AFC CABLE SYSTEMS, INC.
1,500,000 Shares of Common Stock
UNDERWRITING AGREEMENT
Boston, Massachusetts
April __, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, LLC
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
AFC Cable Systems, Inc., a Delaware corporation (the "Company"), and
certain shareholders of the Company named in Schedule B hereto (the "Selling
Shareholders") confirm their agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇
▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated ("Baird") and The
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC ("`▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇"), and each of the other
underwriters, if any, named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 9), for whom ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ are acting as representatives (in such capacity, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ are herein referred to as "you" or the
"Representatives"), with respect to the sale by the Company and the Selling
Shareholders and the purchase by the Underwriters, acting severally and not
jointly, of an aggregate of 1,500,000 shares of the Common Stock, $.01 par value
per share (the "Common Stock"), of the Company, of which 800,000 shares are to
be sold by the Company and 700,000 shares are to be sold by the Selling
Shareholders (collectively, the "Firm Shares"), and with respect to the grant by
the Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase from the Company all or any part of
225,000 additional shares of Common Stock for the purpose of covering
over-allotments, if any. The Firm Shares and all or any part of the shares of
Common Stock subject to the option described in Section 2(b) hereof (the
"Optional Shares") are hereinafter collectively referred to as the "Stock."
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Underwriting
Agreement (this "Agreement") on behalf of the several Underwriters, and (b) that
the several Underwriters are willing, acting severally and not jointly, to
purchase the numbers of Firm Shares set forth opposite their respective names in
Schedule A, plus their pro rata portion of the Optional Shares if you elect to
exercise the over-allotment option, in whole or in part, for the accounts of the
several Underwriters.
The following terms, when used in this Agreement, shall have the meanings
indicated: "Commission" means the Securities and Exchange Commission;
"Securities Act" means the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder (the "Rules"); "Exchange Act" means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder; "Effective Date" means each date that the Registration
Statement (as defined herein) or any post-effective amendment or amendments to
the Registration Statement became or become effective; "Execution Time" means
the date and the time that this Agreement is executed and delivered by the
parties hereto; "Preliminary Prospectus" means any preliminary prospectus
referred to in Section 1(a) below with respect to the offering of the Stock, and
any preliminary prospectus included in the Registration Statement at the
Effective Date that omits Rule 430A Information (as defined below). "Prospectus"
means the final prospectus containing the Rule 430A Information; "Registration
Statement" means the registration statement referred to in Section 1(a) below,
including exhibits and financial statements and schedules, in the form in which
it has or shall become effective and, if any post-effective amendment thereto
becomes effective before any Closing Date (as defined in Section 3), shall also
mean such registration statement as so amended on such date;. "Rule 430A
Information" means information with respect to the Stock and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. Any reference herein to the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing of any document
with the Commission deemed to be incorporated by reference therein. Such terms
shall also include Rule 430A Information deemed to be included therein at the
Effective Date, as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules under the Securities Act.
1. Representations, Warranties and Agreements of the Company and the
Selling Shareholders.
(a) The Company represents and warrants to, and agrees with, each of
the Underwriters as of the date hereof and as of each Closing Date, as defined
in Section 3(b) hereof, as follows:
(i) The Company meets the requirements for the use of Form S-3
under the Securities Act, and has filed with the Commission a registration
statement, including related preliminary prospectuses, on Form S-3 (No.
333-_______) for the registration of the Stock under the Securities Act. The
Company may have filed one or more amendments to the Registration Statement,
including the related Preliminary Prospectuses. Copies of such Registration
Statement and each such amendment to such Registration Statement, each such
Preliminary Prospectus, each document incorporated by reference therein and each
exhibit to the Registration Statement and documents incorporated by reference
therein have been delivered to you. The Company will next file with the
Commission either, before effectiveness of the Registration Statement, a further
amendment thereto (including the form of final prospectus) or, after
effectiveness of the Registration Statement, the Prospectus in accordance with
Rules 430A and 424(b)(1) or (4). As filed, such amendment and form of final
prospectus, or such Prospectus shall include all Rule 430A Information and,
except to the extent you agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you in writing, prior
to the Execution Time, will be included or made therein.
(ii) Each Preliminary Prospectus, when filed, complied and
conformed in all material respects with the applicable requirements of the
Securities Act and the Rules and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading. The
Commission has not issued any order suspending or preventing the use of any
Preliminary Prospectus or instituted proceedings for that purpose. On the
Effective Date, the Registration Statement did or will, and when the Prospectus
is first filed (if required) in accordance with Rule 424(b), and on each Closing
Date, the Prospectus (and any supplements thereto) will, comply and conform in
all material respects with the applicable requirements of the Securities Act and
the Rules; on the Effective Date and each Closing Date, the Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and the Prospectus, on the
Effective Date, if not filed pursuant to Rule 424(b), did not or will not, and
on the date of any filing pursuant to Rule 424(b) and on each Closing Date, the
Prospectus (and any supplements thereto) will not, include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
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which there were made, not misleading. The documents incorporated by reference
in the Registration Statement, the Prospectus, any amendment or supplement
thereto or any Preliminary Prospectus, when they became or become effective
under the Securities Act or were or are filed with the Commission under the
Exchange Act, as the case may be, conformed or will conform in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, and the Rules, and as of the date any such document was or is filed
with the Commission under the Exchange Act such document did not omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided, however, that the Company makes no
representations or warranties as to information contained in the section
entitled "Underwriting" or the legends appearing on the inside front cover of
the Prospectus contained in the Registration Statement and in the Prospectus, in
reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter through the Representatives,
specifically for use in the preparation thereof.
(iii) The accountants whose report appears in the Prospectus
are independent accountants as required by the Securities Act and the Rules. The
financial statements and schedules (including the related notes) included in the
Registration Statement, any Preliminary Prospectus or the Prospectus, present
fairly the financial condition, results of operations and cash flows of the
entities purported to be shown thereby at the dates and for the periods
indicated and have been prepared in accordance with the Rules and generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated, and all adjustments thereto necessary for a fair presentation
of the results for such periods have been made. The financial and other
information of the Company set forth in the Prospectus under the captions
"Summary Financial Data", "Capitalization", "Selected Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" fairly present, on the basis stated in the Prospectus, the
information included therein. Neither the Company nor any of the Subsidiaries,
as defined in Section 1(a)(v) hereof, has any material contingent obligation
which is not disclosed in the Registration Statement.
(iv) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full power and authority (corporate and other) to own or lease
its properties and conduct its business as described in the Prospectus, and is
duly qualified to do business and is in good standing in each jurisdiction in
which such qualification is required except for such jurisdictions where the
failure to so qualify would not have a material adverse effect on the business,
results of operations, prospects, condition (financial or otherwise) or material
assets or properties of the Company and the Subsidiaries, taken as a whole.
(v) The subsidiaries of the Company listed in Exhibit 21.1 to
the Annual Report on Form 10-K of the Company for the year end December 31, 1997
as filed with the Commission on March 31, 1998 (the "1997 Form 10-K") and
incorporated by reference in the Registration Statement (the "Subsidiaries")
have been duly organized and are validly existing as corporations in good
standing under the laws of their respective states of incorporation, with full
power and authority (corporate and other) to own or lease their respective
properties and conduct their respective businesses as described in the
Prospectus, and are duly qualified to do business and are in good standing in
each jurisdiction in which such qualification is required except for such
jurisdictions where the failure to so qualify would not have a material adverse
effect on the business, results of operations, prospects, condition (financial
or otherwise) or material assets or properties of the Company and the
Subsidiaries, taken as a whole.
(vi) The capitalization of the Company at December 31, 1997 is
as set forth under the caption "Capitalization" in the Prospectus, and the
Common Stock conforms to the description thereof contained under the caption
"Description of Capital Stock" in the Prospectus. The Stock conforms in all
respects to statements with respect thereto contained in the Registration
Statement and the Prospectus. All outstanding shares of Common Stock
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have been, and the Stock (upon delivery and payment therefor in the manner
described in this Agreement) will be, duly authorized, validly issued, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof and none of the shares of Common Stock have been and the Stock will not
be issued in violation of any preemptive or similar right. Except as disclosed
in the Prospectus, there are no preemptive rights, rights of first refusal or
other rights to subscribe for or to purchase, or any restriction upon the voting
or transfer of, any shares of Common Stock pursuant to the Company's Restated
Certificate of Incorporation, as amended, Bylaws or other governing documents or
any agreement or other instrument to which the Company or any Subsidiary is a
party or by which any of them or any of their properties may be bound. Except as
disclosed in the Registration Statement and the Prospectus, there are no
outstanding rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, or agreements or understandings with respect to the
sale or issuance of, any shares of capital stock of the Company.
