or expiration of the
option relating to the Option Shares nor will the Company, any of its
subsidiaries or any of the Founding Companies declare or pay any dividend
or make any other distribution upon the Common Stock payable to
shareholders of record on a date prior to the earlier of the Second Closing
Date or termination or expiration of the option relating to the Option
Shares, except in either case as contemplated by the Prospectus.
(g) As soon as practicable, but in any event not later than 15 months
after the effective date of the Registration Statement, the Company will
make generally available to its security holders an earnings statement
(which need not be audited) covering a period of at least 12 months
beginning after the effective date of the Registration Statement, which
will satisfy the provisions of the last paragraph of Section 11(a) of the
1933 Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as you may reasonably request, for the
purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the state or province securities laws
of such jurisdictions as you designate, and will continue such
qualifications in effect so long as reasonably required for the
distribution of the Shares. In connection with such qualification or
registration of the Shares, the Company shall not be required to qualify as
a foreign corporation or to file a general consent to service of process in
any such jurisdiction where it is not currently qualified or where it would
be subject to taxation as a foreign corporation.
(j) During the period of five years hereafter, the Company will
furnish you with a copy (i) as soon as practicable after the filing
thereof, of each report filed by the Company with the Commission, any
securities exchange or the NASD, (ii) as soon as practicable after the
release thereof, of each material press release in respect of the Company,
(iii) as soon as available, of each report of the Company mailed to
shareholders and (iv) any additional information of a public nature
concerning the Company or its business that you may reasonably request.
13
(k) The Company will use the net proceeds received by it from the sale
of the Shares being sold by it in all material respects in the manner
specified in the Prospectus.
(l) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately following the execution of the
Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A, Rule 424(b)
and/or Rule 434, copies of an amended Prospectus, or, if required by such
Rule 430A and/or Rule 434, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file, or transmit for
filing, a Rule 462(b) Registration Statement not later than the date of the
execution of the Pricing Agreement. If a Rule 462(b) Registration Statement
is filed, the Company shall make payment of, or arrange for payment of, the
additional registration fee owing to the Commission required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market
which may from time to time be applicable to the Company and will file with
the Commission in a timely manner all reports on Form SR required by Rule
463 and will furnish you copies of any such reports as soon as practicable
after the filing thereof.
(n) The Company agrees not to sell, contract to sell or otherwise
dispose of, or file a registration statement with the Commission with
respect to, any Common Stock or securities convertible into Common Stock
for a period of 180 days after this Agreement becomes effective without the
prior written consent of Xxxxxxx Xxxxx & Company, L.L.C., except (i) in
connection with the offering of the Shares, (ii) in connection with the
acquisition of the Founding Companies on the terms described in the
Registration Statement, (iii) in connection with an acquisition by the
Company of another entity pursuant to which the Company sells, transfers or
issues any of its shares of Common Stock to a third party as part or all of
the purchase price for such entity; provided, however, that prior to any
sale or transfer, such third party shall have agreed in writing with
Xxxxxxx Xxxxx & Company, L.L.C., that it will not sell, contract to sell or
otherwise dispose of, or exercise any registration rights with respect to,
any Common Stock or securities convertible into Common Stock for the
remainder of the 180 days after the date this Agreement becomes effective
without the prior written consent of Xxxxxxx Xxxxx & Company, L.L.C., (iv)
the filing of a shelf registration statement by the Company registering an
additional 2,000,000 shares of Common Stock for use by the Company as
consideration in future acquisitions, and (v) the filing by the Company of
a registration statement on Form S-8 registering up to an additional
850,000 shares of Common Stock issuable upon the exercise of options
granted under the Company's existing equity incentive plans. At or before
the time the Pricing Agreement is executed, the Company shall delivered to
you a letter substantially in the form of Exhibit B hereto from each of
14
the Company's officers, directors, shareholders and each former shareholder
of a Founding Company to whom shares of Common Stock are being issued in
connection with the Acquisitions in which each such person agrees not to
offer, sell, contract to sell or otherwise dispose of any Common Stock or
any securities exercisable for or convertible into Common Stock for a
period of 180 days after the date of such letter without the prior written
consent of Xxxxxxx Xxxxx & Company, L.L.C.
(o) The Company will promptly deliver to the Representatives copies of
all correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Shares under the 1933
Act.
