GLOBAL IMAGING SYSTEMS, INC.
7,000,000 Shares/1/
Common Stock
UNDERWRITING AGREEMENT
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June ___, 1998
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
XXXXXXX XXXXX, L.L.C.
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
GLOBAL IMAGING SYSTEMS, INC., a Delaware corporation (the "Company"), and
each of the selling stockholders of the Company named in Schedule 1 hereto (the
"Selling Stockholders") severally confirm their respective agreements with the
several underwriters named in Schedule 2 hereto (the "Underwriters"), for whom
you have been duly authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
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Company proposes to issue and sell to the several Underwriters an aggregate
of 6,700,000 shares (the "Company Shares") of the Company's Common Stock, par
value $0.01 per share ("Common Stock") and the Selling Stockholders propose to
sell to the several Underwriters an aggregate of 300,000 shares (together with
the Company Shares, the "Firm Securities") of Common Stock. The Selling
Stockholders propose to sell, severally, to the several Underwriters not more
than an aggregate of 1,050,000 additional shares of Common Stock if requested by
the Representatives as provided in Section 3 of this agreement (the "Agreement")
in the respective amounts set forth opposite the names of the Selling
Stockholders in Schedule 1 hereto. Any and all shares of Common Stock to be
purchased by the Underwriters pursuant to such option are referred to herein as
the "Option Securities", and the Firm Securities and any Option Securities are
collectively referred to herein as the "Securities".
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/1/ Plus an option to purchase from the Selling Stockholders up to 1,050,000
additional shares to cover over-allotments.
2(A). Representations and Warranties of the Company and its Chief
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Executive Officer. The Company and Xxxxxx X. Xxxxxxx, president and chief
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executive officer of the Company ("Xxxxxxx"), jointly and severally represent
and warrant to, and agree with, each of the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-48103) with
respect to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if the
Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined)
relating to the Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act or (B) if the
Company does not rely on Rule 434 under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of either clause (i)(A) or (i)(B) of
this sentence as have been or shall be provided to and approved by the
Representatives, or (ii) if such registration statement, as it may have been
amended, has not been declared by the Commission to be effective under the Act,
an amendment to such registration statement, including a form of prospectus, a
copy of which amendment has been furnished to and approved by the
Representatives prior to the execution of this Agreement. The Company may also
file a related registration statement with the Commission pursuant to Rule
462(b) under the Act for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission pursuant
to Rule 462(b) under the Act (including the Original Registration Statement and
any Preliminary Prospectus or Prospectus incorporated therein at the time such
registration statement becomes effective); the term "Registration Statement"
includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule 424(b)(7)
under the Act, together with the Preliminary Prospectus identified therein
that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b) under
the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is
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required to be filed pursuant to Rule 424(b) under the Act, the prospectus
included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or suspending use
of any Preliminary Prospectus. When any Preliminary Prospectus was filed with
the Commission it (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the requirements of,
the Act and the rules and regulations of the Commission thereunder and (ii) did
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared effective, it
(i) contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that is
a part thereof or any amendment or supplement to the Prospectus is filed with
the Commission pursuant to Rule 424(b) (or, if the Prospectus or part thereof or
such amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment or
supplement to the Prospectus was or is declared effective) and on the Firm
Closing Date and any Option Closing Date (both as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act and the rules and regulations of the Commission thereunder and (ii) did not
or will not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made in
any Preliminary Prospectus, the Registration Statement or any amendment thereto
or the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the Company
has filed or will file a Rule 462(b) Registration Statement in compliance with
and that is effective upon filing pursuant to Rule 462(b) and (ii) the Company
has given or will give irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under the Act or
the Commission has received payment of such filing fee.
(d) The Company and each of its subsidiaries have been duly organized
and are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective
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properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not amount to a
material liability or disability to the Company and its subsidiaries, taken as a
whole.
(e) The Company and each of its subsidiaries have full power (corporate
and other) to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and are owned beneficially by the Company or its subsidiaries free
and clear of any security interests, liens, encumbrances, equities or claims,
other than the liens granted to JNL pursuant to the Company's Credit Agreement.
(g) The Company has an authorized, issued and outstanding capitalization
as set forth in the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus. All of the issued shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable. The Firm Securities and the Option Securities have been duly
authorized and at the Firm Closing Date or the related Option Closing Date (as
the case may be), after payment therefor in accordance herewith, will be validly
issued, fully paid and nonassessable. No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Firm Securities to be sold by the Company,
and no holder of securities of the Company has any right which has not been
fully waived or complied with to require the Company to register the offer or
sale of any securities owned by such holder under the Act in the public offering
contemplated by this Agreement.
(h) The capital stock of the Company conforms to the description thereof
contained in the Prospectus or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), there are no outstanding
(A) securities or obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any capital stock of the Company or any
such subsidiary, (B) warrants, rights or options to subscribe for or purchase
from the Company or any such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations of the
Company or any such subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such warrants,
rights or options.
(j) The consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the Company and
its consolidated subsidiaries and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Financial Data" in the Prospectus
(or, if
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the Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present, on the basis stated in the Prospectus (or such Preliminary
Prospectus), the information included therein.
(k) Ernst & Young LLP, who have certified certain financial statements
of the Company and its consolidated subsidiaries and delivered their report with
respect to the audited consolidated financial statements and schedules included
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), are independent public
accountants as required by the Act and the applicable rules and regulations
thereunder.
(l) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, receivership, conservatorship or other
similar laws, regulations or procedures of general applicability relating to or
affecting enforcement of the rights of creditors or by general equity principles
and the discretion of the court before which any proceeding is brought
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and except as the obligations of the Company under the indemnification
and contribution provisions hereof may be limited by public policy under certain
circumstances, including applicable federal or state securities laws.
(m) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and, to the Company's knowledge, no such proceedings have been
threatened against the Company or any of its subsidiaries or with respect to any
of their respective properties; and no contract or other document is required to
be described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement that is not described therein (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus) or
filed as required.