(vii) All of the outstanding shares of capital stock of the
Subsidiaries are owned by the Company, free and clear of any claim, lien,
encumbrance, equity, security interest or other restriction whatsoever. The
Company does not own or control, directly or indirectly, any corporation,
association or other entity other than those listed in Exhibit 21.1 to the 1997
Form 10-K.
(viii) Except as waived, no holder of any security of the
Company has the right to have any security owned thereby included in the
Registration Statement, or to demand registration of any security owned
thereby, during the period ending 180 days after the date of the Prospectus.
Each director and executive officer of the Company, each Selling Shareholder
who is not also a director or executive officer and certain of the prior
stockholders of (i) B&B Electronics Manufacturing Company, Inc. and (ii)
FLEXFAB Horizons International, Inc. has delivered to the Representatives
such person's enforceable written agreement that such person will not, for a
period of 180 days after the date of the Prospectus, transfer or otherwise
dispose of, or offer or contract to sell, offer to otherwise dispose of,
directly or indirectly, any Common Stock or any rights to purchase or acquire
Common Stock, or any securities convertible into or exchangeable for Common
Stock, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. In addition,
Sutro & Co. Incorporated has delivered to the Representatives its enforceable
written agreement that it will not for a period of 180 days after the date of
the Prospectus, transfer or otherwise dispose of any Warrant Shares (as
defined in that certain Warrant delivered by the Company to it in connection
with the Company's Initial Public Offering) without the prior written consent
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(ix) Except as disclosed in the Registration Statement and the
Prospectus, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (A) neither the Company nor any
Subsidiary has incurred any liabilities or obligations other than in the
ordinary course of business, direct or contingent, or entered into any
transactions, material, individually or in the aggregate, to the Company and the
Subsidiaries, taken as a whole; (B) there has not been any change in the capital
stock of the Company, including but not limited to, any payment or declaration
of any dividends or any other distribution with respect to any shares of the
capital stock of the Company; (C) there has not been any material adverse change
or any development involving a prospective material adverse change in the
business, results of operations, prospects, condition (financial or otherwise)
or material assets or properties of the Company and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business and whether or not covered by insurance.
(x) None of the execution or delivery hereof or consummation
of the transactions contemplated pursuant to this Agreement, including, without
limitation, the issuance, sale and delivery of the Firm Shares and the Optional
Shares, if any, to be sold by the Company, will result in a violation of,
conflict with, or constitute a default under, or require consent or waiver under
or cause acceleration or give any party the right to cause acceleration of, the
Company's obligations under its Restated Certificate of Incorporation, as
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amended, Bylaws or other governing documents, or any material agreement,
indenture, mortgage, deed of trust, note or other instrument to which the
Company or any Subsidiary is a party or by which any of them is bound, or to
which any of their respective properties is subject, violate any law, rule,
administrative regulation or decree of any court or any governmental agency or
body having jurisdiction over the Company, any Subsidiary, or any of their
respective properties, or result in the creation or imposition of any material
lien, charge, encumbrance, security interest, claim or other restriction of any
nature whatsoever upon any property or asset of the Company or any Subsidiary.
Except for permits and similar authorizations required under the Securities Act
and the securities or Blue Sky laws of certain jurisdictions, including Canadian
and provincial securities laws and the National Association of Securities
Dealers, Inc. (such permits and authorizations having been obtained), no
consent, approval, authorization or order of any court, governmental agency or
body, financial institution or other person or entity is required in connection
with the consummation of the transactions contemplated pursuant to this
Agreement.
(xi) Neither the Company nor any Subsidiary is, nor with the
giving of notice or lapse of time or both would be (A) in violation of or in
default under, any material agreement, indenture, mortgage, deed of trust, note
or other instrument to which the Company or any Subsidiary is a party or by
which either is bound, or to which any of their respective properties is
subject, (B) in violation of any term or provision of its Restated Certificate
of Incorporation or Bylaws, or (C) in violation of, or in default with respect
to, any law, rule, regulation, order, judgment or decree applicable to the
Company, the violation of which, individually or in the aggregate, would have a
material adverse effect upon the business, results of operations, prospects,
condition (financial or otherwise) or material assets or properties of the
Company and the Subsidiaries, taken as a whole.
(xii) Each of the Company and the Subsidiaries has filed all
federal, state, local and foreign tax returns that are required to be filed or
has received valid extensions with respect thereto and has paid all taxes and
all assessments to the extent that the same have become due except for
assessments being contested in good faith and for which full reserves have been
established. No tax assessment or deficiency has been made or proposed against
the Company or any Subsidiary, nor has the Company or any Subsidiary received
any notice of any proposed assessment or deficiency. The charges, accruals and
reserves shown in the financial statements included in the Registration
Statement and the Prospectus in respect of taxes for all fiscal periods to date
are adequate based on current tax laws and Generally Accepted Accounting
Principles. There is no unpaid assessment or, to the Company's knowledge,
proposal by any taxing authority for additional taxes for which the Company or
any Subsidiary does not have adequate reserves for any fiscal year.
(xiii) With such exceptions as are not material or have been
disclosed in the Registration Statement and the Prospectus, (A) each of the
Company and the Subsidiaries is in compliance with all applicable federal, state
and local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants, and (B) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge or disposal of any chemicals, pollutants,
contaminants, wastes, toxic substances or petroleum products, that might
reasonably be expected to result in the imposition of liability on the Company
or any Subsidiary.
(xiv) Except as disclosed in the Registration Statement and
the Prospectus, there is no litigation, arbitration, action, suit, proceeding or
investigation before or by any court or by any public, regulatory or
governmental agency, body or board, domestic or foreign, pending or threatened
or contemplated against, or involving the assets, properties or business of or
otherwise affecting, the Company or any Subsidiary which (A) if determined
adversely to the Company, could have, individually or in the aggregate, a
material adverse effect on the value or the operation of any such assets or
properties, or on the business, results of operations, prospects, condition
(financial or otherwise) or material assets or properties of the Company and the
Subsidiaries, taken as a whole, or (B) might prevent the
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consummation of the transactions contemplated by this Agreement. The aggregate
of all pending legal, governmental and regulatory proceedings to which the
Company or any Subsidiary is a party or which affect any of their respective
properties and which are not described in the Registration Statement and the
Prospectus, including, without limitation, ordinary routine litigation
incidental to the business of the Company or any Subsidiary, would not
reasonably be expected to have a material adverse effect on the business,
results of operations, prospects, condition (financial or otherwise) or material
assets or properties of the Company and the Subsidiaries, taken as a whole.
(xv) Each of the Company and the Subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and permits
(collectively, "Permits") of and from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its business in the
manner described in the Prospectus, except to the extent that the failure to
obtain or file would not individually or in the aggregate have a material
adverse effect on the Company and the Subsidiaries, taken as whole.
(xvi) All executed agreements or copies of executed agreements
filed or incorporated by reference as exhibits to the Registration Statement to
which the Company or any of the Subsidiaries is a party or by which any of them
may be bound or to which any of their respective assets, properties or
businesses may be subject have been duly and validly authorized, executed and
delivered by the Company and such Subsidiaries, and, assuming due authorization,
execution and delivery by the other parties thereto, constitute the legal, valid
and binding agreements of the Company and such Subsidiaries enforceable against
the Company and such Subsidiaries in accordance with their respective terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable, and except as rights to
indemnity or contribution may be limited by applicable law). The descriptions in
the Registration Statement of contracts and other documents are accurate in all
material respects, and there are no contracts or other documents that are
required by the Securities Act to be described in the Registration Statement or
filed or incorporated by reference as exhibits to the Registration Statement
that are not described or filed or incorporated by reference as required, and
the exhibits that have been filed or incorporated by reference are complete and
correct copies of the documents of which they purport to be copies.
(xvii) Each of the Company and the Subsidiaries owns or
possesses adequate licenses or other rights to use all patents, patent
applications, copyrights, copyright applications, trademarks, trademark
applications, service marks, trade names and other know-how, proprietary
knowledge, and similar intellectual property (collectively, "Intangibles")
necessary for the conduct of its business as described in the Registration
Statement and the Prospectus and, except as disclosed to the Underwriters in
writing neither the Company nor any Subsidiary has received any notice of
infringement or conflict with (or knows of any infringement or conflict with)
asserted rights of others with respect to any Intangibles. All software and
hardware used in the Company's business prior to, during and after the year 2000
and shall not cause any business interruptions or adverse effects on the
business, results of operations, prospects, condition (financial or otherwise)
or material assets or properties of the Company and the Subsidiaries, taken as a
whole.
