Exhibit 1.1
[3,000,000] Shares of Common Stock
XXXXXX INDUSTRIES, INC.
UNDERWRITING AGREEMENT
_________, 2002
BEAR, XXXXXXX & CO. INC.
XX XXXXX
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx Industries, Inc., a corporation organized and existing
under the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named
in Schedule I hereto (the "Underwriters") an aggregate of [3,000,000] shares
(the "Firm Shares") of its common stock, par value $0.10 per share (the
"Common Stock"). The Company and the Stockholders of the Company listed on
Scheduled II hereto (the "Selling Stockholders") propose to sell for the sole
purpose of covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, up to an additional [450,000]
shares (the "Additional Shares") of Common Stock. The Firm Shares and any
Additional Shares purchased by the Underwriters are referred to herein as the
"Shares." The Shares are more fully described in the Registration Statement
referred to below.
1. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, each of the Underwriters
that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(No. 333-_____), and amendments thereto, and related preliminary prospectuses
for the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the Shares which registration statement, as so amended
(including post-effective amendments, if any), has been declared effective by
the Commission and copies of which have heretofore been delivered to the
Underwriters. The registration statement, as amended at the time it
became effective, including the exhibits and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rule 430A or 434(d) under the Securities Act, is hereinafter referred to as
the "Registration Statement." If the Company has filed or is required pursuant
to the terms hereof to file a registration statement pursuant to Rule 462(b)
under the Securities Act registering additional shares of Common Stock (a
"Rule 462(b) Registration Statement"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to
include such Rule 462(b) Registration Statement. Other than a Rule 462(b)
Registration Statement, which became effective upon filing, no other document
with respect to the Registration Statement has heretofore been filed with the
Commission. No stop order suspending the effectiveness of either the
Registration Statement or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or,
threatened by the Commission. The Company, if required by the Securities Act
and rules and regulations of the Commission (together, the "Rules and
Regulations"), proposes to file the Prospectus with the Commission pursuant to
Rule 424(b) of the Rules and Regulations. The Prospectus, in the form in which
it is to be filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, or, if the Prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the Prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became
effective, is hereinafter referred to as the "Prospectus," except that if any
revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the offering and sale
of the Shares (the "Offering") which differs from the Prospectus (whether or
not such revised prospectus or prospectus supplement is required to be filed
by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus or prospectus supplement,
as the case may be, from and after the time it is first provided to the
Underwriters for such use. Any preliminary prospectus or prospectus subject to
completion included in the Registration Statement or filed with the Commission
pursuant to Rule 424 under the Securities Act is hereafter called a
"Preliminary Prospectus." Any reference herein to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents 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 of the
Registration Statement, the date of such Preliminary Prospectus or the date of
the Prospectus, as the case may be, and 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 (i) the filing of any document under the Exchange Act
after the effective date of the Registration Statement, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case may be,
which is incorporated therein by reference and (ii) any such document so
filed. All references in this Agreement to the Registration Statement, the
Rule 462(b) Registration Statement, the Preliminary Prospectus and the
Prospectus, or any amendments or supplements to any of the foregoing, shall be
deemed to include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering,
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Analysis and Retrieval System ("XXXXX").
(b) At the time of the effectiveness of the
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Rules and Regulations,
when any supplement to or amendment of the Prospectus is filed with the
Commission, when any document filed under the Exchange Act was or is filed and
at the Closing Date and the Additional Closing Date, if any (as hereinafter
respectively defined), the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto complied or will comply in all
material respects with the applicable provisions of the Securities Act and the
Rules and Regulations and did not and will not contain an untrue statement of
a material fact and did not and will not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein (i) in the case of the Registration Statement, not misleading and (ii)
in the case of the Prospectus or any related Preliminary Prospectus in light
of the circumstances under which they were made, not misleading. When any
related preliminary prospectus was first filed with the Commission (whether
filed as part of the registration statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the Rules and
Regulations) and when any amendment thereof or supplement thereto was first
filed with the Commission, such Preliminary Prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of the Securities Act, the Rules and Regulations, the
Exchange Act and the respective rules and regulations thereunder and did not
contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein in light of the circumstances under which they were made
not misleading. No representation and warranty is made in this subsection (b),
however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related Preliminary Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through you specifically for use therein
("Underwriters' Information"). The parties acknowledge and agree that the
Underwriters Information consists solely of the material included in
paragraphs ___, ___ and ___ under the caption "Underwriting" in the
Prospectus. If Rule 434 is used, the Company will comply with the requirements
of Rule 434.
(c) Xxxxxx Xxxxxxxx LLP, who has certified the
financial statements and supporting schedules included or incorporated in the
Registration Statement, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(d) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, except
as set forth in the Registration Statement and the Prospectus, the Company has
not paid any dividends on
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its capital stock and there has been no material adverse change or any
development involving a prospective material adverse change on (i) the
business, prospects, properties, operations, condition (financial or other),
stockholders' equity (investment) or results of operations of the Company and
each subsidiary of the Company (the "Subsidiaries"), taken as a whole; (ii)
the long-term debt of the Company; (iii) the capital stock of the Company
(other than pursuant to the exercise of stock options described in the
Registration Statement and the Prospectus as outstanding or the grant of stock
options under stock option plans described in the Registration Statement and
the Prospectus); (iv) the Offering, or anything giving rise to any liability
or obligation on the part of the Underwriters; or (v) the consummation of the
transactions contemplated by this Agreement or the Company's performance of
its obligations hereunder (any of the events set forth in (i), (ii), (iii),
(iv) or (v), a "Material Adverse Change" or "Material Adverse Effect"),
whether or not arising from transactions in the ordinary course of business,
and since the date of the latest balance sheet presented in the Registration
Statement and the Prospectus, neither the Company nor any of the Subsidiaries
has incurred or undertaken any liabilities or obligations, direct or
contingent, or entered into any transactions which are material to the Company
and the Subsidiaries, taken as a whole, except for liabilities or obligations
which are reflected in the Registration Statement and the Prospectus.
(e) This Agreement and the transactions
contemplated herein have been duly and validly authorized by the Company and
this Agreement has been duly and validly executed and delivered by the
Company.
(f) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of the Subsidiaries pursuant to any indenture, mortgage,
deed of trust, loan agreement or other agreement, instrument, franchise,
license or permit to which the Company or any of the Subsidiaries is a party
or by which the Company or any of the Subsidiaries or their respective
properties or assets may be bound or (ii) violate or conflict with any
provision of the certificate or articles of incorporation, by-laws or other
organizational documents of the Company or any of the Subsidiaries or any
judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having jurisdiction over the
Company or any of the Subsidiaries or any of their respective properties,
operations or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their respective properties
or assets is required for the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby, by the
Registration Statement and by the Prospectus, including the issuance, sale and
delivery of the Shares to be issued, sold and delivered by the Company
hereunder, except the
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registration under the Securities Act of the Shares and such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters.
(g) The Company has the authorized capitalization
set forth in the Prospectus and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and were not issued in violation of or subject to any
preemptive or similar rights that entitle or will entitle any person to
acquire any Shares from the Company upon issuance or sale by the Company of
Shares in the Offering, except for such rights as may have been fully
satisfied or waived prior to the effectiveness of the Registration Statement;
the Shares to be delivered on the Closing Date and the Additional Closing
Date, if any, (as hereinafter respectively defined) have been duly and validly
authorized and, when delivered by the Company in accordance with this
Agreement, will be duly and validly issued, fully paid and non-assessable and
will not have been issued in violation of or subject to any preemptive or
similar rights that entitle or will entitle any person to acquire any Shares
from the Company upon issuance thereof by the Company; and all of the issued
shares of capital stock of each of its Subsidiaries has been duly and validly
authorized and issued and are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims; the Common Stock, the Firm Shares and the
Additional Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus. Except as disclosed in or
specifically contemplated by the Prospectus, the Company has no outstanding
options to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any shares of its capital stock or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its capital
stock or any such options, rights, convertible securities or obligations.