(p) Prior to the First Closing Date, neither the Company nor any
Founding Company will issue any press release or other communication to the
public, directly or indirectly, with respect to the Company, any of its
subsidiaries or any of the Founding Companies or with respect to the
financial condition, results of operations, business, properties, assets or
liabilities of any of them, or the offering of the Shares, without your
prior consent, which consent shall not be unreasonably withheld.
(p) All of the issued and outstanding shares of Series A Convertible
Preferred Stock will be converted into shares of Common Stock on or before
the First Closing Date as described in the Prospectus.
(q) All conditions to the closings of the Acquisitions of the Founding
Companies have been satisfied or waived, and the Company intends to
complete all such closings on the First Closing Date simultaneously with
the closing of the initial public offering of the Firm Shares. The Company
will promptly notify the Underwriters of the occurrence of any event which
may result in the non-consummation of any of the Acquisitions on the
Closing Date.
(r) Unless the Company and you agree otherwise in writing, promptly
after the First Closing Date, the Company will file a shelf registration
statement with the Registration Statement registering an additional
2,000,000 shares of Common Stock for use by the Company as consideration in
future acquisitions, and the Company will use its best efforts to cause
such registration statement to be declared effective by the Commission as
soon as practicable thereafter.
SECTION 6. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company agrees to pay (i) all costs,
fees and expenses (other than legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution of the Registration Statement, each
preliminary prospectus and the Prospectus (including all
15
exhibits and financial statements) and all amendments and supplements provided
for herein, this Agreement, the Pricing Agreement and the blue sky memorandum,
(ii) all costs, fees and expenses (including reasonable legal fees and
disbursements of counsel for the Underwriters) incurred by the Underwriters in
connection with qualifying or registering all or any part of the Shares for
offer and sale under applicable state or province securities laws, including the
preparation of a blue sky memorandum relating to the Shares and clearance of
such offering with the NASD; (iii) all fees and expenses of the Company's
transfer agent, printing of the certificates for the Shares and all transfer
taxes, if any, with respect to the sale and delivery of the Shares to the
several Underwriters; and (iv) all costs, fees and expenses incurred in
connection with the Acquisitions and the performance of the Company's
obligations under the Acquisition Agreements, including without limiting the
generality of the foregoing, all fees and expenses of legal counsel for the
Company and of the Company's independent accountants.
SECTION 7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company herein set forth (including those representations and warranties
which relate to the Company's subsidiaries and the Founding Companies) as of the
date hereof and as of the First Closing Date or the Second Closing Date, as the
case may be, to the accuracy of the statements of officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company or you, shall be contemplated by the
Commission. If the Company has elected to rely upon Rule 430A and/or Rule
434, the information concerning the initial public offering price of the
Shares and price-related information shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within the prescribed period
and the Company will provide evidence satisfactory to the Representatives
of such timely filing (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been
transmitted to the Commission for filing and become effective within the
prescribed time period and, prior to the First Closing Date, the Company
shall have provided evidence of such filing and effectiveness in accordance
with Rule 462(b).
16
(b) The Shares shall have been qualified for sale under the state or
province securities laws of such jurisdictions as shall have been specified
by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have been
approved by counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company, its subsidiaries or the Founding Companies taken as a
whole, whether or not arising in the ordinary course of business, which, in
the judgment of the Representatives, makes it impractical or inadvisable to
proceed with the public offering or purchase of the Shares as contemplated
hereby.
(f) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Pepper, Xxxxxxxx & Xxxxxxx LLP, counsel for the
Company, addressed to the Underwriters and dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania with corporate power and authority
to own its properties and conduct its business as described in
the Prospectus; and the Company has been duly qualified to do
business as a foreign corporation under the corporation law of,
and is in good standing as such in, every jurisdiction where the
ownership or leasing of property or the conduct of its business
requires such qualification, except where the failure so to
qualify would not have a Material Adverse Effect;
17
(2) an opinion to the same general effect as clause (1) of
this subparagraph (i) in respect of each Founding Company and
each direct and indirect subsidiary of the Company;
(3) the authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under the caption
"Capitalization" as of the dates stated therein, and such capital
stock conforms as to legal matters in all material respects to
the description thereof in the Registration Statement and
Prospectus; the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is fully
paid and nonassessable and free of statutory preemptive rights;
except as described in the Prospectus, to such counsel's
knowledge, there are 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 of or other ownership interests in the Company;
(4) the issued and outstanding capital stock of each
subsidiary of the Company and each Founding Company has been duly
authorized, validly issued and is fully paid and nonassessable
and free of statutory preemptive rights; the Company owns
directly or indirectly 100 percent of the outstanding capital
stock of each subsidiary, and to such counsel's knowledge, such
stock is owned free and clear of any claims, liens, encumbrances
or security interests; and, upon consummation of the Acquisitions
of Image Memory Systems, Inc., Laser Graphics Systems & Services,
Inc. and Codalex Microfilming Corporation pursuant to the
respective Acquisition Agreements, the Company will own directly
or indirectly 100 percent of the outstanding capital stock of
each such Founding Company, and to such counsel's knowledge, such
stock will be owned free and clear of any claims, liens,
encumbrances or security interests; except as contemplated by the
Acquisition Agreements, there are outstanding 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 of or other ownership interests
in any of the Company's subsidiaries or the Founding Companies.
