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EXHIBIT 1.1
1,468,026 Shares
POWERHOUSE TECHNOLOGIES, INC.
Common Stock
UNDERWRITING AGREEMENT
February __, 1998
XXXXXX XXXXXX XXXXXXXX & CO., INC.
LADENBURG XXXXXXXX & CO. INC.
As Representatives of the
several Underwriters
c/o Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The persons named in Schedule I (the "SELLING STOCKHOLDERS")
acting severally and not jointly and Xxxxxxx Xxxxx, as authorized
representative of the Selling Stockholders, individually and on behalf of the
Selling Stockholders ("Xxxxx") propose to sell an aggregate of 1,468,026 shares
(the "FIRM SHARES") of the Common Stock, $0.01 par value per share (the "COMMON
STOCK"), of Powerhouse Technologies, Inc., a Delaware corporation (the
"COMPANY"), to you and to the other underwriters named in Schedule II
(collectively, the "UNDERWRITERS"), for whom Xxxxxx Xxxxxx Xxxxxxxx & Co.,
Inc., a New York corporation ("GKM") and Ladenburg Xxxxxxxx & Co. Inc. are
acting as representatives (the "REPRESENTATIVES"). The Company has also agreed
to grant to you and the other Underwriters an option (the "OPTION") to purchase
up to an additional 220,204 shares of Common Stock, respectively (the "OPTION
SHARES") on the terms and for the purposes set forth in Section 1(b). The Firm
Shares and Option Shares are hereinafter collectively referred to as the
"SHARES."
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The initial public offering price per share for the Shares
and the purchase price per share for the Shares to be paid by the several
Underwriters shall be agreed upon by the Company, the Selling Stockholders and
the Representatives, acting on behalf of the several Underwriters, and such
agreement shall be set forth in a separate written instrument substantially in
the form of Exhibit A hereto (the "PRICE DETERMINATION AGREEMENT"). The Price
Determination Agreement may take the form of an exchange of any standard form
of written telecommunication among the Company, the Selling Stockholders and
the Representatives and shall specify such applicable information as is
indicated in Exhibit A hereto. The offering of the Shares shall be governed by
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context otherwise indicates, all references contained herein to "this
Agreement" and to the phrase "herein" shall be deemed to include, the Price
Determination Agreement.
Xxxxx, as authorized representative of the Selling
Stockholders, individually and on behalf of the other Selling Stockholders, has
executed and delivered a Custody Agreement in the form attached as Exhibit B
(collectively, the "CUSTODY AGREEMENT") pursuant to which such Selling
Stockholders have placed their Firm Shares in custody and appointed the persons
designated therein as attorneys-in-fact (collectively, the "ATTORNEYS") with
authority to execute and deliver this Agreement on behalf of such Selling
Stockholders and to take certain other actions with respect thereto and hereto.
The Company and the Selling Stockholders, acting severally
and not jointly, and Xxxxx, as authorized representative of the Selling
Stockholders, individually and on behalf of the other Selling Stockholders
confirm as follows their respective agreements with the Representatives and the
several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the respective
representations, warranties and agreements of the Company, the Selling
Stockholders and Xxxxx herein contained and subject to all the terms and
conditions of this Agreement, (i) the Selling Stockholders agree to sell to the
several Underwriters, and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Selling Stockholders, at the purchase
price per share for the Firm Shares to be agreed upon by the Company, the
Selling Stockholders and the Representatives, in accordance with Section 1(c)
hereof and set forth in the Price Determination Agreement, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule II, plus
such additional number of Firm Shares which such Underwriter may become
obligated to purchase pursuant to Section 9 hereof. Sched ule II may be
attached to the Price Determination Agreement.
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(b) Subject to all the terms and conditions of
this Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, up to 220,204 Option Shares from the
Company, respectively, at the same price per share as the Under writers 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 (or, if the Company has elected
to rely on Rule 430A, on or before the 45th day after the date of the Price
Determination 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 in 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 Company
shall issue and sell to the Underwriters the number of Option Shares set forth
in the Option Shares Notice, and each Underwriter shall 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.
(c) The initial public offering price per share
for the Firm Shares and the purchase price per share for the Firm Shares to be
paid by the several Underwriters shall be agreed upon and set forth in the
Price Determination Agreement. In the event such price has not been agreed upon
and the Price Determination Agreement has not been executed by the close of
business on the fourteenth business day following the date on which the
Registration Statement (as hereinafter defined) becomes effective, this
Agreement shall terminate forthwith, without liability of any party to any
other party except that Section 7 shall remain in effect.
2. 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 wire transfer payable in New York
Clearing House to the Custodian for disbursement in accordance with the
instructions of the Attorney to such account or accounts as Xxxxx, on behalf of
the Selling Stockholders, shall designate no later than three business days
prior to the Closing Date. Such payment shall be made at 10:00 a.m., New York
City time, on the third business day (the fourth business day, should the
offering be priced after 4:30 p.m., EST) after the date on which the first bona
fide offering of the Shares to the public is made by the Underwriters or at
such time on such other date, not later than seven business days after such
date, as may be agreed upon by the Selling Stockholders 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)
shall take place at the offices specified in the preceding paragraph, at the
time and date (which may be the Closing Date) specified in the Option Shares
Notice.
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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 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.
3. Representations and Warranties of the Company. The
Company represents and warrants to, and covenants with, each Underwriter that,
except as set forth in the Registration Statement:
(a) The Company meets the requirements for use
of Form S-3 and a registration statement (Registration No. 333-41417) on Form
S-3 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 ("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. 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 or Rule 434 of the Rules and Regulations. If the Company files a
registration statement to register a portion of the Shares and relies on Rule
462(b) of the Rules and Regulations for such registration statement to become
effective upon filing with the Commission (the "RULE 462 REGISTRATION
STATEMENT"), then any reference to the "Registration Statement" shall be deemed
to include the Rule 462 Registration Statement, as amended from time to time.
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. Any reference herein to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include the uments incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), on or before the Effective Date or the date of such
preliminary prospectus or the Prospectus, as the case may be. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any ument under the Exchange Act
after the Effective Date, or the date of any
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preliminary prospectus or the Prospectus, as the case may be, and deemed to be
incorporated therein by reference.
(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 as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included or incorporated by reference in the Prospectus, did or will
comply with all applicable provisions of the Act, the Exchange Act, the rules
and regulations thereunder (the "EXCHANGE ACT RULES AND REGULATIONS") and the
Rules and Regulations and will contain all statements required to be stated
therein in accordance with the Act, the Exchange Act, the Exchange Act Rules
and Regulations 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 or any such amendment did or will contain
any 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, in light of the circumstances under which they were
made. 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 not misleading, in light of the
circumstances under which they were made. The foregoing representations and
warranties in this Section 3(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. For all purposes of this Agreement, the
amounts of the selling concession and reallowance set forth 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
preliminary prospectus, the Registration Statement or the Prospectus. The
Company has not distributed any offering material in connection with the
offering or sale of the Shares other than the Registration Statement, the
preliminary prospectus, the Prospectus or any other materials, if any,
permitted by the Act. The Commission has not issued any order preventing or
suspending the use of the preliminary prospectus or instituted proceedings for
that purpose.
(c) The documents which are incorporated by
reference in the preliminary prospectus and the Prospectus or from which
information is so incorporated by reference, when they become effective or were
filed with the Commission, as the case may be, complied in all material
respects with the requirements of the Act or the Exchange Act, as applicable,
the Exchange Act Rules and Regulations and the Rules and Regulations; and any
uments so filed and incorporated
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by reference subsequent to the Effective Date shall, when they are filed with
the Commission, conform in all material respects with the requirements of the
Act and the Exchange Act, as applicable, the Exchange Act Rules and Regulations
and the Rules and Regulations.
(d) The only subsidiaries (as defined in the
Rules and Regulations) of the Company are the subsidiaries listed on Exhibit C
hereto (the "SUBSIDIARIES"). The Company and each of its Subsidiaries 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 and each of its Subsidiaries 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 and
each of its Subsidiaries is, and at the Closing Date will be, duly licensed or
qualified to do business in 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 licensing or
qualification necessary. All of the outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued, and are fully paid
and non-assessable and are owned by the Company free and clear of all liens,
encumbrances and claims whatsoever. Except for the stock of the Subsidiaries
and as disclosed in the Registration Statement, 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 each of its Subsidiaries 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.
(e) The outstanding shares of Common Stock,
including the Firm Shares, have been, and the Option 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,
first refusal, or similar right. The description of the Common Stock included
in or incorporated by reference in the Registration Statement and the
Prospectus is now, and at the 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. Upon the issuance and
delivery pursuant to the terms of this Agreement, the Underwriters will acquire
good and marketable title to the Option Shares, free and clear of any lien,
charge, claim, encumbrance, pledge, security interest, defect or other
restriction or equity of any kind whatsoever.
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(f) The financial statements and schedules
included or incorporated by reference in the Registration Statement or the
Prospectus present fairly the consolidated financial condition of the Company
as of the respective dates thereof and the consolidated 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, the Exchange Act, the Exchange Act Rules and
Regulations or the Rules and Regulations to be included in the Registration
Statement or the Prospectus. KPMG Peat Marwick LLP (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. The statements included in the Registration Statement with
respect to the Accountants pursuant to Rule 509 of Regulation S-K of the Rules
and Regulations are true and correct in all material respects.
(g) The Company maintains a system of internal
accounting control sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(h) 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 and its Subsidiaries, arising for any reason
whatsoever, (ii) neither the Company nor any of its Subsidiaries has 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.
(i) 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.
(j) 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
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or any of its Subsidiaries or any of their 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 any of its Subsidiaries or its business,
properties, business prospects, condition (financial or otherwise) or results
of operations. Neither the Company nor any of its Subsidiaries has received any
notice of proceedings relating to the revocation or modification of any
authorization, approval, order, license, certificate, franchise or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would adversely affect the condition (financial or
otherwise), earnings, business, position, prospects, value, operation,
properties or results of operations of the Company and any of its Subsidiaries
taken as a whole. There are no pending investigations known to the Company
involving the Company or any of its Subsidiaries by any governmental agency
having jurisdiction over the Company or its Subsidiaries or their respective
businesses or operations. The disclosures in the Registration Statement
concerning the effects of federal, state, local and foreign laws, rules and
regulations on each of the Company's and any of its Subsidiaries' businesses as
currently conducted and as proposed to be conducted are correct in all material
respects and do not omit to state a material fact required to be stated therein
or necessary to make the statements contained therein not misleading in light
of the circumstances under which they were made.
(k) Each of the Company and its Subsidiaries
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 obligations required to be performed by it, and is not, and at
the Closing Date will not be, in default under any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note agreement,
lease, contract or other agreement or instrument (collectively, a "CONTRACT OR
OTHER AGREEMENT") to which it is a party or by which its property is bound or
affected. To the best knowl edge of the Company and each of its Subsidiaries,
no other party under any Contract or Other Agreement to which it is a party is
in default in any respect thereunder. Each of the Company and its Subsidiaries
is not now, and at the Closing Date will not be, in violation of any provision
of its certificate of incorporation or by-laws.