(h) The Subsidiaries are the only subsidiaries (as
defined in Rule 405 of the Securities Act) of the Company. Each of the Company
and the Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and the Subsidiaries is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a Material Adverse Effect.
Each of the Company and the Subsidiaries has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits (collectively, the
"Consents") of and from all public, regulatory or governmental agencies and
bodies, to own, lease and operate its properties and conduct its business as
now being conducted and as described in the Registration Statement and the
Prospectus. No Consent contains a materially burdensome restriction not
adequately disclosed in the
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Registration Statement and the Prospectus.
(i) Except as described in the Prospectus, there is
no legal or governmental proceeding, including routine litigation, to which
the Company or any of the Subsidiaries is a party or of which any property of
the Company or any of the Subsidiaries is the subject which, singularly or in
the aggregate, if determined adversely to the Company or any of the
Subsidiaries, is reasonably likely to have a Material Adverse Effect, and, to
the best of the Company's knowledge, no such proceeding is threatened or
contemplated by governmental authorities or threatened or contemplated by
others, and the defense of all such claims against the Company in the
aggregate, including routine litigation, will not have a Material Adverse
Effect.
(j) Neither the Company nor any of its affiliates
have taken and nor will any of them take, directly or indirectly, any action
designed to cause or result in, or which constitutes or which might reasonably
be expected to constitute, the stabilization or manipulation of the price of
the shares of Common Stock to facilitate the sale or resale of the Shares.
(k) Except for the Subsidiaries, the Company owns
no capital stock or other beneficial interest, directly or indirectly, in any
corporation, partnership, joint venture or other business entity.
(l) The financial statements, including the notes
thereto, and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries and the other
entities for which financial statements are included in the Registration
Statement and the Prospectus as of the dates indicated and condition and
results of operations for the periods specified; except as otherwise stated in
the Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved; and the supporting schedules
included in the Registration Statement present fairly the information required
to be stated therein. The other financial and statistical information and data
included in the Registration Statement and the Prospectus present fairly the
information included therein and have been prepared on a basis consistent with
that of the financial statements included or incorporated by reference in the
Registration Statement and the Prospectus and the books and records of the
respective entities presented therein. There are no historical or pro forma
financial statements that are required to be included in the Registration
Statement and Prospectus in accordance with Regulation S-X that have not been
included as so required.
(m) Except as disclosed in the Prospectus, no
holder of securities of the Company has any rights to the registration of
securities of the Company because of the filing of the Registration Statement
or otherwise in connection with the sale of the Shares contemplated hereby,
and any such rights so disclosed have either been fully complied with by the
Company or effectively waived by the holders thereof.
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(n) The Company is not, and upon consummation of
the transactions contemplated hereby, and at all times up to and including the
application of net proceeds as described in the Prospectus, will not be,
subject to registration as an "investment company" under the Investment
Company Act of 1940.
(o) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Registration Statement and the Prospectus or are not reasonably likely to have
a Material Adverse Effect; and any real property and buildings held under
lease or sublease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and the Subsidiaries. Neither the
Company nor any of the Subsidiaries has received any notice of any claim
adverse to their ownership of any real or personal property or of any claim
against the continued possession of any real property, whether owned or held
under lease or sublease by the Company or any of the Subsidiaries, except any
such claims which are not reasonably likely to have a Material Adverse Effect.
(p) The Company and each of the Subsidiaries have
accurately prepared and timely filed all federal, state and other tax returns
that are required to be filed by it and has paid or made provision for the
payment of all taxes, assessments, governmental or other similar charges,
including without limitation, all sales and use taxes and all taxes which the
Company and each of the Subsidiaries is obligated to withhold from amounts
owning to employees, creditors and third parties, with respect to the periods
covered by such tax returns (whether or not such amounts are shown as due on
any tax return). No deficiency assessment with respect to a proposed
adjustment of the Company's or any of the Subsidiaries' Federal, state, or
other taxes is pending or, to the best of the Company's knowledge, threatened.
There is no tax lien, whether imposed by any federal, state, or other taxing
authority, outstanding against the assets, properties or business of the
Company or any of the Subsidiaries, except where the failure to pay such lien
would not have a Material Adverse Effect.
(q) The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and the outstanding shares of Common Stock
(including the Shares) are listed for quotation on the NASDAQ National Market
("NASDAQ"), and the Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act or de-listing the Common Stock from NASDAQ, nor has the Company
received any notification that the SEC or NASDAQ is contemplating terminating
such registration or listing.
(r) The conditions for use of Form S-3, as set
forth in the General Instructions thereto, have been satisfied.
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(s) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission under the Exchange Act, and, when read together
with the other information in the Prospectus, at the time the Registration
Statement and any amendments thereto become effective and at the Closing Date,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(t) There are no contracts or other documents
(including, without limitation, any voting agreement), which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement or the Prospectus by the Securities Act or by the Rules and
Regulations and which have not been so described or filed.
(u) Neither the Company nor any of the Subsidiaries
(i) is in violation of its charter or by-laws, (ii) is in default (and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is subject or
(iii) is in violation in any respect of any statute or any judgment, decree,
order, rule or regulation of any court or governmental or regulatory agency or
body having jurisdiction over the Company or any of the Subsidiaries or any of
their properties or assets, except, with respect to (ii) and (iii), any
violation or default that would not have a Material Adverse Effect.
(v) The Company and each of the Subsidiaries owns
or possesses adequate right to use all patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses, formulae, customer lists, and know-how
and other intellectual property (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses as being
conducted and as described in the Registration Statement and Prospectus and
have no reason to believe that the conduct of their respective businesses will
conflict with, and have not received any notice of any claim of conflict with,
any such right of others which claim, if the subject of an unfavorable
decision, ruling or judgment, could reasonably be expected to result in a
Material Adverse Effect. Except as described in the Prospectus and the
Registration Statement, or as could not reasonably be expected to have a
Material Adverse Effect, (i) there is no infringement by third parties of any
such Intellectual Property; (ii) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the Company's rights in or to any such Intellectual Property, and the Company
is unaware of any facts which would form a
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reasonable basis for any such claim; (iii) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the Company
is unaware of any other fact which would form a reasonable basis for any such
claim.
(w) No labor disturbance by the employees of the
Company or any of the Subsidiaries exists or, to the best of the Company's
knowledge, is imminent which might be expected to have a Material Adverse
Effect.
(x) No "prohibited transaction" (as defined in
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time (the "Code"), or "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been waived) has occurred with
respect to any employee benefit plan which could have a Material Adverse
Effect; each employee benefit plan is in compliance in all material respects
with applicable law, including ERISA and the Code; the Company has not
incurred and does not expect to incur liability under Title IV of ERISA with
respect to the termination of, or withdrawal from, any "pension plan;" and
each "pension plan" (as defined in ERISA) for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could cause the loss of such qualification.
(y) There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission, or other
release of any kind of toxic or other wastes or other hazardous substances by,
due to, or caused by the Company (or, to the Company's knowledge, any other
entity for whose acts or omissions the Company is or may be liable) upon any
other property now or previously owned or leased by the Company or any of the
Subsidiaries, or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or which would,
under any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which would not have, singularly or in
the aggregate with all such violations and liabilities, a Material Adverse
Effect; there has been no disposal discharge, emission or other release of any
kind onto such property or into the environment surrounding such property of
any toxic or other wastes or other hazardous substances with respect to which
the Company or any of the Subsidiaries has knowledge. The Company has not
agreed to assume, undertake or provide indemnification for any liability of
any other person under any Environmental Law, including any obligation for
cleanup or remedial action, except as would not reasonably be expected to have
a Material Adverse Effect.
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(z) Each of the Company and the Subsidiaries has
such authorizations, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect.
(aa) Neither the Company, any of the Subsidiaries
nor, to the Company's knowledge, any of its employees or agents has at any
time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States of any jurisdiction thereof.
(bb) The statistical and market-related data
included in the Prospectus are based on or derived from sources which the
Company believes are reliable and accurate.
2. Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder severally represents and warrants to,
and agrees with, each of the Underwriters that:
(a) This Agreement has been duly and validly
authorized, executed and delivered by or on behalf of the Selling Stockholders
and is a valid and binding agreement of the Selling Stockholders, enforceable
against each Selling Stockholder in accordance with its terms, except as
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(b) Each of the Custody Agreements and Powers of
Attorney ("Custody Agreement and Power of Attorney") signed by (i) each
Selling Stockholder, (ii) the Company, as custodian (in such capacity, the
"Custodian"), and (iii) [ ] and [ ], as the Selling
Stockholders' attorneys-in-fact (in such capacity, the "Attorneys-In-Fact"), has
been duly and validly authorized, executed and delivered by each Selling
Stockholder and is a valid and binding agreement of each Selling Stockholder,
enforceable against him in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles. Each Selling Stockholder agrees that the
Additional Shares, if any, to be sold by each Selling Stockholder on deposit
with the Custodian are subject to the interests of the Underwriters, that the
arrangements made for such custody are to that extent irrevocable, and that the
obligations of each Selling Stockholder hereunder shall not be terminated,
except as provided in this Agreement or in the Custody Agreement and Power of
Attorney, by any act of a Selling Stockholder, by operation of law, by death or
incapacity of such Selling Stockholder or by the occurrence
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of any other event. If a Selling Stockholder should die or become
incapacitated, or if any other event should occur, before the delivery of the
Additional Shares, if any, to be sold by such Selling Stockholder hereunder,
the documents evidencing the Additional Shares, if any, to be sold by such
Selling Stockholder then on deposit with the Custodian shall be delivered by
the Custodian in accordance with the terms and conditions of this Agreement as
if such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice thereof.
(c) Each Selling Stockholder (i) is the lawful
owner of the Additional Shares, if any, to be sold by such Selling Stockholder
hereunder or (ii) holds fully exercisable stock options ("Stock Options") to
purchase a number of shares of Common Stock at least equal to the number of
Additional Shares, if any, to be sold by such Selling Stockholder hereunder,
and will on the Additional Closing Date be the lawful owner of such Additional
Shares, and in each case upon sale and delivery of, and payment for, such
Additional Shares, as provided herein, each Selling Stockholder will convey to
the Underwriters good and marketable title to such Additional Shares, free and
clear of all liens, encumbrances, equities, claims and security interests
whatsoever.
(d) Each Selling Stockholder (unless holding and
exercising the Stock Options referred to in paragraph (c) above) has, and on
the Additional Closing Date, if any, will have, good and valid title to all of
the Additional Shares which may be sold by such Selling Stockholder pursuant
to this Agreement on such date and the legal right and power, and all
authorizations and approvals required by law, to enter into this Agreement and
the applicable Custody Agreement and Power of Attorney, to sell, transfer and
deliver all of the Additional Shares which may be sold by such Selling
Stockholder pursuant to this Agreement and to comply with his other
obligations hereunder and thereunder.
(e) No consent, approval, authorization or order of
any court or governmental agency or body is required for the consummation by
the Selling Stockholders of the transactions contemplated herein, except such
as may have been obtained under the Securities Act and such as may be required
under the state securities laws or the blue sky laws or any jurisdiction in
connection with the purchase and distribution of the Additional Shares by the
Underwriters and such other approvals as have been obtained.
(f) Neither the sale of the Additional Shares, if
any, being sold by the Selling Stockholders nor the consummation of any of the
other transactions contemplated herein by the Selling Stockholders or the
fulfillment of the terms hereof by the Selling Stockholders will conflict
with, result in a breach or violation of, or constitute a default under any
law or the terms of any indenture or other agreement or instrument to which
any Selling Stockholder is party or bound, any judgment, order or decree
applicable to any Selling Stockholder or any court or regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over any Selling
11
Stockholder.
(g) None of the Selling Stockholders has any
registration or other similar rights to have any equity or debt securities
registered for sale by the Company under the Registration Statement or
included in the offering of the Shares, except for such rights as have been
waived or which are described in the Prospectus.
(h) The Selling Stockholders do not have, or have
waived prior to the date hereof, any preemptive right, co-sale right or right
of first refusal or other similar right to purchase any of the Additional
Shares, if any, that are to be sold by the Company to the Underwriters
pursuant to this Agreement; and the Selling Stockholders do not own any
warrants, options or similar rights to acquire, and does not have any right or
arrangement to acquire, any capital stock, right, warrants, options or other
securities from the Company, other than those described in the Registration
Statement and the Prospectus.
(i) All information furnished by or on behalf of
the Selling Stockholders in writing for use in the Registration Statement and
Prospectus, or any document incorporated by reference into the Registration
Statement and Prospectus is, and on the Closing Date and the Additional
Closing Date, if any, will be, true, correct, and complete in all material
respects, and does not, and on the Closing Date and the Additional Closing
Date, if any, will not, contain any untrue statement of a material fact or
omit to state any material fact necessary to make such information not
misleading. To the extent such information appears in the Prospectus, each
Selling Stockholder confirms as accurate the number of shares of Common Stock
and options set forth opposite such Selling Stockholder's name and as
described in the related footnote in the Prospectus under the caption
"Principal and Selling Stockholders" (both prior to and after giving effect to
the sale of the Additional Shares).
(j) The Selling Stockholders have not taken and
will not take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.
(k) The Selling Stockholders have not distributed
and will not distribute, prior to the later of the Additional Closing Date, if
any, and the completion of the Underwriters' distribution of the Shares, any
offering material in connection with the offering and sale of the Shares by
the Selling Stockholders other than a Preliminary Prospectus, the Prospectus
or the Registration Statement.
(l) Each Selling Stockholder has reviewed and is
familiar with the Registration Statement and the Prospectus and (i) has no
knowledge of any material adverse information with regard to the Company or
the Subsidiaries which is not disclosed in the Registration Statement and the
Prospectus, (ii) has no knowledge of any misstatement of a material fact or
failure to state a material fact necessary to make the
12
statements in the Prospectus, in light of the circumstances under which they
were made, not misleading, and (iii) is not prompted to sell the Additional
Shares, if any, to be sold by the Selling Stockholders by any information
concerning the Company or any of the Subsidiaries which is not set forth in
the Registration Statement and the Prospectus.
(m) The representations and warranties of the
Selling Stockholders in the respective Custody Agreements and Powers of
Attorney are, and on the Closing Date and Additional Closing Date, if any,
will be, true and correct.
Any certificate signed by or on behalf of a Selling Stockholder
and delivered to the Representative or to Underwriters' Counsel shall be
deemed to be a representation and warranty by such Selling Shareholder to each
Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters and the Underwriters, severally and not jointly, agree to
purchase from the Company, at a purchase price per share of $_______, the
number of Firm Shares set forth opposite the respective names of the
Underwriters in Schedule I hereto plus any additional number of Shares which
such Underwriter may become obligated to purchase pursuant to the provisions
of Section 10 hereof.
(b) Payment of the purchase price for, and delivery
of certificates for, the Shares shall be made at the office of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
("Underwriters' Counsel") or at such other place as shall be agreed upon by
Bear, Xxxxxxx & Co. Inc. and the Company, at 10:00 A.M., New York City time on
the third or fourth business day (as permitted under Rule 15c6-1 under the
Exchange Act) (unless postponed in accordance with the provisions of Section 9
hereof) following the date of the effectiveness of the Registration Statement
(or, if the Company has elected to rely upon Rule 430A of the Regulations, the
third or fourth business day (as permitted under Rule 15c6-1 under the
Exchange Act) after the determination of the public offering price of the
Shares), or such other time not later than ten business days after such date
as shall be agreed upon by Bear, Xxxxxxx & Co. Inc. and the Company (such time
and date of payment and delivery being herein called the "Closing Date").
(c) Payment for the Shares shall be made to or upon
the order of the Company of the purchase price by wire transfer in Federal
(same day) funds to the Company upon delivery of certificates for the Shares
to you through the facilities of The Depository Trust Company for the
respective accounts of the several Underwriters against receipt therefor
signed by you. Certificates for the Shares to be delivered to you shall be
registered in such name or names and shall be in such denominations as you may
request at least one business day before the Closing Date. The Company will
permit you
13
to examine and package such certificates for delivery at least one full
business day prior to the Closing Date.