(5) the certificates for the Shares to be delivered
hereunder are in due and proper form, and when duly countersigned
by the Company's transfer agent and delivered to you or upon your
order against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement and the Pricing
Agreement, the Shares represented thereby will be duly authorized
and validly issued, fully paid and nonassessable and to such
counsel's knowledge will be free of any pledge, lien,
encumbrance, claim or preemptive rights of, or rights
18
of first refusal in favor of, shareholders with respect to any of
the Shares or the issuance or sale thereof, pursuant to the
articles of incorporation or bylaws of the Company and to such
counsel's knowledge there are no contractual preemptive rights,
rights of first refusal, rights of co-sale or other similar
rights which exist with respect to any of the Shares or the
issuance and sale thereof; and the Shares to be sold hereunder
have been duly and validly authorized and qualified for inclusion
on the Nasdaq National Market, subject to notice of issuance;
(6) the Registration Statement has become effective under
the 1933 Act, and, to such 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 or contemplated under the 1933 Act, and
the Registration Statement (including the information deemed to
be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) and/or Rule 434, if
applicable), the Prospectus and each amendment or supplement
thereto (except for the financial statements and other
statistical or financial data included therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act; the
statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations are accurate and
fairly and correctly present the information required to be
presented by the 1933 Act or the rules and regulations
thereunder, in all material respects and such counsel does not
know of any statutes, rules and regulations required to be
described or referred to in the Registration Statement or the
Prospectus that are not described or referred to therein as
required; and such counsel does not know of any legal or
governmental proceedings pending or threatened required to be
described in the Prospectus which are not described as required,
nor of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described or filed, as required;
(7) the statements under the captions "Risk Factors --
Effect of Certain Charter, Bylaw and Statutory Provisions,"
"Management -- Employment Agreements," "Management -- Stock
Incentive Plans," "Certain Transactions -- Acquisition
Transactions," "Certain Transactions -- Management Contract,"
"Description of Capital Stock" and "Shares Eligible for Future
Sale" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are
accurate summaries and fairly and correctly present, in all
material respects, the information required to be disclosed with
19
respect to such documents and matters by the 1933 Act and the
rules and regulations thereunder;
(8) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder and thereunder
have been duly authorized by all necessary corporate action and
this Agreement and the Pricing Agreement have been duly executed
and delivered by and on behalf of the Company, and are legal,
valid and binding agreements of the Company, except as
enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles applicable to
equitable and similar remedies and except as to those provisions
relating to indemnities for liabilities arising under the 1933
Act as to which no opinion need be expressed; and no approval,
authorization or consent of any Governmental Authority is
necessary in connection with the issue or sale of the Shares by
the Company pursuant to this Agreement (other than under the 1933
Act, applicable state or province securities laws and the rules
of the NASD) or the consummation by the Company of any other
transactions contemplated hereby;
(9) to such counsel's knowledge, none of the Company, its
subsidiaries or the Founding Companies is in violation of its
charter or is in breach of, or in default under (nor has any
event occurred which, with notice, lapse of time or both would
constitute a breach of, or default under) any indenture, lease,
credit agreement or other agreement or instrument to which the
Company, any of its subsidiaries or any of the Founding Companies
is a party or by which their respective properties may be bound
or affected, where such violation or breach or default could have
a Material Adverse Effect;
(10) the execution, delivery and performance of this
Agreement, the issuance and sale of the Shares, and the
consummation of the transactions herein contemplated by the
Company, will not contravene any of the provisions of, or result
in a default under, any agreement, franchise, License, indenture,
mortgage, deed of trust, or other instrument known to such
counsel, of the Company, any of its subsidiaries or any of the
Founding Companies or by which the property of any of them is
bound and which contravention or default would have a Material
Adverse Effect, violate any of the provisions of the charter or
bylaws of the Company, any of its subsidiaries or any of the
Founding Companies; or so far as is known to such counsel,
violate
20
any statute, order, rule or regulation of any Governmental
Authority having jurisdiction over the Company, any of its
subsidiaries or any of the Founding Companies;
(11) except as disclosed in the Prospectus, to such
counsel's knowledge no person has the right, contractual or