(l) No consent, approval, authorization or
order of, or any filing or declaration with, any court or governmental agency
or body is required in connection with the authorization, issuance, transfer,
sale or delivery of the Securities by the Company, in connection with the
execution, delivery and performance of this Agreement by the Company or in
connection with the taking by the Company of any action contemplated hereby or
thereby, except 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
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Dealers, Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Shares to be sold by the Company.
(m) The Company has and will have 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, except as rights to
indemnification and contribution hereunder may be limited by applicable law and
public policy and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors rights generally or by general equitable principles. The
performance of this Agreement and the consummation of the transactions
contemplated hereby and the application of 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 Proceeds" will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its Subsidiaries 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 give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
(x) the certificate of incorporation or by-laws of the Company or any of its
Subsidiaries, or (y) any contract or other agreement 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 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 or any of its Subsidiaries, except for violations,
defaults, breaches or accelerations which would not result in a material
adverse effect in the financial condition of the Company and its Subsidiaries.
(n) Each of the Company and its Subsidiaries
has good and marketable title to all properties and assets described in the
Prospectus to be owned respectively 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 or its
Subsidiaries. Each of the Company and its Subsidiaries has valid, subsisting
and enforceable leases for the properties described in the Prospectus to be
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 and such Subsidiaries.
(o) There is no ument 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 Statement which is
not described or filed as required. All such contracts to which the Company or
any Subsidiary is a party have been duly authorized, executed and delivered by
the Company or such Subsidiary, constitute valid and binding agreements of the
Company or such
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Subsidiary and are enforceable against the Company or such Subsidiary in
accordance with the terms thereof.
(p) To the best knowledge of the Company, no
statement, representation, warranty or covenant made by the Company in this
Agreement or made in any certificate or ument required by this Agreement to be
delivered to the Representatives was or will be, when made, inaccurate, untrue
or incorrect.
(q) Neither the Company nor any of its
directors, officers or controlling persons has taken, directly or indirectly,
any action intended to cause or result in, or which might reasonably be
expected to cause or result in, or which has constituted, stabilization or
manipulation, under the Act or otherwise, of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(r) No holder of securities of the Company has
rights to register any securities of the Company because of the filing of the
Registration Statement.
(s) The Shares are duly authorized for listing,
subject to official notice of issuance, on the Nasdaq National Market System.
(t) Neither the Company nor any of its
Subsidiaries is involved in any material labor dispute nor, to the knowledge of
the Company, is any such dispute threatened.
(u) The Company and its Subsidiaries own, or
are licensed or otherwise have the full exclusive right to use, all material
trademarks and trade names which are used in or necessary for the conduct of
their respective businesses as described in the Prospectus. Neither the Company
nor any of its Subsidiaries has received any notice of any claims asserted by
any person with respect to the use of any such trademarks or trade names, or
challenging or questioning the validity or effectiveness of any such trademark
or trade name. The use, in connection with the business and operations of the
Company and its Subsidiaries of such trademarks and trade names does not, to
the Company's knowledge, infringe on the rights of any person. Except as set
forth in the Prospectus, the Company and its Subsidiaries are not obligated or
under any liability whatsoever to make any payment by way of royalties, fees or
otherwise to any owner or licensee of, or other claimant to, any trademark,
service xxxx or trade name with respect to the use thereof or in connection
with the conduct of their respective businesses or otherwise.
(v) Neither the Company, its Subsidiaries nor,
to the best of the Company's knowledge, any of their respective officers,
directors, partners, employees, agents or affiliates or any other person acting
on behalf of the Company or any of its Subsidiaries have, directly or
indirectly, given or agreed to give any money, gift or similar benefit (other
than legal
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price concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, official or
employee of any governmental agency (domestic or foreign), instrumentality of
any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who was, is or may be in a
position to help or hinder the business of the Company or any of its
Subsidiaries (or assist the Company or any of its Subsidiaries in connection
with any actual or proposed transaction) which (i) might subject the Company or
any of its Subsidiaries or any other such individual or entity to any damage or
penalty in any civil, criminal or governmental litigation or proceeding
(domestic or foreign), (ii) if not given in the past, might have had a
materially adverse effect on the assets, business or operations of the Company
or any of its Subsidiaries or (iii) if not continued in the future, might
adversely affect the assets, business, operations or prospects of the Company
or any of its Subsidiaries.
(w) Each of the Company and its Subsidiaries
(i) has paid all federal, state, local and foreign taxes for which it is
liable, including, but not limited to, withholding taxes and amounts payable
under Chapters 21 through 24 of the Internal Revenue Code of 1986, as amended
(the "CODE"), and has furnished all information returns it is required to
furnish pursuant to the Code, (ii) has established adequate reserves for all of
such taxes which are not immediately due and payable and (iii) does not have
any tax deficiency or claims outstanding, assessed or, to the Company's
knowledge, threatened against it.
(x) Each of the Company and its Subsidiaries
maintains insurance policies and surety bonds, including, but not limited to,
general liability and property insurance, which insure the Company, its
Subsidiaries and their respective employees against losses and risks reasonably
insured against by comparable businesses. Neither the Company nor any of its
Subsidiaries (i) has failed to give notice or present any insurance claim with
respect to any matter, including, but not limited to, the Company's or any of
its Subsidiaries' business, property or employees, under any insurance policy
or surety bond in a due and timely manner, (ii) has any disputes or claims
against any underwriter of such insurance policies or surety bonds or has
failed to pay any premiums due and payable thereunder or (iii) has failed to
comply with all material terms and conditions contained in such insurance
policies and surety bonds. There are no facts or circumstances which would
relieve any insurer of its obligation under any such insurance policy or surety
bond to satisfy in full any valid claim of the Company or any of its
Subsidiaries.
(y) Except as described in the Prospectus,
neither the Company nor any of its Subsidiaries maintains, sponsors or
contributes to any program or arrangement that is an "employee pension benefit
plan," an "employee welfare benefit plan" or a "multiemployer plan"
(collectively, "ERISA PLANS") as such terms are defined in Sections 3(2), 3(1)
and 3(37), respectively, of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). Neither the Company nor any of its Subsidiaries has
maintained or contributed to a defined benefit plan as defined in Section 3(35)
of ERISA. No ERISA Plan (or any trust created thereunder) has
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engaged in a "prohibited transaction" within the meaning of Section 406 of
ERISA or Section 4975 of the Code, which could subject the Company or any of
its Subsidiaries to any tax penalty on prohibited transactions and which has
not adequately been corrected. Each ERISA Plan is in compliance with all
material reporting, disclosure and other requirements of the Code and ERISA as
they relate to such ERISA Plan. Determination letters have been received from
the Internal Revenue Service with respect to each ERISA Plan which are intended
to comply with Code Section 401(a) stating that such ERISA Plan and the
attendant trust are qualified thereunder. Neither the Company nor any of its
Subsidiaries has ever completely or partially withdrawn from such a
"multiemployer plan." Neither the Company nor any of its Subsidiaries will be
subject to any material liability under ERISA or any ERISA Plans.
(z) Each of the Company and its Subsidiaries
owns and has the unrestricted right to use all trade secrets, know-how,
technology (including all other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), inventions, designs,
processes, works of authorship, computer programs and technical data and
information (collectively, the "INTELLECTUAL PROPERTY") that are or could
reasonably be expected to be material to its business as currently conducted or
proposed to be conducted or to the development, manufacture, operation and sale
of any products and services sold or proposed to be sold by any of the Company
or any of its Subsidiaries, each free and clear of and without violating any
right, claimed right, charge, encumbrance, pledge, security interest, defect,
restriction, equity or lien of any kind whatsoever of others, including without
limitation, former employers of its employees. Neither the Company nor any of
its Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any patent, patent application,
copyright or Intellectual Property which singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, might have an adverse
effect on the general affairs, business, business prospects, earnings,
position, value, properties, management, condition (financial or otherwise),
operations or results of operations of the Company and its Subsidiaries taken
as a whole. Except as set forth in the Prospectus, the Company and its
Subsidiaries are not obligated or under any liability whatsoever to make any
payment by way of royalties, fees or otherwise to any owner or licensee of, or
other claimant to, any patent, patent application, copyright or Intellectual
Property, with respect to the use thereof or in connection with the conduct of
their respective businesses or otherwise.
(aa) Each of the Company and its Subsidiaries
has taken reasonable security measures to protect the secrecy, confidentiality
and value of all their Intellectual Property in all material aspects.
4. Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder acting severally and not jointly, and
Xxxxx, individually and on behalf of the other Selling Stockholders, represents
and warrants to, and covenants with, each Underwriter [and with respect to
paragraphs (g) and (h) of, the Company that:
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(a) Such Selling Stockholder has full power and
authority to enter into this Agreement and the Custody Agreement. All
authorizations and consents necessary for the execution and delivery by such
Selling Stockholder of the Custody Agreement, and for the execution of this
Agreement on behalf of such Selling Stockholder, have been given. Each of the
Custody Agreement and this Agreement has been duly authorized (to the extent
such Selling Stockholder is not a natural person), executed and delivered by or
on behalf of such Selling Stockholder and constitutes a valid and binding
agreement of such Selling Stockholder and is enforceable against such Selling
Stockholder in accordance with the terms thereof and hereof, except as rights
to indemnification and contribution hereunder may be limited by applicable law
and public policy and except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors rights generally or by general
equitable principles.
(b) Such Selling Stockholder now has, and at
the time of delivery thereof hereunder will have, (i) good and valid title to
the Firm Shares to be sold by such Selling Stockholder hereunder, free and
clear of all liens, encumbrances and claims whatsoever (other than pursuant to
the Agreement and the Custody Agreement), and (ii) full legal right and power,
and all authorizations and approvals required by law, to sell, transfer and
deliver such Firm Shares to the Underwriters hereunder and to make the
representations, warranties and agreements made by such Selling Stockholder
herein. Upon the delivery of and payment for such Firm Shares hereunder,
assuming each Underwriter has no notice of any adverse claim as such term is
used in the Uniform Commercial Code such Selling Stockholder will deliver good
and valid title thereto, free and clear of all liens, charges, claims,
encumbrances, pledges, security interests, defects or restrictions of any kind
whatsoever.
(c) On the Closing Date 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 Firm Shares to be sold by such
Selling Stockholder to the several Underwriters hereunder will have been fully
paid or provided for by the Selling Stockholder, 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 Stockholder 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, as to such Selling Stockholder, any contract or other agreement to which
such Selling Stockholder is a party or by which such Selling Stockholder or any
of his property is bound or affected, or any ruling, decree, judgment, order,
statute, rule or regulation of any court or other governmental agency or body
having jurisdiction over such Selling
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Stockholder or the property of such Selling Stockholder, except for violations,
defaults, breaches or accelerations which would not result in a material
adverse effect in the financial condition of the Selling Stockholder.
(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 Stockholder of the
transactions on his part contemplated herein and in the Custody Agreement,
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 Firm Shares to be sold by such Selling Stockholder.
(f) Such Selling Stockholder has no knowledge
of any fact or condition not set forth in the Registration Statement or the
Prospectus which has materially adversely affected, or may materially adversely
affect, the general affairs, business, business prospects, earnings, position,
value, properties, management, condition (financial or otherwise), operations
or results of operations of the Company, and the sale of the Firm Shares
proposed to be sold by such Selling Stockholder is not prompted by any such
knowledge.