(n) The issuance, offering and sale of the Securities to the
Underwriters by the Company and the Selling Stockholders pursuant to this
Agreement, the compliance by the Company with the other provisions of this
Agreement and the consummation of the other transactions herein contemplated do
not (i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have been
obtained, such as may be required under state securities or blue sky laws or
from the NASD and, if the registration statement filed with respect to the
Securities (as amended) is not effective under the Act as of the time of
execution hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties are
bound, or the charter documents or by-laws of the Company or any of its
subsidiaries, or any statute or any judgment, decree, order, rule or regulation
of any court or other governmental authority or any arbitrator applicable to the
Company or any of its subsidiaries, except where such breach, violation or
default would not amount to a material liability or disability to the Company
and its subsidiaries, taken as a whole, or adversely impact the value of the
5
Securities.
(o) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, neither the Company nor any
of its subsidiaries has sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding and there has not been any material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or otherwise), management, business
prospects, net worth, or results of the operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities under this Agreement).
(q) The Company has not distributed and, prior to the later of (I) the
Closing Date and (ii) the completion of the distribution of the Securities, will
not distribute any offering material in connection with the offering and sale of
the Securities other than the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or other materials, if any permitted by the Act.
(r) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), (1) the Company and its
subsidiaries have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business; (2) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock; and (3) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(s) The Company and each of its subsidiaries have marketable title to
all personal property owned by each of them, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such property
by the Company or such subsidiary, and any real property and buildings held
under lease by the Company or any such subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as are not material and
do not interfere with the use made or proposed to be made of such property and
buildings by the Company or such subsidiary, in each case except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the
6
most recent Preliminary Prospectus). Neither the Company nor any of its
subsidiaries owns any real property.
(t) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its subsidiaries taken as
a whole, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(u) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks, service
marks, trade names, licenses, copyrights and proprietary or other confidential
information currently employed by them in connection with their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of infringement of or conflict with asserted rights of any third party
with respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(v) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(w) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(x) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its subsidiaries taken as a whole,
except as described in or contemplated by the Prospectus (or, if the
7
Prospectus is not in existence, the most recent Preliminary Prospectus).
(y) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and this transaction will not cause the Company to
become an investment company subject to registration under such Act.
(z) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company and its subsidiaries taken as a whole) and has
paid all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being
contested in good faith or as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(aa) Neither the Company nor any of its subsidiaries is in violation of
any federal or state law or regulation relating to occupational safety and
health or to the storage, handling or transportation of hazardous or toxic
materials and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(bb) Each certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
(cc) Except for the shares of capital stock of each of the subsidiaries
owned by the Company and such subsidiaries, neither the Company nor any such
subsidiary owns any shares of stock or any other equity securities of any
corporation or has any equity interest in any firm, partnership, association or
other entity, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(dd) There are no holders of securities of the Company, who, by reason of
the filing of the Registration Statement, have the right (and have not waived
such right) to request the Company to register under the Act, or to include in
the Registration Statement, securities held by them.
(ee) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance
8
with management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (3) access to assets is permitted only in accordance with
management's general or specific authorization; and (4) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(ff) No material default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a material default in the due
performance and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties is bound or may be
affected in any material adverse respect with regard to property, business or
operations of the Company and its subsidiaries taken as a whole.
2(B). Representations and Warranties of the Selling Stockholders. Each
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Selling Stockholder, severally and not jointly, represents and warrants to, and
agrees with, each of the several Underwriters that:
(a) Such Selling Stockholder has full power to enter into this Agreement
and to sell, assign, transfer and deliver to the Underwriters the Firm
Securities and the Option Securities to be sold by such Selling Stockholder
hereunder in accordance with the terms of this Agreement; and this Agreement has
been duly executed and delivered by such Selling Stockholder.
(b) Such Selling Stockholder has duly executed and delivered a custody
agreement and power of attorney (the "Custody Agreement" and "Power-of-
Attorney"), each in the form heretofore delivered to the Representatives,
appointing each of Xxxxxxx and Xxxxxxx Xxxxxxxxx (the "Attorneys-in-Fact") with
authority to execute, deliver and perform this Agreement on behalf of such
Selling Stockholder and appointing First Union National Bank as custodian
thereunder (the "Custodian"). Certificates in negotiable form, endorsed in
blank or accompanied by blank stock powers duly executed, with signatures
appropriately guaranteed, representing the Firm Securities and the Option
Securities to be sold by such Selling Stockholder hereunder or securities that
will convert automatically into such Securities on the Firm Closing Date have
been deposited with the Custodian pursuant to the Custody Agreement and Power of
Attorney for the purpose of delivery pursuant to this Agreement. Such Selling
Stockholder has full power to enter into the Custody Agreement and Power-of-
Attorney and to perform her, his or its obligations thereunder. The Custody
Agreement and Power-of-Attorney have been duly executed and delivered by such
Selling Stockholder and, assuming due authorization, execution and delivery by
the Custodian, are the legal, valid, binding and enforceable instruments of such
Selling Stockholder, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, receivership,
conservatorship or other similar laws, regulations or procedures of general
applicability relating to or affecting enforcement of the rights of creditors or
by general equity principles and the discretion of the court before which any
proceeding is brought (regardless of whether enforceability is considered in a
proceeding in equity or at law) and except as the obligations of the Company
under the indemnification and contribution provisions hereof may be limited by
public policy under certain circumstances, including applicable federal or state
securities laws. Such Selling Stockholder agrees that each of the Firm
Securities and the Option
9
Securities or securities convertible into such Securities represented by the
certificates on deposit with the Custodian is subject to the interests of the
Underwriters hereunder, that the arrangements made for such custody, the
appointment of the Attorneys-in-Fact and the right, power and authority of the
Attorneys-in-Fact to execute and deliver this Agreement, to agree on the price
at which the Securities (including such Selling Stockholder's Firm Securities
and Option Securities) are to be sold to the Underwriters, and to carry out the
terms of this Agreement, are to that extent irrevocable and that the obligations
of such Selling Stockholder hereunder shall not be terminated, except as
provided in this Agreement or the Custody Agreement and Power of Attorney, by
any act of such Selling Stockholder, by operation of law or otherwise, whether
by the death or incapacity of such Selling Stockholder or in the case of a trust
or estate by the death of the trustee or trustees or the executor or executors
or the termination of such trust or estate. If such Selling Stockholder, or any
trustee or executor should die or become incapacitated or any such trust should
be terminated, or if any other event should occur, before the delivery of such
Firm Securities or Option Securities or securities convertible into such
Securities hereunder, the certificates for such Firm Securities or Option
Securities deposited with the Custodian shall be delivered by the Custodian in
accordance with the respective terms and conditions of this Agreement as if such
death, incapacity, termination or other event had not occurred, regardless of
whether or not the Custodian or the Attorneys-in-Fact shall have received notice
thereof.