(xviii) Each of the Company and the Subsidiaries has good and
marketable title to all items of real property and good and marketable title to
all personal property owned by it, in each case clear of all liens, encumbrances
and defects except as are disclosed in the Registration Statement and the
Prospectus or as do not materially affect the value of such property and do not
interfere with the use made or proposed to be made or proposed to be made of
such property by the Company or any Subsidiary. Any real or personal property or
buildings held under lease by the Company or a Subsidiary are held by it under
valid,
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existing and enforceable leases with such exceptions as are not material and do
not interfere with the use made or proposed to be made of such property or
buildings.
(xix) Each of the Company and the Subsidiaries has insurance
or indemnity agreements with financially responsible insurers of the types and
in the amounts adequate for its business and consistent with insurance or
indemnity coverage maintained by companies of similar size and engaged in
similar businesses.
(xx) Neither the Company nor any Subsidiary, nor any of their
respective officers, directors or affiliates has taken or will take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company.
(xxi) The Stock is authorized for quotation on the Nasdaq
National Market ("Nasdaq National Market "). Quotations and last sale data with
respect to the Company's Common Stock are reported on the Nasdaq National Market
under the symbol "AFCX" and the Company knows of no currently existing reason or
set of facts which is likely to result in the inability or refusal to quote the
Common Stock or the Stock.
(xxii) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and constitutes the valid and binding agreement of
the Company and is enforceable against the Company in accordance with its terms
except to the extent that rights to indemnity under this Agreement may be
limited by federal or state securities laws and except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally. The Registration Statement
and the filing of the Registration Statement with the Commission have been duly
authorized by and on behalf of the Company, and the Registration Statement has
been duly executed pursuant to such authorization by and on behalf of the
Company.
(xxiii) Except as contemplated by this Agreement or as
disclosed in the Registration Statement or the Prospectus, no person has the
right to any payment in connection with the sale of the Stock resulting from any
acts of the Company or any Subsidiary.
(xxiv) Except as disclosed in the Registration Statement and
the Prospectus, no transaction has occurred between or among the Company or any
Subsidiary, on the one hand, and any of the Company's or any Subsidiary's
officers or directors or any affiliate or affiliates of any such officer or
director, on the other hand, that is required to be so disclosed, including, but
not limited to, any outstanding loans, advances or guaranties of indebtedness by
the Company or any Subsidiary to or for the benefit of any affiliates of the
Company or any Subsidiary or any of the officers or directors of the Company or
any Subsidiary, or any family member of any of them.
(xxv) Neither the Company, any Subsidiary nor any officers or
directors, acting on behalf of the Company or any Subsidiary has within the past
five years (A) made any payment outside the ordinary course of business to any
purchasing or selling agent or person charged with similar duties of any entity
to which the Company or any Subsidiary sells or from which the Company or any
Subsidiary buys products for the purpose of influencing such agent or person to
buy products from or sell products to the Company or any Subsidiary, or (B)
except as set forth in the Registration Statement and Prospectus, engaged in any
transaction, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected in the
normally maintained books and records of the Company or any Subsidiary.
(xxvi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions are
executed in accordance
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with management's general or specific authorization, (B)
transactions are recorded as necessary in order to permit preparation of
financial statements in accordance with generally accepted accounting principles
and to maintain accountability for assets, (C) access to assets is permitted
only in accordance with management's general or specific authorization, or (D)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxvii) Except as disclosed in the Registration Statement and
Prospectus, no labor problem exists with the Company's employees or with
employees of any Subsidiary or is imminent that could adversely affect the
Company and the Subsidiaries, taken as a whole, except for grievances that have
been made, none of which individually or in the aggregate, if adversely
determined, would reasonably be expected to materially adversely affect the
Company and the Subsidiaries, taken as a whole, and there is no existing or
imminent labor disturbance by the employees of any of the Company's or any
Subsidiary's principal suppliers, contractors or customers that would have a
material adverse effect on the Company and the Subsidiaries, taken as a whole.
(xxviii) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
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 failure to act, which would cause the
loss of such qualification.
(xxix) The Company has not distributed and will not distribute
any offering material in connection with the offering and sale of the Stock,
other than the Prospectus, any Preliminary Prospectus, the Registration
Statement and other materials permitted by the Securities Act.
(xxx) Neither the Company nor any Subsidiary is an investment
company or controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended or an investment adviser within the
meaning of the Investment Advisers Act of 1940, as amended.
Any certificates signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall also be deemed a
representation and warranty of the Company to the Underwriters as to the matters
covered thereby. Any certificate delivered by the Company to its counsel for
purposes of enabling such counsel to render the opinions referred to in Section
6(e) will also be furnished to the Underwriters and counsel for the Underwriters
and shall be deemed to be additional representations and warranties by the
Company to the Underwriters as to the matters covered thereby.
(b) Each of the Selling Shareholders severally represents and warrants
to and agrees with, each of the Underwriters and the Company as of the date
hereof and as of each Closing Date, as defined in Section 3(b) hereof as
follows:
(i) Such Selling Shareholder owns the Stock to be sold by such
Selling Shareholder, free of any liens, encumbrances, equities and claims, and
has full right, power and authority to effect the sale and delivery of such
Stock; and upon the delivery of and payment for such Stock pursuant to this
Agreement, ownership thereof, free of any liens, encumbrances, equities and
claims, will be transferred to the several Underwriters.
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(ii) No consents, approvals, authorizations and orders of any
court or regulatory body is necessary for the execution and delivery by such
Selling Shareholder of this Agreement, the Power of Attorney and Custody
Agreement (as hereafter defined) and for the sale and delivery of the Stock to
be sold by such Selling Shareholder hereunder (except such consents and
authorizations as may be required under the Securities Act, state securities
laws or Blue Sky Laws or securities laws of Canada or the provinces of Canada)
in connection with the public offering of the Stock, have been obtained. Such
Selling Shareholder has full right, power and authority to enter into this
Agreement, the Power of Attorney and the Custody Agreement and to sell, assign,
transfer, and deliver the Stock to be sold by such Selling Shareholder
hereunder. This Agreement, the Power of Attorney and the Custody Agreement have
been duly executed and delivered by such Selling Shareholder, and each such
document is a valid, binding and legally enforceable obligation of such Selling
Shareholder in accordance with its terms, except insofar as rights to indemnity
or contribution hereunder may be limited by federal or state securities laws and
except as limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors' rights
generally.
(iii) Neither the sale of Stock to be sold by such Selling
Shareholder hereunder, nor the execution, delivery and performance of this
Agreement and the Power of Attorney will result in a breach or violation of any
material term or provision of, or constitute a default under any statute (to the
best of such Selling Shareholder's knowledge), any material (individually or in
the aggregate) indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder is bound, or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over such Selling Shareholder
or over any of such Selling Shareholder's properties.
(iv) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company. Such Selling
Shareholder has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Stock.
(v) Each Selling Shareholder listed in Schedule C hereto (a
"Principal Selling Shareholder") has no reason to believe that the
representations and warranties of the Company contained in this Section 1 are
not true and correct, is familiar with the Registration Statement and has no
knowledge of any material fact, condition or information not disclosed in the
Registration Statement which has adversely affected or may adversely affect the
business of the Company or any of the Subsidiaries; and the sale of the Firm
Shares by such Selling Shareholder pursuant hereto is not prompted by any
information concerning the Company or any of the Subsidiaries which is not set
forth in the Registration Statement.
(vi) Certificates in negotiable form representing all of the
Stock to be sold by such Selling Shareholder hereunder have been placed in
custody under a Custody Agreement ("Custody Agreement"), which Custody Agreement
has been duly executed and delivered by such Selling Shareholder to The First
National Bank of Boston, as custodian ("Custodian"), and such selling
stockholder has executed a Power of Attorney ("Power of Attorney") which
appoints ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as such Selling Shareholder's
attorney-in-fact ("Attorney-In-Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Shareholder, to determine the purchase price
to be paid by the Underwriters to the Selling Shareholders as provided in
Section 3 hereof, to authorize the delivery of the Stock to be sold by such
Selling Shareholder hereunder, and otherwise to act on behalf of such Selling
Shareholder in connection with the transactions contemplated by this Agreement
and the Custody Agreement.