(d) In addition, the Company and the Selling
Stockholders hereby grant to the Underwriters the option to purchase up to
[450,000] Additional Shares at the same purchase price per share to be paid by
the Underwriters to the Company for the Firm Shares as set forth in this
Section 2, for the sole purpose of covering over-allotments in the sale of
Firm Shares by the Underwriters. This option may be exercised at any time and
from time to time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to the Company.
Such notice shall set forth the aggregate number of Additional Shares as to
which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date
and time being herein sometimes referred to as the "Additional Closing Date");
provided however, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date
on which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered
in such name or names and in such authorized denominations as you may request
in writing at least two full business days prior to the Additional Closing
Date. The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same ratio to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number
increased as set forth in Section 10 hereof) bears to the total number of Firm
Shares, subject, however, to such adjustments to eliminate any fractional
shares as Bear, Xxxxxxx & Co. Inc. in its sole discretion shall make. The
number of Additional Shares to be sold by (i) the Company shall be the number
which bears the same ratio to the aggregate number of Additional Shares being
purchased as [ ] bears to [450,000] and (ii) each Selling Stockholder shall be
the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Additional Shares set forth opposite
the name of such Selling Stockholder in the second column of Schedule II
hereto bears to [450,000], subject in each case, however, to such adjustments
to eliminate any fractional shares as Bear, Xxxxxxx & Co. Inc. in its sole
discretion shall make.
Payment for the Additional Shares shall be made to or upon the
order of the Company of the purchase price by wire transfer in Federal (same
day) funds to the Company at the offices of Underwriters' Counsel, or such
other location as may be mutually acceptable upon delivery of the certificates
for the Additional Shares to you for the respective accounts of the
Underwriters. Payment for the Additional Shares to be
14
sold by the Selling Stockholders shall be made to or upon the order of the
Selling Stockholder of the purchase price by wire transfer in Federal (same
day) funds to the Selling Stockholders [[or the Custodian]] at the offices of
Underwriters' Counsel, or such other location as may be mutually acceptable,
upon delivery of the certificates for the Additional Shares to Bear, Xxxxxxx &
Co. Inc. for the respective accounts of the Underwriters. Each Selling
Stockholder hereby agrees that (i) he will pay all stock transfer taxes, stamp
duties and other similar taxes, if any, payable upon the sale or delivery of
the Additional Shares to be sold by the Selling Stockholder to the several
Underwriters, or otherwise in connection with the performance of the Selling
Stockholders' obligations hereunder and (ii) the Custodian is authorized to
deduct for such payment any such amounts from the proceeds to the Selling
Stockholders hereunder and to hold such amounts for the account of the Selling
Stockholders with the Custodian under the Custody Agreement and Power of
Attorney.
4. Offering. Upon your authorization of the release of the
Firm Shares, the Underwriters propose to offer the Shares for sale to the
public upon the terms and conditions set forth in the Prospectus.
5. Covenants of the Company; Covenants of the Selling
Stockholders.
(A) The Company covenants and agrees with each
of the Underwriters that:
(a) The Registration Statement and any amendments
thereto have become effective, and if Rule 430A is used or the filing of the
Prospectus is otherwise required under Rule 424(b), or Rule 434, the Company
will file the Prospectus (properly completed if Rule 430A has been used)
pursuant to Rule 424(b) within the prescribed time period and will provide
evidence satisfactory to you of such timely filing. If the Company elects to
rely on Rule 434, the Company will prepare and file a Term Sheet that complies
with requirements of Rule 434 and provide the Underwriters with copies of such
filings prior to their use.
The Company will notify you immediately (and, if requested by
you, will confirm such notice in writing) (i) when the Registration Statement
and any amendments thereto become effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (iii) of the Company's
intention to file or prepare any amendments to the Registration Statement
(including pursuant to rule 462(b)), the Term Sheet or any supplement,
revision or amendment to the Registration Statement or the Prospectus, (iv) of
the mailing or the delivery to the Commission for filing of any amendment of
or supplement to the Registration Statement or the Prospectus, (v) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment thereto or of the
initiation, or the threatening, of any proceedings therefor, it being
understood that the Company shall make every effort to
15
avoid the issuance of any such stop order, (v) of the receipt of any comments
from the Commission, and (vi) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any
proceeding for that purpose. If the Commission shall propose or enter a stop
order at any time, the Company will make every reasonable effort to prevent
the issuance of any such stop order and, if issued, to obtain the lifting of
such order as soon as possible. The Company will not file any amendment to the
Registration Statement or any amendment of or supplement to the Prospectus
(including the prospectus required to be filed pursuant to Rule 424(b) or Rule
434) that differs from the prospectus on file at the time of the effectiveness
of the Registration Statement [before or] after the effective date of the
Registration Statement or, file any document under the Exchange Act if such
document would be deemed to be incorporated by reference into the Prospectus
to which you shall object in writing after being timely furnished in advance a
copy thereof.
(b) The Company shall comply with the Securities
Act and the Exchange Act to permit completion of the distribution as
contemplated in this Agreement, the Registration Statement and Prospectus. If
at any time when a prospectus relating to the Shares is required to be
delivered under the Securities Act or the Exchange Act in connection with the
sales of Shares, any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would, in the judgment of the
Underwriters or the Company, include an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances existing at the
time of delivery to the purchaser, not misleading, or if it shall be necessary
at any time to amend or supplement the Prospectus or Registration Statement to
comply with the Securities Act or the Rules and Regulations, or to file under
the Exchange Act so as to comply therewith any document incorporated by
reference in the Registration Statement or the Prospectus or in any amendment
thereof or supplement thereto, the Company will notify you promptly and
prepare and file with the Commission, subject to the second paragraph of
Section 4(a) hereof, an appropriate amendment or supplement (in form and
substance satisfactory to you) which will correct such statement or omission
or which will effect such compliance and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as
possible.
(c) The Company will promptly deliver to each of
the Underwriters and Underwriters' Counsel a signed copy of the Registration
Statement, including all consents and exhibits filed therewith and all
documents incorporated by reference therein and all amendments thereto, and
the Company will promptly deliver to each of the Underwriters such number of
copies of any Preliminary Prospectus, the Prospectus, the Registration
Statement, and all amendments of and supplements to such documents, if any,
all documents incorporated by reference in the Registration Statement and
Prospectus or any amendment thereof or supplement thereto, as you may
reasonably request. Prior to 10:00 A.M., New York City time, on the business
day next succeeding
16
the date of this Agreement and from time to time thereafter the Company will
furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may reasonably request.
(d) The Company shall promptly deliver to each of
the Underwriters and to Underwriters' Counsel copies of the Preliminary
Prospectus, and the Company consents to the use and delivery of the
Preliminary Prospectus by the Underwriters in accordance with Rule 430 and
Section 5(b) of the Securities Act. The Company shall also furnish to each of
the Underwriters copies of the Final Prospectus as requested by any of the
Underwriters.
(e) The Company will use its best efforts, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as you may designate and to maintain such qualification in
effect for so long as required for the distribution thereof; except that in no
event shall the Company be obligated in connection therewith to qualify as a
foreign corporation or to execute a general consent to service of process.
(f) The Company will make generally available to
its security holders and to the Underwriters as soon as practicable, but in
any event not later than twelve months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Securities Act),
an earnings statement of the Company and the Subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158).
(g) During the period of 90 days from the date of
the Prospectus, the Company will not, directly or indirectly, without your
prior written consent, issue, sell, offer or agree to sell, grant any option
for the sale of, pledge, make any short sale or maintain any short position,
establish or maintain a "put equivalent position" (within the meaning of Rule
16-a-1(h) under the Exchange Act ), enter into any swap, derivative
transaction or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock
(whether any such transaction is to be settled by delivery of Common Stock,
other securities, cash or other consideration) or otherwise dispose of, any
Common Stock (or any securities convertible into, exercisable for or
exchangeable for Common Stock) or interest therein of the Company or of any of
the Subsidiaries, and the Company will obtain the undertaking of each of its
officers and directors and such of its shareholders as have been heretofore
designated by you and listed on Schedule III attached hereto not to engage in
any of the aforementioned transactions on their own behalf, other than the
Company's sale of Shares hereunder and the Company's issuance of Common Stock
upon (i) the conversion or exchange of convertible or exchangeable securities
outstanding on the date hereof; (ii) the exercise of currently outstanding
options; (iii) the exercise of currently outstanding warrants; and (iv) the
grant and exercise of options under, or the issuance and
17
sale of shares pursuant to, employee stock option plans in effect on the date
hereof.