otherwise, to cause the Company, any of its subsidiaries or any
of the Founding Companies to issue, or register pursuant to the
1933 Act, any shares of capital stock of the Company, any of its
subsidiaries or any of the Founding Companies, upon the issue and
sale of the Shares to be sold by the Company to the Underwriters
pursuant to this Agreement;
(12) all offers and sales of the Company's, each of its
subsidiaries' and, to such counsel's knowledge, each of the
Founding Companies' capital stock prior to the date hereof were
at all relevant times exempt from the registration requirements
of the 1933 Act and were duly registered or the subject of an
available exemption from the registration requirements of
applicable state securities laws; the offer and sale of
securities in the Acquisitions, in the absence of the public
offering contemplated by the Registration Statement (the
"Offering"), would be exempt from the registration provisions of
Section 5 of the 1933 Act by virtue of the exemption from
registration provided by Section 4(2) of the 1933 Act. Moreover,
such counsel is familiar with the reasoning set forth in the
requests for the no-action letters issued by the Commission with
respect to Black Box Incorporated (SEC no-action letter dated
June 26, 1990) and Verticom, Inc. (SEC no-action letter dated
February 12, 1986), and with the Commission staff's favorable
responses to both such requests, in both of which instances the
Commission staff indicated that it would take no enforcement
action concerning the integration of a private offering with a
subsequent public offering in certain circumstances. In Black
Box, the Commission staff relied upon Rule 152 under the 1933 Act
to reach the position that certain private placements made
pursuant to agreements entered into prior to the filing of a
registration statement under the 1933 Act relating to a public
offering, as to the consummation of which private placements the
issuer had represented to the Commission staff that the
obligations of the parties thereto were subject only to the
satisfaction of conditions which were not within such parties'
control, would not be required to be integrated with such
subsequent public offering. In Verticom, the Commission staff
similarly relied upon Rule 152 to arrive at the position that,
notwithstanding Verticom's contemplation of a public offering at
the time that it effected a private offering that it believed to
be exempt pursuant to Section 4(2) of the 1933 Act, such private
offering concluded prior to the filing of a registration
statement under the 1933 Act relating to the public offering need
not be
21
integrated with such later registered public offering. The
Company entered to Acquisition Agreements on September 9, 1997
and September 11, 1997; in each such Acquisition Agreement, the
only material condition to the consummation of the subject
Acquisition was the consummation of the Offering; and no such
Acquisition Agreement was subject to renegotiation following
September 11, 1997. The Registration Statement was initially
filed by the Company with the Commission on September 12, 1997.
Based upon such facts, Rule 152 and the reasoning adopted by the
Commission in the Black Box and Verticom letters, such counsel is
of the opinion that the exemption from registration of the offer
and sale of securities in the Acquisitions provided by Section
4(2) under the 1933 Act is not vitiated by the filing of the
Registration Statement, the Offering or the consummation of the
Offering upon effectiveness thereof and the offer and sale of
securities in the Acquisitions are exempt from registration under
all applicable state securities laws or Blue Sky laws;
(13) Assuming the application of the net proceeds from the
sale of the Shares as described in the Prospectus under the
caption "Use of Proceeds," none of the Company, its subsidiaries
or the Founding Companies is an "investment company" or a person
"controlled by" an "investment company" within the meaning of the
Investment Company Act;
(14) The Company, its subsidiaries and the Founding
Companies own and possess all right, title and interest in and
to, or has duly licensed from third parties a valid, enforceable
right to use, all Trade Rights described in the Prospectus as
being owned or licensed by them or any of them or necessary for
the conduct of their respective businesses, and such counsel is
not aware of any claim to the contrary or any challenge of any
other person to the rights of the Company, the subsidiaries and
the Founding Companies with respect to the foregoing; and
(15) The consummation of the Acquisitions and the execution,
delivery and performance of all documents and instruments
executed and delivered in connection therewith were authorized by
all necessary corporate action on the part of Company and the
Founding Companies; the Acquisition Agreements are legal, valid
and binding agreements of the Company, the Founding Companies and
other parties thereto except as enforceability of the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights and by the
exercise of judicial discretion in accordance with general
principles applicable to equitable and similar remedies and
except with respect to those provisions relating to indemnities
for
22
liabilities arising under the 1933 Act, as to which no opinion
need be expressed; all consents, approvals, authorizations,
orders, licenses, certificates, permits, registrations or