(c) Such Selling Stockholder is the lawful owner of the Firm Securities
and the Option Securities (or the securities convertible into such Securities)
to be sold by such Selling Stockholder hereunder and upon sale and delivery of,
and payment for, such Firm Securities and Option Securities, as provided herein,
such Selling Stockholder will convey good and marketable title to such Firm
Securities and Option Securities, free and clear of any security interests,
liens, encumbrances, equities, claims or other defects.
(d) Such Selling Stockholder has not, directly or indirectly, (i) taken
any action designed to cause or result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities by such Selling Stockholder under this Agreement).
(e) Such Selling Stockholder has not distributed and, prior to the later
of (i) the Option Closing Date (as defined below) and (ii) the completion of the
distribution of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary Prospectus and
the Prospectus or any amendment or supplement thereto, or other materials, if
any, permitted by the Act.
(f) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Internal Revenue Code of 1986, as amended,
with respect to the transactions herein contemplated, such Selling Stockholder
agrees to deliver to you prior to or on the Firm Closing Date, as hereinafter
defined, a properly completed and executed United States Treasury Department
Form W-8 or W-9 (or other applicable form of statement specified by Treasury
Department regulations in lieu thereof).
10
(g) The sale by such Selling Stockholder of Option Securities pursuant
hereto is not prompted by any adverse information concerning the Company that is
not set forth in the Registration Statement or the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(h) The sale of the Firm Securities and the Option Securities to the
Underwriters by such Selling Stockholder pursuant to this Agreement, the
compliance by such Selling Stockholder with the other provisions of this
Agreement, the Custody Agreement and the Power of Attorney and the consummation
of the other transactions herein contemplated do not (A) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws or from the NASD and, if the
Registration Statement is not effective under the Act as of the time of
execution hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act, or (B) conflict with or result in a material
breach or violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other agreement
or instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder or any of such Selling Stockholder's properties are bound,
or any statute or any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator applicable to such Selling
Stockholder.
(i) The information furnished by or on behalf of such Selling Stockholder
relating to such Selling Stockholder and the Securities being sold hereunder by
such Selling Stockholder included in the Registration Statement and the
Prospectus does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make such information not misleading.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of the
---------------------------------------------
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell 6,700,000 shares of Firm Securities, each of the Selling
Stockholders agrees to sell to the several Underwriters the number of shares of
Firm Securities set forth opposite the name of such Selling Stockholder in
column (a) of Schedule 1 hereto, and each of the Underwriters, severally and not
jointly, agrees to purchase from the Company and the Selling Stockholders, the
number of Firm Securities set forth opposite the name of such Underwriter in
Column (a) of Schedule 2 hereto at a purchase price of $________ per share. One
or more certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representatives
request upon notice to the Company and the Attorneys-in-Fact at least 48 hours
prior to the Firm Closing Date, shall be delivered by or on behalf of the
Company and the Selling Stockholders to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire transfer in same-day funds
(the "Wired Funds") to the account of the Company and each Selling Stockholder.
Such delivery of and payment for the Firm Securities shall be made at the
offices of Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000 Xxxxxxxxxx Xxxxxx, XX,
Xxxxxxxxxx, X.X. at 9:30 A.M., New York time, on __________, 1998, or at such
other place, time or date as the Representatives and the Company may agree upon
or as the Representatives may determine pursuant to Section 9 hereof, such time
and date of delivery against payment being herein referred to as the "Firm
Closing Date".
11
The Company and each Selling Stockholder will make such certificate or
certificates for the Firm Securities available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's transfer
agent or registrar or of Prudential Securities Incorporated at least 24 hours
prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Securities as contemplated by the Prospectus,
each of the Selling Stockholders, severally and not jointly, hereby grants to
the several Underwriters an option to purchase, severally and not jointly, the
number of Option Securities set forth opposite the name of such Underwriter in
column (b) of Schedule 2 hereto. The purchase price to be paid for any Option
Securities shall be the same price per share as the price per share for the Firm
Securities set forth above in paragraph (a) of this Section 3. The option
granted hereby may be exercised as to all or any part of the Option Securities
from time to time within 30 (thirty) days after the date of the Prospectus (or,
if such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open for trading).
The Underwriters shall not be under any obligation to purchase any of the Option
Securities prior to the exercise of such option. The Representatives may from
time to time exercise the option granted hereby by giving notice in writing or
by telephone (confirmed in writing) to the Attorneys-in-Fact and the Company
setting forth the aggregate number of Option Securities as to which the several
Underwriters are then exercising the option and the date and time for delivery
of and payment for such Option Securities. Any such date of delivery shall be
determined by the Representatives but shall not be earlier than three business
days or later than five business days after such exercise of the option and, in
any event, shall not be earlier than the Firm Closing Date. The time and date
set forth in such notice, or such other time on such other date as the
Representatives, the Attorneys-in-Fact and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, is herein called the
"Option Closing Date" with respect to such Option Securities. Upon exercise of
the option as provided herein, each of the Selling Stockholders shall become
obligated to sell to the several Underwriters up to the number of Option
Securities set forth opposite the name of such Selling Stockholder in column (b)
of Schedule 1 hereto, in the same percentage of the total number of Option
Securities as to which the several Underwriters are exercising the option herein
as the number set forth opposite the name of such Selling Stockholder in column
(b) of Schedule 1 bears to 1,050,000, as adjusted by the Company in such manner
as it deems advisable to avoid fractional shares, and, subject to the terms and
conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Selling Stockholders the
number of Option Securities set forth opposite the name of such Underwriter in
Column (b) of Schedule 2 hereto in the same percentage of the total number of
the Option Securities as to which the several Underwriters are then exercising
the option as such Underwriter is obligated to purchase of the aggregate number
of Firm Securities, as adjusted by the Representatives in such manner as they
deem advisable to avoid fractional shares. If the option is exercised as to all
or any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Securities and the Firm Closing Date shall be deemed, for purposes of
this paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company, each Selling Stockholder and the Underwriters hereby
acknowledge
12
that the wire transfer by or on behalf of the Underwriters of the purchase price
for any Securities, and/or the delivery by the Company or a Selling Stockholder
of stock certificates representing Securities does not constitute closing of a
purchase and sale of the Securities. Only execution and delivery of a receipt
for Securities by the Underwriters and execution by the Company and the Selling
Stockholders of a receipt for payment of the purchase price of such Securities
indicate completion of the closing of a purchase of the Securities from the
Company or any Selling Stockholder. Furthermore, in the event that the
Underwriters wire funds to the Company or any Selling Stockholder prior to the
completion of the closing of a purchase of Securities, the Company and each
Selling Stockholder hereby acknowledge that until the Underwriters execute and
deliver a receipt for the Securities, by facsimile or otherwise, the Company and
each Selling Stockholder will not be entitled to the Wired Funds and shall
return the Wired Funds to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the closing of a
purchase of Securities is not completed and the Wired Funds are not returned by
the Company or any Selling Stockholder to the Underwriters on the same day the
Wired Funds were received by the Company, the Company and each Selling
Stockholder agree to pay to the Underwriters in respect of each day the Wired
Funds could practicably be and are not returned by it, in same-day funds,
interest on the amount of such Wired Funds in an amount representing the
Underwriters' cost of financing as reasonably determined by Prudential
Securities Incorporated.
