OHS DRAFT 10/16/97
MADE2MANAGE SYSTEMS, INC.
2,000,000 Shares of Common Stock*
UNDERWRITING AGREEMENT
__________ __, 1997
First Albany Corporation
Xxx Xxxxxx & Company
RvR Securities Corp.,
As Representatives of
the several Underwriters
c/o First Albany Corporation
Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Section 1. INTRODUCTORY. Made2Manage Systems, Inc., an Indiana
corporation (the "Company"), has an authorized capital stock consisting of
10,000,000 shares, no par value, of Common Stock ("Common Stock") and 2,000,000
shares, no par value, of Preferred Stock, of which 1,686,451 shares were
outstanding as of October 15, 1997. The Company, and the person named in
Schedule II (the "Primary Selling Shareholder"), propose to issue and sell
2,000,000 shares (the "Firm Shares") of Common Stock, of which 1,800,000 shares
are to be issued and sold by the Company and 200,000 shares are to be sold by
the Primary Selling Shareholder to the several underwriters named in Schedule I
as it may be amended by the Pricing Agreement hereinafter defined (the
"Underwriters"), who are acting severally and not jointly. In addition, certain
persons named in Schedule III (the "Option Selling Shareholders") propose to
grant to the Underwriters an option to purchase up to 300,000 additional shares
of Common Stock ("Option Shares"), in the respective amounts set forth opposite
their respective names in Schedule III, as provided in Section 5 hereof. The
Firm Shares and, to the extent such option is exercised, the Option Shares, are
hereinafter collectively referred to as the "Shares." The Primary Selling
Shareholder and the Option Selling Shareholders are hereinafter collectively
referred to as the "Selling Shareholders." Each Selling Shareholder has
executed and delivered a Custody Agreement and a Power of Attorney in the form
attached hereto as Exhibit A (collectively, the "Custody Agreement and Power of
Attorney") pursuant to which each Selling Shareholder has placed his Firm Shares
in custody and appointed the persons designated therein as a committee (the
"Committee") with authority to execute and deliver this Agreement on behalf of
such Selling Shareholder and to take certain other actions with respect thereto
and hereto.
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*Plus an option to acquire up to 300,000 additional shares to cover
over-allotments.
You have advised the Company that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representatives, acting on behalf of the
several Underwriters, shall enter an agreement substantially in the form of
Exhibit B hereto (the "Pricing Agreement"). The Pricing Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Company and the Representative and shall specify such applicable information
as is indicated in Exhibit B hereto. The offering of the Shares will be
governed by this Agreement, as supplemented by the Pricing Agreement. From and
after the date of the execution and delivery of the Pricing Agreement, this
Agreement shall be deemed to incorporate the Pricing Agreement.
The Company and the Selling Shareholders hereby confirm their agreement with the
Underwriters as follows:
Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-1 and a
registration statement (Registration No. 333- ___) on Form S-1 relating to the
Shares, including a preliminary prospectus and such amendments to such
registration statement as may have been required to the date of this Agreement,
has been prepared by the Company under the provisions of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations (collectively
referred to as the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a
preliminary prospectus as contemplated by Rule 430 or Rule 430A of the Rules and
Regulations included at any time as part of the registration statement. Copies
of such registration statement and amendments and of each related preliminary
prospectus have been delivered to the Representatives. If such registration
statement has not become effective, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit such
registration statement to become effective will be filed promptly by the Company
with the Commission. If such registration statement has become effective, a
final prospectus containing information permitted to be omitted at the time of
effectiveness by Rule 430A of the Rules and Regulations will be filed promptly
by the Company with the Commission in accordance with Rule 424(b) of the Rules
and Regulations. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A. The term "Prospectus" means the prospectus
as first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no such filing is required, the form of final prospectus
included in the Registration Statement at the Effective Date.
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(b) On the Effective Date, the date the Prospectus is first filed
with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto) did or will comply with all applicable provisions of the
Act and the Rules and Regulations and will contain all statements required to be
stated therein in accordance with the Act and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement, the
Prospectus or any such amendment or supplement did or will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the Option Closing Date, the Prospectus did not or will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing representations and
warranties in this Section 2(b) do not apply to any statements or omissions made
in reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement or Prospectus or any amendment or
supplement thereto. The Company acknowledges that the statements set forth
under the heading "Underwriting" in the Prospectus constitute the only
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement.