qualifications required to be obtained in connection with the
consummation of the Acquisitions have been obtained, other than
such consents, approvals, authorizations, orders, licenses,
certificates, permits, registrations or qualifications which,
individually or in the aggregate, would not have a Material
Adverse Effect; the consummation of the Acquisitions will not (i)
conflict with or result in a breach or violation of any of terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company, any of its
subsidiaries or any of the Founding Companies was or is bound or
to which any of the property or assets of the Company, any of its
subsidiaries or any of the Founding Companies was or is subject,
(ii) result in any violation of the provisions of the charter or
by-laws of the Company, any of its subsidiaries or any of the
Founding Companies or (iii) result in any violation of the
provisions of any statute or any order, rule or regulation of any
Governmental Authority having jurisdiction over the Company, any
of its subsidiaries or any of the Founding Companies or any of
their properties, other than, in the case of clauses (i) and
(iii) above, such conflicts, breaches, violations or defaults
that, individually or in the aggregate, would not have a Material
Adverse Effect.
In addition, such counsel shall advise the Underwriters that
they have participated in the preparation of the Registration
Statement and the Prospectus and in conferences with officers and
other representatives of the Company, representatives of the
independent public accountants for the Company, and the
Underwriters' representatives and counsel at which the contents
of the Registration Statement, the Prospectus and related matters
were discussed and, although such counsel has not passed upon or
assumed any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus, and although, except as otherwise
may be expressly provided in their opinion, such counsel has not
undertaken to verify independently the accuracy or completeness
of the statements in the Registration Statement and the
Prospectus and, therefore, would not necessarily have become
aware of any material misstatement of fact or omission to state a
material fact, on the basis of and subject to the foregoing such
counsel does not believe that either the Registration Statement,
as of its effective date, or the Prospectus, as of its date of
issue (other than the financial statements, notes or schedules
thereto and other financial or statistical data and supplemental
schedules included therein or omitted therefrom, as to which such
counsel need express no belief), contained
23
or contains any untrue statement of a material fact or omitted or
omits 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.
In rendering such opinion, such counsel may state that they
are relying upon the certificate of Stock Trans, Inc., the
transfer agent for the Common Stock, as to the number of shares
of Common Stock at any time or times outstanding. Such counsel
may also rely upon the opinions of competent local counsel
satisfactory to counsel to the Underwriters as to legal matters
in jurisdictions other than those in which they are domiciled and
Delaware (provided that such counsel shall state in their opinion
that they have examined such other opinions and believe that they
and the Underwriters are justified in relying on such other
opinions) and, as to factual matters, on certificates of officers
of the Company and of state or province officials, in which case
their opinion is to state that they are so doing and copies of
such opinions or certificates are to be attached to the opinion
unless such opinions or certificates (or, in the case of
certificates, the information therein) have been furnished to the
Representatives in other form.
(ii) An opinion of counsel of each Founding Company addressed to the
Underwriters and in the form required pursuant to the Acquisition Agreement
to which such Founding Company is a party.
(iii) Such opinion or opinions of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx,
counsel for the Underwriters, dated the First Closing Date or the Second
Closing Date, as the case may be, with respect to the incorporation of the
Company, the validity of the Shares to be sold by the Company, the
Registration Statement and the Prospectus and other related matters as you
may reasonably require, and the Company shall have furnished to such
counsel such documents and shall have exhibited to them such papers and
records as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(iv) A certificate of the chief executive officer and the principal
financial officer of the Company, dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) the representations and warranties of the Company set forth
in Section 2 of this Agreement are true and correct as of the date of
this Agreement and as of the First Closing Date or the Second Closing
Date, as the case may be, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date; and
24
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary prospectus
filed as a part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the knowledge of the
respective signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act.
The delivery of the certificate provided for in this subparagraph
shall be and constitute a representation and warranty of the Company as to
the facts required in the immediately foregoing clauses (1) and (2) of this
subparagraph to be set forth in such certificate.