-9-
(vii) The Stock represented by the certificates held in
custody for such Selling Shareholder under the Custody Agreement are subject to
the interests of the Underwriters hereunder. The arrangements made by such
Selling Shareholder under such Custody Agreement, and the appointment by such
Selling Shareholder of the Attorney-In-Fact by the Power of Attorney, are
irrevocable. The obligations of a Selling Shareholder shall not be terminated by
any act or deed of the Selling Shareholder or operation of law or the occurrence
of any event whatsoever, including but not limited to the death, incompetency or
other disability of the Selling Shareholder; or, in the case of a trust, the
death, incapacitation, resignation or removal of any trustee or trustees or the
termination of such trust; or, in the case of any estate, the death,
incapacitation, resignation or removal of any executor or administrator. If any
such event should occur, before the delivery of the Stock hereunder,
certificates representing the Stock shall be delivered on behalf of such Selling
Shareholder in accordance with the terms and conditions of this Agreement and of
such Power of Attorney, and all actions taken by such Attorney-In-Fact pursuant
to the Power of Attorney shall be as valid as if such event had not occurred,
regardless of whether or not the Custodian, the Attorney-In-Fact, or any of
them, shall have received notice of such event.
2. Purchase and Sale of Securities.
(a) On the basis of the representations, warranties, covenants and
agreements contained in this Agreement, but subject to the terms and conditions
herein set forth, the Company and the Selling Shareholders agree to sell the
Firm Shares to the several Underwriters. Each of the Underwriters agrees,
severally and not jointly, to purchase from the Company and the Selling
Shareholders, at a purchase price of $_____ per share (the "Initial Price"), the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto plus any additional number of Firm Shares that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof. The number of Firm Shares to be purchased by each Underwriter
from the Company and each Selling Stockholder shall be as nearly as practicable
in the same proportion to the total number of Firm Shares being sold by the
Company and each Selling Stockholder as the number of Firm Shares being
purchased by each Underwriter bears to the total number of Firm Shares to be
sold hereunder. The obligations of the Company and of each of the Selling
Shareholders shall be several and not joint.
(b) In addition, upon written notice from you to the Company not more
than once within thirty (30) days after the date of the Prospectus, and 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 each Underwriter agrees, severally and
not jointly, to purchase from the Company the number of Optional Shares (which
may be some or all of the Optional Shares) specified in such notice at the
purchase price per share set forth in Section 2(a) in the same proportion as the
number of Firm Shares set forth opposite such Underwriter's name in Schedule A
hereto bears to the total number of Firm Shares (subject to adjustment by you to
eliminate fractions). The Optional Shares may be purchased by the Underwriters
only for the purpose of covering over-allotments made in connection with the
sale of the Firm Shares. No Optional Shares shall be sold or delivered unless
the Firm Shares previously have been, or simultaneously are, sold and delivered,
and if the Optional Shares are to be purchased on the First Closing Date the
written notice from you must be delivered at least two business days prior to
the First Closing Date. The right to purchase the Optional Shares or any portion
thereof may be surrendered and terminated at any time upon notice by you to the
Company.
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3. Delivery of and Payment for Stock.
(a) Delivery by the Company and the Custodian of the Firm Shares to you
for the respective accounts of the Underwriters shall be made at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ at 10:00 a.m., Boston
time, on the fourth` business day following the date of this Agreement (unless
postponed pursuant to Section 8 or 9 hereof), or at such other place, time and
on such other date, not later than 10 business days after the date of this
Agreement, as shall be agreed upon by you and the Company (such time and date of
delivery being referred to herein as the "First Closing Date"). Payment of the
purchase price for the Firm Shares shall be by wire transfer in immediately
available funds to the Company for the Firm Shares sold by the Company and to
the Custodian (in such names as the Custodian may request) for the Firm Shares
sold by the Selling Shareholders in each case against delivery of certificates
therefore.
(b) In the event the option with respect to the Optional Shares is
exercised, delivery by the Company of the Optional Shares to you for the
respective accounts of the Underwriters shall be made at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ specified in paragraph (a) of this Section 3 at the time and on the date
(which may be the same date as, but in no event shall be earlier than, the First
Closing Date) set forth in the notice referred to in Section 2(b) hereof (such
time and date of delivery being referred to herein as an "Option Closing Date").
Payment of the purchase price for the Optional Shares shall be by wire transfer
in immediately available funds to the Company for the Optional Shares sold by
the Company against delivery of certificates therefor. The First Closing Date
and the Option Closing Date are collectively referred to herein as the "Closing
Date").
(c) Certificates evidencing the Stock shall be in definitive, fully
registered form, shall bear no restrictive legends and shall be registered in
such names and shall be in such denominations as the Representatives shall
request at least two full business days prior to the First Closing Date or, in
the case of Optional Shares, on the day of each notice of exercise of the option
to purchase Optional Shares set forth in Section 2(b) hereof and shall be made
available to you for checking and packaging, at such place as is designated by
you, on the second full business day before the First Closing Date or, in the
case of Optional Shares, the Option Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Stock for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company and the Selling Shareholders.
(a) The Company covenants and agrees with each Underwriter that:
(i) The Company will use its best efforts to cause the
Registration Statement, and any amendment thereof, if not effective at the
Execution Time, to become effective as promptly as possible. If the Registration
Statement has become or becomes effective pursuant to Rule 430A, or filing of
the Prospectus is otherwise required under Rule 424(b), the Company will file
the Prospectus, properly completed, pursuant to Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to you of such timely
filing. The Company will promptly advise you (A) when the Registration Statement
shall have become effective, (B) when any amendment thereof shall have become
effective, (C) of any request by the Commission for any amendment or supplement
of the Registration Statement or the Prospectus or for any additional
information, (D) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (E) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Stock for sale in any jurisdiction or the initiation or threatening of
such stop order or suspension and, if issued, to obtain as soon as possible its
withdrawal. The Company will not file any amendment to the Registration
Statement or supplement to the Prospectus without your prior consent. The
Company shall prepare and file with the Commission, promptly upon
-11-
your request, any amendment to the Registration Statement or supplement to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Stock by you, and use its best efforts to cause the same to
become effective as promptly as possible.
(ii) The Company shall, during the period of time when a
Prospectus relating to the Stock is required to be delivered under the
Securities Act and the Rules, comply with all requirements imposed by the
Securities Act and the Rules as is necessary to permit the continuance of sales
of or dealings in the Stock in accordance with the provisions hereof and of the
Prospectus. The Company consents to the use of the Prospectus included in the
Registration Statement or any amendment or supplement thereto by the several
Underwriters and by all dealers to whom the Stock may be sold, in connection
with the offering or sale of the Stock and for such period of time thereafter as
the Prospectus is required by law to be delivered in connection therewith.
(iii) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally available
to its security holders in the manner contemplated by Rule 158(b) of the
Securities Act an earning statement covering a period of at least 12 months
beginning after the Effective Date that will satisfy the provisions of Section
11(a) of the Securities Act. For purposes of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth fiscal
quarter following the fiscal quarter that includes the Effective Date, except
that, if such fourth fiscal quarter is the last quarter of the Company's fiscal
year, "Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(iv) The Company will furnish to you copies of the
Registration Statement (three of which will be signed and will include all
exhibits), each Preliminary Prospectus, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available in such
quantities as you reasonably request.
(v) The Company will cooperate with the Underwriters and
counsel to the Underwriters to arrange for the qualification of the Stock for
sale under the laws of such jurisdictions as you designate and will continue
such qualifications in effect so long as required for the distribution of the
Stock, except that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction.
(vi) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market that
may from time to time apply to the Company.
(vii) The Company will apply net proceeds from the offering
received by it in the manner set forth under "Use of Proceeds" in the
Prospectus.
(viii) For a period of five years following the date of this
Agreement, the Company will furnish to you and, upon request, to each of the
other Underwriters, without charge, as soon as available, (A) copies of such
financial statements and other periodic and special reports as the Company may
from time to time distribute generally to the holders of its Common Stock and to
furnish to you a copy of each annual or other report it shall be required to
file with the Commission under the Exchange Act, and (B) from time to time, such
other information of a public nature concerning the Company as you, or such
other Underwriters, may reasonably request.
(ix) Whether or not this Agreement becomes effective or is
terminated or the sale of the Stock to the Underwriters is consummated, the
Company shall pay or cause to be paid (A) all costs and expenses (including
stock transfer or similar taxes) incurred in connection with the delivery to the
several Underwriters of the Stock, (B) all fees, costs and expenses (including,
without limitation, fees and expenses of the Company's accountants and counsel)
in connection with the preparation, printing, filing, delivery and shipping of
the
-12-
Registration Statement (including the financial statements therein and all
amendments and exhibits thereto), each Preliminary Prospectus as amended or
supplemented and the delivery and shipping of this Agreement and other
underwriting documents including Blue Sky Memoranda, and Selected Dealer
Agreements, (C) all costs, filing fees, and expenses, the registration or
qualification of the Stock for offer and sale under the securities or Blue Sky
laws of the various jurisdictions referred to in Section 5(a)(v) herein,
including the fees and disbursements of counsel to the Underwriters in
connection with such registration and qualification and the preparation,
printing, distribution and shipment of preliminary, supplementary and final Blue
Sky Memoranda, (D) the filing fee of the National Association of Securities
Dealers, Inc. ("NASD"), (E) all costs and expenses incurred in connection with
the preparation of materials used in connection with a "road show" or other
presentation to potential investors, (F) the cost of printing certificates
representing the Stock, (G) the cost and charges of any transfer agent or
registrar, (H) the furnishing (including costs of shipping and mailing) to you
and to the Underwriters of copies of all reports and information required by
Section 5(a)(viii) hereof, and (I) all other costs and expenses of the Company
incident to the performance of its obligations hereunder that are not otherwise
provided for in this Section. To the extent, if at all, that any Selling
Shareholder engages special legal counsel to represent it in connection with
this offering, the fees and expenses of such counsel shall be borne by such
Selling Shareholder, except as otherwise provided in the registration rights
agreements between the Company and certain Selling Shareholders.