(c) The Company is, and at the Closing Date will be, a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Company has, and at the Closing Date will
have, full power and authority to conduct all the activities conducted by it, to
own or lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The Company is, and
at the Closing Date will be, duly licensed or qualified to do business and in
good standing as a foreign corporation in all jurisdictions in which the nature
of the activities conducted by it or the character of the assets owned or leased
by it makes such license or qualification necessary. The Company does not own,
and at the Closing Date will not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture, association or
other entity. Complete and correct copies of the certificate of incorporation
and of the by-laws of the Company and all amendments thereto have been delivered
to the Representatives, and no changes therein will be made subsequent to the
date hereof and prior to the Closing Date or, if later, the Option Closing Date.
(d) The outstanding shares of Common Stock have been, and the Shares
to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and will not be subject
to any preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the
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Closing Date will be, complete and accurate in all respects. Except as set
forth in the Prospectus, the Company does not have outstanding, and at the
Closing Date will not have outstanding, any options to purchase, or any rights
or warrants to subscribe for, or any securities or obligations convertible into,
or any contracts or commitments to issue or sell, any shares of Common Stock,
any shares of capital stock of any subsidiary or any such warrants, convertible
securities or obligations.
(e) The financial statements and schedules included in the
Registration Statement or the Prospectus present fairly the financial condition
of the Company as of the respective dates thereof and the results of operations
and cash flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. No other financial statements or schedules of the Company are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. Coopers & Xxxxxxx, L.L.P., (the
"Accountants") who have reported on such financial statements and schedules, are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations.
(f) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the Closing
Date, except as set forth in or contemplated by the Registration Statement and
the Prospectus, (i) there has not been and will not have been any change in the
capitalization of the Company, or in the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company arising for any reason whatsoever, (ii) the Company has not incurred nor
will it incur any material liabilities or obligations, direct or contingent, nor
has it entered into nor will it enter into any material transactions other than
pursuant to this Agreement and the transactions referred to herein and (iii) the
Company has not and will not have paid or declared any dividends or other
distributions of any kind on any class of its capital stock.
(g) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(h) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any of its respective officers in their
capacity as such, before or by any Federal or state court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding might materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or otherwise) or results of operations.
(i) The Company has, and at the Closing Date will have, (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus, (ii) complied in all respects with all laws, regulations and orders
applicable to it or its business and (iii) performed all its obligations
required to be performed by it, and is not, and at the Closing Date will not be,
in default, under any contract
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or other instrument to which it is a party or by which its property is bound or
affected and, to the best knowledge of the Company, there does not exist any
state of facts which constitutes an event of default as defined in such contract
or instrument or which, with notice or lapse of time or both, would constitute
such an event of default. To the best knowledge of the Company, no other party
under any contract or other instrument to which it is a party is in default in
any respect thereunder. The Company is not, nor at the Closing Date will be, in
violation of any provision of its certificate of incorporation or by-laws.
(j) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
execution of this Agreement or the Pricing Agreement or the consummation by the
Company of the transactions on its part herein contemplated, except such as have
been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the purchase and distribution by the Underwriters of the Shares to be sold by
the Company.
(k) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement of the Company and
is enforceable against the Company in accordance with the terms hereof. The
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or result in the acceleration
of any obligation under, the certificate of incorporation or by-laws of the
Company, any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness,
lease, contract or other agreement or instrument to which the Company is a party
or by which the Company or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company.
(l) Except as disclosed in the Prospectus, there are no holders of
securities of the Company having rights to registration thereof or preemptive
rights to purchase Common stock.
(m) The Company has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material to the business of the Company. The Company has
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it, with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such
properties by the Company.
(n) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration
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Statement which is not described or filed as required. All such contracts to
which the Company is a party have been duly authorized, executed and delivered
by the Company, constitute valid and binding agreements of the Company and are
enforceable against the Company in accordance with the terms thereof.
(o) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect.