(v) At the time the Pricing Agreement is executed and also on the
First Closing Date or the Second Closing Date, as the case may be, there
shall be delivered to you a letter addressed to you, as Representatives of
the Underwriters, from Xxxxxx Xxxxxxxx LLP, independent accountants, the
first one to be dated the date of the Pricing Agreement, the second one to
be dated the First Closing Date and the third one (in the event of a second
closing) to be dated the Second Closing Date, to the effect set forth in
Schedule B. There shall not have been any change or decrease specified in
the letters referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(vi) At or before the time the Pricing Agreement is executed, there
shall be delivered to you a letter substantially in the form of Exhibit B
hereto from each of the Company's officers, directors, shareholders and
each former shareholder of a Founding Company to whom shares of Common
Stock are being issued in connection with the Acquisitions in which each
such person agrees not to offer, sell, contract to sell or otherwise
dispose of any Common Stock or any securities exercisable for or
convertible into Common Stock for a period of 180 days after the date of
such letter without the prior written consent of Xxxxxxx Xxxxx & Company,
L.L.C.
(viii) Such further certificates and documents as you may reasonably
request.
(g) All of the issued and outstanding shares of Series A Convertible
Preferred Stock shall have been converted into shares of Common Stock as
described in the Prospectus.
(h) Each of the Acquisitions shall have been completed upon the terms set
forth in the Prospectus simultaneously with the closing of the purchase of the
Firm Shares by the Underwriters.
25
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, counsel for the Underwriters, which approval
shall not be unreasonably withheld. The Company shall furnish you with such
manually signed or conformed copies of such opinions, certificates, letters and
documents as you request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without liability
on the part of any Underwriter or the Company, except for the expenses to be
paid or reimbursed by the Company pursuant to Sections 6 and 8 hereof and except
to the extent provided in Section 10 hereof.
SECTION 8. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Shares on the First Closing Date is 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 to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by you and them in connection with the proposed purchase and
sale of the Shares. Any such termination shall be without liability of any party
to any other party except that the provisions of this Section, Section 6 and
Section 10 shall at all times be effective and shall apply.
SECTION 9. Effectiveness of Registration Statement. You and the Company
will use your and its best efforts to cause the Registration Statement to become
effective, if it has not yet become effective, and to prevent the issuance of
any stop order suspending the effectiveness of the Registration Statement and,
if such stop order be issued, to obtain as soon as possible the lifting thereof.
SECTION 10. 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 1933 Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the 1933 Act, the Exchange Act
or other foreign, federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions 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, including the information deemed
to be part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A and/or Rule 434, if applicable, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, 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;
26
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 or action; provided, however, that the Company will not
be liable in any such case to the extent that (i) 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 any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Shares in any case where
such delivery is required by the 1933 Act. In addition to its other obligations
under this Section 10(a), the Company agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 10(a), it will reimburse the Underwriters
on a monthly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of the 1933 Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other foreign,
federal or state statutory law or regulation, at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue 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 alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with Section 3 of this
Agreement or any other written information furnished to the Company by such
Underwriter through the Representatives specifically for use in the
27
preparation thereof; and will reimburse any legal or other expenses reasonably
incurred by the Company, or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. In addition to their other obligations under this Section
10(b), the Underwriters agree that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 10(b), they will reimburse the Company on a monthly
basis for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Underwriters' obligation to reimburse
the Company for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of
28
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
arising out of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of 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 Company and the
Underwriters from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Underwriters 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 respective relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion in the case of the
Company, as the total price paid to the Company for the Shares by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters 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 Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation 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, 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 which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person
29
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section are several in proportion to
their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
SECTION 11. Default of Underwriters. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters shall
purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such Shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Shares hereunder on the First Closing Date and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the Representatives may make arrangements satisfactory to the Company for
the purchase of such Shares by other persons, including any of the Underwriters,
but if no such arrangements are made by such date the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Shares which such defaulting Underwriters agreed but
failed to purchase on such date. If any Underwriter or Underwriters so default
and the aggregate number of Shares with respect to which such default or
defaults occur is more than the above percentage and arrangements satisfactory
to the Representatives and the Company for the purchase of such Shares by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any nondefaulting Underwriter or the
Company, except for the expenses to be paid by the Company pursuant to Section 6
hereof and except to the extent provided in Section 10 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that any necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
SECTION 12. Effective Date. This Agreement shall become effective
immediately as to Sections 6, 8, 10 and 13 and as to all other provisions at
10:00 A.M., Chicago time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall become effective at such hour on
the business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company or by release of any Shares for sale to the public. For
the purposes of this
30
Section, the Shares shall be deemed to have been so released upon the release
for publication of any newspaper advertisement relating to the Shares or upon
the release by you of telegrams (i) advising Underwriters that the Shares are
released for public offering, or (ii) offering the Shares for sale to securities
dealers, whichever may occur first.