(x) So long as the Company's Stock is registered under the
Exchange Act, the Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar (which may be the
same entity as the transfer agent) for its Common Stock.
(xi) For at least five years after the date of this Agreement,
the Company will use its best efforts to maintain insurance with financially
responsible insurers of the types and in the amounts that it deems adequate for
its business and consistent with insurance coverage maintained by companies of
similar size and engaged in similar businesses.
(xii) The Company will not register with the Commission,
offer, sell, contract to sell or otherwise dispose of any additional shares of
its Common Stock or any security convertible into or exchangeable for its Common
Stock without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ for 180 days after the
date of the Prospectus, except issuances by the Company pursuant to the grant of
options and the issuance of shares pursuant to the Company's equity-based plans
described in the Registration Statement or copies of which have been delivered
to the Underwriters or their counsel or pursuant to the exercise of warrants
outstanding on the date hereof.
(xiii) The Company will take such steps as shall be necessary
to ensure that neither the Company nor any Subsidiary is an investment company
or controlled by an investment company within the meaning of the Investment
Company Act of 1940, as amended or an investment adviser within the meaning of
the Investment Adviser Act of 1940, as amended.
(b) Each of the Selling Shareholders covenants and agrees with each
Underwriter that:
(i) They will promptly notify the Representatives of any
information which comes to such Selling Shareholder's attention which would
cause such Selling Shareholder to have reason to believe that his or her
representations, warranties and statements in this Agreement are not accurate in
all material respects.
(ii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act of
1983 with respect to the transactions herein
-13-
contemplated, each of the Selling Shareholders agrees to deliver to you prior to
or at the Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
6. Closing Conditions. The obligations of the Underwriters to purchase the
Firm Shares and the Optional Shares, as the case may be, at any Closing Date,
and the other obligations of the Underwriters hereunder will be subject, in your
reasonable discretion, to the accuracy of the representations and warranties on
the part of the Company and the Selling Shareholders herein, both at the
Execution Time and at and as of each Closing Date, the accuracy, in your
reasonable discretion, of the statements of Company officers made pursuant to
the provisions hereof, and the timely performance by the Company and the Selling
Shareholders of their obligations hereunder and to the following additional
conditions precedent:
(a) If the Registration Statement is not effective at the time of
execution of this Agreement, the Registration Statement shall have become
effective not later than 5:00 p.m. Boston time on the date of this Agreement or
at such later date and time as you may approve in writing. If the Company has
elected to rely upon Rule 430A of the Rules, the price of the Stock and any
other information previously omitted from the effective Registration Statement
pursuant to such Rule 430A shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) of the Rules within the prescribed time period,
and, prior to the Closing Date, the Company shall have provided evidence
satisfactory to the Representatives of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the Rules. No
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus shall have been made or shall be in effect and no order suspending
the effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceeding for the issuance of such an
order shall have been initiated or threatened by the Commission or any Blue Sky
or other securities authority or any jurisdiction, and any request on the part
of the Commission or any Blue Sky or other securities authority of any
jurisdiction for additional information (to be included in the Registration
Statement or Prospectus or otherwise) shall have been disclosed to you and
complied with to the reasonable satisfaction of you and counsel to the
Underwriters.
(b) You shall not have advised the Company that the Registration
Statement or the Prospectus contains an untrue statement of fact which, in your
opinion, is material or omits to state a fact which, in your opinion, is
material or is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) At the Execution Time and at each Closing Date, you shall have
received a letter, dated the date of delivery thereof, of Ernst & Young in form
and substance satisfactory to you, confirming that they are independent public
accountants with respect to the Company within the meaning of the Securities Act
and the applicable Rules and stating in effect that:
(i) The financial statements and schedules audited by them and
included in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Securities Act and
the related Rules;
(ii) The amounts under the headings "Summary Financial
Information" and "Selected Financial Data" included in the Registration
Statement and the Prospectus agree with the corresponding amounts in the audited
and unaudited financial statements of the Company from which such amounts were
derived;
(iii) On the basis of performing the procedures specified by
the American Institute of Certified Public Accountants for review of interim
financial information as
-14-
described in SAS 71, and a reading of the latest available unaudited financial
statements of the Company and certain other information, inspection of the
minutes of the meetings of the stockholders and the Board of Directors of the
Company, inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company as to transactions and
events subsequent to the date of the latest audited financial statements
included in the Registration Statement and the Prospectus and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention which caused them to believe that:
(A) As of a specified date not more than five days
prior to the date of delivery of such letter, there were
any changes in the capital stock of the Company or any
increase in long-term debt of the Company, or any
decreases in net current assets or stockholders' equity of
the Company, as compared with amounts shown on the
Company's 1997 unaudited financial statements;
(B) For the period from December 31, 1997 to a
specified date not more than five days prior to the date
of delivery of such letter, there were any decreases in
combined net sales or decreases in income from operations
or the total or per share amounts of net income, or any
decreases or increases, as the case may be, in other items
specified by you, in each case as compared with comparable
periods in the preceding year, except in each case for
increases or decreases which the Registration Statement
and the Prospectus disclose, have occurred or may occur;
and
(C) They have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration
Statement and the Prospectus (in each case to the extent
that such dollar amounts, percentages and other financial
information are derived from the general accounting
records of the Company or are derived directly from such
records by analysis or computation) with the results
obtained from a reading of such general accounting records
and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial
information to be in agreement with such results, except
as otherwise specified in such letter.
(d) You shall have received from Ernst & Young a letter, in accordance
with A.U. Section 9325-Auditing Interpretations of Section 325 (February 1989)
of the American Institute of Certified Public Accountants (the
"Interpretation"), stating that in planning and performing their audit of the
audited financial statements included or incorporated by reference in the
Registration Statement, they noted no matters involving the Company's internal
control structure and its operation that they consider to be material weaknesses
as defined in the interpretation.