(g) The information under the caption "Selling
Stockholder" in the Prospectus is complete and accurate in all material
respects.
(h) Other than as permitted by the Act and the
Rules and Regulations, such Selling Stockholder 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
Stockholder has not taken, directly or indirectly, any action intended to cause
or result in, or which might reasonably be expected to cause or result in, or
which has caused or resulted in, stabilization or manipulation, under the Act
or otherwise, of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(i) Certificates in negotiable form for the
Firm Shares to be sold hereunder by such Selling Stockholder have been placed
in custody, for the purpose of making delivery of such Firm Shares under this
Agreement, under the Custody Agreement which appoints [the Company's Registrar
and Transfer Agent] as custodian (the "CUSTODIAN") for such Selling
Stockholder. Such Selling Stockholder agrees that the Firm Shares represented
by the certificates held in custody for him under the Custody Agreement are for
the benefit of and coupled with and subject to the interest hereunder of the
Custodian, the Underwriters and the Company, that the arrangements made by such
Selling Stockholder for such custody and the appointment of the Custodian by
such Selling Stockholder are irrevocable, and that the obligations of such
Selling Stockholder hereunder shall not be terminated by operation of law,
whether by the death, disability
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or incapacity of such Selling Stockholder or the occurrence of any other event.
If the Selling Stockholder should die, become disabled or incapacitated or if
any other such event should occur before the delivery of the Firm Shares
hereunder, certificates for the Firm Shares shall be delivered by the Custodian
in accordance with the terms and conditions of this Agreement, and actions
taken by the Custodian pursuant to the Agreement and the Custody Agreement
shall be as valid, as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have received notice
thereof.
4A. Representations and Warranties of Xxxxx. Xxxxx,
acting individually, represents and warrants to the Underwriter and the Company
that:
(a) The information under the caption "Selling
Stockholders" in the Prospectus is complete and accurate in all material
respects.
(b) To the best of his knowledge, on the Effective Date,
and at the Closing Date no part of the Registration Statement or any amendment
thereto did or will contain any untrue statement of 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, in light of the circumstances under
which they were made; at the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission, the
Prospectus did not and will not contain any 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, in light of the
circumstances under which they were made.
5. Agreements of the Company and the Selling
Stockholder. The Company and the Selling Stockholders ,severally and not
jointly, and Xxxxxxx Xxxxx as authorized representative of the Selling
Stockholders, individually and on behalf of the Selling Stockholders (in the
case of the Selling Stockholders and Xxxxx, as to Sections 5(j), (k), (n) and
(o) only ) agree with the several Underwriters as follows:
(a) The Company shall 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 State ment 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 shall use its best efforts to
cause the Registration Statement to become effective, and shall notify the
Representatives and the Selling Stockholders promptly, and shall confirm such
advice in writing, (i) when the Registration Statement has become
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effective and when any post-effective amendment thereto becomes effective, (ii)
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (iii)
of the commencement by the Commission or by any state securities commission of
any proceedings for the suspension of the qualification of any of the Shares
for offering or sale in any jurisdiction or of the initiation, or the
threatening, of any proceeding for that purpose, including, without limitation,
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, (iv) of the happening of any event during the
period mentioned in the second sentence of Section 5(e) hereof 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 the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (v) of receipt by the Company or any representative 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 Statement, the Company shall make every reasonable effort to
obtain the withdrawal of such order at the earliest possible moment. The
Company shall use its best efforts to comply with the provisions of and make
all requisite filings with the Commission pursuant to Rule 430A and to notify
the Representatives promptly of all such filings.
(c) The Company shall 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 (including any ument filed
under the Exchange Act and deemed to be incorporated by reference into the
Prospectus) and shall 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 shall 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 shall deliver to each of the Underwriters and the
Selling Stockholders, without charge, as many copies of the Prospectus or any
amendment or supplement thereto as the Representatives or the Selling
Stockholders may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement 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 [or the Selling
Stockholders] should be set forth in the
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Prospectus in order to make any statement therein, in the 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 shall
forthwith prepare and duly file with the Commission an appropriate supplement
or amendment thereto, and shall deliver to each of the Underwriters and the
Selling Stockholders, without charge, such number of copies thereof as the
Representatives may reasonably request. The Company shall not file any ument
under the Exchange Act before the termination of the offering of the Shares by
the Underwriters if such ument would be deemed to be incorporated by
reference into the Prospectus which is not approved by the Representatives [and
the Selling Stockholders] after reasonable notice thereof.
(f) Prior to any public offering of the Shares
by the Underwriters, the Company shall 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,
however, 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 shall 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.
(h) The Company shall 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 any of the transactions '
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company shall pay, or reimburse if paid by the Representatives, all costs
and expenses incident to the performance of the obligations of the Company and,
except as specified in paragraph (j) below, the Selling Stockholder under this
Agreement (other than underwriting discounts and fees and fees and expenses of
counsel and accountants of the Selling Stockholders), including but not limited
to costs and expenses of or relat ing to (i) the preparation, printing and
filing of the Registration Statement and exhibits thereto, each preliminary
prospectus, the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus, (ii) the preparation and delivery of certificates
representing the
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Securities, (iii) the printing of this Agreement, the Agreement Among
Underwriters, any Dealer Agreements, any Underwriters' Questionnaire and the
Power of Attorney and the Custody Agreement, (iv) furnishing (including costs
of shipping, mailing and courier) 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, (v) the listing of the Shares on the Nasdaq National Market
System, (vi) 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, (vii) 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 5(f) hereof, 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, (viii) counsel to the Company, (ix) the transfer agent for the
Shares and (x) the Accoun tants. The cost of original issue tax stamps, if any,
in connection with the issuance and delivery of the Option Shares 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
Stockholders shall be borne by the Selling Stockholders. The Company with
respect to the Option Shares and the Selling Stockholders with respect to the
Firm Shares shall pay and hold each Underwriter and any subse xxxxx xxxxxx 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 Under writer of the Shares.
(j)(I) If this Agreement shall be terminated by the
Company pursuant to any of the provisions hereof (other than pursuant to
Section 9) or if for any reason the Company shall be unable to perform its
obligations hereunder, the Company shall 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; provided, however, that any payments received by the Underwriters
pursuant to clause (j) (III) below shall be deducted from any amounts due
pursuant to this clause (j) (I); (II) if this Agreement shall be terminated by
the Selling Stockholders pursuant to any of the provisions hereof (other than
pursuant to Section 9) or if for any reason the Selling Stockholders shall be
unable to perform their obligations hereunder, the Selling Stockholders shall
reimburse the several Underwriters for all out-of-pocket expenses (including
the fees, disbursements and other charges of counsel to the Underwriters)
reasonably incurred in connection herewith; provided, however, that any
payments received by the Underwriters pursuant to clause (j) (III) below shall
be deducted from any amount due pursuant to this clause (j) (II); (III) whether
or not any of the transactions contemplated by this Agreement are consummated
or whether or not this Agreement is terminated, Selling Stockholders shall
reimburse the Representatives for all out-of-pocket expenses (including the
fees, disbursements and other charges of counsel to the Underwriters)
reasonably incurred by them in connection
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herewith (other than fees and expenses paid by the Company pursuant to
paragraphs 5(i)(vii) above); provided, however, that Selling Stockholders'
obligations pursuant to this clause (j) (III) shall not exceed $150,000. The
obligations of the Selling Stockholders under this paragraph (j) shall be joint
and several.
(k) Neither the Company nor the Selling
Stockholders shall, at any time, directly or indirectly, take any action
intended to cause or result in, or which might reasonably be expected to cause
or result in, or which will constitute, stabilization or manipulation, under
the Act or otherwise, of the price of the shares of Common Stock to facilitate
the sale or resale of any of the Shares.
(l) The Company shall 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 Proceeds".
(m) The Company shall not, and shall cause each
of its executive officers, directors and each beneficial owner of more than 5%
of the outstanding shares of Common Stock to enter into agreements with the
Representatives in the form set forth in Exhibit D to the effect that they
shall not, for a period of 120 days after the commencement of the public
offering of the Shares, without the prior written consent of the
Representatives, offer to sell, sell, contract to sell, grant any option to
sell, pledge, grant any rights with respect to, or otherwise dispose of, or
require the Company to file with the Commission a registration statement under
the Act to register, any shares of Common Stock or securities convertible into
or exchangeable for Common Stock or warrants or other rights to acquire shares
of Common Stock of which the undersigned is now, or may in the future become,
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act).
Furthermore, such person has also agreed and consented to the entry of stop
transfer instructions with the Company's transfer agent against the transfer of
the Company Stock held by such person except in compliance with this
restriction. The Company has provided to counsel for the Representatives a
complete and accurate list of all securityholders of the Company and the number
and type of securities held by each securityholder. The Company has provided to
counsel for the Representatives true, accurate and complete copies of all of
the agreements pursuant to which its officers, directors and stockholders have
agreed to such or similar restrictions (the "Lock-up Agreements") presently in
effect or effected hereby. The Company hereby represents and warrants that it
will not release any of its officers, directors or stockholders from any
Lock-up Agreements currently existing or hereafter effected without the prior
written consent of the Representatives.
(n) As soon as any Selling Stockholder is
advised thereof, such Selling Stockholder shall advise the Representatives and
the Company and confirm such advice in writing, (i) of receipt by such Selling
Stockholder, or by any representative of such Selling Stockholder, of any
communication from the Commission relating to the Registration Statement, the
Prospectus or
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any preliminary prospectus, or any notice or order of the Commission relating
to the Company or such Selling Stockholder in connection with the transactions
contemplated by this Agreement, and (ii) of the happening of any event during
the period from and after the Effective Date that in the reasonable judgment of
such Selling Stockholder 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.
(o) Each Selling Stockholder shall deliver to
Representatives prior to or on the Effective Date a properly completed and
executed United States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in lieu thereof).
6. Conditions of the Obligations of the Underwriters.
In addition to the execution and delivery of the Price Determination Agreement,
the obligations of each Underwriter hereunder 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
Representatives and all filings required by Rule 424 of the Rules and
Regulations and Rule 430A 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 any 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) and (iii).
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(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 or development involving a
prospective material adverse change, in the general affairs, business, business
prospects, earnings, position, value, properties, management, condition
(financial or otherwise), operations 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 and the Prospectus, (ii)
neither the Company nor any of its Subsidiaries shall 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, (iii) there shall have been no transactions, not in the ordinary course
of business, entered into by the Company or any of its Subsidiaries and no
liabilities or obligations incurred by the Company or any of its Subsidiaries,
in each case from the latest date as of which the financial condition of the
Company and its Subsidiaries is set forth in the Registration Statement and the
Prospectus, which are materially adverse to the Company and its Subsidiaries,
taken as a whole, (iv) neither the Company nor any of its Subsidiaries shall
have issued any securities (other than the Securities) or declared or paid any
dividend or made any distribution in respect of its capital stock of any class,
debt (long term or short term) or, except in the ordinary course of business,
liabilities or obligations of the Company or any of its Subsidiaries
(contingent or otherwise), except as set forth in the Registration Statement
and Prospectus and (v) no material amount of the assets of the Company or any
of its Subsidiaries shall have been pledged, mortgaged or otherwise encumbered,
except as set forth in the Registration Statement and Prospectus.