(p) Neither the Company nor any or its directors, officers or
controlling persons has taken, directly or indirectly, any action designed, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(q) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(r) Prior to the Effective Date, the Shares will be duly authorized
for listing by the Nasdaq National Market, upon official notice of issuance.
(s) To the best of the Company's knowledge, none of the trademarks,
trade names, service marks, service names, copyrights, patents and patent
applications, and none of the licenses and rights to the foregoing, presently
owned or held by the Company are in dispute or are in conflict with the right of
any other person or entity. The Company (i) owns or has the right to use, free
and clear of all liens, charges, claims, encumbrances, pledges, security
interests, defects or other restrictions or equities of any kind whatsoever, all
trademarks, trade names, service marks, service names, copyrights, patents and
patent applications, and licenses and rights with respect to the foregoing, used
in the conduct of its business as now conducted or proposed to be conducted
without infringing upon or otherwise acting adversely to the right or claimed
right of any person, corporation or other entity under or with respect to any of
the foregoing and (ii) is not obligated or under any liability whatsoever to
make any payments by way of royalties, fees or otherwise to any owner or
licensee of, or other claimant to, any trademark, trade name, service xxxx,
service name, copyright, patent or patent application except as set forth in the
Registration Statement or the Prospectus. There is no action, suit, proceeding,
inquiry, arbitration, investigation, litigation or governmental or other
proceeding, domestic or foreign, pending or threatened (or circumstances that
may give rise to the same) against the Company which challenges the exclusive
rights of the Company with respect to any trademarks, trade names, service
marks, service names, copyrights, patents, patent applications or licenses or
rights to the foregoing used in the conduct of its business.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder, severally and not jointly, represents, warrants and
covenants to each Underwriter that:
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(a) Such Selling Shareholder has full power and authority to enter
into this Agreement and the Custody Agreement and Power of Attorney. All
authorizations and consents necessary for the execution and delivery by such
Selling Shareholder of the Custody Agreement and Power of Attorney, and for the
execution of this Agreement on behalf of such Selling Shareholder, have been
given. Each of the Custody Agreement and Power of Attorney and this Agreement
has been duly authorized, executed and delivered by or on behalf of such Selling
Shareholder and constitutes a valid and binding agreement of such Selling
Shareholder and is enforceable against such Selling Shareholders in accordance
with the terms thereof and hereof.
(b) Such Selling Shareholder now has, and at the time of delivery
thereof hereunder will have, (i) good and marketable title to the Shares to be
sold by such Selling Shareholder hereunder, free and clear of all liens,
encumbrances and claims whatsoever (other than pursuant to the Custody Agreement
and Power of Attorney) and (ii) full legal right and power, and all
authorizations and approvals required by law, to sell, transfer and deliver such
Shares to the Underwriters hereunder and to make the representations, warranties
and agreements made by such Selling Shareholder herein. Upon the delivery of
and payment for such Shares hereunder, such Selling Shareholder will deliver
good and marketable title thereto, free and clear of all liens, encumbrances and
claims whatsoever.
(c) On the Closing Date or Option Closing Date, as the case may be,
all stock transfer or other taxes (other than income taxes) which are required
to be paid in connection with the sale and transfer of the shares to be sold by
such Selling Shareholder to the several Underwriters hereunder will have been
fully paid or provided for by such Selling Shareholder and all laws imposing
such taxes will have been fully complied with.
(d) The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of such Selling
Shareholder pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the acceleration of any obligation under, if such Selling
Shareholder is a corporation or partnership, the organizational documents of
such Selling Shareholder, or, as to all such Selling shareholders, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder or any of its property is bound or
affected, or under any ruling, decree, judgment, order, statute, rule or
regulation of any court or other governmental agency or body having jurisdiction
over such Selling Shareholder or the property of such Selling Shareholder.
(e) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by such Selling Shareholder of the transactions on its part
contemplated herein and in the Custody Agreement and Power of Attorney, except
such as have been obtained under the Act or the Rules and Regulations and such
as may be required under state securities or Blue Sky laws or the by-laws and
rules of the NASD in connection with the purchase and distribution by the
Underwriters of the Shares to be sold by such Selling Shareholder.