(e) On each Closing Date, you shall have received a written opinion,
dated such Closing Date, of Ropes & ▇▇▇▇, counsel for the Company, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, with corporate power
to own its properties and conduct its business as described in the Prospectus,
and is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the Company maintains an office or owns or leases
property;
(ii) The Subsidiaries are corporations duly organized, validly
existing and in good standing under the laws their respective states of
incorporation, with corporate power to own their respective properties and
conduct their respective businesses, and are duly
-15-
qualified and in good standing as foreign corporations in each jurisdiction in
which the Company maintains an office or owns or leases property; and all of the
outstanding shares of capital stock of the Subsidiaries are owned directly by
the Company free and clear of any claim, lien, encumbrance, equity, security
interest or other restriction;
(iii) The Company has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
under this Agreement, and to issue and sell the Stock;
(iv) This Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Company;
(v) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Capitalization table contained in the
Prospectus for the date set forth thereunder (with the exception of shares of
restricted stock disclosed in the footnote thereto). The Stock and the other
shares of Common Stock issued and outstanding on the date of such opinion have
been, duly authorized and validly issued and are fully-paid and nonassessable,
with no personal liability attaching to the ownership thereof. The authorized,
issued and outstanding stock of the Company conforms in all material respects to
the statements in relation thereto contained in the Registration Statement and
the Prospectus. The form of Certificate used to evidence the Stock is in due and
proper form. The issuance of the Stock to the Underwriters is not subject to (A)
statutory preemptive rights or voting or transfer restrictions, (B) preemptive
rights or voting or transfer restrictions under the Company's Restated
Certificate of Incorporation, as amended, or Bylaws or, (C) to such counsel's
knowledge, any contractual preemptive rights or voting or transfer restrictions
(other than pursuant to federal and state securities laws);
(vi) None of (A) the execution, delivery, and performance of
this Agreement, (B) the consummation of the transactions contemplated by this
Agreement, including, without limitation, the issuance, sale and delivery of the
Firm Shares and the Optional Shares, if any, or (C) compliance with the terms
and provisions of this Agreement will (1) conflict with or result in a breach or
default or require consent under any agreement listed as an exhibit to the 1997
Form 10-K or the Registration Statement, (2) violate or conflict with any
provisions of the Restated Certificate of Incorporation, as amended, or Bylaws
of the Company, (3) violate any judgment, decree or order known to such counsel,
or law or regulation, of any court or governmental agency, entity or
instrumentality binding upon the Company or any Subsidiary or any of their
properties, except that such counsel need express no opinion as to state
securities or Blue Sky laws or (4) require obtaining the consent or
authorization for, or filing with, any governmental agency or entity or any
court except such as have been obtained and made under the Securities Act and
such as may be required under state securities or Blue Sky laws as to which such
counsel need express no opinion; such counsel need express no opinion in this
paragraph (vi) as to compliance with the anti-fraud provisions of the federal or
state securities laws;
(vii) To such counsel's actual knowledge, no default exists,
and no event has occurred which, with notice or lapse of time or both, would
constitute a default, in the due performance and observance of any term,
covenant or condition of any material indenture, mortgage, agreement or
instrument to which the Company or any Subsidiary a party or by which the
Company or any Subsidiary or any of their respective properties or assets may be
bound or affected except for such default or event which, individually or taken
together with all such other defaults or events, would not have a material
adverse effect on the business, results of operations, prospects, condition
(financial or otherwise) or the material assets or properties of the Company and
the Subsidiaries taken as a whole;
(viii) To such counsel's actual knowledge, neither the Company
nor any Subsidiary is in violation of any term or provision of its Restated
Certificate of Incorporation or Bylaws or of any judgment, decree, or order
known to such counsel;
-16-
(ix) The Registration Statement, the Preliminary Prospectus
and the Prospectus and each amendment or supplement thereto (except for the
financial statements and notes and schedules thereto and other financial or
accounting information included therein, as to which such counsel expresses no
opinion) comply as to form in all material respects with the requirements of the
Securities Act and the Rules; and the documents incorporated by reference in the
Registration Statement, the Preliminary Prospectus and the Prospectus and each
amendment or supplement thereto, when they became effective under the Act or
were filed with the Commission under the Exchange Act, as the case may be,
complied as to form in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules;
(x) To the knowledge of such counsel, all contracts,
agreements and other documents of a character required to be described in the
Prospectus or documents incorporated therein by reference or filed as exhibits
to the Registration Statement or documents incorporated therein by reference
have been so described or filed as exhibits;
(xi) The Registration Statement is effective under the
Securities Act, and any required filing of the Prospectus or any supplement
thereto pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b). To such counsel's knowledge, no order suspending
the effectiveness of the Registration Statement, or any post-effective amendment
thereof, has been issued and no proceedings therefor have been instituted or are
threatened, pending or contemplated;
(xii) To the knowledge of such counsel, there are no legal or
governmental proceedings or investigations pending or threatened to which the
Company or any Subsidiary is or would be a party or to which any of their
respective property is subject (A) which are required to be described in the
Registration Statement or the Prospectus or documents incorporated therein by
reference and which are not so described or (B) which might prevent the
consummation of the transactions contemplated by this Agreement;
(xiii) To the knowledge of such counsel, except as described
in the Prospectus, no holder of any security of the Company has any right to
require or participate in the registration under the Securities Act of the
Common Stock or any other security to be effected by the Registration Statement
except for such rights as have been waived;
(xiv) To the extent that the statements contained in the
Prospectus under the headings "Risk Factors-Antitakeover Provisions", "Risk
Factor-Shares Eligible for Future Sale", "Business-Environmental/Legal
Proceedings", "Description of Capital Stock" and "Shares Eligible For Future
Sale" refer to matters of law or summarize the status of litigation or summarize
the provisions of statutes, regulations, contracts, agreements or other
documents, such statements have been reviewed by such counsel, are accurate and
correct in all material respects and fairly present the status of any such
litigation and such provisions purported to be summarized;
(xv) The Company is not, and will not become as a result of
the transactions contemplated by this Agreement, an "Investment Company" as
defined in the Investment Company Act of 1940, as amended; and
In addition, such counsel shall state that, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (except as specified elsewhere in such counsel's
opinion), and based upon such counsel's examination and participation in
discussions with your representatives and those of the Company and its
independent accountants, in which the business and affairs of the Company and
the contents of the Registration Statement and Prospectus were discussed, no
facts have come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective (except
with respect to the financial statements and notes and schedules thereto and
other financial or accounting information, as to which such counsel
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shall not be required to express any belief) contained any 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 that the
Prospectus as amended or supplemented (except with respect to the financial
statements and notes and schedules thereto and other financial or accounting
information, as to which such counsel shall not be required to make any
statement) on the date thereof and on the Closing Date contained any untrue
statements 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, not misleading; further, no facts have come to the
attention of such counsel to cause it to believe that any document incorporated
by reference in the Registration Statement, the Prospectus, any amendment or
supplement thereto or any Preliminary Prospectus, as of the date of the filing
thereof with the Commission, contained any 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 and no facts have come to the
attention of such counsel that cause it to believe that on the Closing Date,
such incorporated documents taken as a whole contain any 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 not misleading (it being understood
that such counsel need express no view with respect to the financial statements
and schedules, related notes, and other financial and statistical data included
or incorporated by reference in any Preliminary Prospectus, the Registration
Statement (including any exhibit thereto) or the Prospectus or any amendment or
supplement thereto).
In rendering such opinion, such counsel may rely as to matters governed by
the laws of states other than Massachusetts or Delaware or Federal laws of the
United States of America on local counsel in such jurisdiction. As to factual
matters, such counsel may rely on certificates obtained from officers of the
Company and the Subsidiaries and from public officials.
(f) On each Closing Date, you shall have received a written opinion or
opinions dated such Closing Date, of Ropes & ▇▇▇▇, counsel for the Principal
Selling Shareholders, and separate counsel for each of the other Selling
Shareholders to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by each of the Selling Shareholders (through their duly authorized
attorney-in-fact);
(ii) The Power of Attorney has been duly authorized and
executed, and delivered by each of the Selling Shareholders and, pursuant to
such Power of Attorney, each Selling Shareholder has authorized its
attorney-in-fact to carry out the transactions contemplated in this Agreement on
its behalf, and to deliver the shares of Stock being sold by it pursuant to this
Agreement; and
(iii) Immediately prior to the Closing Date, each Selling
Shareholder was the sole registered owner of the shares of Stock to be sold by
such Selling Shareholder; each Selling Shareholder has full legal right, power
and authority, and any approval required by law (other than any approval
required by the applicable state securities and Blue Sky laws) to sell, assign,
transfer and deliver the shares of Stock to be sold by such Selling Shareholder
in the manner provided in this Agreement and the respective Selling Shareholders
Power of Attorney; upon registration of the shares of Stock to be sold by the
Selling Shareholders in the names of the Underwriters in the stock records of
the Company, assuming the Underwriters purchased such Stock in good faith and
without notice of any adverse claim within the meaning of Section 8-302 of the
Massachusetts Uniform Commercial Code, the Underwriters will have acquired all
rights of such Selling Shareholders in the shares of Stock being sold by them
free of any adverse claim, any lien in favor of the Company, and any
restrictions on transfer imposed by the Company; and the owner of such Stock, if
other than the Selling Shareholders, is precluded from asserting against the
Underwriters the ineffectiveness of any unauthorized endorsement.
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(g) On each Closing Date, you shall have received from Peabody & ▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated such Closing Date,
with respect to the incorporation of the Company, the validity of the Stock, the
Registration Statement, the Prospectus and other related matters as you may
require, and the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon such
matters.
(h) On each Closing Date, you shall have received a certificate, dated
such Closing Date, of the chief executive officer and the principal financial
officer of the Company, in which such officers shall state that the
representations and warranties of the Company in this Agreement are true and
correct on and as of the date of this Agreement and such Closing Date, that the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or before such Closing Date, that
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, after the date of the most recent
financial statements in the Prospectus, there has been no material adverse
change in the financial position or results of operations of the Company except
as set forth in or contemplated by the Prospectus or as described in such
certificate.
(i) On each Closing Date, you shall have received a certificate, dated
such Closing Date, of the Selling Shareholders through the Attorney-In-Fact
designated in the Power of Attorney, in which the Attorney-In-Fact shall state
on behalf of the Selling Shareholders that the representations and warranties of
the Selling Shareholders in this Agreement are true and correct on and as of the
date of this Agreement and such Closing Date, and that each of the Selling
Shareholders have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or before such Closing
Date.