(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 Subsidiaries or any of their 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 general
affairs, business, business prospects, earnings, position, value, properties,
management, condition (financial or otherwise), operations or results of
operations, of the Company and its Subsidiaries taken as a whole.
(e) Each of the representations and warranties
of the Company, the Selling Stockholders and Xxxxx contained herein shall be
true and correct in all material respects at the Closing Date and, with respect
to the Option Shares, the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the
Option Closing
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Date, as if made at the Closing Date and, with respect to the Company and the
Option Shares, at the Option Closing Date, and all covenants and agreements
contained herein to be performed by the Company and all conditions contained
herein to be fulfilled or complied with by the Company at or prior to the
Closing Date and, with respect to the covenants, agreements and conditions
relating to the Company in connection with the Option Shares, at or prior to
the Option Closing Date, shall have been duly performed, fulfilled or complied
with.
(f) The Representatives and, with respect to
the Firm Shares, the Selling Stockholders, shall have received opinions, each
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, satisfactory in form and substance to counsel for the
Underwriters and the Selling Stockholders, as the case may be, from Xxxxxx &
Xxxxxx, counsel to the Company, to the effect set forth in Exhibit E and from
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel to the Selling Stockholders,
to the effect set forth in Exhibit F.
(g) The Representatives shall have received an
opinion, dated the Closing Date and the Option Closing Date, from Xxxx,
Scholer, Fierman, Xxxx & Handler, 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) On the date of the Prospectus, 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
or incorporated by reference therein. 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 of the Prospectus, if it were required to be dated and delivered
at the Closing Date and the Option Closing Date. The Selling Stockholders shall
have received an "agreed upon procedures" letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by such letters in connection with public offerings of
securities as the Selling Stockholders shall reasonably request, dated within
five days of the date of effectiveness or supplements, as the case may be,
addressed to the Selling Stockholders and with an appropriate bring down as of
the Closing Date.
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(i) 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 of the
Company, 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
(including any uments filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus), and (A) as of the date
of such certificate, such uments 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 misleading in light of the circumstances under which they were
made, and (B) 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, and there has been no ument required to be filed
under the Exchange Act and the Exchange Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference into
the Prospectus that has not been so filed.
(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 delivered,
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 delivery of such certificate has been duly, timely and
fully complied with.
(j) At the Closing Date, there shall have been
furnished to the Representatives and the Company, as applicable, an accurate
certificate, dated the date of its delivery, signed by Xxxxx on behalf of the
Selling Stockholders, in form and substance satisfactory to the
Representatives, to the effect that the representations and warranties of the
Selling Stockholders and Xxxxx 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 Stockholders
and Xxxxx 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 5(m).
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(l) The Shares shall be qualified for sale in
such states as the Representatives may reasonably request, 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 System upon
official notice of issuance.
(n) The Company, the Selling Stockholders and
Xxxxx 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, with respect to the Company and the Option Shares, the Option Closing
Date of any statement in the Registration Statement or the Prospectus or any
uments filed under the Exchange Act and deemed to be incorporated by reference
into the Prospectus, as to the accuracy at the Closing Date and, with respect
to the Company, the Option Closing Date of the representations and warranties
of the Company, the Selling Stockholders and Xxxxx herein, as to the
performance by the Company, the Selling Stockholders and Xxxxx of their
respective obligations hereunder or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the Representatives.
7. Indemnification.
(a) The Company severally and each of the
Selling Stockholders, jointly and severally, shall indemnify and hold harmless
each Underwriter, the directors, officers, employees, counsel 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 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 between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or otherwise, 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 or alleged untrue statement of a material fact contained in (i) any
preliminary prospectus, the Registra tion Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or in
any uments filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, (ii) any application, other ument or written
communication, executed by the Company or based upon written information
supplied by the Company, filed with or sent to the Commission, (iii) any
application, other ument or written communication, executed by the Company or
based upon written information supplied by the Company, filed in any
jurisdiction in order to qualify the Shares under the securities laws of such
jurisdiction or (iv) any
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document, executed by the Company or based on written information supplied by
the Company, filed with any securities exchange, or the omission or alleged
omission to state in such uments enumerated in (i-iv) of a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, pro vided
that the Company and the Selling Stockholders shall 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 omission or alleged untrue state ment 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
Under writer expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus; provided, further, that the Selling
Stockholders (other than Xxxxx) shall not be liable unless such loss, claim,
liability, expense or damages arises from the sale of the Firm Shares in the
public offering to any person by an Underwriter and arises out of or is based
on an untrue statement or omission or alleged untrue statement or omission made
in reliance on and in conformity with information furnished in writing to the
Company by the Selling Stockholders or Xxxxx expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus. In no
event shall the aggregate liability of any Selling Stockholder for
indemnification hereunder exceed the net proceeds received by such Selling
Stockholder in the offering of the Firm Shares hereunder and no Selling
Stockholder (other than Xxxxx) shall be liable for any untrue statement,
alleged untrue statement, omission or alleged omission of any other Selling
Stockholder. Xxxxx shall be jointly and severally liable for any statement,
alleged untrue statement, omission or alleged omission of all the Selling
Stockholders. In no event shall Xxxxx'x liability under this Agreement, as
representative of himself and the other Selling Stockholders exceed the
aggregate net proceeds received by all Selling Stockholders. If multiple claims
are brought against any Underwriter, the directors, officers, employees,
counsel and agents of such Underwriter and any person, if any, who controls
such Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, in an arbitration proceeding, and indemnification is
permitted under applicable law and is provided for under this Agreement with
respect to at least one such claim, the Company agrees that any arbitration
award shall be conclusively deemed to be based on claims as to which
indemnification is permitted and provided for, except to the extent the
arbitration award expressly states that the award, or any portion thereof, is
based solely on a claim as to which indemnification is not available. [The
Company agrees to indemnify and hold harmless each of the Selling Stockholders
(other than Xxxxx) to the same extent that the Company has agreed to indemnify
and hold harmless each Underwriter pursuant to the preceding paragraph;
provided, however, the Company shall not be liable under this paragraph to the
extent any loss, claim, liability, expense or damages described in the
preceding paragraph arises out of or is based upon an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information furnished in writing to the Company by the Selling
Stockholders or Xxxxx expressly for inclusion in the Registration Statement,
any preliminary prospectus or the Prospectus.] This indemnity agreement
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will be in addition to any liability that the Company, the Selling Stockholders
and Xxxxx might other wise have, including any other agreements between the
Company and the Selling Stockholders.
(b) Each Underwriter shall indemnify and hold
harmless the Company, the Selling Stockholders, each person, if any, who
controls the Company within the meaning of Sec tion 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 Stockholders to each
Underwriter, but only insofar as losses, claims, liabilities, expenses or
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 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 7 shall, 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 Sec tion 7,
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 shall not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 7 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 (1) 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 shall 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
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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 shall 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 except (i) where authorized by the indemnifying party, (ii)
indemnified parties have reasonably concluded (based on advice of counsel) that
there may be legal defenses available to each of them that are different from
or in addition to those available to the other indemnified parties or (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified parties. All such fees,
disbursements and other charges shall be reimbursed by the indemnifying party
promptly as they are incurred. An indemnifying party shall not be liable for
any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld or delayed). No indemnifying
party shall, without the prior written consent of each indemnified party,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding relating to the matters contemplated by
this Section 7 (whether or not any indemnified party is a party thereto),
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising or that may arise out of
such claim, action or proceeding and does not include any statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(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 7 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company, the
Selling Stockholders or the Underwriters, the Company, the Selling Stockholders
and the Underwriters shall 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 Stockholders from persons
other than the Underwriters, such as persons who control the Company 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 Stockholders and any one or
more of the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company and
Selling Stockholders on the one hand and the Underwriters on the other. 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 net 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, in
each case as set forth in the table on the cover page of the Prospectus. If,
but only if, the
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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
Stockholders, on the one hand, and the Underwriters, on the other, with respect
to the statements 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; provided, however, that no Selling
Stockholder (other than Xxxxx) shall be liable for any untrue statement,
alleged untrue statement, omission or alleged omission of any other Selling
Stockholder. Xxxxx shall be jointly and severally liable for any untrue
statement, alleged untrue statement, omission or alleged omission of all the
Selling Stockholders. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(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 7(d) shall be deemed to
include, for purpose of this Sec tion 7(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 7(d), no Underwriter shall be required to 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) shall 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 7(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7(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
con tribution as the Company, subject in each case to the provisions hereof.
Any party entitled to contri bution, 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 7(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 7(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 7 and the representations and warranties of the
Company, the Selling Stockholders and Xxxxx contained
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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 Shares and payment therefor or (iii) any
termination of this Agreement.
8. 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 or the Selling Stockholders, 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 Nasdaq National 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, (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
declaration by the United States of a national emergency or war or other
calamity or crisis shall have occurred, the effect of any of which is such as
to make it impracticable or inadvisable to market the Shares or Option Shares
on the terms and in the manner contemplated by the Prospectus, (v) if the
Company or any of its Subsidiaries shall have sustained a loss material or
substantial to the Company or any of its Subsidiaries by reason of flood, fire,
accident, hurricane, earthquake, theft, sabotage, or other calamity or
malicious act which, whether or not such loss shall have been insured, will
make it inadvisable to proceed with the offering and sale of the Shares or
Option Shares or (vi) if there shall have been a material adverse change in the
condition (financial or otherwise), earnings, business, prospects,
stockholders' equity, operations, properties, business, or results of
operations, of the Company or the Company and its Subsidiaries taken as a
whole, as would make it inadvisable to proceed with the offering and sale of
the Shares or Option Shares.
9. 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 1 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;
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provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by more than one-ninth of the number of Firm Shares
agreed to be purchased by such Underwriter without the prior written consent of
such Underwriter. If any Underwriter or Underwriters shall 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 refused to purchase
exceeds one-tenth of the aggregate number of the Firm Shares and arrangements
satisfactory to the Company, the Attorneys and the Representatives 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 Under writer, or the Company or the Selling Stockholders for the
purchase or sale of any Shares under this Agreement. In any such case either
the Representatives or the Company and the Attorneys 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 uments or arrangements may be effected. Any
action taken pursuant to this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. 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, 0000
Xxxxx 0xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxxxx, (b) if
to the Selling Stockholders, to ____________________, or (c) if to the
Underwriters, to GKM at the offices of GKM, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and to Ladenburg Xxxxxxxx & Co. Inc. at its offices at ________________.
Any such notice shall be effective only upon receipt. Any notice under Section
8 or 9 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, the Company and the Selling Stockholders, and of the
controlling persons, directors and officers referred to in Section 7, 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.
With respect to any obligation of the Company and the Selling
Stockholders hereunder to make any payment, to indemnify for any liability or
to reimburse for any expense, the Underwriters (or any other person to whom
such payment, indemnification or reimbursement is owed) may pursue the Company
with respect thereto prior to pursuing any Selling Stockholder.