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(f) Such Selling Shareholder has no knowledge of any material fact or
condition not set forth in the Registration Statement or Prospectus which has
adversely affected, or may adversely affect, the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company, and the sale of the Shares proposed to be sold by such Selling
Shareholder is not prompted by any such knowledge.
(g) All information with respect to such Selling Shareholder
contained in the Registration Statement and the Prospectus (as amended or
supplemented, if the Company shall have filed with the Commission any amendment
or supplement thereto) complied and will comply with all applicable provisions
of the Act and the Rules and Regulations, contains and will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations, and does not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
(h) To the best knowledge of such Selling Shareholder, the
representations and warranties of the Company contained in Section 2 are true
and correct.
(i) Other than as permitted by the Act and the Rules and Regulations,
such Selling Shareholder has not distributed and will not distribute any
preliminary prospectus, the Prospectus or any other offering material in
connection with the offering and sale of the Shares. Such Selling Shareholder
has not taken, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result in, under the Act or otherwise, or
which has caused or resulted in, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares.
(j) Certificates in negotiable form for the Firm Shares to be sold
hereunder by such Selling Shareholder have been placed in custody, for the
purpose of making delivery of such Firm Shares under this Agreement, under the
Custody Agreement and Power of Attorney which appoints ___________ as custodian
(the "Custodian") for each Selling Shareholder. Such Selling Shareholder agrees
that the Shares represented by the certificates held in custody for him or it
under the Agreement and Power of Attorney are for the benefit of and coupled
with and subject to the interest hereunder of the Custodian, the Committee, the
Underwriters, each other Selling Shareholder and the Company, that the
arrangements made by such Selling Shareholder for such custody and the
appointment of the Custodian and the Committee by such Selling Shareholder are
irrevocable, and that the obligations of such Selling Shareholder hereunder
shall not be terminated by operation of law, whether by the death, disability,
incapacity or liquidation of any Selling Shareholder or the occurrence of any
other event. If any Selling Shareholder should die, become disabled or
incapacitated or is liquidated or if any other such event should occur before
the delivery of the Shares hereunder, certificates for the Shares shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement and actions taken by the Committee and the Custodian pursuant to the
Agreement and Power of Attorney shall be as valid as if such death, liquidation,
incapacity or other event had not occurred, regardless of whether or not the
Custodian or the Committee, or either of them, shall have received notice
thereof.
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Section 4. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discounts and commissions and
terms of the offering and (b) under "Underwriting" in the Prospectus was
furnished to the Company by and on behalf of the Underwriters for use in
connection with the preparation of the Registration and is correct and complete
in all material respects.
Section 5. AGREEMENT TO SELL AND PURCHASE.
(a) The Company and each of the Selling Shareholders, severally and
not jointly, agree to sell to the Underwriters named in Schedule I, and upon the
basis of the respective representations, warranties and agreements of the
Company and the Selling Shareholders herein contained and subject to all the
terms and conditions of this Agreement, each Underwriter agrees, severally and
not jointly, to purchase from the Company and the Selling Shareholders, the
respective number of Firm Shares set forth opposite its name on Schedule I. The
initial public offering price and the purchase price shall be set forth in the
Pricing Agreement.
(b) Subject to all the terms and conditions of this Agreement, the
Option Selling Shareholders grant the Option to the several Underwriters to
purchase, severally and not jointly, up to 300,000 Option Shares at the same
price per share as the Underwriters shall pay for the Firm Shares. The Option
may be exercised only to cover over-allotments in the sale of the Firm Shares by
the Underwriters and may be exercised in whole or in part at any time (but not
more than once) on or before the 45th day after the date of this Agreement upon
written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for
closing on the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and date for
such purchase. On the Option Closing Date, the Selling Shareholders will issue
and sell to the Underwriters the number of Option Shares set forth in the Option
Shares Notice, and each Underwriter will purchase such percentage of the Option
Shares as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional Shares.