(d) It is understood that any of you, individually and not as one of the
Representatives, may (but shall not be obligated to) make payment on behalf of
any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
-----------------------------
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company and the Selling Stockholders. (A) The
------------------------------------------------------
Company covenants and agrees with each of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required, the
Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required to
be delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the Prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(A)(a) hereof, any amendment or supplement to such
Prospectus, Term Sheet or any amendment to the Registration Statement or any
Rule 462(b) Registration Statement unless the Representatives previously have
been advised and furnished with a copy (through their counsel) for a reasonable
period of time prior to the proposed filing and shall have given their consent.
The Company will prepare and file with the Commission, in accordance with the
rules and regulations of the Commission, promptly upon request by the
13
Representatives or counsel for the Underwriters, any amendments to the
Registration Statement or amendments or supplements to the Prospectus that may
be necessary or advisable in connection with the distribution of the Securities
by the several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the Representatives,
promptly after receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to the Representatives of each such filing or
effectiveness.
(b) The Company will advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Original Registration
Statement or any Rule 462(b) Registration Statement or any amendment thereto or
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, (ii) the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, (iii)
the institution, threatening or contemplation of any proceeding for any such
purpose or (iv) any request made by the Commission for amending the Original
Registration Statement or any Rule 462(b) Registration Statement, for amending
or supplementing the Prospectus or for additional information. The Company will
use its best efforts to prevent the issuance of any such stop order and, if any
such stop order is issued, to obtain the withdrawal thereof as promptly as
possible.
(c) The Company will cooperate, when and as requested by you, in the
qualification of the Securities for offering and sale under the securities or
blue sky laws of such jurisdictions as the Representatives may designate and
will continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Securities, provided, however, that in
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connection therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 5(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a conformed copy of the registration
statement originally filed with respect to the Securities and each amendment
thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, certified by the Secretary or an Assistant Secretary of
the Company to be true and complete copies thereof as filed with the Commission
by electronic transmission, (ii) to each other Underwriter, a conformed copy of
such registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii)
14
so long as a prospectus relating to the Securities is required to be delivered
under the Act, as many copies of each Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto as the Representatives may reasonably
request; without limiting the application of clause (iii) of this sentence, the
Company, not later than (A) 6:00 P.M., New York City time, on the date of
determination of the public offering price, if such determination occurred at or
prior to 10:00 A.M., New York City time, on such date or (B) 2:00 P.M., New York
City time, on the business day following the date of determination of the public
offering price, if such determination occurred after 10:00 A.M., New York City
time, on such date, will use its best efforts to deliver to the Underwriters,
without charge, as many copies of the Prospectus and any amendment or supplement
thereto as the Representatives may reasonably request for purposes of confirming
orders that are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally available to
its securityholders and to the Representatives a consolidated earnings statement
of the Company and its subsidiaries that satisfies the provisions of Section
11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds to it from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of any option to purchase or other sale or
disposition) of any shares of Common Stock or any securities convertible into,
or exchangeable or exercisable for, shares of Common Stock for a period of 180
days after the date hereof, except pursuant to this Agreement, other than grants
of options pursuant to the Company's 1998 Stock Option and Incentive Plan and
pursuant to the Company's Savings Plan.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) except for the sale of the Firm Securities pursuant to this
Agreement, (A) sell, bid for, purchase, or pay anyone any compensation for
soliciting purchases of, the Securities or (B) pay or agree to pay to any person
any compensation for soliciting another to purchase any other securities of the
Company (except for the sale of Securities by the Selling Securityholders under
this Agreement).
(j) The Company will obtain the agreements described in Section 7(f) hereof
prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public
15
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall both
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 promulgated
under the Act by the time confirmations are sent or given, as specified by Rule
462(b)(2).
(m) The Company will cause the Securities to be duly included for quotation
on The Nasdaq Stock Market's National Market (the "Nasdaq National Market")
prior to the Firm Closing Date. The Company will make best efforts to ensure
that the Securities remain included for quotation on the Nasdaq National Market
following the Firm Closing Date.
(B) Each of the Selling Stockholders covenants and agrees with each of the
Underwriters that:
(a) Such Selling Stockholder will not, directly or indirectly, (i) take any
action designed to cause or result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) except for the sale of Securities pursuant to this Agreement
(A) sell, bid for, purchase, or pay anyone any compensation for soliciting
purchases of, the Securities or (B) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(b) Such Selling Stockholder will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) any shares of Common Stock or such similar
securities, beneficially owned by such Selling Stockholder (excluding any shares
of the Common Stock that may be acquired through the Company's Savings Plan, as
that term is defined in the Registration Statement) for a period of 180 days
after the date hereof (other than (i) the redemption by the Company of the
shares of Class A Common Stock as described in the Registration Statement and
(ii) the transfer of any or all shares of the Common Stock now owned or
hereafter acquired by the undersigned to a member of the undersigned's immediate
family or to a trust, limited partnership or other entity whose sole
beneficiaries or equity owners are the undersigned and/or members of the
undersigned's immediate family; provided, however, that any such transferee
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shall execute and deliver to you an agreement of substantially the tenor of this
Section 5(B)(b) with respect to such shares).