All representations, warranties and agreements of the Company
and the Selling Stockholders contained herein or in certificates or other
instruments delivered pursuant hereto, shall remain operative and in full force
and effect regardless of (i) any investigation made by or on behalf
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of any Underwriter (ii) acceptance of and Shares and payment therefor or (iii)
any termination of this Agreement.
Any action required or permitted to be taken by the
Representatives under this Agreement may be taken by them jointly or by GKM.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. Each party hereto hereby
irrevocably submits for purposes of any action arising from this Agreement
brought by the other party hereto to the jurisdiction of the courts of New York
State located in the Borough of Manhattan and the U.S. District Court for the
Southern District of New York. 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.
The Company, the Selling Stockholders and the Underwriters
each hereby irrevocably waive any right they may have to a trial by jury in
respect of any claim based upon or arising out of this Agreement or the
transactions contemplated hereby.
This Agreement embodies the entire agreement and
understanding between the Company and Underwriters, on the one hand and the
Selling Stockholders and the Underwriters on the other, and supersedes all
prior agreements and understandings relating to the subject matter hereof
between those respective parties, including the letter agreement dated December
1, 1997 between the Representatives and Xxxxx, individually and on behalf of
the Selling Stockholders. This Agreement does not supersede the Stockholders
Agreement dated February 23, 1993 and the Letter Agreement dated December 3,
1997 between the Company and Xxxxxxx Xxxxx. This Agreement may not be amended
or otherwise modified or any provision hereof waived except by an instrument in
writing signed by the Representatives, the Selling Stockholders and the
Company.
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
POWERHOUSE TECHNOLOGIES, INC.
By:
-----------------------------
Name:
Title:
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE I ATTACHED HERETO
By:
-----------------------------
Name:
Attorney-in-Fact
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Confirmed as of the date first above mentioned:
XXXXXX XXXXXX XXXXXXXX & CO., INC.
LADENBURG XXXXXXXX & CO. INC.
Acting on behalf of
themselves and as the
Representatives of the
other several Underwriters
named in Schedule II hereof.
By: XXXXXX XXXXXX XXXXXXXX & CO., INC.
By:
-------------------------------
Name:
Title:
By: LADENBURG XXXXXXXX & CO. INC.
By:
-------------------------------
Name:
Title:
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SCHEDULE I
SELLING STOCKHOLDERS
Name of Selling Stockholder Total Number of Firm Shares to be Sold
--------------------------- --------------------------------------
Xxxxxxx Xxxxx
Video Investment Partners, X.X.
Xxxxxxx Capital, L.P.
Asgard Ltd.
LBN Investment Associates, L.P.
Parkway M&A Capital Corporation
Xxxxx Xxxxx
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SCHEDULE II
UNDERWRITERS
Names of Underwriters Number of Firm Shares to be Purchased
--------------------- -------------------------------------
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
Ladenburg Xxxxxxxx & Co. Inc.
Total -------------------------------------
=====================================
36
EXHIBIT A
POWERHOUSE TECHNOLOGIES, INC.
---------------------
PRICE DETERMINATION AGREEMENT
February __, 1998
XXXXXX XXXXXX XXXXXXXX & CO., INC.
LADENBURG XXXXXXXX & CO. INC.
As Representatives of the several Underwriters
c/o Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated February
__, 1998 (the "UNDERWRITING AGREEMENT"), among Powerhouse Technologies, Inc., a
Delaware corporation (the "COMPANY"), the Selling Stockholders named in Schedule
I thereto or hereto (the "SELLING STOCKHOLDERS") and the several Underwriters
named in Schedule II thereto or hereto (the "UNDERWRITERS"), for whom Xxxxxx
Xxxxxx Xxxxxxxx & Co., Inc. ("GKM") and Ladenburg Xxxxxxxx & Co. Inc. are acting
as Representatives (the "REPRESENTATIVES"). The Underwriting Agreement provides
for the purchase by the Underwriters from the Selling Stockholder, subject to
the terms and conditions set forth therein, of an aggregate of ________ shares
(the "FIRM SHARES") of the Company's common stock, par value $0.01 per share.
This Agreement is the Price Determination Agreement referred to in the
Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agree with the Representatives as follows:
1. The public offering price per share for the Firm Shares shall be
$_______.
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2. The purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be $_______, representing an amount equal to the
initial public offering price set forth above, less $______ per share. In
addition, the Underwriters shall retain $150,000, representing approximately
$___ per share from the proceeds payable to the Selling Stockholders for
reimbursement of Underwriters expenses in accordance with Section 5(j)(III) of
the Underwriting Agreement.
The Company represents and warrants to each of the Underwriters
that the representations and warranties of the Company set forth in Section 3 of
the Underwriting Agreement are accurate as though expressly made at and as of
the date hereof.
Each Selling Stockholder represents and warrants to each of the
Underwriters that the representations and warranties of such Selling Stockholder
and, as applicable, to the Company set forth in Section 4 of the Underwriting
Agreement are accurate as though expressly made at and as of the date hereof.
Xxxxx represents and warrants to each Underwriter and the Company
that the representations and warranties set forth in Section 4A of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
As contemplated by the Underwriting Agreement, attached as
Schedule II is a completed list of the several Underwriters, which shall be a
part of this Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE. Each party hereto hereby irrevocably
submits for purposes of any action arising from this Agreement brought by the
other party hereto to the jurisdiction of the courts of New York State located
in the Borough of Manhattan and the U.S. District Court for the Southern
District of New York.
If the foregoing is in accordance with your understanding of the
agreement among the Company, the Selling Stockholders and the Underwriters,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts and together with the Underwriting
Agreement shall be a binding agreement among the Company, the Selling
38
Stockholders and the Underwriters in accordance with its terms and the terms of
the Underwriting Agreement. Very truly yours,
POWERHOUSE TECHNOLOGIES, INC.
By:
------------------------------
Name:
Title:
THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE I TO THE
UNDERWRITING AGREEMENT
By:
-----------------------------
Name: Xxxxxxx Xxxxx
Attorney-in-Fact
Confirmed as of the date
first above mentioned:
XXXXXX XXXXXX XXXXXXXX & CO., INC.
LADENBURG XXXXXXXX & CO. INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule II hereof.
By: XXXXXX XXXXXX XXXXXXXX & CO., INC.
By:
--------------------------------
Name:
Title:
By: LADENBURG XXXXXXXX & CO. INC.
By:
--------------------------------
Name:
Title:
39
EXHIBIT B
POWER OF ATTORNEY
POWERHOUSE TECHNOLOGIES, INC.
Common Stock
Xxxxxxx Xxxxx
Ladies and Gentlemen:
The undersigned understands that Powerhouse Technologies, Inc., a
Delaware corporation (the "COMPANY"), intends to file a registration statement
(the "REGISTRATION STATEMENT") under the Securities Act of 1933, as amended (the
"ACT"), in connection with the proposed public offering and sale by the
undersigned (the "SELLING STOCKHOLDER") of the Company's Common Stock, par value
$0.01 per share (the "COMMON STOCK").
The Selling Stockholder desires to sell certain shares of Common
Stock and to include such shares among the shares covered by the Registration
Statement. The number of shares of Common Stock which the undersigned desires to
sell (the "SHARES") are set forth beneath the signature of the Selling
Stockholder below.
Concurrently with the execution and delivery of this Power of
Attorney, the undersigned is delivering to you, or requesting the Company to
deliver to you, certificates for the Shares, which you are authorized to deposit
with a custodian of your selection (the "CUSTODIAN"), pursuant to a custody
agreement in the form attached as Attachment A hereto (the "CUSTODY AGREEMENT").
1. In connection with the foregoing, the Selling Stockholder hereby
makes, constitutes and appoints you (the "MEMBER") and your substitute under
Section 3, the true and lawful attorney-in-fact of the undersigned (the Member
or substitute, being herein referred to as the "ATTORNEY"), with full power and
authority, in the name and on behalf of the Selling Stockholder:
40
(a) To enter into the Custody Agreement and deposit with the
Custodian pursuant thereto the certificates for the Shares delivered to the
Attorney concurrently herewith;
(b) For the purpose of effecting the sale of the Shares, to
execute and deliver (i) an Underwriting Agreement in the form filed as an
exhibit to the Registration Statement with such changes as the Attorney deems
necessary or advisable (the "UNDERWRITING AGREEMENT"), by and among the Company,
the Selling Stockholders and the Representatives (the "REPRESENTATIVES"),
selected by the Company, of the several Underwriters identified on Schedule II
to the Underwriting Agreement (the "UNDERWRITERS") and (ii) a Price
Determination Agreement (as defined in the Underwriting Agreement), by and among
the Company, the Selling Stockholders and the Representatives of the several
Underwriters;
(c) To endorse, transfer and deliver certificates for the
Shares to or on the order of the Representatives or to their nominee or
nominees, and to give such orders and instructions to the Custodian as the
Attorney may in its sole discretion determine with respect to (i) the transfer
on the books of the Company of the Shares in order to effect such sale
(including the names in which new certificates for such Shares are to be issued
and the denominations thereof); (ii) the delivery to or for the account of the
Representatives of the certificates for the Shares against receipt by the
Custodian of the full purchase price to be paid therefor; (iii) the remittance
to the Selling Stockholder of the Selling Stockholder's share of the proceeds,
after payment of expenses described in the Underwriting Agreement, from any sale
of Shares; and (iv) the return to the Selling Stockholder of certificates
representing the number of Shares (if any) deposited with the Custodian but not
sold by the Selling Stockholder under the Registration Statement for any reason;
(d) To retain Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx as legal
counsel for the Selling Stockholder in connection with any and all matters
referred to herein;
(e) To take for the Selling Stockholder all steps deemed
necessary or advisable by the Attorney in connection with the registration of
the Shares under the Act, including without limitation filing amendments to the
Registration Statement, requesting acceleration of effectiveness of the
Registration Statement, advising the Securities and Exchange Commission that the
reason the Selling Stockholder is offering the Shares for sale is to diversify
the Selling Stockholder's investments and to assist the Company in enlarging the
public market for the Common Stock, informing said Commission that the Selling
Stockholder has no knowledge of any material adverse information with regard to
the current and prospective operations of the Company which is not stated in the
Registration Statement, and such other steps as the Attorney may in its absolute
discretion deem necessary or advisable;
(f) To make, acknowledge, verify and file on behalf of the
Selling Stockholder applications, consents to service of process and such other
undertakings or reports as
41
may be required by law with state commissioners or officers administering state
securities or Blue Sky laws and to take any other action required to facilitate
the qualification of the Shares under the securities or Blue Sky laws of the
jurisdictions in which the Shares are to be offered;
(g) If necessary, to endorse (in blank or otherwise) on behalf
of the Selling Stockholder the certificate or certificates representing the
Shares, or a stock power or powers attached to such certificate or certificates;
and
(h) To make, execute, acknowledge and deliver all such other
contracts, orders, receipts, notices, requests, instructions, certificates,
letters and other writings and, in general, to do all things and to take all
actions which the Attorney in its sole discretion may consider necessary or
proper in connection with or to carry out the aforesaid sale of Shares, as fully
as could the Selling Stockholder if personally present and acting.
