EXHIBIT 1.1
▇▇▇▇▇▇▇ RIVER ASSOCIATES INCORPORATED
2,061,000 Shares Common Stock(1)
UNDERWRITING AGREEMENT
August ____, 2003
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
As Representatives of the Several
Underwriters Named in Schedule A
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. ▇▇▇▇▇▇▇ River Associates Incorporated (the
"COMPANY"), a Massachusetts corporation, has an authorized capital stock
consisting of 1,000,000 shares of Preferred Stock, without par value, of which
no shares are outstanding and 25,000,000 shares of Common Stock, without par
value ("COMMON STOCK"), of which 9,032,082 shares were outstanding as of May 16,
2003. The Company proposes to issue and sell 400,000 shares of its authorized
but unissued Common Stock, and certain stockholders and optionholders of the
Company (collectively referred to as the "SELLING STOCKHOLDERS" and named in
Schedule B) propose to sell 1,661,000 shares of the Company's issued and
outstanding Common Stock, to the several underwriters named in Schedule A as it
may be amended by the Pricing Agreement hereinafter defined ("UNDERWRITERS"),
who are acting severally and not jointly. Collectively, such total of 2,061,000
shares of Common Stock proposed to be sold by the Company and the Selling
Stockholders is hereinafter referred to as the "FIRM SHARES." In addition, the
Company and the Selling Stockholders propose to grant to the Underwriters an
option to purchase up to 309,150 additional shares of Common Stock ("OPTION
SHARES") as provided in Section 5 hereof. The Firm Shares and, to the extent
such option is exercised, the Option Shares, are hereinafter collectively
referred to as the "SHARES."
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(1) Plus an option to acquire up to 309,150 additional shares to cover
overallotments.
You have advised the Company and the Selling Stockholders that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon as you deem advisable after the Registration Statement
becomes effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company, the Selling Stockholders and the Representatives,
acting on behalf of the several Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto (the "PRICING AGREEMENT"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company, the Selling Stockholders and the
Representatives and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by this Agreement,
as supplemented by the Pricing Agreement. From and after the date of the
execution and delivery of the Pricing Agreement, this Agreement shall be deemed
to incorporate the Pricing Agreement.
The Company and each of the Selling Stockholders hereby confirm their
respective agreements with the Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents, warrants and covenants to each Underwriter as
follows:
(a) REGISTRATION STATEMENT; PROSPECTUS. A registration statement
on Form S-3 (File No. 333-107033) and a related preliminary prospectus with
respect to the Shares have been prepared and filed with the Securities and
Exchange Commission (the "COMMISSION") by the Company in conformity with
the requirements of the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "SECURITIES
ACT;" unless indicated to the contrary, all references herein to specific
rules are rules promulgated under the Securities Act); and the Company has
so prepared and has filed such amendments thereto, if any, and such amended
preliminary prospectuses as may have been required to the date hereof and
will file such additional amendments thereto and such amended prospectuses
as may hereafter be required.
Such registration statement (as amended, if applicable) at
the time it becomes effective and the prospectus constituting a part
thereof (including the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) and/or Rule 434), as from time to time amended or
supplemented, are hereinafter referred to as the "REGISTRATION STATEMENT,"
and the "PROSPECTUS," respectively, except that if any revised prospectus
shall be provided to the Underwriters by the Company for use in connection
with the offering of the Shares which differs from the Prospectus on file
at the Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule
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424(b)), the term Prospectus shall refer to such revised prospectus from
and after the time it was provided to the Underwriters for such use. If the
Company elects to rely on Rule 434 of the Securities Act, all references to
"Prospectus" shall be deemed to include, without limitation, the form of
prospectus and the term sheet, taken together, provided to the Underwriters
by the Company in accordance with Rule 434 of the Securities Act ("RULE 434
Prospectus"). Any registration statement (including any amendment or
supplement thereto or information which is deemed part thereof) filed by
the Company under Rule 462(b) ("RULE 462(b) REGISTRATION STATEMENT") shall
be deemed to be part of the "Registration Statement" as defined herein, and
any prospectus (including any amendment or supplement thereto or
information which is deemed part thereof) included in such registration
statement shall be deemed to be part of the "Prospectus," as defined
herein, as appropriate. The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder are hereinafter
collectively referred to as the "EXCHANGE ACT." Any reference herein to any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Form
S-3 under the Securities Act ("INCORPORATED DOCUMENTS"), as of the date of
such preliminary prospectus or Prospectus, as the case may be. Any document
filed by the Company under the Exchange Act after the effective date of the
Registration Statement or the date of the Prospectus and incorporated by
reference in the Prospectus shall be deemed to be included in the
Registration Statement and the Prospectus as of the date of such filing.
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has
complied to the Commission's satisfaction with all requests of the
Commission for additional or supplemental information. No stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement is in effect and no proceedings for such
purpose have been instituted or are pending or, to the best knowledge of
the Company, are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed complied
in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to the Commission's Electronic Data
Gathering, Analysis and Retrieval System (▇▇▇▇▇) (except as may be
permitted by Regulation S-T under the Securities Act), was identical to the
copy thereof delivered to the Underwriters for use in connection with the
offer and sale of the Shares. Each of the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendment thereto, at
the time it became effective and at all subsequent times, complied and will
comply in all material respects with the Securities Act and did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, as amended or
supplemented, as of its date and at all subsequent times, did not and will
not contain any untrue statement of a material fact or omit to state a
material fact necessary, in order to make the
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statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the
two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus, or
any amendments or supplements thereto, made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by the Underwriters expressly for use therein. There are
no contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement which have not
been described or filed as required.