SECTION 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
or by you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 6 hereof and except to the extent provided in Section 10 hereof) or
of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may be
cancelled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or
United States authorities, or (iii) there shall have been any change in
financial markets or in political, economic or financial conditions which,
in the opinion of the Representatives, either renders it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the
terms set forth in the Prospectus or materially and adversely affects the
market for the Shares, or (iv) there shall have been an outbreak of major
armed hostilities between the United States and any foreign power which in
the opinion of the Representatives makes it impractical or inadvisable to
offer or sell the Shares. Any termination pursuant to this paragraph (b)
shall be without liability on the part of any Underwriter to the Company or
on the part of the Company to any Underwriter (except for expenses to be
paid or reimbursed pursuant to Section 6 hereof and except to the extent
provided in Section 10 hereof).
SECTION 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, principals, members, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Shares sold hereunder.
SECTION 15. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered, telecopied or telegraphed
and confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxx X. Xxxxx, Fax (000) 000-0000, with a copy to
Xxxxxxx X. Xxxx,
31
Esquire, Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, Fax (000) 000-0000, if sent to the Company will be mailed, delivered or
telegraphed and confirmed to the Company at its corporate headquarters with a
copy to Xxxxx X. Xxxxxxx, Esquire, Pepper, Xxxxxxxx & Xxxxxxx LLP, 3000 Two
Xxxxx Square, Eighteenth and Xxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000-0000, Fax (000) 000-0000.
SECTION 16. Successors. This Agreement and the Pricing Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors, personal representatives and assigns, and to the benefit of the
officers and directors and controlling persons referred to in Section 10, and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 17. Representation of Underwriters. You will act as Representatives
for the several Underwriters in connection with this financing, and any action
under or in respect of this Agreement taken by you will be binding upon all the
Underwriters.
SECTION 18. Partial Unenforceability. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 19. Information Provided by Underwriters. The Company and the
Underwriters acknowledge and agree that the only information furnished or to be
furnished by any Underwriter to the Company for inclusion in any Prospectus or
the Registration Statement consists of the information set forth in the last
paragraph on the front cover page of the Prospectus (insofar as such information
relates to the Underwriters), the legend required by Item 502(d) of Regulation
S-K under the Act and the information under the caption "Underwriting" in the
Prospectus.
SECTION 20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
SECTION 21. Applicable Law. This Agreement and the Pricing Agreement shall
be governed by and construed in accordance with the laws of the State of
Illinois.
[This space intentionally left blank.]
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 and the several Underwriters
including you, all in accordance with its terms.
Very truly yours,
IMAGEMAX, INC.
By:
----------------------------------
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXX XXXXXXXXXX XXXXX INC.
Acting as Representatives of the
several Underwriters named in
Schedule A.
XXXXXXX XXXXX & COMPANY, L.L.C.
By:
-------------------------
A Principal
33
SCHEDULE A
Number of Firm
Shares to be
Underwriter Purchased
----------- ---------
Xxxxxxx Xxxxx & Company, L.L.C. ............................
Xxxxxx Xxxxxxxxxx Xxxxx Inc.................................
---------
TOTAL ...................................................... 3,100,000
=========
SCHEDULE B
Comfort Letter for ImageMAX, Inc.
To Be Delivered by Xxxxxx Xxxxxxxx LLP
(1) They are independent public accountants with respect to the Company,
its subsidiaries and the Founding Companies within the meaning of the 1933 Act.