(h) During the period of three years from the
effective date of the Registration Statement, the Company will furnish to you
copies of all reports or other communications (financial or other) furnished
to security holders, and will deliver to you (i) as soon as they are
available, copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial statements to be
on a consolidated basis to the extent the accounts of the Company and the
Subsidiaries are consolidated in reports furnished to its security holders
generally or to the Commission).
(i) The Company will apply the net proceeds it
receives from the sale of the Shares as set forth under the caption "Use of
Proceeds" in the Prospectus.
(j) The Company will use its best efforts to list
for quotation the Shares on NASDAQ.
(k) The Company, during the period when the
Prospectus is required to be delivered under the Securities Act or the
Exchange Act, will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act within the time periods
required by the Exchange Act and the rules and regulations thereunder.
(B) Each Selling Stockholder covenants and
agrees with each Underwriter:
(a) To deliver to the Representatives prior to the
Closing Date, a properly completed and executed United States Treasury
Department Form W-8 (if such Selling Stockholder is a non-United States
Person) or Form W-9 (if such Selling Stockholder is a United States Person).
(b) If, at any time prior to the date on which the
distribution of the Shares as contemplated herein and in the Prospectus has
been completed, as determined by the Representatives, such Selling Stockholder
has knowledge of the occurrence of any event as a result of which the
Prospectus or the Registration Statement, in each case as then amended or
supplemented, would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, such Selling
Stockholder will promptly notify the Company and the Representatives.
(c) To cooperate to the extent necessary to cause
the Registration Statement or any post-effective amendment thereto to become
effective at the earliest possible time and to do and perform all things to be
done and performed
18
under this Agreement prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Shares pursuant to this Agreement.
(d) Pay or to cause to be paid all transfer taxes
with respect to the Additional Shares, if any, to be sold by such Selling
Stockholder.
(e) To deliver to Bear, Xxxxxxx & Co. Inc. on or
prior to the date of this Agreement the lock-up agreement referenced in
Section 7(j) hereof.
6. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is
terminated, the Company hereby agrees to pay all costs and expenses incident
to the performance of the obligations of the Company hereunder, including the
following: (i) the fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the Shares under the
Securities Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
producing any Agreement among Underwriters, this Agreement, the blue sky
memoranda closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(A)
hereof, including the fees and disbursements of counsel for the Underwriters
in connection with such qualification and in connection with the blue sky
survey; (iv) all fees and expenses in connection with listing the Shares on
NASDAQ; (v) all travel expenses of the Company's officers and employees and
any other expense of the Company incurred in connection with attending or
hosting meetings with prospective purchasers of the Shares; (vi) any stock
transfer taxes incurred in connection with this Agreement or the Offering; and
(vii) the filing fees incident to, and the fees and disbursements of counsel
for the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of
the Shares; (viii) fees of the Custodian and other fees and expenses related
to the offering of the Additional Shares by the Selling Stockholders, on
behalf of the Selling Stockholders in connection with the sale of Additional
Shares, if any. The Company also will pay or cause to be paid: (i) the cost of
preparing stock certificates; (ii) the cost and charges of any transfer agent
or registrar; and (iii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 6. It is understood, however, that except as
provided in this Section, and Sections 8 and 12 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make. Notwithstanding
anything to the contrary in this Section 6, in the event that this Agreement
is terminated pursuant to Section 7 hereof, or subsequent to a Material
Adverse Change, the Company will pay all out-of pocket
19
expenses of the Underwriters incurred in connection herewith.
7. Conditions of Underwriters' Obligations. The
obligations of the Underwriters to purchase and pay for the Firm Shares and
the Additional Shares, as provided herein, shall be subject to the accuracy of
the representations and warranties of the Company and the Selling Stockholders
herein contained, as of the date hereof and as of the Closing Date (for
purposes of this Section 7 "Closing Date" shall refer to the Closing Date for
the Firm Shares and any Additional Closing Date, if different, for the
Additional Shares), to the absence from any certificates, opinions, written
statements or letters furnished to you or to Underwriters' Counsel pursuant to
this Section 7 of any misstatement or omission, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Registration Statement shall have become
effective and all necessary approvals from NASDAQ shall have been received not
later than, if pricing pursuant to Rule 430A: 5:30 P.M., New York City time,
on the date of this Agreement or at such later time and date as shall have
been consented to in writing by you; if the Company shall have elected to rely
upon Rule 430A or Rule 434 of the Regulations, the Prospectus shall have been
filed with the Commission in a timely fashion in accordance with Section
5(A)(a) hereof and a form of the Prospectus containing information relating to
the description of the Shares and the method of distribution and similar
matters shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period; and, at or prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no proceedings
therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date, you shall have received
the favorable written opinion of Blau, Kramer, Wactler & Xxxxxxxxx P.C.,
counsel for the Company, dated the Closing Date, addressed to the Underwriters
in the form attached hereto as Annex I.
(c) At the Closing Date, you shall have received
the favorable written opinion of Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.,
counsel for the Selling Stockholders, dated the Closing Date addressed to the
Underwriters in the form attached hereto as Annex II.
(d) All proceedings taken in connection with the
sale of the Firm Shares and the Additional Shares as herein contemplated shall
be reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, and the Underwriters shall have received from said Underwriters'
Counsel a favorable opinion, dated as of the Closing Date, with respect to the
issuance and sale of the Shares, the Registration Statement and the Prospectus
and such other related matters as you may require, and the Company shall have
furnished to Underwriters' Counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
20
(e) At the Closing Date, you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that (i) the condition set
forth in subsection (a) of this Section 7 has been satisfied, (ii) as of the
date hereof and as of the Closing Date, the representations and warranties of
the Company set forth in Section 1 hereof are accurate, (iii) as of the
Closing Date, all agreements, conditions and obligations of the Company to be
performed or complied with hereunder on or prior thereto have been duly
performed or complied with, (iv) the Company and the Subsidiaries have not
sustained any material loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and (v) subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus
there has not been any Material Adverse Change in the capital stock or
long-term debt of the Company or any of the Subsidiaries or any change, or any
development involving a prospective change in the business, prospects,
properties, operations, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries taken as a whole, except in
each case as described in or contemplated by the Prospectus.
(f) At the time this Agreement is executed and at
the Closing Date, you shall have received a comfort letter from Xxxxxx
Xxxxxxxx LLP, independent public accountants for the Company, dated as of the
date of this Agreement and as of the Closing Date, respectively, addressed to
the Company and the Underwriters and in form and substance satisfactory to the
Underwriters and Underwriters' Counsel.
(g) Subsequent to the execution and delivery of
this Agreement or, if earlier, the dates as of which information is given in
the Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto), there shall not have been
any change in the capital stock (other than through the exercise of stock
options referred to in the Registration Statement and Prospectus) or long-term
debt of the Company or any of the Subsidiaries or any change, or any
development involving a prospective change in or affecting the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and the Subsidiaries taken as a whole, including,
without limitation, the occurrence of a fire, flood, explosion or other
calamity at any of the properties owned or leased by the Company or any of its
Subsidiaries, the effect of which, in any such case described above, is, in
the judgment of the Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus (exclusive of any supplement).
(h) You shall have received a lock-up agreement
from each person who is a director or officer of the Company and each
shareholder as shall have been heretofore designated by you and listed on
Schedule III hereto substantially in the
21
form attached hereto as Annex II. [List of officers to be discussed.]
(i) At the Closing Date, the Shares shall have been
approved for listing on NASDAQ.