(j) On each Closing Date, you shall have received a letter, dated such
Closing Date, of Ernst & Young that meets the requirements of subsection (c) of
this Section (or that brings down to date and confirms matters set forth in such
letter delivered pursuant to subsection (c)), except that the specified date
referred to in such subsection will be not more than five days before such
Closing Date for purposes of this subsection.
(k) You shall have received an agreement (i) from each director and
executive officer, each Selling Stockholder who is not also a director or
executive officer and certain of the prior stockholders designated by you of
(i) B&B Electronics Manufacturing Company and (ii) FLEXFAB Horizons
International, Inc. in form and substance satisfactory to you, that such
person will not offer, sell or otherwise dispose of any shares of the
Company's Common Stock or any security convertible into or exchangeable for
such Common Stock and (ii) from Sutro & Co. Incorporated in form and
substance satisfactory to you, that it will not offer, sell or otherwise
dispose of certain Warrant Shares (as defined in a certain warrant delivered
by the Company to it in connection with the Company's initial public
offering), in each instance without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ for 180 days after the date of the Prospectus.
(l) The Stock delivered on the Closing Date shall have been duly
listed, subject to notice of official issuance, on the Nasdaq National Market.
The Company will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all respects when made as provided in this Agreement, or if any of
the opinions and certificates mentioned above or elsewhere in this Agreement
shall not be in all respects reasonably satisfactory in form and substance to
you and your counsel, you may cancel this Agreement and all obligations of the
Underwriters hereunder at, or at any time prior to, any Closing
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Date. Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The obligations of the Company and the Selling Shareholders to sell and
deliver the portion of the Stock required to be delivered as and when specified
in this Agreement are subject to the condition that at the Closing Date or the
Option Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened.
7. Indemnification and Contribution.
(a) The Company and each Selling Shareholder, jointly and severally,
will indemnify and hold harmless each Underwriter, each of its officers and
directors against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter, officer or director may become subject, under the
Securities Act, the Exchange Act or otherwise (including, without limitation,
all costs of disputing or defending any such claim or action or any amount paid
in settlement thereof and all reasonable costs of investigation in connection
therewith), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related Preliminary Prospectus, 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, or (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
application or other document or communication executed by or on behalf of the
Company or the Selling Shareholders or based upon written information furnished
by or on behalf of the Company or the Selling Shareholders filed in any
jurisdiction in order to qualify the Stock under the securities or Blue Sky laws
thereof or filed with the Commission or any securities exchange, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter, officer or director for any legal or other expenses
reasonably incurred by such Underwriter, officer or director in connection with
investigating or defending any such losses, claims, damages, liabilities or
actions as such expenses are incurred; provided, however, that (x) with respect
to the indemnity of each Selling Shareholder, other than the Principal Selling
Shareholders listed on Schedule C hereto, the indemnity shall, in each case,
apply only to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement, or
omission or alleged omission made in the Registration Statement, any Preliminary
Prospectus or the Prospectus in reliance upon and in conformity with written
information furnished by such Selling Shareholder specifically for use in the
preparation thereof; (y) the Company and the Selling Shareholders will not be
liable in any such case to the extent that any such losses, claims, damages or
liabilities arise out of or are based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from the information included under
the heading "Underwriting" in the Prospectus in reliance upon and in conformity
with written information furnished to the Company and the Selling Shareholders
by you or by or on behalf of any Underwriter through you specifically for
inclusion therein and (z) the Company and the Selling Shareholders will not be
liable to any Underwriter, officer or director under this section with respect
to any Preliminary Prospectus to the extent that any loss, claim, damage or
liability of such person results from the fact that such Underwriter sold shares
of Stock to a person to whom there was not given or sent, at or prior to the
written confirmation of such sale, a copy of the Prospectus or of the Prospectus
as then amended or supplemented in any case where such delivery is required by
the Securities Act if the Company has previously furnished copies thereof to
such Underwriter and the loss, claim, damage or liability of such Underwriter,
officer or director results from an untrue statement or omission of a material
fact contained in the Preliminary Prospectus which was corrected in the
Prospectus (or the Prospectus as amended or supplemented). In no event, however,
shall the liability of any Selling Shareholder for indemnification under this
Section 7(a) exceed the net proceeds received by such Selling Shareholder from
the Underwriters in the offering.
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(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company and the Selling Shareholders against any losses,
claims, damages or liabilities to which the Company or the Selling Shareholders
may become subject, under the Securities Act, the Exchange Act or otherwise
(including, without limitation, all costs of disputing or defending such claim
or action or any amount paid in settlement thereof and all reasonable costs of
investigation in connection therewith), insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related Preliminary Prospectus, or arise out of or are based
upon the omission or the 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
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement or omission or alleged omission from the
information included under the heading "Underwriting" in the Prospectus in
reliance upon and in conformity with written information furnished to the
Company by you or by or on behalf of any Underwriter through you specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company or the Selling Shareholders in connection with
investigating or defending any such losses, claims, damages, liabilities or
actions as such expenses are incurred, and provided, further, that the
obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to the net
proceeds received by the Company from such Underwriter.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof, enclosing a copy of all papers served. No indemnification provided for
in this Section 7 shall be available to any party which shall fail to give
notice as provided in this Section 7(c) if the party to which notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
such indemnifying party from any liability that such indemnifying party may have
to any indemnified party for contribution or otherwise than under this Section
7. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, assume the
defenses thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses, except as provided below.
The indemnified party shall have the right to employ its counsel in any such
action, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the employment of counsel by such indemnified
party has been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have reasonably concluded that there may be a conflict
of interest between the indemnifying parties and the indemnified party in the
conduct of the defense of such action (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 (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time after
notice of the commencement thereof, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying parties. Anything in this
Section 7 to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any action, suit, proceeding or claim effected
without its written consent, which consent shall not be unreasonably withheld.
If a claim, action, suit or proceeding is settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the
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indemnified party from and against any loss, liability, claim, damage or
expense by reason of such settlement or judgment.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subsection (a) or (b)
above is due in accordance with its terms but for any reason is held to be
unavailable, the Company, the Selling Shareholders and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities, and expenses
(including, without limitation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit, proceeding or
litigation, or any claim, but after deducting any contribution received by the
Company from persons other than the Underwriters, such as persons who control
the Company within the meaning of the Securities Act, officers of the Company
who signed the Registration Statement and directors of the Company, who may also
be liable for the contribution) to which the Company, the Selling Shareholders
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
Selling Shareholders and the Underwriters from the offering of the Stock 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 7 hereof, then each such indemnifying party shall contribute
to such amount paid or payable to such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company, the Selling Shareholders 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 Shareholders and the Underwriters shall be deemed to be in the same
proportion as (a) the total proceeds from the offering (net of underwriting
discounts but before deducting expenses) received by the Company and the Selling
Shareholders, as set forth in the table on the cover page of the Prospectus,
bear to (b) the underwriting discounts received by the Underwriters, as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company, the Selling Shareholders or the Underwriters, shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact related to information supplied by the Company, the
Selling Shareholders 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 Shareholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) 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. Notwithstanding the provisions of this Section 7(d), in no
case shall (i) any Underwriter (except as otherwise agreed among the
Underwriters) be liable or responsible for any amount in excess of the
underwriting discount applicable to the Stock purchased by such Underwriter
hereunder and (ii) any Selling Shareholder be liable or responsible for any
amount in excess of the net proceeds received by such Selling Stockholder from
the Underwriters in the offering, provided, however, that 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. 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 under this Section 7(d), notify such
party or parties from whom contribution shall be sought, but the omission so to
notify such party or parties from whom contribution may be sought shall not
relieve the party or parties from whom contribution may be sought from any other
obligation such party or parties may have hereunder or otherwise than under this
Section 7(d). No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its written consent. The
Underwriters' obligations to make contributions pursuant to this Section 7(d)
are several in proportion to their respective underwriting commitments and not
joint.
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(e) The obligations of the Company and the Selling Shareholders under
this Section shall be in addition to any liability that the Company or the
Selling Shareholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Securities Act or the Exchange Act. The obligations of the
Underwriters under this Section shall be in addition to any liability the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act.
(f) It is understood that the indemnifying party shall, in connection
with any one action, suit, or proceeding or separate but substantially similar
or related actions, suits, or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all indemnified parties not having actual or
potential differing interests among themselves, which firm shall be designated
by a majority of such indemnified parties.
8. Default by the Company or the Selling Shareholders.
(a) If the Company or the Selling Shareholders shall fail on the First
Closing Date or, if any Optional Shares are to be purchased, any Subsequent
Closing Date, as the case may be, to sell and deliver the number of Firm Shares
or Optional Shares, as the case may be, which the Company or the Selling
Shareholders is obligated to sell hereunder, then, at the option of the
Underwriters, this Agreement shall terminate without any liability on the part
of any Underwriter for such termination.