(c) Such Selling Stockholder will pay all Federal and other taxes, if any,
on the transfer or sale of the Firm Securities and the Option Securities being
sold by such Selling Stockholder to the Underwriters.
(d) Such Selling Stockholder will do or perform all things required to be
done or performed by such Selling Stockholder prior to any Firm Closing Date or
Option Closing Date to satisfy all conditions precedent to the delivery of the
Firm Securities and the Option Securities being sold by such Selling Stockholder
pursuant to this Agreement.
16
6. Expenses. The Company will pay all costs and expenses incident to the
--------
performance of the obligations of the Company and the Selling Stockholders under
this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing or other
production of documents with respect to the transactions, including any costs of
printing the registration statement originally filed with respect to the
Securities and any amendment thereto, any Rule 462(b) Registration Statement,
any Preliminary Prospectus and the Prospectus and any amendment or supplement
thereto, this Agreement and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company and, in accordance with
applicable agreements between the Company and the Selling Stockholders, the
Selling Stockholders, (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (v) the qualification of the Securities under
state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto and, in
accordance with applicable agreements between the Company and the Selling
Stockholders, the Selling Stockholders, (vi) the filing fees of the Commission
and the National Association of Securities Dealers, Inc. relating to the
Securities, (vii) any quotation of the Securities on the Nasdaq National Market,
(viii) any meetings with prospective investors in the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters) and (ix) advertising relating to the offering of the
Securities (other than advertising at the sole request of the Representatives).
If the sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 7 hereof
is not satisfied, because this Agreement is terminated pursuant to Section 11
hereof or because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally upon demand
for all out-of-pocket expenses (including counsel fees and disbursements) that
shall have been incurred by them in connection with the proposed purchase and
sale of the Securities. The Company shall not in any event be liable to any of
the Underwriters for the loss of anticipated profits from the transactions
covered by this Agreement.
Each Selling Stockholder will pay any transfer taxes attributable to the
sale by such Selling Stockholder of the Securities it sells hereunder.
7. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and Xxxxxxx in Section 2(A) hereof
and of the Selling Stockholders in Section 2(B) hereof, in each case as of the
date hereof and as of the Firm Closing Date, as if made on and as of the Firm
Closing Date, to the accuracy of the statements of the Company's officers made
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholders of their respective covenants and agreements hereunder and
to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto filed
prior to the Firm Closing Date has not been declared effective as of the time of
execution hereof, the Original Registration Statement or such amendment and, if
the Company has elected to rely upon Rule 462(b),
17
the Rule 462(b) Registration Statement shall have been declared effective not
later than the earlier of (i) 11:00 A.M., New York time, on the date on which
the amendment to the registration statement originally filed with respect to the
Securities or to the Registration Statement, as the case may be, containing
information regarding the initial public offering price of the Securities has
been filed with the Commission and (ii) the time confirmations are sent or given
as specified by Rule 462(b)(2), or with respect to the Original Registration
Statement, or such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus or any Term Sheet that constitutes
a part thereof and any amendment or supplement thereto shall have been filed
with the Commission in the manner and within the time period required by Rules
434 and 424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to the
knowledge of the Company, the Selling Stockholders or the Representatives, shall
be contemplated by the Commission; and the Company and each Selling Stockholder
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxx & Xxxxxxx, L.L.P., counsel for the Company, to the effect
that:
(i) the Company and each of its subsidiaries listed in Schedule 3
hereto (the "Subsidiaries") have been duly organized and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
does not amount to a material liability or disability to the Company and
the Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have corporate power to
own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus,
and the Company has corporate power to enter into this Agreement and to
carry out all the terms and provisions hereof to be carried out by it;
(iii) the issued shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable and are owned beneficially by the Company free and clear of
any perfected security interests or, to the best knowledge of such counsel,
any other security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued shares of
capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable, have been issued in compliance with
all applicable federal and state securities laws and were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities; the Firm Securities have been duly
authorized by all necessary corporate action of the Company and, when
issued and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable; the
Securities have been
18
duly included for trading on the Nasdaq National Market; no holders of
outstanding shares of capital stock of the Company are entitled as such to
any preemptive or other rights to subscribe for any of the Securities; and
no holders of securities of the Company are entitled to have such
securities registered under the Registration Statement;
(v) the statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements purport to
summarize certain provisions of the capital stock of the Company, provide a
fair summary of such provisions; and the statements set forth under the
heading "Business--Legal Proceedings" in the Prospectus, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, provide a fair summary of such legal
matters, documents and proceedings;
(vi) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(vii) (A) no legal or governmental proceedings are pending to which
the Company or any of the Subsidiaries is a party or to which the property
of the Company or any of the Subsidiaries is subject that are required to
be described in the Registration Statement or the Prospectus and are not
described therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against the Company or any of the
Subsidiaries or with respect to any of their respective properties and (B)
no contract or other document is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein or filed as
required;
(viii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been obtained
and such as may be required under state securities or blue sky laws, or (B)
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, lease or other agreement or instrument, known to such counsel, to
which the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or any of their respective properties
are bound, or the charter documents or by-laws of the Company or any of the
Subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
known to such counsel and applicable to the Company or Subsidiaries;
(ix) the Registration Statement is effective under the Act; any
required filing of the Prospectus, or any Term Sheet that constitutes a
part thereof, pursuant to Rules 434 and 424(b) has been made in the manner
and within the time period required by Rules 434 and 424(b); and no stop
order suspending the effectiveness of the Registration Statement or any
amendment thereto has been issued, and no proceedings for that purpose have
been instituted or threatened or, to the best knowledge of such counsel,
are contemplated by the Commission;
19
(x) the Registration Statement originally filed with respect to the
Securities and each amendment thereto, any Rule 462(b) Registration
Statement and the Prospectus (in each case, other than the financial
statements and other financial information contained therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the rules and
regulations of the Commission thereunder; and
(xi) if the Company elects to rely on Rule 434, the Prospectus is not
"materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or an effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A).