2. This Power of Attorney and all authority conferred hereby is
granted and conferred subject to and in consideration of the interests of the
Company, the Representatives and the Underwriters and, for the purpose of
completing the transactions contemplated by this Power of Attorney, this Power
of Attorney and all authority conferred hereby shall be irrevocable and shall
not be terminated by any act of the Selling Stockholder or by operation of law,
whether by the death, disability, incapacity or liquidation of the Selling
Stockholder or by the occurrence of any other event or events (including,
without limitation, the termination of any trust or estate for which the Selling
Stockholder is acting as a fiduciary or fiduciaries), and if, after the
execution hereof, the Selling Stockholder shall die or become disabled or
incapacitated, or if any other such event or events shall occur before the
completion of the transactions contemplated by this Power of Attorney, the
Attorney shall nevertheless be authorized and directed to complete all such
transactions as if such death, disability, incapacity or other event or events
had not occurred and regardless of notice thereof.
3. The Member shall have full power to make and substitute any person
in the place and stead of such Member, and the Selling Stockholder hereby
ratifies and confirms all that the Member or substitute shall do by virtue of
these presents. All actions hereunder may be taken by any the Member or his
substitute.
4. The Selling Stockholder hereby represents, warrants and covenants
that:
(a) Such Selling Stockholder has full power and authority to
enter into this Agreement, the Underwriting Agreement and the Custody Agreement.
All authorizations and consents necessary for the execution and delivery by such
Selling Stockholder of this Agreement, the Underwriting Agreement and the
Custody Agreement have been given. Each of this Agreement, the Underwriting
Agreement. Each of this Agreement, the Underwriting Agreement and the Custody
42
Agreement has been duly author ized (to the extent such Selling Stockholder is
not a natural person), executed and delivered by or on behalf of such Selling
Stockholder. This Agreement constitutes a valid and binding agreement of such
Selling Stockholder and is enforceable against such Selling Stockholder in
accordance with the terms hereof, and the Underwriting Agreement and the Custody
Agreement, when executed and delivered by the Attorney in accordance herewith,
will constitute the valid and binding agreement of such Selling Stockholder and
will be enforceable against Selling Stockholder in accordance with the terms
thereof; except with respect to each agreement as rights to indemnification and
contribution thereunder may be limited by applicable law and public policy and
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors rights generally or by general equitable principles.
(b) Such Selling Stockholder now has, and at the time of
delivery thereof pursuant to the Underwriting Agreement will have, (i) good and
valid title to the Firm Shares to be sold by such Selling Stockholder hereunder,
free and clear of all liens, encumbrances and claims whatsoever (other than
pursuant to the Underwriting Agreement and the Custody Agreement), and (ii) full
legal right and power, and all authorizations and approvals required by law, to
sell, transfer and deliver such Firm Shares to the Underwriters pursuant to the
Underwriting Agreement and to make the representations, warranties and
agreements made by such Selling Stockholder therein. Upon the delivery of and
payment for such Firm Shares pursuant to the Underwriting Agreement, assuming
each Underwriter has no notice of any adverse claim as such term is used in the
Uniform Commercial Code such Selling Stockholder will deliver good and valid
title thereto, free and clear of all liens, charges, claims, encumbrances,
pledges, security interests, defects or restrictions of any kind whatsoever.
(c) On the Closing Date 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 Firm Shares to be sold by such Selling Stockholder to
the several Underwriters pursuant to the Underwriting Agreement will have been
fully paid or provided for by the Selling Stockholder, and all laws imposing
such taxes will have been fully complied with.
(d) The performance of this Agreement, the Underwriting
Agreement and the Custody 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 Stockholder
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or consti tute a default under, or result in
the acceleration of any obligation under, as to such Selling Stockholder, any
contract or other agreement to which such Selling Stockholder is a party or by
which such Selling Stockholder or any of his property is bound or affected, or
any ruling, decree, judgment, order, statute, rule or regulation of any court or
other governmental agency or body having jurisdiction over such Selling
Stockholder or the property of
43
such Selling Stockholder, except for violations, defaults, breaches or
accelerations which would not result in a material adverse effect in the
financial condition of the Selling Stockholder.
(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 Stockholder of the transactions on his part
contemplated in this Agreement, the Underwriting Agreement and the Custody
Agreement, 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 Firm Shares to be sold by such Selling
Stockholder.
(f) The information under the caption "Selling Stockholder" in
the Prospectus is complete and accurate in all material respects.
(g) Other than as permitted by the Act and the Rules and Regula
tions, such Selling Stockholder 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 Stockholder
has not taken, directly or indirectly, any action intended to cause or result
in, or which might reasonably be expected to cause or result in, or which has
caused or resulted in, stabilization or manipulation, under the Act or
otherwise, of the price of any security of the Company to facilitate the sale or
resale of the Shares.
(h) Certificates in negotiable form for the Firm Shares to be
sold pursuant to the Underwriting Agreement by such Selling Stockholder have
been placed in custody, for the purpose of making delivery of such Firm Shares
pursuant to the Underwriting Agreement, under the Custody Agreement which
appoints a custodian (the "CUSTODIAN") for such Selling Stockholder. Such
Selling Stockholder agrees that the Firm Shares represented by the certificates
held in custody for him under the Custody Agreement are for the benefit of and
coupled with and subject to the interest hereunder of the Custodian, the
Underwriters and the Company, that the arrangements made by such Selling
Stockholder for such custody and the appointment of the Custodian by such
Selling Stockholder are irrevocable, and that the obligations of such Selling
Stockholder pursuant to the Underwriting Agreement shall not be terminated by
operation of law, whether by the death, disability or incapacity of such Selling
Stockholder or the occurrence of any other event. If the Selling Stockholder
should die, become disabled or incapacitated or if any other such event should
occur before the delivery of the Firm Shares hereunder, certificates for the
Firm Shares shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement, and actions taken by the Custodian pursuant to the
Agreement and the Custody Agreement shall be as valid, as if such death,
incapacity or other event had not occurred, regardless of whether or not the
Custodian shall have received notice thereof.
44
5. The representations, warranties and covenants of the
Selling Stockholder in this Power of Attorney are made for the benefit of, and
may be relied upon by, the Attorney, the Custodian, the Underwriters and the
Representatives.
6. The Attorney shall be entitled to act and rely upon any
statement, request, notice or instructions respecting this Power of Attorney
given to it by the Selling Stockholder, not only as to the authorization,
validity and effectiveness thereof, but also as to the truth and acceptability
of any information therein contained.
It is understood that the Attorney assumes no responsibility or
liability to any person other than to deal with the Shares deposited with it and
the proceeds from the sale of the Shares in accordance with the provisions
hereof. The Attorney makes no representations with respect to and shall have no
responsibility for the Registration Statement, the Prospectus or any Preliminary
Prospectus nor, except as herein expressly provided, for any aspect of the
offering of Common Stock, and shall not be liable for any error of judgment or
for any act done or omitted or for any mistake of fact or law except for their
own negligence, willful misconduct or bad faith. The Selling Stockholder agrees
to indemnify the Attorney for and to hold the Attorney harmless against any
loss, claim, damage or liability incurred on their part arising out of or in
connection with their acting as the Attorney under this Power of Attorney, as
well as the cost and expense of investigating and defending against any such
loss, claim, damage or liability, except to the extent such loss, claim, damage
or liability is due to the negligence, willful misconduct or bad faith of the
Member seeking indemnifi cation. The Selling Stockholder agrees that the
Attorney may consult with counsel of their own choice (who may be counsel for
the Company) and they shall have full and complete authorization and protection
for any action taken or suffered by them hereunder in good faith and in
accordance with the opinion of such counsel.
It is understood that the Attorney may, without breaching any express or
implied obligation to the Selling Stockholder hereunder, release, amend or
modify any other Power of Attorney granted by any other Selling Stockholder.
7. It is understood that the Attorney shall serve entirely without
compensation.
8. This Power of Attorney shall be governed by the laws of the State
of New York applicable to agreements made and to be performed entirely within
such State. Each party hereto hereby irrevocably submits for purposes of any
action arising from this Agreement brought by the other party hereto to the
jurisdiction of the courts of New York State located in the Borough of Manhattan
and the U.S. District Court for the Southern District of New York.
This Power of Attorney may be signed in two or more counterparts with the
same effect as if the signature thereto and hereto were upon the same
instrument.
45
In case any provision in this Power of Attorney 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.
This Power of Attorney shall be binding upon the Attorneys and the
Selling Stockholder and the heirs, legal representatives, distributees,
successors and assigns of the Selling Stockholder.
Dated: February __, 1998
Very truly yours,
SELLING STOCKHOLDER
By: (1)
----------------------------
Name:
Title:
----------------------------
(Address)
SHARES TO BE SOLD:
shares of Common Stock
---------
ACKNOWLEDGED AND ACCEPTED:
ATTORNEY-IN-FACT:
--------------------------------
Xxxxxxx Xxxxx
--------------------------------
(1) To be signed in exactly the same manner as the shares are registered.
NOTE: SIGNATURES MUST BE NOTARIZED
46
Attachment A
CUSTODY AGREEMENT
CUSTODY AGREEMENT, dated _____________________, 1998, between
___________________________, as Custodian (the "CUSTODIAN"), and ______________
(the "SELLING STOCKHOLDER").
Powerhouse Technologies, Inc., a Delaware corporation (the
"COMPANY"), intends to file a Registration Statement (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission to register for sale to
the public under the Securities Act of 1933, as amended (the "ACT"), shares of
the Company's common stock, $0.01 par value per share (the "COMMON STOCK").
The shares to be covered by the Registration Statement shall
consist of up to ________ shares of Common Stock (the "SHARES") to be sold by
the Selling Stockholder.
The Selling Stockholder has executed and delivered a Power of
Attorney (the "POWER OF ATTORNEY") naming Xxxxxxx Xxxxx as his attorney-in-fact
(the "ATTORNEY"), for certain purposes, including the execution, delivery and
performance of this Agreement in its name, place and stead, in connection with
the proposed sale by the Selling Stockholder of ___________ Shares.
1. A custody arrangement is hereby established by the Selling
Stockholder with the Custodian with respect to the Shares, and the Custodian is
hereby instructed to act in accordance with this Agreement and any amendments or
supplements hereto authorized by the Attorney.
2. There are herewith delivered to the Custodian, and the Custodian
hereby acknowledges receipt of, certificates representing the Shares, which
certificates have been endorsed in blank or are accompanied by duly executed
stock powers, in each case with all signatures guaranteed by a commercial bank
or trust company or by a member firm of the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. or a member of the National Association of
Securities Dealers, Inc. Such certificates are to be held by the Custodian for
the account of the Selling Stockholder and are to be disposed of by the Custo
dian in accordance with this Agreement.