(b) In the event of a default by the Company or the Selling
Shareholders under this Section 8, the Underwriters shall have the right to
postpone the First Closing Date or, if any Optional Shares are to be purchased,
any Subsequent Closing Date, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements.
(c) No action taken pursuant to this Section 8 shall relieve the
Company or the Selling Shareholders from any liability, if any, in respect of
such default.
9. Substitution of Underwriters. If one or more of the Underwriters shall
fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Sections 6, 8 or 10 hereof) to purchase on
any Closing Date the shares of Stock agreed to be purchased on such Closing Date
by such Underwriter or Underwriters, you may find one or more substitute
underwriters to purchase such Stock or make such other arrangements as you may
deem advisable or one or more of the remaining Underwriters may agree to
purchase such Stock in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date:
(a) If the number of shares of Stock to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Stock that all the
Underwriters are obligated to purchase on such Closing Date, then each of the
nondefaulting Underwriters shall be obligated to purchase such shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, however, that in no event shall the maximum number of shares of Stock
that any Underwriter has agreed to purchase pursuant to Section 1 hereof be
increased pursuant to this Section 9 by more than one-ninth of such number of
shares without the written consent of such Underwriter, or
(b) If the number of shares of Stock to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Stock that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to an
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additional business day with which it may, but is not obligated to, find one or
more substitute Underwriters reasonably satisfactory to you to purchase such
shares of Stock upon the terms set forth in this Agreement.
In any such case, either you or the Company shall have the right to
postpone the applicable Closing Date for a period of not more than five business
days in order that necessary changes and arrangements (including any necessary
amendments or supplements to the Registration Statement or Prospectus) may be
effected by you and the Company and the Company agrees to prepare and file
promptly any amendment or supplement to the Registration Statement or the
Prospectus which in the opinion of counsel to the Underwriters may thereby be
made necessary. If the number of shares of Stock to be purchased on such Closing
Date by such defaulting Underwriter or Underwriters shall exceed 10% of the
shares of Stock that all the Underwriters are obligated to purchase on such
Closing Date, and none of the nondefaulting Underwriters or the Company shall
make arrangements pursuant to this Section 9 within the period specified for the
purchase of the shares of Stock that the defaulting Underwriters agreed to
purchase, this Agreement shall terminate with respect to the shares of Stock to
be purchased on such Closing Date without liability on the part of any
nondefaulting Underwriter to the Company and without liability on the part of
the Company, except in both cases as otherwise provided for herein in Sections 7
and 11 hereof. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 9 as if such
party had originally been a party to this Agreement and had been allocated the
aggregate number of (i) such Stock actually purchased by such party as a result
of its original commitment to purchase Stock, plus (ii) Stock purchased pursuant
to this Section 9.
10. Termination. This Agreement may be terminated by you by notice to the
Company and the Selling Shareholders (a) at any time prior to the earlier of (i)
the time the Stock is released by you for sale by notice to the Underwriters, or
(ii) 11:30 a.m. on the first business day following the date of this Agreement.
The obligations of the several Underwriters to purchase the Stock also may be
terminated at any time on or prior to any Closing Date by notice to the Company,
from a Representative at any time if in the discretion of the Representatives at
or before any Closing Date, upon or prior to such dates: (i) there shall have
occurred any material loss to or interference with the businesses or properties
of the Company or any Subsidiary from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, or any material adverse change, or any
development involving a prospective material adverse change (including, without
limitation, a change in management or control of the Company) or in the
condition (financial or otherwise), business, prospects, capitalization, net
worth or results of operations of the Company or any Subsidiary; (ii) trading in
the Stock has been suspended by the Commission or trading generally on the New
York Stock Exchange or on the American Stock Exchange has been suspended or
limited, or minimum or maximum ranges for prices of securities shall have been
fixed, or maximum ranges for prices of securities have been required, by such
exchanges or by order of the Commission, the NASD or any other governmental or
regulatory authority; (iii) any banking moratorium has been declared by federal
or Massachusetts or New York bank authorities; (iv) any domestic or
international event or act or occurrence shall have occurred that shall have
materially disrupted, or in your opinion will in the future materially disrupt,
the securities market; (v) there shall have occurred any new outbreak or
material escalation of hostilities or other calamity or crisis the effect of
which on the financial markets of the United States is such as to make it, in
your judgment, inadvisable or impracticable to proceed with the offering; or
(vi) there shall be such a material adverse change in general financial,
political or economic conditions or the effect of international conditions on
the financial markets in the United States as to make it, in your judgment,
inadvisable or impracticable to market the Stock.
11. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of (i)
the
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Company or its officers, (ii) the Selling Shareholders or (iii) the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the Company, the
Selling Shareholders or any of their respective representatives, officers, or
directors or any controlling person, and will survive delivery of and payment
for the Stock. Upon termination of this Agreement, the Company shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5(a)(ix) and the respective obligations of the Company, the Selling
Shareholders and the Underwriters pursuant to Section 7 shall remain in effect,
and if the Agreement is terminated after the First Closing Date, the
representations and warranties in Section 1 and all obligations under Section 5
shall also remain in effect. If the purchase of the Stock by the Underwriters is
not consummated for any reason other than solely because of the termination of
this Agreement pursuant to Sections 9 and 10, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) incurred by them in connection with the offering of the Stock.
12. Applicable Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of The Commonwealth of
Massachusetts without giving effect to choice or conflict of law principles. If
any action or proceeding shall have been brought by the Company, the Selling
Shareholders or by any of the Underwriters in order to enforce any right or
remedy under this Agreement or relating to or arising out of the transactions
contemplated hereby, the Company, the Selling Shareholders and each of the
Underwriters hereby consent to, and agree to submit to, the jurisdiction of the
state courts of The Commonwealth of Massachusetts and of any United States
federal court sitting in Massachusetts, and waive any claim of improper venue or
forum non conveniens as to any such action or proceeding. The Company, the
Selling Shareholders and each Underwriter hereby irrevocably agree that process
in any such action or proceeding may be served in the manner provided by
Massachusetts law for service on foreign corporations or other entities.
13. Notices. All notices and communications hereunder may be mailed or
transmitted by any standard form of telecommunication and, except as herein
otherwise specifically provided, shall be in writing and shall be deemed to have
been duly given when delivered to a notice party hereto at the address specified
herein or at the address subsequently communicated in writing to the notice
parties. Notices to the Underwriters shall be directed to the Representatives
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention ▇▇▇▇ ▇. ▇▇▇▇, Managing Director, with a copy to Peabody & ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
Notices to the Company shall be directed to AFC Cable Systems, Inc., ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial
Officer, with a copy to Ropes & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. Notices to the Selling
Shareholders shall be directed to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Attorney-in fact, c/o AFC
Cable Systems, Inc., ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. In each case a
notice party may change its address for notice hereunder by a written
communication to the other notice parties.
14. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives,
successors and to the extent provided in Section 7 herein the officers and
directors and controlling persons referred to in Section 7(e), and no other
person will have any right or obligation hereunder.
15. Representation of Underwriters. You will act for the several
Underwriters in connection with this financing, and any action under this
Agreement taken by the jointly will be binding upon all of the Underwriters.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
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17. Entire Agreement. This Agreement and the Schedules hereto contain the
entire agreement between the parties hereto in connection with the subject
matter hereof and supersede all prior agreements, written and verbal, with
respect to such subject matter.
18. Amendment. This Agreement and the Schedules hereto may not be amended,
modified or altered without the written agreement of the Company, the Selling
Shareholders and the Representatives.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us one of the counterparts hereof, whereupon it will
become a binding agreement among the Company, the Selling Shareholders and the
several Underwriters in accordance with its terms.
Very truly yours,
AFC CABLE SYSTEMS, INC.
By:____________________________________
Name:_________________
Title:__________________
Selling Shareholders
By:____________________________________
Attorney-in-Fact:_______________________
Agreed for themselves and on behalf of and as
the Representatives of the other
Underwriters named in Schedule A hereto.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, LLC
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INCORPORATED
By:__________________________________
Name:_________________
Title:__________________
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SCHEDULE A
Number of Firm
Shares to Be
Underwriters Purchased
------------ ----------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC
Total...........................................1,500,000
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SCHEDULE B
Schedule of Selling Shareholders
Number of Firm Shares
Selling Shareholder to be sold
------------------- ---------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 500,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 50,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1995 Trust 75,000
for ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 75,000
Total 700,000
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SCHEDULE C
Schedule of Principal Selling Shareholder
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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