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or the date of such opinion, included or includes any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials [and, as to matters involving the
application of laws of any jurisdiction other than the State of
__________________ or the United States, to the extent satisfactory in form and
scope to counsel for the Underwriters, upon the opinion of [insert name of local
---------------------
counsel]. [The foregoing opinion shall also state that the Underwriters are
--------
justified in relying upon such opinion of [insert name of local counsel], and
------------------------------
copies of such opinion shall be delivered to the Representatives and counsel for
the Underwriters.]
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(b)(2) The Representative shall have received an opinion, dated the
Firm Closing Date, of Xxxxx & Xxxxxxx, counsel for the Selling Stockholders
[other than [ ], counsel for which is [ ]], to the effect that:
(i) each Selling Stockholder has full corporate, partnership or
trust power, as applicable, to enter into this Agreement; the Custody
Agreement and the Power-of-Attorney and to sell, transfer and deliver the
Securities being sold by such Selling Stockholder hereunder in the manner
provided in this Agreement and to perform its obligations under the Custody
Agreement; if such Selling Stockholder is a corporation, the execution and
delivery of this Agreement and, in the case of each Selling Stockholder,
the Custody Agreement and the Power-of-Attorney, have been duly authorized
by all necessary corporate action of each Selling Stockholder; this
Agreement and, in the case of each Selling Stockholder, the Custody
Agreement and the Power-of-Attorney, have been duly executed and delivered
by each Selling Stockholder each such agreement constitutes the
20
legal, valid, binding and enforceable instrument of each Selling
Stockholder, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law);
(ii) when the Underwriters obtain control of the Securities to be
sold by the Selling Stockholders, assuming that the Underwriters purchased
such Securities for value and without notice of any adverse claim to such
Securities within the meaning of Section 8-102 of the Uniform Commercial
Code as in effect in the State of Delaware, the Underwriters will have
acquired all rights of the Selling Stockholders in such Securities free of
any adverse claim;
(iii) the sale of the Securities to the Underwriters by each Selling
Stockholder pursuant to this Agreement, the compliance by each Selling
Stockholder with the provisions of this Agreement and, in the case of each
Selling Stockholder, the Custody Agreement, and the consummation of the
other transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such as may
be required under state securities or blue sky laws, or (ii) conflict with
or result in a breach or violation of any of the terms and provision of, or
constitute a default under any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder or any of such Selling Stockholder's
properties are bound, or the charter documents of by-laws of such Selling
Stockholder or any of its subsidiaries or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to such Selling Stockholder.
In rendering any such opinion, such counsel may rely, as to the matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials, the Selling Stockholders and
representations and warranties of the Company and the Selling Stockholders
contained herein, in the Custody Agreements and in the Powers of Attorney.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, counsel for the Underwriters, with respect to the issuance and sale of the
Firm Securities, the Registration Statement and the Prospectus, and such other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters. [In
rendering such opinion, such counsel may rely as to all matters of law upon the
opinion of [insert name of local counsel] referred to in paragraph (b) above.]
------------------------------
(d) The Representatives shall have received from Ernst & Young LLP a letter
or letters dated, respectively, the date hereof and the Firm Closing Date, in
form and substance satisfactory to the Representatives, to the effect that:
(i) they are independent accountants with respect to the Company and
its consolidated subsidiaries within the meaning of the Act and the
applicable rules and
21
regulations thereunder;
(ii) in their opinion, the audited consolidated financial statements
and schedules examined by them and included in the Registration Statement
and the Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations;
(iii) on the basis of carrying out certain specified procedures (which
do not constitute an examination made in accordance with generally accepted
auditing standards) that would not necessarily reveal matters of significance
with respect to the comments set forth in this paragraph (iii), a reading of the
minute books of the shareholders, the board of directors and any committees
thereof of the Company, and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters, nothing came to their
attention that caused them to believe that, at a specific date not more than
five business days prior to the date of such letter, there were any changes in
the capital stock or long-term debt of the Company consolidated or any decreases
in net current assets or stockholders' equity of the Company consolidated, in
each case compared with amounts shown on the March 31, 1998 consolidated balance
sheet included in the Registration Statement and the Prospectus, or, for the
period from April 1, 1998 to such specified date, there were any decreases, as
compared with a period of substantially the same length of time ended on March
31, 1998, in total revenues, net income before income taxes or total or per
share amounts of net income of the Company consolidated, except in all instances
for changes, decreases or increases set forth in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records of
the Company and its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus and have compared such amounts,
percentages and financial information with such records of the Company and its
consolidated subsidiaries and with information derived from such records and
have found them to be in agreement, excluding any questions of legal
interpretation; and
(v) on the basis of a reading of the unaudited pro forma
consolidated financial statements included in the Registration Statement and the
Prospectus, carrying out certain specified procedures that would not necessarily
reveal matters of significance with respect to the comments set forth in this
paragraph (v), inquiries of certain officials of the Company 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 in the unaudited pro forma consolidated financial statements, nothing
came to their attention that caused them to believe that the unaudited pro forma
consolidated financial statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to
22
proceed with the purchase and delivery of the Securities as contemplated by the
Registration Statement, as amended as of the date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(e)(1) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm Closing
Date; the Registration Statement, as amended as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplemented as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Firm
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings for
that purpose have been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or results of
operations of the Company or any of its subsidiaries, except in each case
as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto).
(e)(2) The Representatives shall have received a certificate, dated the
Firm Closing Date, from each Selling Stockholder, signed by one of the
Attorneys-in-Fact, to the effect that:
(i) the representations and warranties of such Selling Stockholder
in this Agreement are true and correct as if made on and as of the Firm
Closing Date; and
(ii) such Selling Stockholder has performed all covenants and
agreements on its part to be performed or satisfied at or prior to the Firm
Closing Date.