Section 6. DELIVERY AND PAYMENT. Delivery of the Firm Shares shall be
made to the Representatives for the accounts of the Underwriters against payment
of the purchase price by certified or official bank checks payable in New York
Clearing House (next-day) funds to the order of each of the Company and the
Selling Shareholder at the office of First Albany Corporation, at 10:00 a.m.,
New York City time, on the third business day following the date of this
Agreement, or at such time on such other date, not later than seven business
days after the date of this Agreement, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the "Closing
Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above
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for the Closing Date at the time and date (which may be the Closing Date)
specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Representatives shall
request at least two (2) business days prior to the Closing Date or the Option
Closing-Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective Underwriters shall be borne by the Company. The cost of tax stamps,
if any, in connection with the sale of the Firm Shares by the Selling
Shareholders shall be borne by the Selling Shareholders. The Company and the
Selling Shareholders will pay and save each Underwriter and any subsequent
holder of the Shares harmless from any and all liabilities with respect to or
resulting from any failure or delay in paying Federal and state stamp and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the original issuance or sale to such Underwriter of the Firm
Shares and Option Shares.
Section 7. AGREEMENTS OF THE COMPANY AND THE SELLING SHAREHOLDERS. The
Company and the Selling Shareholders agree, severally and not jointly, with the
several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (1) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the Commission for amendments or supplements to
the Registration Statement or Prospectus or for additional information, (3) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose
or the threat thereof, (4) of the happening of any event during the period
mentioned in the second sentence of Section 7(e) that in the judgment of the
Company makes any statement made in the Registration Statement or the Prospectus
untrue or that requires the making of any changes in the registration Statement
or Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading, and (5) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration
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Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A of
the Rules and Regulations, the Company will use its best efforts to comply with
the provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and to notify the Representatives promptly of all such filings.
(c) The Company will furnish to the Representatives, without charge,
two signed copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto, and will furnish to the Representatives, without charge, for
transmittal to each of the other Underwriters, a copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request. The Company consents to the use of the Prospectus or
any amendment thereto by the several Underwriters and by all dealers to whom the
Shares may be sold, both in connection with the offering or sale of the Shares
and for any period of time thereafter during which the Prospectus is required by
law to be delivered in connection therewith. If during such period of time any
event shall occur which in the judgment of the Company or counsel to the
Underwriters should be set forth in the Prospectus in order to make any
statement therein, in light of the circumstances under which it was made, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver to
each of the Underwriters, without charge, such number of copies thereof as the
Representatives may reasonably request.
(f) Prior to any public offering of the Shares by the Underwriters,
the Company will cooperate with the Representatives and counsel to the
Underwriters in connection with the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representatives may request; provided, that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the Effective Date,
the Company will furnish to the Representatives and each other Underwriter who
may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
11
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company and the Selling
Shareholders, in such proportions (aggregating 100%) as they may agree upon
among themselves, will pay, or reimburse if paid by the Representatives, all
costs and expenses incident to the performance of the obligations of the Company
and the Selling Shareholders under this Agreement, including but not limited to
costs and expenses of or relating to (1) the preparation, printing and filing of
the Registration Statement and exhibits to it, each preliminary prospectus, the
Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (2) the preparation and delivery of certificates representing the
Shares, (3) the printing of this Agreement, the Agreement Among Underwriters,
any Dealer Agreements, any Underwriters' Questionnaire and the Custody Agreement
and Power of Attorney, (4) furnishing (including costs of shipping and mailing)
such copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be requested for
use in connection with the offering and sale of the Shares by the Underwriters
or by dealers to whom shares may be sold, (5) the quotation of the Shares on the
National Association of Securities Dealers Automated Quotation System, (6) any
filings required to be made by the Underwriters with the NASD, and the fees,
disbursements and other charges of counsel for the Underwriters in connection
therewith, (7) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 7(f), including the fees, disbursements and other charges of
counsel to the Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (8) counsel
to the Company and counsel to the Selling Shareholders and (9) the transfer
agent for the Shares.
(j) If this Agreement shall be terminated by the Company or the
Selling Shareholders pursuant to any of the provisions hereof or if for any
reason the Company or any Selling Shareholder shall be unable to perform its
obligations hereunder, the Company and the Selling Shareholders, in such
proportions (aggregating 100%) as they may agree among themselves, will
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees, disbursements and other charges of counsel to the Underwriters) reasonably
incurred by them in connection herewith.