3. The Custodian is authorized and directed by the Selling
Stockholder:
(a) To hold the certificates representing the Shares delivered
by the Selling Stockholder in its custody;
47
(b) On or immediately prior to the settlement date for any
Shares sold pursuant to the Registration Statement (the "CLOSING DATE"), to
cause such Shares to be transferred on the books of the Company into such names
as the Custodian shall have been instructed by the Representatives (the
"REPRESENTATIVES") of the several Underwriters (the "UNDERWRITERS") pursuant to
the Underwriting Agreement, dated February __, 1998 (the "UNDERWRITING
AGREEMENT"), among the Company, the Selling Stockholder and the Underwriters; to
cause to be issued, against surrender of the certificates for the Shares, a new
certificate or certificates for such Shares, free of any restrictive legend,
registered in such name or names; to deliver such new certificates representing
such Shares to the Representatives, as instructed by the Representatives on the
Closing Date for their account or accounts against full payment therefor; and to
give receipt for such payment;
(c) To disburse such payments in the following manner: (i) to
itself, as agent for the Selling Stockholder, a reserve amount to be designated
in writing by the Attorney from which amount the Custodian shall pay by the end
of the fifth business day following the Closing Date, (A) the Selling
Stockholder's proportionate share of all expenses of the offering and sale of
the Shares as provided in the Underwriting Agreement, and (B) any applicable
stock transfer taxes; and (ii) to the Selling Stockholder, pursuant to the
written instructions of the Attorney, (A) on the Closing Date, a sum equal to
the share of the proceeds to which such Selling Stockholder is entitled, as
determined by the Attorney, less the reserve amount designated by such Attorney,
and (B) promptly after all proper charges, disbursements, costs and expenses
shall have been paid, any remaining balance of the amount reserved under clause
(i) above. Before making any payment from the amount reserved under clause (i)
above, except payments made pursuant to subclause (B) of clause (ii) above, the
Custodian shall request and receive the written approval of the Attorneys. To
the extent the expenses referred to in subclause (A) of clause (i) above exceed
the amount reserved, the Selling Stockholder shall remain liable for their
proportionate share of such expenses. The Company shall be responsible for any
fees of the Custodian.
4. Subject in each case to the indemnification obligations set forth
in Section 7, in the event Shares of the Selling Stockholder are not sold, the
Custodian shall deliver to such Selling Stockholder as soon as practicable after
termination of the offering of the Shares, certificates representing such Shares
deposited by such Selling Stockholder. Certificates returned to the Selling
Stockholder shall be returned with any related stock powers, and any new
certificates issued to the Selling Stockholder with respect to such Shares shall
bear any appropriate legend reflecting the unregistered status thereof under the
Act.
5. This Agreement is for the express benefit of the Company and the
Selling Stockholder, the Underwriters and the Representatives. Prior to the
termination of the offering of the Shares, the obligations and authorizations of
the Selling Stockholder hereunder are irrevocable and shall not be terminated by
any act of the Selling Stockholder or by operation of law, whether by the death,
disability or incapacity of the Selling Stockholder or by the occurrence of any
other event
48
or events (including, without limitation, the termination of any trust or estate
for which the Selling Stockholder is acting as a fiduciary), and if after the
execution hereof the Selling Stockholder shall die or become disabled or
incapacitated, or if any other event or events shall occur before the delivery
of such Selling Stockholder's Shares hereunder to the Representatives, such
Shares shall be delivered to the Representatives in accordance with the terms
and conditions of this Agreement, as if such event had not occurred, regardless
of whether or not the Custodian shall have received notice of such event.
6. Until payment of the purchase price for the Shares has been made
to the Selling Stockholder or to the Custodian, the Selling Stockholder shall
remain the owner of (and shall retain the right to receive dividends and
distributions on, and to vote) the number of Shares delivered by him to the
Custodian hereunder. Until such payment in full has been made or until the
offering of Shares has been terminated, the Selling Stockholder agrees that he
will not give, sell, pledge, hypothecate, grant any lien on, transfer, deal with
or contract with respect to the Shares and any interests therein.
7. The Custodian shall assume no responsibility to any person other
than to deal with the certificates for the Shares and the proceeds from the sale
of the Shares represented thereby in accordance with the provisions hereof, and
the Selling Stockholder hereby agrees to indemnify the Custodian for and to hold
the Custodian harmless against any and all losses, claims, damages or
liabilities incurred on its part arising out of or in connection with it acting
as the Custodian pursuant hereto, as well as the costs and expenses of
investigating and defending any such losses, claims, damages or liabilities,
except to the extent such losses, claims, damages or liabilities are due to the
negligence, willful misconduct or bad faith of the Custodian. The Selling
Stockholder agrees that the Custodian may consult with counsel of its own choice
(who may be counsel for the Company), and the Custodian shall have full and
complete authorization and protection for any action taken or suffered by the
Custodian hereunder in good faith and in accordance with the opinion of such
counsel.
8. The Selling Stockholder hereby represents and warrants that: (a)
he has, and at the time of delivery of its Shares to the Representatives he will
have, full power and authority to enter into this Agreement and the Power of
Attorney, to carry out the terms and provisions hereof and thereof and to make
all of the representations, warranties and agreements contained herein and
therein; and (b) this Agreement and the Power of Attorney are valid and binding
agreements of such Selling Stockholder and are enforceable against such Selling
Stockholder in accordance with their respective terms.
9. The Custodian's acceptance of this Agreement by the execution
hereof shall constitute an acknowledgment by the Custodian of the authorization
herein conferred and shall
49
evidence the Custodian's agreement to carry out and perform this Agreement in
accordance with its terms.
10. The Custodian shall be entitled to act and rely upon any
statement, request, notice or instruction with respect to this Agreement given
to it on behalf of the Selling Stockholder if the same shall be made or given to
the Custodian by the Attorneys, not only as to the authorization, validity and
effectiveness thereof, but also as to the truth and acceptability of any
information therein contained.
11. This Agreement may be executed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument. Execution by the Custodian of one counterpart hereof and its
delivery thereof to the Attorneys shall constitute the valid execution of this
Agreement by the Custodian.
12. This Agreement shall be binding upon the Custodian, the Selling
Stockholder and the heirs, legal representatives, distributees, successors and
assigns of the Selling Stockholder.
13. This Agreement shall be governed by the laws of the State of New
York applicable to agreements made and to be performed entirely within such
State. Each party hereto hereby irrevocably submits for purposes of any action
arising from this Agreement brought by the other party hereto to the
jurisdiction of the courts of New York State located in the Borough of Manhattan
and the U.S. District Court for the Southern District of New York.
14. Any notice given pursuant to this Agreement shall be deemed given
if in writing and delivered in person, or if given by telephone or telegraph if
subsequently confirmed by letter: (i) if to the Selling Stockholder, to his
attorney, Xxxxxxx Xxxxx at _____________________; and (ii) if to the Custodian,
to it at ___________________.
50
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
------------------------
-----------------------,
as Custodian
THE SELLING STOCKHOLDER
By: THE ATTORNEY
By:
---------------------
Xxxxxxx Xxxxx
Attorney-in-Fact
51
EXHIBIT C
SUBSIDIARIES
52
EXHIBIT D
February __, 1998
XXXXXX XXXXXX XXXXXXXX & CO., INC.
LADENBURG XXXXXXXX & CO. INC.
As Representatives of the
several Underwriters
c/o Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In consideration of the agreement of the several Underwriters, for
which Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. ("GKM") and Ladenburg Xxxxxxxx & Co.
Inc. (the "REPRESENTATIVES") intend to act as Representatives, to underwrite a
proposed public offering (the "OFFERING") of ____________ shares of Common
Stock, par value $0.01 per share (the "COMMON STOCK") of Powerhouse
Technologies, Inc., a Delaware corporation, the undersigned hereby agrees that
the undersigned shall not, for a period of 120 days after the commencement of
the public offering of such shares, without the prior written consent of the
Representatives, offer to sell, sell, contract to sell, grant any option to
sell, or otherwise dispose of, or require the Company to file with the
Securities and Exchange Commission a registration statement under the Securities
Act of 1933, as amended, to register, any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other rights to
acquire shares of Common Stock of which the undersigned is now, or may in the
future become, the beneficial owner (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended).
Very truly yours,
-------------------------------
By:
------------------------
Name:
Title:
53
EXHIBIT E
Form of Opinion of
Counsel to the Company
1. Each of the Company and its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate 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 the sole record owner and, to our
knowledge, the sole beneficial owner of all of the capital stock of each of its
Subsidiaries.
2. The Firm Shares have been, and the Option Shares, when paid
for by the Underwriters in accordance with the terms of the Agreement will be,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right under (i) the statutes, judicial and
administrative decisions and the rules and regulations of the governmental
agencies of the State of Delaware, (ii) the Company's certificate of
incorporation or by-laws or (iii) any instrument, document, contract or other
agreement referred to in the Registration Statement or any instrument, document,
contract or agreement filed as an exhibit to, or incorporated as an exhibit by
reference in, the Registration Statement. Except as described in the
Registration Statement or the Prospectus, to the best of our knowledge, there is
no commitment or arrangement to issue, and there are no outstanding options,
warrants or other rights calling for the issuance of, any share of capital stock
of the Company or any Subsidiary to any person or any security or other
instrument that by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company.
3. No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
in connection with the authorization, issuance, transfer, sale or delivery of
the Shares by the Company, in connection with the execution, delivery and
performance of the Agreement or the Price Determination Agreement (collectively
the "TRANSACTION AGREEMENTS") by the Company or in connection with the taking by
the Company of any action contemplated thereby [or, if so required, all such
consents, approvals, authorizations and orders, [specifying the same] have been
obtained and are in full force and effect], except such as have been obtained
under the Act and the Rules and Regulations and such as may be required under
state securities or "Blue Sky" laws or by 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 the Company.
54
4. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Registration Statement and the Prospectus under
the caption "Capitalization." To our knowledge, the description of the Common
Stock contained in the Prospectus is complete and accurate in all material
respects. The form of certificate used to evidence the Common Stock is in due
and proper form and complies with all applicable statutory requirements.
5. The Registration Statement and the Prospectus (including
any documents incorporated by reference into the Prospectus, at the time they
were filed) comply or complied in all material respects as to form with the
requirements of the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations (except that we express no opinion as
to financial statements, schedules and other financial data contained in the
Registration Statement or the Prospectus or incorporated by reference therein).
6. To the best of our knowledge, any instrument, document,
lease, license, contract or other agreement (collectively, "DOCUMENTS") required
to be described or referred to in the Registration Statement or the Prospectus
has been properly described or referred to therein and any Document required to
be filed as an exhibit to the Registration Statement has been filed as an
exhibit thereto or has been incorporated as an exhibit by reference in the
Registration Statement; and to our knowledge no default exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any Document filed or required to be filed as an exhibit
to the Registration Statement.
7. To the best of our knowledge, the Company and its
Subsidiaries have obtained all authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental or regulatory
officials and bodies (including, without limitation, those with jurisdiction
over environmental or similar matters) necessary to own or lease their
respective properties and to conduct their respective businesses as described in
the Prospectus. To the best of our knowledge, the Company and its Subsidiaries
have been, and are currently, conducting their respective businesses in
compliance with all such approvals, orders, licenses, certificates, franchises
and permits. To the best of our knowledge, neither the Company nor any of its
Subsidiaries has received any notice of any proceedings relating to the
revocation or modification of any such authorization, approval, order, license,
certificate, franchise or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would adversely affect
the business, condition (financial or otherwise), earnings, prospects,
operations, properties, or results of operations of the Company and its
Subsidiaries taken as a whole.