(2) In their opinion the financial statements and schedules of the Company
and the Founding Companies included in the Registration Statement and the
financial statements of the Company and the Founding Companies from which the
information presented under the captions "Summary Pro Forma Combined Financial
Data," "Summary Individual Founding Company Financial Data" and "Selected Pro
Forma Combined Financial Data" has been derived which are stated therein to have
been examined by them comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and the Founding Companies responsible for
financial and accounting matters as to transactions and events subsequent to the
end of the most recently completed fiscal year of such entity, a reading of
minutes of meetings of the shareholders and directors of the Company and the
Founding Companies since the end of the most recently completed fiscal year of
such entity, a reading of the latest available interim unaudited financial
statements of the Company and the Founding Companies (with an indication of the
date thereof) and other procedures as specified in such letter, nothing came to
their attention which caused them to believe that (i) the unaudited financial
statements of the Company and the Founding Companies included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act or that such unaudited
financial statements are not fairly presented in accordance with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the Registration Statement,
(ii) the amounts in "Summary Pro Forma Combined Financial Data," "Summary
Individual Founding Company Financial Data" and "Selected Pro Forma Combined
Financial Data" included in the Prospectus do not agree with or are not
derivable from the corresponding amounts in the audited financial statements or
unaudited financial statements (as applicable) from which such amounts were
derived, and (iii) at a specified date not more than five days prior to the date
thereof in the case of the first letter and not more than two business days
prior to the date thereof in the case of the second and third letters, there was
any change in the capital stock or long-term debt or short-term debt (other than
normal payments) of the Company and the Founding Companies on a basis or any
decrease in net current assets or shareholders' equity as compared with amounts
shown on the latest unaudited balance sheet of the Company or the relevant
Founding Company (as applicable) included in the Registration Statement or for
the period from the date of such balance sheet to a date not more than five days
prior to the date
thereof in the case of the first letter and not more than two business days
prior to the date thereof in the case of the second and third letters, there
were any decreases, as compared with the corresponding period of the prior year,
in net sales, income before income taxes or in the total or per share amounts of
net income except, in all instances, for changes or decreases which the
Prospectus discloses have occurred or may occur or which are set forth in such
letter.
(4) On the basis of reading the pro forma information included in the
Prospectus, carrying out specified procedures, inquiries of certain officials of
the Company and the Founding Companies who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy of the application of
the pro forma adjustments to the historical amounts, nothing came to their
attention which caused them to believe that the pro forma financial information
does not comply in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X and the pro forma adjustments have
not been properly applied to the historical amounts in the compilation of such
information.
(5) They have carried out specified procedures, which have been agreed to
by the Representatives, with respect to certain information in the Prospectus
specified by the Representatives, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company and the Founding Companies.
EXHIBIT A
IMAGEMAX, INC.
3,100,000 Shares Common Stock(1)
PRICING AGREEMENT
_______, 1997
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated ____________, 1997
(the "Underwriting Agreement") relating to the sale by the Company and the
purchase by the several Underwriters for whom Xxxxxxx Xxxxx & Company and Xxxxxx
Xxxxxxxxxx Xxxxx Inc. are acting as representatives (the "Representatives"), of
the above Shares. All terms herein shall have the definitions contained in the
Underwriting Agreement except as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees
with the Representatives as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $_________, being an amount equal to the initial public
offering price set forth above less $________ per share.
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(1) Plus an option to acquire up to 465,000 additional shares from the
Company to cover overallotments.
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 and the several Underwriters,
including you, all in accordance with its terms. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original and all
of which together shall be considered one and the same agreement.
Very truly yours,
IMAGEMAX, INC.
By:
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Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXX XXXXXXXXXX XXXXX INC.
Acting as Representatives of the
several Underwriters named in
Schedule A.
XXXXXXX XXXXX & COMPANY, L.L.C.
By:
----------------------
A Principal
EXHIBIT B
________, 1997
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") among ImageMAX, Inc., a
Pennsylvania corporation (the "Company"), and each of you as representatives of
a group of Underwriters named therein, relating to an underwritten public
offering of Common Stock, no par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned agrees not to directly or indirectly
offer, sell, contract to sell or otherwise dispose of any Common Stock or
securities exercisable for or convertible into Common Stock for a period of 180
days after the effective date of the Registration Statement (as defined in the
Underwriting Agreement) without the prior written consent of Xxxxxxx Xxxxx &
Company, L.L.C., except, in each case, for (i) bona fide gifts to immediate
family members who agree in writing to be bound by the terms of this Agreement
(or trusts for the benefits of such stockholder or family members, the trustees
of which so agree to be bound), and (ii) the conversion of Series A Convertible
Preferred Stock upon the consummation of the offering contemplated by the
Underwriting Agreement.
If for any reason the Underwriting Agreement shall be terminated prior to
the First Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Very truly yours,
[Signature of officer, director or
shareholder of the Company or a
Founding Company]
[Name and address]