(k) The Company will not at any time, directly or indirectly, take
any action designed, or which might reasonably be expected, to cause or result
in, or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of
12
Proceeds" and shall file such reports with the Commission with respect to the
sale of the Shares and the application of the proceeds therefrom as may be
required in accordance with Rule 463 under the Act.
(m) During the period of six months commencing at the Closing Date,
the Company will not, without the prior written consent of the Representatives,
grant options to purchase shares of Common Stock at a price less than the
initial public offering price.
(n) On or before the Effective Date, the Company shall provide the
Representatives with true copies of duly executed, legally binding and
enforceable agreements pursuant to which for a period of six months from the
Effective Date, the officers and directors of the Company, holders of all shares
of Common Stock and holders of securities exchangeable or exercisable for or
convertible into shares of Common Stock, agree that it or he or she will not
directly or indirectly, issue, offer to sell, sell, grant an option for the sale
of, assign, transfer, pledge, hypothecate, distribute or otherwise encumber or
dispose of any shares of Common Stock or securities convertible into,
exercisable or exchangeable for or evidencing any right to purchase or subscribe
for any shares of Common stock (either pursuant to Rule 144 of the Rules and
Regulations or otherwise) or dispose of any beneficial interest therein without
the prior written consent of First Albany Corporation.
(o) The Selling Shareholders will not, for a period of six months
after the commencement of the public offering of the Shares, without the prior
written consent of the Representatives, sell, contract to sell or otherwise
dispose of any shares of Common Stock.
(p) The Selling Shareholders will not, without the prior written
consent of the Representatives, make any bid for or purchase any shares of
Common Stock during the six month period commencing on the date hereof.
(q) As soon as any Selling Shareholder is advised thereof, such
Selling Shareholder will advise the Representatives and confirm such advice in
writing, (1) of receipt by such Selling Shareholder, or by any representative of
such Selling Shareholder, of any communication from the Commission relating to
the Registration Statement, the Prospectus or any preliminary prospectus, or any
notice or order of the Commission relating to the Company or any of the Selling
Shareholders in connection with the transactions contemplated by this Agreement
and (2) of the happening of any event during the period from and after the
Effective Date that in the judgment of such Selling Shareholder makes any
statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they were made, not misleading.
Section 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of each Underwriter are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the
13
Representatives and all filings required by Rule 424 and Rule 430A of the Rules
and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of such jurisdiction, (iii) any request for additional information
on the part of the staff of the Commission or any such authorities shall have
been complied with to the satisfaction of the staff of the Commission or such
authorities and (iv) after the date hereof no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives did
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer or the Chairman of the Board of Directors of the
Company and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii), (iii) and (iv).
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement or Prospectus
and (ii) the Company shall not have sustained any material loss or interference
with its business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not set
forth in the Registration Statement and the Prospectus, if in the judgment of
the Representatives any such development makes it impracticable or inadvisable
to consummate the sale and delivery of the Shares by the Underwriters at the
initial public offering price.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
respective officers or directors in their capacities as such, before or by any
Federal, state or local court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or otherwise) or results of operations.
(e) Each of the representations and warranties of the Company and the
Selling Shareholders contained herein shall be true and correct in all material
respects at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, as if made at the
14
Closing Date and, with respect to the Option Shares, at the Option Closing Date,
and all covenants and agreements herein contained to be performed on the part of
the Company and the Selling Shareholders and all conditions herein contained to
be fulfilled or complied with by the Company and the Selling Shareholders at or
prior to the Closing Date Closing Date and, with respect to the Option Shares,
at or prior to the Option Closing Date, shall have been duly performed,
fulfilled or complied with.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
and satisfactory in form and substance to counsel for the Underwriters, from
Ice, Xxxxxx, Xxxxxxx & Xxxx, counsel to the Company and the Selling
Shareholders, to the effect set forth in Exhibit C.
(g) The Representatives shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
LLP, counsel to the Underwriters, with respect to the Registration Statement,
the Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to the Representatives.
(h) Concurrently with the execution and delivery of this Agreement,
the Accountants shall have furnished to the Representatives a letter, dated the
date of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations and with respect to the financial and other statistical and
numerical information contained in the Registration Statement. At the Closing
Date and, as to the Option Shares, the Option Closing Date, the Accountants
shall have furnished to the Representatives a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that nothing has come
to their attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the letter) not more than five days
prior to the Closing Date and the Option Closing Date which would require any
change in their letter dated the date hereof if it were required to be dated and
delivered at the Closing Date and the Option Closing Date.