(j) At the Closing Date, you shall have received a
certificate of each Selling Stockholder, dated the Closing Date, to the effect
that the representations and warranties of the Selling Stockholder set forth
in Section 2 hereof are accurate and that such Selling Stockholder has
complied with all agreements and satisfied all conditions on his part to be
performed or satisfied hereunder at or prior to the Closing Date.
(k) On or prior to the Closing Date, you shall have
received 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) from each Selling Stockholder.
(l) The Company shall have complied with the
provisions of Section 5(A)(c) hereof with respect to the furnishing of
prospectuses.
(m) The Company shall have furnished the
Underwriters and Underwriters' Counsel with such other certificates, opinions
or other documents as they may have reasonably requested.
(n) At the Closing Date the National Association of
Securities Dealers, Inc. shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
If any of the conditions specified in this Section 7 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 7 shall not be satisfactory in
form and substance to you and to Underwriters' Counsel, all obligations of the
Underwriters hereunder may be cancelled by you at, or at any time prior to,
the Closing Date and the obligations of the Underwriters to purchase the
Additional Shares may be cancelled by you at, or at any time prior to, the
Additional Closing Date. Notice of such cancellation shall be given to the
Company in writing, or by telephone. Any such telephone notice shall be
confirmed promptly thereafter in writing.
8. Indemnification.
(a) The Company shall indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but
22
not limited to reasonable attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares, as originally filed
or any amendment thereof, or any related Preliminary Prospectus or the
Prospectus, or in any supplement thereto or amendment thereof, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided however, that the Company will not be liable in any
such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through you
expressly for use therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have, including under this
Agreement.
(b) Each Selling Stockholder agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act against any and all losses, liabilities, claims,
damages and expenses whatsoever as incurred (including but not limited to
reasonable attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact relating to such Selling
Stockholder contained in the Registration Statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
Preliminary Prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact relating to such Selling Stockholder
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that in no such case shall any Selling
Stockholder be liable or responsible for any amount in excess of the proceeds
(net of the underwriting discount) applicable to the Shares sold by such
Selling Stockholder pursuant to the transactions contemplated hereby. This
indemnity agreement will be in addition to any liability which any Selling
Stockholder may otherwise have including under this Agreement.
23
(c) Each Underwriter severally, and not jointly,
shall indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, against any losses, liabilities, claims, damages
and expenses whatsoever as incurred (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim, and any and all amounts paid in settlement of any claim or litigation),
jointly or severally, to which they or any of them may become subject under
the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided
however, that in no case shall any Underwriter be liable or responsible for
any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder. This indemnity will be in addition to
any liability which any Underwriter may otherwise have, including under this
Agreement. The Company acknowledges that the statements set forth in [ ]
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the Registration Statement relating to the
Shares as originally filed or in any amendment thereof, any related
preliminary prospectus or the Prospectus or in any amendment thereof or
supplement thereto, as the case may be.
(d) Promptly after receipt by an indemnified party
under subsection (a), (b) or (c) above of notice of any claims or the
commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing of the claim or the commencement thereof (but the failure so to notify
an indemnifying party shall not relieve the indemnifying party from any
liability which it may have under this Section 8 to the extent that it is not
materially prejudiced as a result thereof and in any event shall not relieve
it from any liability that such indemnifying party may have otherwise than on
account of the indemnity agreement hereunder). In case any such claim or
action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, an indemnifying party may
participate, at its own expense in the defense of such action, and
24
to the extent it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel satisfactory to such
indemnified party; provided however, that counsel to the indemnifying party
shall not (except with the written consent of the indemnified party) also be
counsel to the indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties unless (i) the employment
of such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement
of the action, (iii) the indemnifying party does not diligently defend the
action after assumption of the defense or (iv) such indemnified party or
parties shall have reasonably concluded that there may be defenses available
to it or them which are different from or additional to those available to one
or all of the indemnifying parties (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties. No indemnifying party shall,
without the prior written consent of the indemnified parties, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could have been sought under Section 8
or 9 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes
an unconditional release of the indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim, (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of the indemnified party and (iii) the indemnifying
party reaffirms its indemnification obligations pursuant to this Agreement.
9. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 8 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company, the
Selling Stockholders and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated
by such indemnification provision (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claims asserted, but after deducting
in the case of losses, claims, damages, liabilities and expenses suffered by
the Company and each Selling Stockholder, any contribution received by the
Company and/or the Selling Stockholder from persons, other than the
Underwriters, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) as incurred to
25
which the Company, each Selling Stockholder and one or more of the
Underwriters may be subject, in such proportions as are appropriate to reflect
the relative benefits received by the Company, each Selling Stockholder and
the Underwriters from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 8
hereof, in such proportions as are appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the
Company, the Selling Stockholder and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company, the Selling
Stockholders and the Underwriters shall be deemed to be in the same proportion
as (x) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
Selling Stockholders bear to (y) the underwriting discount received by the
respective Underwriters, respectively, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of the Company, any
Selling Stockholder and of the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, a Selling Stockholder or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 9. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this
Section 9 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon
any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares are underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of Section 15 of the
26
Securities Act or Section 20 of the Exchange Act, each officer of the Company,
who shall have signed the Registration Statement, and each director of the
Company shall have the same rights to contribution as the Company and any
Selling Stockholder, as applicable, subject in each case to clauses (i) and
(ii) of this Section 9. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 9 or
otherwise. The obligations of the Underwriters to contribute pursuant to this
Section 9 are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
10. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall
default in its or their obligation to purchase Firm Shares or Additional
Shares hereunder, and if the Firm Shares or Additional Shares with respect to
which such default relates do not (after giving effect to arrangements, if
any, made by you pursuant to subsection (b) below) exceed in the aggregate 10%
of the number of Firm Shares or Additional Shares, the Firm Shares or
Additional Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions which
the numbers of Firm Shares set forth opposite their respective names in
Schedule I hereto bear to the aggregate number of Firm Shares [set forth
opposite the names of the non-defaulting Underwriters.]
(b) In the event that such default relates to more
than 10% of the Firm Shares or Additional Shares, as the case may be, you may
in your discretion arrange for yourself or for another party or parties
(including any non-defaulting Underwriter or Underwriters who so agree) to
purchase such Firm Shares or Additional Shares, as the case may be, to which
such default relates on the terms contained herein. In the event that within
five calendar days after such a default you do not arrange for the purchase of
the Firm Shares or Additional Shares, as the case may be, to which such
default relates as provided in this Section 10, this Agreement or, in the case
of a default with respect to the Additional Shares, the obligations of the
Underwriters to purchase and of the Company and the Selling Stockholders to
sell the Additional Shares shall thereupon terminate, without liability on the
part of the Company or the Selling Stockholders with respect thereto (except
in each case as provided in Sections 6, 8(a) and 9 hereof with respect to the
Company and Sections 8(b) and 9 hereof with respect to the Selling
Stockholders) or the Underwriters, but nothing in this Agreement shall relieve
a defaulting Underwriter or Underwriters of its or their liability, if any, to
the other Underwriters and the Company and the Selling Stockholders for
damages occasioned by its or their default hereunder.
27
(c) In the event that the Firm Shares or Additional
Shares to which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be, for a period not exceeding five
business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus which,
in the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 10 with like effect as if it had
originally been a party to this Agreement with respect to such Firm Shares and
Additional Shares.
11. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Underwriters
and the Company and the Selling Stockholders contained in this Agreement or in
certificates of officers of the Company or any Subsidiary submitted hereto or
thereto, including the agreements contained in Section 6, the indemnity
agreements contained in Section 8 and the contribution agreements contained in
Section 9, shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any Underwriter or any controlling
person thereof or by or on behalf of the Company or the Selling Stockholders,
any of its officers and directors or any controlling person thereof, and shall
survive delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in
Sections 6, 8, 9, 11 and 12(d) hereof shall survive the termination of this
Agreement, including termination pursuant to Section 10 or 12 hereof.
12. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the
later of when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the public offering price or the purchase price per Share
has not been agreed upon prior to 5:00 P.M., New York City time, on the fifth
full business day after the Registration Statement shall have become
effective, this Agreement shall thereupon terminate without liability to the
Company, the Selling Stockholders or the Underwriters except as herein
expressly provided. Until this Agreement becomes effective as aforesaid, it
may be terminated by the Company by notifying you or by you notifying the
Company. Notwithstanding the foregoing, the provisions of this Section 12 and
of Sections 1, 6, 8 and 9 hereof shall at all times be in full force and
effect.
(b) You shall have the right to terminate this
Agreement at any time prior to the Closing Date or to terminate the
obligations of the Underwriters to purchase the Additional Shares at any time
prior to the Additional Closing Date, as the
28
case may be, if (A) any domestic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, the market for the Company's securities or securities in
general; or (B) if trading on the New York Stock Exchange or NASDAQ shall have
been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required,
on the New York Stock Exchange or NASDAQ by the New York Stock Exchange or
NASDAQ or by order of the Commission or any other governmental authority
having jurisdiction; or (C) if a banking moratorium has been declared by any
state or federal authority or if any material disruption in commercial banking
or securities settlement or clearance services shall have occurred; or (D) any
downgrading shall have occurred in the Company's corporate credit rating or
the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization" as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act or if any
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities; or (E) (i) if there shall have occurred any
outbreak or escalation of hostilities or acts of terrorism involving the
United States or there is a declaration of a national emergency or war by the
United States or (ii) if there shall have been any other calamity or crisis or
any change in political, financial or economic conditions if the effect of any
such event in (i) or (ii) in your judgment makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Shares
or the Additional Shares, as the case may be, on the terms and in the manner
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this
Section 12 shall be in writing.
(d) If this Agreement shall be terminated pursuant
to any of the provisions hereof (otherwise than pursuant to (i) notification
by you as provided in Section 12(a) hereof or (ii) Section 10(b)), or if the
sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof,
the Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees and expenses of their
counsel), incurred by the Underwriters in connection herewith. If this
Agreement shall be terminated pursuant to Section 12(b) hereof, then no party
shall have any liability hereunder except for the Company's obligation,
pursuant to Section 6 hereof, to pay all out-of-pocket expenses of the
Underwriters (including the reasonable fees and expenses of their Counsel)
incurred in connection with this Agreement.
13. Notices. All communications hereunder, except as may
be otherwise specifically provided herein, shall be in writing, and:
29
(a) if sent to any Underwriter, shall be mailed,
delivered, or faxed and confirmed in writing, to such Underwriter c/o Bear,
Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Equity Capital Markets, with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxx X.
Xxxxxxxxxxx, Esq.
(b) if sent to the Company, shall be mailed,
delivered, or faxed and confirmed in writing to the Company and its counsel at
the addresses set forth in the Registration Statement, Attention: Xxxxx
Xxxxxxxxx, Esq.;
(c) if sent to the Selling Stockholders, shall be
mailed, delivered, or faxed and confirmed in writing to the Custodian c/o the
Company, at [3061 Industry Drive, Lancaster, Pennsylvania 17603-4025 ].
provided however, that any notice to an Underwriter pursuant to
Section 8 shall be delivered or sent by mail or facsimile transmission to such
Underwriter at its address set forth in its acceptance facsimile to you, which
address will be supplied to any other party hereto by you upon request. Any
such statements, requests, notices or agreements shall take effect at the time
of receipt thereof.
14. Parties. This Agreement shall inure solely to the
benefit of, and shall be binding upon, the Underwriters and the Company and
the controlling persons, directors, officers, employees and agents referred to
in Sections 8 and 9 hereof and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and it is not for the
benefit of any other person, firm or corporation. The term "successors and
assigns" shall not include a purchaser, in its capacity as such, of Shares
from any of the Underwriters.
15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of law.
16. Counterparts. This Agreement may be executed in any
number of counterparts, each of which may be delivered by facsimile and shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
17. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
30
18. Time is of the Essence. Time shall be of the essence
of this Agreement. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
[signature page follows]
31
If the foregoing correctly sets forth the understanding between
you and the Company and the Selling Stockholders, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute
a binding agreement among us. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination, upon request, but without warranty
on your part as to the authority of the signers thereof.
Very truly yours,
XXXXXX INDUSTRIES, INC.
By: ____________________________________
SELLING STOCKHOLDERS
By: ____________________________________
Name: Xxx X. Xxxxx
Title: Chairman
By: ______________________________
Name: [ ]
Title: [ ]
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
By:
___________________________
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
SCHEDULE I
NUMBER OF FIRM SHARES
NAME OF UNDERWRITER TO BE PURCHASED
Bear, Xxxxxxx & Co. Inc............................ ----------------
XX Xxxxx........................................... ----------------
---------------
---------------
Total:................................... ===============
I-1
SCHEDULE II
-----------------------------------------------------------------------------------------
NUMBER OF ADDITIONAL SHARES TO BE SOLD TO
NAMES OF SELLING STOCKHOLDER THE UNDERWRITERS
-----------------------------------------------------------------------------------------
Xxx X. Xxxxx [ ]
-----------------------------------------------------------------------------------------
II-1
SCHEDULE III
NAMES OF STOCKHOLDERS SUBJECT TO THE LOCK-UP PROVISION
III-1
ANNEX I
Form of Opinion of Company Counsel
(i) Each of the Company and the Subsidiaries has been duly organized and
is validly existing as a corporation in good standing under the laws
of its jurisdiction of incorporation with full power and corporate and
all other necessary authority to own its properties and conduct its
business as described in the Prospectus. Each of the Company and the
Subsidiaries is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct of
its business makes such qualification necessary, except for those
failures to be so qualified or in good standing which will not in the
aggregate have a Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus. All of the issued shares
of capital stock of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are not now in
violation of or subject to any preemptive or, to the best of such
counsel's knowledge, similar rights that entitle or will entitle any
person to acquire any Shares from the Company upon issuance thereof by
the Company; and the Common Stock, the Firm Shares and the Additional
Shares conform as to legal matters to the descriptions thereof
contained in the Registration Statement and the Prospectus. The
Shares to be delivered on the Closing Date have been duly and validly
authorized and, when delivered by the Company against payment therefor
in accordance with this Agreement, will be duly and validly issued,
fully paid and non-assessable and will not have been issued in
violation of or subject to preemptive or, to the best of such
counsel's knowledge, similar rights that entitle or will entitle any
person to acquire any Shares from the Company upon issuance thereof by
the Company. All of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims.
(iii) Except as disclosed in the Prospectus and Registration Statement, the
Company has not granted any registration rights that remain
outstanding with respect to any of its capital stock, and no such
rights will be triggered by the consummation of the Offering or the
transactions contemplated by this Agreement.
(iv) The Common Stock currently outstanding is listed, and the Shares to be
sold under this Agreement to the Underwriters are duly authorized for
listing on NASDAQ.
(v) This Agreement has been duly and validly authorized, executed and
delivered by the Company.
A-1
(vi) To the best of such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of the Subsidiaries is a party or of which
any property of the Company or any of the Subsidiaries is the subject
which, if determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(vii) The issuance and sale of the Shares by the Company, the execution,
delivery, and performance of this Agreement, compliance by the Company
with all provisions of this Agreement and the consummation of the
transactions contemplated hereby by the Company do not and will not
(A) conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which with notice
or lapse of time, or both, would constitute a default) under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan
agreement or any other agreement, instrument, franchise, license or
permit known to such counsel to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries or their respective properties or assets is subject or
may be bound or (B) violate or conflict with any provision of the
certificate of incorporation or by-laws of the Company or any of the
Subsidiaries, or, to the best knowledge of such counsel, any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of the Subsidiaries or any of their respective
properties or assets.
(viii) No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their respective
properties or assets is required for the issuance, sale and delivery
of the Shares, the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby,
except for (1) such as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters (as to which such counsel need express no
opinion), (2) such as have been made or obtained under the Securities
Act and (3) such as are required by the National Association of
Securities Dealers, Inc.
(ix) The Registration Statement and the Prospectus and any amendments
thereof or supplements thereto (other than the financial statements
and schedules and other financial data included or incorporated by
reference therein, as to which no opinion need be rendered) appear on
their face to be responsive in all material respects with the
requirements of the Securities Act and the Rules and Regulations.