(f) The Representatives shall have received from each person who is a
director or officer
23
of the Company and from each shareholder (other than one former employee who
owns approximately 12,000 shares of Common Stock) an agreement to the effect
that such person will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of any option to purchase or other sale or
disposition) of any shares of Common Stock or any securities convertible into,
or exchangeable or exercisable for, shares of Common Stock (excluding any shares
of the Common Stock that may be acquired through the Company's Savings Plan, as
that term is defined in the Registration Statement) for a period of 180 days
after the date of this Agreement (other than (i) shares of Class A Common Stock
redeemed by the Company as described in the Registration Statement and (ii) any
or all shares of the Common Stock now owned or hereafter acquired by the
undersigned that are transferred to a member of the undersigned's immediate
family or to a trust, limited partnership or other entity whose sole
beneficiaries or equity owners are the undersigned and/or members of the
undersigned's immediate family; provided, however, that any such transferee
-------- -------
shall execute and deliver to you an agreement of substantially the tenor of this
section 7(f) with respect to such shares).
(g) On or before the Firm Closing Date, the Representatives and counsel for
the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(h) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and pay
for any Option Securities shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Securities, except that all references
to the Firm Securities and the Firm Closing Date shall be deemed to refer to
such Option Securities and the related Option Closing Date, respectively.
8. Indemnification and Contribution. (a) The Company and Xxxxxxx, jointly
--------------------------------
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Securities Exchange Act of 1934 (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
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company or Xxxxxxx in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact
24
contained in (A) the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or Xxxxxxx or based upon
written information furnished by or on behalf of the Company or Xxxxxxx
filed in any jurisdiction in order to qualify the Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of any material
fact contained in any audio or visual materials used in connection with the
marketing of the Securities, including without limitation, slides, videos,
films or tape recordings,
and will reimburse, as incurred, 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, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and Xxxxxxx
-------- -------
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and
provided, further, that the Company and Xxxxxxx will not be liable to any
-------- -------
Underwriter or any person controlling such Underwriter with respect to any such
untrue statement or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or supplement thereto) if the
person asserting any such loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale of
such Securities to such person in any case where such delivery of the Prospectus
(as amended or supplemented) is required by the Act, unless such failure to
deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 5(d) and (e) of this Agreement. This
indemnity agreement will be in addition to any liability which the Company or
Xxxxxxx may otherwise have. Neither the Company nor Xxxxxxx will, without the
prior written consent of the Underwriter or Underwriters purchasing, in the
aggregate, more than fifty percent (50%) of the Securities, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any such Underwriter or any person who controls any
such Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of all
of the Underwriters and such controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(b) Each Selling Stockholder, other than Xxxxxxx, severally and not
jointly, agrees to
25
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of 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 Act or otherwise, 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 made by such Selling
Stockholder in Section 2(B) of this Agreement, and will reimburse, as incurred,
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, defending against or appearing as a third-party
witness in connection with any such loss, claim damage, liability or action;
provided, however, that such Selling Stockholder will not be liable to any
Underwriter or any person controlling such Underwriter with respect to any such
untrue statement or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or supplement thereto) if the
person asserting any such loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale of
such Securities to such person in any case where such delivery of the Prospectus
(as amended or supplemented) is required by the Act, unless such failure to
deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 5(A)(d) or (e) of this Agreement. This
indemnity agreement will be in addition to any liability which such Selling
Stockholder may otherwise have. No Selling Stockholder will, without the prior
written consent of the Underwriters purchasing, in the aggregate, more than
fifty percent (50%) of the Securities, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
(c) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement, each Selling Stockholder and each person, if any, who
controls the Company or such Selling Stockholder within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities to which the Company, any such director or officer of the
Company, such Selling Stockholder or any such controlling person of the Company
or such Selling Stockholder may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or any Application or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application 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 reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein, and, subject to the
limitation set forth immediately
26
preceding this clause, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company or any such director or officer, such Selling
Stockholder or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, 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 otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that 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 one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(e) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 8 is unavailable or insufficient, for any
reason, to hold harmless an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof), each indemnifying party,
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the
27
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholders bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault of the parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or any Selling Stockholder, or the
Underwriters, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company, the
Selling Stockholders and the Underwriters agree that it would not be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this paragraph (e).
Notwithstanding any other provision of this paragraph (e), no Underwriter shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section II(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (e), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, shall have the same rights to contribution as the Company or
such Selling Stockholder, as the case may be.
(f) The aggregate liability of the Selling Stockholders, other than
Xxxxxxx, under all provisions of this Agreement shall, in each case, not exceed
an amount equal to the aggregate proceeds received by such Selling Stockholder
for the Securities sold by such person or entity to the Underwriters. The
aggregate liability of Xxxxxxx under all provisions of this Agreement shall not
exceed an amount equal to the sum of (i) the aggregate cash proceeds received by
Xxxxxxx in redemption of his Class A Shares and (ii) the aggregate proceeds
received by Xxxxxxx in consideration for the Securities sold by Xxxxxxx to the
Underwriters hereunder.
9. Default of Underwriters. If one or more Underwriters default in their
-----------------------
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities
28
that such defaulting Underwriter or Underwriters agreed but failed to purchase
is ten percent or less of the aggregate number of Firm Securities or Option
Securities to be purchased by all of the Underwriters at such time hereunder,
the other Underwriters may make arrangements satisfactory to the Representatives
for the purchase of such Securities by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives), but if
no such arrangements are made by the Firm Closing Date or the related Option
Closing Date, as the case may be, the other Underwriters shall be obligated
severally in proportion to their respective commitments hereunder to purchase
the Firm Securities or Option Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If one or more Underwriters so
default with respect to an aggregate number of Securities that is more than ten
percent of the aggregate number of Firm Securities or Option Securities, as the
case may be, to be purchased by all of the Underwriters at such time hereunder,
and if arrangements satisfactory to the Representatives are not made within 36
hours after such default for the purchase by other persons (who may include one
or more of the non-defaulting Underwriters, including the Representatives) of
the Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company other than as provided in Section 10 hereof. In the event of any default
by one or more Underwriters as described in this Section 9, the Representatives
shall have the right to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in Section 3 hereof for not
more than seven business days in order that any necessary changes may be made in
the arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company, its officers, the
Selling Stockholders and the several Underwriters set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, any of its officers or directors, the Selling
Stockholders, any Underwriter or any controlling person referred to in Section 8
hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 6
and 8 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to the
-----------
Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company and the Selling Stockholders given
prior to the Firm Closing Date or the related Option Closing Date, respectively,
in the event that the Company or any of the Selling Stockholders shall have
failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of its subsidiaries shall have, in the sole
judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall
29
have been any material adverse change, or any development involving a
prospective material adverse change (including without limitation a change
in management or control of the Company), in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or supplement
thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally
on the New York Stock Exchange or Nasdaq National Market shall have been
suspended or minimum or maximum prices shall have been established on any
such exchange or market system;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political or financial conditions
having an effect on the U.S. financial markets that, in the sole judgment
of the Representatives, makes it impractical or inadvisable to proceed with
the public offering or the delivery of the Securities as contemplated by
the Registration Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by Underwriters. The statements set forth in the
-------------------------------------
last paragraph on the front cover page and under the heading "Underwriting" in
any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(A)(b) and 8 hereof. The Underwriters confirm that such statements
(to such extent) are correct.