(i) Concurrently with the execution and delivery of this Agreement
and at the Closing Date and, as to the Option Shares, the Option Closing Date,
there shall be furnished to the Representatives an accurate certificate, dated
the date of its delivery, signed by each of the Chief Executive Officer and the
Chief Financial Officer, in form and substance satisfactory to the
Representatives, to the effect that:
i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents are true and correct in all material respects
and do not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not untrue or misleading
and (B) in the case of the certificate delivered at the Closing Date and
the Option Closing Date, since the Effective Date no event has occurred as
a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein not untrue or misleading in any
material respect.
15
ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is dated, true and correct in all material respects.
iii) Each of the covenants required herein to be performed by
the Company on or prior to the date of such certificate has been duly,
timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the date of such certificate
has been duly, timely and fully complied with.
(j) Concurrently with the execution and delivery of this Agreement
and at the Closing Date and, as to the Option Shares, the Option Closing Date,
there shall have been furnished to the Representatives an accurate certificate,
dated the date of its delivery, signed by the Committee on behalf of each of the
Selling Shareholders, in form and substance satisfactory to the Representatives,
to the effect that the representations and warranties of each of the Selling
Shareholders contained herein are true and correct in all material respects on
and as of the date of such certificate as if made on and as of the date of such
certificate, and each of the covenants and conditions required herein to be
performed or complied with by the Selling Shareholders on or prior to the date
of such certificate has been duly, timely and fully performed or complied with.
(k) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 7(n).
(l) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the Nasdaq National Market upon official notice of
issuance.
(n) The Company and the Selling Shareholders shall have furnished to
the Representatives such certificates, in addition to those specifically
mentioned herein, as the Representatives may have reasonably requested as to the
accuracy and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus, as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company and the Selling Shareholders herein, as to the
performance by the Company and the Selling Shareholders of its and their
respective obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the Representatives.
16
Section 9. INDEMNIFICATION.
(a) Each of the Company and the Selling Shareholders, jointly and
severally, will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person, if any, who
controls each Underwriter within the meaning of Section 15 of the Act or Section
20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from
and against any and all losses, claims, liabilities, expenses and damages
(including any and all investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they, or any of them, may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based on any untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus, or the omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading, provided that the Company and the
Selling Shareholders will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by an Underwriter and is based on an untrue statement or
alleged untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives on behalf of any Underwriter expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus, and
provided further that the Company and the Selling Shareholders will not be
liable to any Underwriter, the directors, officer, employees or agents of such
Underwriter or any person controlling such Underwriter with respect to any loss,
claim, liability, expense, charge or damage arising out of or based on any
untrue statement or alleged untrue statement or omission or alleged omission to
state a material fact in any preliminary prospectus which is corrected in the
Prospectus if the person asserting any such loss, claim, liability, charge or
damage purchased Shares from such Underwriter but was not sent or given a copy
of the Prospectus at or prior to the written confirmation of the sale of such
Shares to such Person. The Company and the Selling Shareholders acknowledge
that the statements set forth under the heading "Underwriting" in any
preliminary prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representatives on behalf of the Underwriters expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus. This
indemnity agreement will be in addition to any liability that the Company or any
Selling Shareholder might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
the Selling Shareholders, each person, if any, who controls the Company or the
Selling Shareholders within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, each director of the Company and each officer of the
Company who signs the Registration Statement to the same extent as the foregoing
indemnity from the Company and the Selling Shareholders to each Underwriter, but
only insofar as losses, claims, liabilities, expenses and damages arise out of
or are based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of such Underwriter expressly for use
17
in the Registration Statement, any preliminary prospectus or the Prospectus.
The Company and the Selling Shareholders acknowledge that the statements set
forth under the heading "Underwriting" in any preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by the Representatives on behalf of the Underwriters
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. This indemnity will be in addition to any
liability that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 9 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
this Section unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled
to participate in and, to the extent that it elects by delivering written notice
to the indemnified party promptly after receiving notice of the commencement of
the action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (l) the
employment of counsel by the indemnified party has been authorized in writing by
the indemnifying party, (2) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All
such fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).