There are no known amendments to the Registration Statement and there
are no documents required by the Rules and Regulations to be filed in
connection with, incorporated by reference, or described in the
Registration
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Statement that have not been so filed, incorporated by reference or
described. The documents filed under the Exchange Act to the extent
incorporated by reference in the Registration Statement and the
Prospectus or any amendment thereof or supplement thereto (other than
the financial statements and schedules and other financial data
included or incorporated by reference therein, as to which no opinion
need be rendered) when they became effective or were filed with the
Commission, as the case may be, appear on their face to be responsive
as to form in all material respects with the Securities Act or the
Exchange Act, as applicable, and the Rules and Regulations of the
Commission thereunder; and such counsel has no reason to believe that
any of such documents, when such documents became effective or were so
filed, as they case may be, contained, in the case of a registration
statement which became effective under the Securities Act, an untrue
statement of a material fact, or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or, in the case of other documents which were
filed under the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading.
(x) The statements under the caption "Description of Capital Stock" in the
Prospectus and Items 14 and 15 of Part II of the Registration
Statement, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly
summarize the information called for with respect to such legal
matters, documents and proceedings.
(xi) The Company is not and, after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(xii) Such counsel has been orally advised by the Commission that the
Registration Statement was declared effective on _____________, 2002
at _________ and that such counsel has been orally advised by the
Commission that no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof has
been issued and to the best of such counsel's knowledge no proceedings
therefor have been initiated or threatened by the Commission and all
filings required by Rule 424(b) and Rule 430A of the Rules and
Regulations have been made.
(xiii) The Company has full right, power and authority to execute and deliver
this Agreement and the Shares and to perform its obligations
hereunder, and all corporate action required to be taken for the due
and proper authorization, execution and delivery of this Agreement and
the Shares and the consummation of the transactions contemplated by
this Agreement and as described in the Prospectus have been duly and
validly taken.
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(xiv) To the best of such counsel's knowledge, no contract or agreement is
required to be filed as an exhibit to the Registration Statement that
is not so filed.
(xv) Neither the Company nor any of the Subsidiaries is in violation of its
respective charter or by-laws and, to the best of such counsel's
knowledge after due inquiry, neither the Company nor any of the
Subsidiaries is in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and the Subsidiaries, taken as a whole, to
which the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries or their respective properties
may be bound.
In addition, such opinion shall also contain a statement that such counsel has
participated in conferences with officers and representatives of the Company,
representatives of the independent public accountants for the Company and the
Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement, at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), or any
amendment thereof made prior to the Closing Date, as of the date of such
amendment, contained or incorporated by reference any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus (including the documents incorporated by reference therein), as of
its date (or any amendment thereof or supplement thereto made prior to the
Closing Date as of the date of such amendment or supplement) and as of the
Closing Date, contained or contains an untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel
need express no belief or opinion with respect to the financial statements and
schedules and other financial data included or incorporated by reference
therein).
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ANNEX II
Form of Opinions of Selling Stockholder's Counsel
(i) Each Selling Stockholder has full legal right, power
and authority, and any approval required by law (other than any approval
imposed by the applicable state securities and Blue Sky laws), to sell,
assign, transfer and deliver the Additional Shares to be sold by the Selling
Stockholder in the manner provided in this Agreement.
(ii) To the best of such counsel's knowledge, after due
inquiry, each Selling Stockholder has good and clear title to the certificates
for the Additional Shares to be sold by such Selling Stockholder, and upon
delivery thereof pursuant hereto and payment therefor, good and clear title
will pass to the Underwriters, severally, free of all restrictions and
transfer, liens, encumbrances, security interests and claims whatsoever.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by each Selling Stockholder.
(iv) The Custody Agreements and Powers of Attorney
appointing _________________ as the Custodian and _______________ and
________________ as the Selling Stockholders' Attorneys-In-Fact, to the extent
set forth therein with regard to the transactions contemplated hereby and by
the Registration Statement, have been duly authorized, executed and delivered
by or on behalf of each Selling Stockholder enforceable in accordance with its
terms, and pursuant to such power of attorney, each Selling Stockholder has
authorized such Attorneys-In-Fact, to execute and deliver on such Selling
Stockholder's behalf this Agreement and any other document necessary or
desirable in connection with the transactions contemplated hereby and to
deliver the Additional Shares to be sold by such Selling Stockholder pursuant
to this Agreement.
(v) The execution, delivery and performance of this
Agreement by each Selling Stockholder, compliance by each Selling Stockholder
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval, authorization or
other order of any court, regulatory body, administrative agency or other
governmental body (except as such may be required under the Securities Act,
state securities laws or Blue Sky laws or except as such may have been
obtained) and will not conflict with or constitute a breach of any of the
terms or provisions of, or a default under, any material agreement, indenture
or other instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or property of such Selling Stockholder is bound, or,
to the knowledge of such counsel, violate or conflict with any laws,
administrative regulation or ruling or court decree applicable to such Selling
Stockholder or property of such Selling Stockholder.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to
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Underwriters' Counsel, familiar with the applicable laws; (B) as to matters of
fact, to the extent they deem proper, on certificates of the Selling
Stockholders provided that copies of any such statements or certificates shall
be delivered to Underwriters' Counsel. The opinion of such counsel shall state
that the opinion of any such other counsel is in form satisfactory to such
counsel and, in their opinion, you and they are justified in relying thereon.
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ANNEX III
_______________ __, 2002
BEAR, XXXXXXX & CO. INC.
[as Representative
of the several Underwriters]
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
Xxxxxx Industries, Inc. Lock-Up Agreement
Ladies and Gentlemen:
We refer to the proposed Underwriting Agreement (the "Underwriting
Agreement"), between Xxxxxx Industries, Inc., a Delaware corporation (the
"Company") and you, as representatives of the Underwriters named therein (the
"Underwriters"), relating to an underwritten public offering (the "Offering")
of common stock, $0.10 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters underwrite the
Offering, the undersigned hereby agrees that, without the prior written
consent of Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx"), during the period from
the date hereof until ninety (90) days from the date of the final prospectus
for the Offering (the "Lock-Up Period"), the undersigned (a) will not,
directly or indirectly, offer, sell, agree to offer or sell, solicit offers to
purchase, grant any call option or purchase any put option with respect to,
pledge, borrow or otherwise dispose of any Relevant Security (as defined
below), and (b) will not establish or increase any "put equivalent position"
or liquidate or decrease any "call equivalent position" with respect to any
Relevant Security (in each case within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder), or otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in part, any
economic consequence of ownership of Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration. As used herein "Relevant Security"
means the Stock, any other equity security of the Company or any of its
subsidiaries and any security convertible into, or exercisable or exchangeable
for, any Stock or other such equity security.
The undersigned hereby authorizes the Company during the Lock-Up
Period to cause any transfer agent for the Relevant Securities to decline to
transfer, and to note stop transfer restrictions on the stock register and
other records relating to, Relevant Securities for which the undersigned is
the record holder and, in the case of the Relevant Securities for which the
undersigned is the beneficial but not the record holder, agrees during the
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Lock-Up Period to cause the record holder to cause the relevant transfer agent
to decline to transfer, and to note stop transfer restrictions on the stock
register and other records relating to, such Relevant Securities. The
undersigned hereby further agrees that, without the prior written consent of
Bear Xxxxxxx, during the Lock-Up Period the undersigned (x) will not file or
participate in the filing with the Securities and Exchange Commission of any
registration statement, or circulate or participate in the circulation of any
preliminary or final prospectus or other disclosure document with respect to
any proposed offering or sale of a Relevant Security and (y) will not exercise
any rights the undersigned may have to require registration with the
Securities and Exchange Commission of any proposed offering or sale of a
Relevant Security.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Agreement and that this
Agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon
the successors and assigns of the undersigned from the date first above
written.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Delivery of a signed copy of this letter by
telecopier or facsimile transmission shall be effective as delivery of the
original hereof.
Very truly yours,
By: ________________________________
Print Name: _________________________
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