13. Default by Selling Stockholders. If on the Firm Closing Date or the
-------------------------------
Option Closing Date any Selling Stockholder fails to sell the Securities which
such Selling Stockholder has agreed to sell on such date as set forth in
Schedule 1 hereto or Section 3(b) hereof, the Company agrees that it will sell
or arrange for the sale of at least 10% of that number of shares of Common Stock
to the Underwriters which represents Securities which such Selling Stockholder
has failed to so sell, as set forth in Schedule 1 hereto or Section 3(b) hereof,
or such lesser number as may be requested by the Representatives.
14. Notices. All communications hereunder shall be in writing and, if
-------
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group, with a copy to Xxxxxxx X. Xxxxx, Xx., Xxxxxxx Xxxx &
Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; if sent to the Company,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to the Company at Global Imaging Systems, Inc., 00000 Xxxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000, with a copy to Xxxx X.
00
Xxx, Xxx., Xxxxx & Xxxxxxx L.L.P., 000 Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000-0000 and, if sent to any Selling Stockholder, shall be delivered or sent
by mail at its address on the register of the Company.
15. Successors. This Agreement shall inure to the benefit of and shall be
----------
binding upon the several Underwriters, the Company and the Selling Stockholders
and their respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (i) the indemnities of the Company and the Selling Stockholders contained
in Section 8 of this Agreement shall also be for the benefit of any person or
persons who control any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 8 of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act and the
Selling Stockholders. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
16. Applicable Law. The validity and interpretation of this Agreement,
--------------
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
17. Consent to Jurisdiction and Service of Process. All judicial
----------------------------------------------
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, each Selling Stockholder accepts
for itself and in connection with its properties, generally and unconditionally,
the nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Each Selling Stockholder designates
and appoints Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxxxx and such other persons as may
hereafter be selected by such Selling Stockholder irrevocably agreeing in
writing to so serve, as its agent to receive on its behalf service of all
process in any such proceedings in any such court, such service being hereby
acknowledged by such Selling Stockholder to be effective and binding service in
every respect. A copy of any such process so served shall be mailed by
registered mail to such Selling Stockholder at its address provided in Section
14 hereof; provided, however, that, unless otherwise provided by applicable law,
-------- -------
any failure to mail such copy shall not affect the validity of service of such
process. If any agent appointed by such Selling Stockholder refuses to accept
service, such Selling Stockholder hereby agrees that service of process
sufficient for personal jurisdiction in any action against such Selling
Stockholder in the State of New York may be made by registered or certified
mail, return receipt requested, to such Selling Stockholder at its address
provided in Section 14 hereof, and such Selling Stockholder hereby acknowledges
that such service shall be effective and binding in every respect. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of any Underwriter to bring proceedings against any
Selling Stockholder in the courts of any other jurisdiction.
31
18. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
32
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company, each Selling
Stockholder and each of the several Underwriters.
Very truly yours,
GLOBAL IMAGING SYSTEMS, INC.
By
--------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
SELLING STOCKHOLDERS
By
--------------------------
as Attorney-in-Fact, acting on behalf of
the Selling Stockholders listed in
Schedule 1 hereof
--------------------------
Xxxxxx X. Xxxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
XXXXXXX XXXXX, L.L.C.
XXXXXXX XXXXX & ASSOCIATES, INC.
By PRUDENTIAL SECURITIES INCORPORATED
By
---------------------------
Name: Xxxx-Xxxxxx Canfin
Title: Managing Director
For itself and on behalf of the Representatives
33
SCHEDULE 1
SELLING STOCKHOLDERS
(a) (b)
Selling Stockholder Number of Firm Number of Option
------------------- -------------- ----------------
Securities Securities
---------- ----------
to be Sold to to be Sold to
------------- -------------
Underwriters Underwriters
------------ ------------
Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV 269,887 881,090
Limited Partnership
Xxxxxxx National Life Insurance Company 27,584 96,555
Xxxxxx Xxxxxxx 0 60,000
Xxxxxxx Xxxxxxxxx 0 3,960
Xxxxx Xxxxxx 587 2,053
Green, Xxxxxxx & Bunch Holdings, Inc. 1,942 6,342
Total 300,000 1,050,000
SCHEDULE 2
UNDERWRITERS
(a) (b)
Number of
Number of Firm Option
Securities to be Securities to be
Purchased from the Purchased from
Company and the the Selling
Underwriter Selling Stockholder Stockholders
----------- -------------------- ------------
Prudential Securities Incorporated
Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx, L.L.C.
Xxxxxxx Xxxxx & Associates, Inc.
[ ]
Total 7,000,000 1,050,000
SCHEDULE 3
SUBSIDIARIES
Global Imaging Finance Company
Global Imaging Operations, Inc.
Copy Service and Supply, Inc.
Office Furniture Concepts, Inc.
Felco Office Systems, Inc.
American Photocopy Equipment Company of Pittsburgh d/b/a AMCOM Office Systems
Xxxxxx, Inc.
Southern Copy Systems, Inc.
Cameron Office Products, Inc.
Xxxxxx Office Products, Inc.
Business Equipment Unlimited
Electronic Systems, Inc.
Eastern Copy Products, Inc.
Southern Business Communications, Inc.
Quality Business Systems, Inc.
Duplicating Specialties, Inc.
CSS Leasing, LLC