18
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Selling Shareholders
or the Underwriters, the Company, the Selling Shareholders and the Underwriters
will contribute to the total losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted, but after deducting any contribution received
by the Company or the Selling Shareholders from persons other than the
Underwriters, such as persons who control the Company or the Selling
Shareholders within the meaning of the Act, officers of the Company who signed
the Registration Statement and directors of the Company, who also may be liable
for contribution) to which the Company or the Selling Shareholders and any one
or more of the Underwriters may be subject in such proportion so that the
Underwriters are responsible for that portion represented by the percentage that
the underwriting discount appearing on the cover of the Prospectus bears to the
public offering price appearing on the cover and the Company and the Selling
Shareholders are responsible in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and Selling Shareholders.
If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the Company
and the Selling Shareholders, on the one hand, and the Underwriters, on the
other, with respect to the statement or omissions which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 9(d)
were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, liability, expense or damage, or action in respect thereof,
referred to above in this Section 9(d) shall be deemed to include, for purpose
of this Section 9(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9(d), no Underwriter
shall be required contribute any amount in excess of the underwriting discounts
received by it, and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 9(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 9(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company,
19
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 9(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 9(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 9 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of any of the Securities and payment therefor or (iii) any termination of this
Agreement.
Section 10. TERMINATION. The obligations of the several Underwriters
under this Agreement may be terminated at any time prior to the Closing Date
(or, with respect to the Option Shares, on or prior to the Option Closing Date),
by notice to the Company from the Representatives, without liability on the part
of any Underwriter to the Company, if, prior to delivery and payment for the
Shares (or the Option Shares, as the case may be), in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission, by an exchange that lists the
Shares or by the National Association of Securities Dealers Automated Quotation
Market System, (ii) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum or maximum prices shall
have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by such exchange or by
order of the Commission or any court or other governmental authority, (iii) a
general banking moratorium shall have been declared by either Federal or New
York State authorities or (iv) any material adverse change in the financial or
securities markets in the United States or in political, financial or economic
conditions in the United States or any outbreak or material escalation of
hostilities or other calamity or crisis shall have occurred, the effect of which
is such as to make it, in the sole judgment of the Representatives,
impracticable to market the Shares.
Section 11. SUBSTITUTION OF UNDERWRITERS. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 5 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 5 be
increased pursuant to this Section 11 by more than one-ninth of such number of
Firm Shares without the prior written consent of such Underwriter. If any
Underwriter or Underwriters shall
20
fail or refuse to purchase any Firm Shares and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refuse to purchase exceeds one-tenth of the aggregate number of the Firm Shares
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any Shares
under this Agreement. In any such case either the Representatives or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken pursuant to this Section 11
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
Section 12. MISCELLANEOUS. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office of
the Company, Made2Manage Systems, Inc., 0000 Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxxx or (b) if to the
Underwriters, to the Representatives at the offices of First Albany Corporation,
Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Finance Department. Any such notice shall be effective only upon receipt. Any
notice under Section 10 or 11 may be made by telex or telephone, but if so made
shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters and the Company and of the controlling persons, directors and
officers referred to in Section 9, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall
not include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
Any action required or permitted to be taken by the Representatives under
this Agreement may be taken by them jointly or by First Albany Corporation.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
21
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several Underwriters.
Very truly yours,
MADE2MANAGE SYSTEMS, INC.
By:
-----------------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned:
FIRST ALBANY CORPORATION
XXX XXXXXX & COMPANY
RvR SECURITIES CORP.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule II hereof.
BY: FIRST ALBANY CORPORATION
By:
------------------------------------
Name:
Title:
22
SCHEDULE I
UNDERWRITERS
Name Number of Shares
---- ----------------
----------------
Total ----------------
23
SCHEDULE II
PRIMARY SELLING SHAREHOLDER
Name Number of Shares
---- ----------------
----------------
Total ----------------
24
SCHEDULE III
OPTION SELLING SHAREHOLDERS
Name Number of Shares
---- ----------------
----------------
Total ----------------
25