8. To the best of our knowledge, except as disclosed in the
Registration Statement or the Prospectus, no person or entity has the right to
require the registration under the Act of shares of Common Stock or other
securities of the Company by reason of the filing or effectiveness of the
Registration Statement.
55
9. To the best of our knowledge, the Company is not in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment or decree, except as may be described in the Prospectus or such as in
the aggregate do not now have and will not in the future have a material adverse
effect upon the operations, business or assets of the Company and the
Subsidiaries, taken as a whole.
10. To our knowledge, all descriptions in the Prospectus of
statutes, regulations or legal or governmental proceedings are accurate and
fairly present the information required to be shown.
11. The Company has full corporate power and authority to enter
into the Transaction Agreements, and the Transaction Agreements have been duly
authorized, executed and delivered by the Company, are valid and binding
agreements of the Company and, except for the indemnification and contribution
provisions thereof, as to which we express no opinion, are enforceable against
the Company in accordance with the terms thereof.
12. The execution and delivery by the Company of, and the
performance by the Company of its agreements in, the Transaction Agreements do
not and will not (i) violate the certificate of incorporation or by-laws of the
Company, (ii) to our knowledge, breach or result in a default under, cause the
time for performance of any obligation to be accelerated under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Company or any of its Subsidiaries pursuant to the terms of, (x) any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement, capital lease or other evidence of indebtedness, (y) to our
knowledge, any voting trust arrangement or any contract or other agreement to
which the Company is a party that restricts the ability of the Company to issue
securities or (z) to our knowledge, any Document filed as an exhibit to, or
incorporated as an exhibit by reference in, the Registration Statement, (iii) to
our knowledge, breach or otherwise violate any existing obligation of the
Company under any court or administrative order, judgment or decree of which we
have knowledge or (iv) to our knowledge, violate applicable provisions of any
statute or regulation in the States of Delaware, or any other state where the
Company has material operations or of the United States.
13. Delivery of certificates for the Option Shares will
transfer valid and marketable title thereto to each Underwriter that has
purchased such Shares in good faith and without any notice of any adverse claim
with respect thereto.
15. 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.
56
16. The Shares have been duly authorized for listing by the
Nasdaq National Market System upon official notice of issuance.
We hereby confirm to you that we have been advised by the
Commission that the Registration Statement has become effective under the Act
and that no order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been instituted or is
threatened, pending or contemplated.
We hereby further confirm to you that to our knowledge, there are
no actions, suits, proceedings or investigations pending or overtly threatened
in writing against the Company or any of its respective officers or directors in
their capacities as such, before or by any court, governmental agency or
arbitrator which (i) seek to challenge the legality or enforceability of the
Transaction Agreements, (ii) seek to challenge the legality or enforceability of
any of the Documents filed, or required to be filed, as exhibits to the
Registration Statement, (iii) seek damages or other remedies with respect to any
of the Documents filed, or required to be filed, as exhibits to the Registration
Statement, (iv) except as set forth in or contemplated by the Registration
Statement and the Prospectus, seek money damages in excess of $100,000 or seek
to impose criminal penalties upon the Company, any of its Subsidiaries or any of
their respective officers or directors in their capacities as such and of which
we have knowledge, (v) seek to enjoin any of the business activities of the
Company or any of its Subsidiaries or the transactions described in the
Prospectus and of which we have knowledge, (vi) question the validity of the
capital stock, (vii) in any of which there is a reasonable possibility of an
adverse decision which may result in a material change in the condition
(financial or otherwise), earnings, business, prospects, stockholders' equity,
operations, properties, business, or results of operations, of the Company and
its Subsidiaries or (viii) are required to be disclosed in the Registration
Statement and Prospectus but are either not disclosed, or not disclosed
accurately in all material respects.
We have participated in the preparation of the Registration
Statement and the Prospectus and, without assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or in any document incorporated by reference into the Prospectus,
nothing has come to our attention that causes us to believe that, both as of the
Effective Date and as of the Closing Date and the Option Closing Date, the
Registration Statement, or any amendment thereto, contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that any Prospectus or any amendment or supplement thereto
including any documents incorporated by reference into the Prospectus, at the
time such Prospectus was issued, at the time any such amended or supplemented
Prospectus was issued, at the Closing Date and the Option Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact
57
necessary in order to make the statements therein, in the light of the circum
stances in which they were made, not misleading (except that we express no
opinion as to financial statements, schedules and other financial data contained
in the Registration Statement or the Prospectus or incorporated by reference
therein).
The foregoing opinion is subject to the qualification that the
enforceability of the Transaction Agreements may be: (i) subject to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally; and (ii) subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in
equity), including principles of commercial reasonableness or conscionability
and an implied covenant of good faith and fair dealing.
This letter is furnished by us solely for your benefit in
connection with the transactions referred to in the Transaction Agreements and
may not be circulated to, or relied upon by, any other person, except that this
letter may be relied upon by your counsel in connection with the opinion letter
to be delivered to you pursuant to Section 6(g) of the Agreement.
58
EXHIBIT F
Form of Selling Stockholder Opinion
February __, 1998
XXXXXX XXXXXX XXXXXXXX & CO., INC.
LADENBURG XXXXXXXX & CO. INC.
As Representatives of
the several Underwriters
c/o Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We are acting a special counsel to the holders of Common Stock (the
"Common Stock") of Powerhouse Technologies, Inc., a Delaware corporation (the
"Company") who are listed as selling stockholders in the Registration Statement
(No. 333-41417) and Prospectus, dated January __, 1998, of the Company under the
heading "Selling Stockholders" (the "Selling Stockholders") in connection with
the secondary offering by the Selling Stockholders of up to 1,468,026 shares
(the "Shares") of Common Stock of the Company. This opinion is being delivered
to you pursuant to Section 6(f) of the underwriting agreement, dated February
__, 1998 (the "Underwriting Agreement"), among the Company, the Selling
Stockholders and Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. and Ladenburg Xxxxxxxx & Co.
Inc., as representatives (the "Representatives") of the several Underwriters
named in Schedule I thereto (the "Underwriters"). All terms used herein that are
defined in the Underwriting Agreement have the respective meanings set forth
therein, unless otherwise defined herein.
We have examined the originals, or certified, conformed or reproduction
copies, of all records, agreements, instruments and documents as we have deemed
relevant or necessary as the basis for the opinions hereinafter expressed,
including, without limitation, (i) an Agreement of Limited Partnership of Video
Investment Partners, L.P. and the Investment Agreement among certain of the
Selling Stockholders (collectively, the "Investment Agreements"), executed and
delivered by or on behalf of each of the Selling Stockholders, pursuant to which
Xx. Xxxxxxx Xxxxx (the "Authorized Representative") is appointed
attorney-in-fact for the Selling Stockholders, (ii) a custody agreement (the
"Custody Agreement") between the Authorized Representative, individually and on
behalf of each of the Selling Stockholders and ___________, as custodian (the
"Custodian"),
59
(iii) the Underwriting Agreement, and (iv) the Powers of Attorney executed by
each of the Selling Stockholders other than Xx. Xxxxx (the "Xxxxxx of
Attorney"). In all such examinations, we have assumed that all natural persons
executing documents have the legal capacity to execute and deliver those
documents. In addition, in all such examinations, we have assumed the
genuineness of all signatures, the authenticity of all original or certified
copies and the conformity to original or certified copies of all copies
submitted to us as conformed or reproduction copies. We have also assumed for
purposes of the opinions expressed herein that the Custodian has the power to
enter into and perform the Custody Agreement and that such agreement has been
duly authorized, executed and delivered by, and constitutes a valid and binding
obligation of, the Custodian. As to various questions of fact relevant to the
opinions expressed herein, we have relied upon and assume the accuracy of the
representations and warranties of each Selling Stockholder contained in the
Underwriting Agreement, the Investment Agreements or the Custody Agreement, and
of certificates and oral or written statements and other information of or from
public officials, representatives of the Company, the Selling Stockholders, and
others, and assume compliance on the part of all parties to the Underwriting
Agreement and the Custody Agreement with the covenants and agreements contained
therein.
For purposes of the opinions expressed below, we have, with your
permission, further assumed that the opinion expressed in paragraph (v) below is
governed solely by the provisions of Article 8 of the Uniform Commercial Code as
currently in effect in the State of New York.
Based upon the foregoing, and subject to the limitations, qualifications
and assumptions set forth herein, we are of the opinion that:
(i) The Powers of Attorney, the Investment Agreements and the
Custody Agreement have been duly executed and delivered by or on behalf of each
Selling Stockholder and constitute valid and binding agreements of such Selling
Stockholder, enforceable against such Selling Stockholder in accordance with
their respective terms, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws affecting
creditors' rights generally and (ii) general principles of equity (whether
considered in a proceeding at law or in equity).
(ii) The Underwriting Agreement has been duly executed and
delivered by or on behalf of each Selling Stockholder.
(iii) The execution and delivery of the Underwriting Agreement,
the Investment Agreements, the Powers of Attorney and the Custody Agreement by
or on behalf of each Selling Stockholder and the sale of the Shares to be sold
by each Selling Stockholder pursuant to the Underwriting Agreement and the
compliance by each Selling Stockholder with all of the provisions of the
Underwriting Agreement, the Power of Attorney and the Custody Agreement
applicable to him, her, or it and with the powers of attorney set forth in the
Investment Agreements will not result in a breach or violation of any terms or
provisions of, or constitute a default under, any law or
60
present regulation of any governmental agency or authority of the State of New
York or the United States of America known to us to be applicable to such
Selling Stockholder (except that we express no opinion as to (A) the Act and the
Rules and Regulations thereunder, (B) the anti-fraud provisions of any federal
securities law of the United States and (C) the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares),
provided that the foregoing opinion is limited to such laws which, in our
experience, are normally applicable to public offerings of securities of the
type contemplated by this Agreement.
(iv) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental agency or body of
the United States of America or the State of New York is required for the
consummation by each Selling Stockholder of the sale of the Shares to be sold by
such Selling Stockholder pursuant to the Underwriting Agreement (except that we
express no opinion as to any consent, approval, authorization, order, filing,
registration or qualification which may be required under the Act and the Rules
and Regulation or state securities or Blue Sky laws in connection with the
purchase and distribution of such Shares by the Underwriters), provided that the
foregoing opinion is limited to such consents, approvals, authorizations,
orders, filings, registrations or qualifications which, in our experience, are
normally applicable to public offerings of securities of the type contemplated
by this Agreement.
(v) Assuming that the Underwriters purchase the Shares to be
delivered at the Time of Delivery for value and without notice of any adverse
claim as such term is used in Section 8-102 of the Uniform Commercial Code as
currently in effect in the State of New York, the delivery of certificates
representing such Shares either registered in the name of the Underwriters or
effectively endorsed to the Underwriters or in blank will pass to the
Underwriters all rights that the transferor has in such Shares, free and clear
of all adverse claims.
The opinions expressed herein are limited to the federal law of the
United States of America and the internal laws of the State of New York and, to
the extent relevant hereto, the General Corporation Law of the State of
Delaware, as currently in effect.
The opinions expressed herein are solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person and may not be
quoted in whole or in part without our prior written consent.
Very truly yours,
By:
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