(c) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company has
delivered to each Representative and their counsel one complete manually
signed copy of the Registration Statement and of each consent and
certificate of experts filed as a part thereof, and to each Underwriter
conformed copies of the Registration Statement (without exhibits) and
preliminary prospectuses and the Prospectus, as amended or supplemented, in
such quantities and at such places as the Underwriters have reasonably
requested.
(d) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The Company
has not distributed and will not distribute, prior to the later of the
Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(e) THE UNDERWRITING AGREEMENT AND THE PRICING AGREEMENT. This
Agreement and the Pricing Agreement have been duly authorized, executed and
delivered by, and are valid and binding agreements of, the Company,
enforceable in accordance with their terms, except as rights to
indemnification or contribution hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(f) AUTHORIZATION OF THE SHARES. The Shares to be purchased by
the Underwriters from the Company have been duly authorized for issuance
and sale pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(g) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There are
no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement, except for such
rights as have been duly waived or complied with.
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(h) NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed in
the Prospectus, subsequent to the respective dates as of which information
is given in the Prospectus: (i) there has been no material adverse change,
or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of the Company and
its subsidiaries (the "SUBSIDIARIES"), considered as one entity (any such
change is called a "MATERIAL ADVERSE CHANGE"); (ii) the Company and the
Subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been
no dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company, by a Subsidiary on
any class of capital stock or repurchase or redemption by the Company or
any Subsidiary of any class of capital stock.
(i) INDEPENDENT ACCOUNTANTS. Ernst & Young LLP, who have
expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus, are independent
public or certified public accountants as required by the Securities Act
and the Exchange Act.
(j) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the consolidated
financial position of the Company and the Subsidiaries as of and at the
dates indicated and the results of their operations and cash flows for the
periods specified. The supporting schedules, if any, included in the
Registration Statement present fairly the information required to be stated
therein. Such financial statements and supporting schedules have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as
may be expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary - Summary Consolidated Financial
Data," "Selected Consolidated Financial Data" and "Capitalization" fairly
present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration
Statement.
(k) INCORPORATION AND GOOD STANDING OF THE COMPANY AND THE
SUBSIDIARIES. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Massachusetts and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement. Each Subsidiary has been duly organized and is validly existing
as a corporation or limited liability company in good
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standing under the laws of the jurisdiction of its organization and has
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus. Each of the Company and the
Subsidiaries is duly qualified to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except for such jurisdictions where the failure to so qualify or to be in
good standing would not, individually or in the aggregate, result in a
Material Adverse Change. The Company is the legal and beneficial owner of
the capital stock or membership interest in each Subsidiary, as described
in the Registration Statement. The Company owns its capital stock or
membership interest in each Subsidiary free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim. Except as described
in the Prospectus, the Company has no obligation to contribute capital to
any Subsidiary pursuant to the organizational documents, operating
agreement or certificate of formation of such Subsidiary or any contractual
arrangement with any third party. The Company does not own or control,
directly or indirectly, any corporation, association or other entity other
than the Subsidiaries.
(l) COMPLIANCE WITH LAWS. The conduct of the business of the
Company and each of the Subsidiaries is in compliance in all respects with
applicable federal, state, local and foreign laws and regulations, except
where the failure to be in compliance would not result in a Material
Adverse Change.
(m) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The
authorized, issued and outstanding capital stock of the Company as of May
16, 2003 was as set forth in the Prospectus under the caption
"Capitalization." The Common Stock (including the Shares) conforms in all
material respects to the description thereof contained in the Prospectus.
All of the issued and outstanding shares of Common Stock (including the
shares of Common Stock owned by Selling Stockholders) have been duly
authorized and validly issued, are (except, in the case of shares purchased
by officers of the Company under agreements which provide for the purchase
price to be paid in installments, to the extent of the installments which
are not yet due and payable) fully paid and nonassessable and have been
issued in compliance with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of
the Company or any Subsidiary other than those accurately described in the
Prospectus and those relating to NeuCo, Inc. The description of the
Company's stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted thereunder, set forth in the
Prospectus is an accurate and fair description in all material respects of
such plans, arrangements, options and rights.
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(n) EXCHANGE ACT AND NASDAQ NATIONAL MARKET LISTING. The Common
Stock (including the Shares) is registered pursuant to Section 12(g) of the
Exchange Act and is listed on the Nasdaq National Market, and the Company
has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the Nasdaq National Market, nor has the
Company received any notification that the Commission or the National
Association of Securities Dealers, Inc. (the "NASD") is contemplating
terminating such registration or listing.
(o) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED. Neither the Company nor any
Subsidiary is in violation of its charter or by-laws or is in default (or,
with the giving of notice or lapse of time, would be in default)
("DEFAULT") under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which the Company or such
Subsidiary is a party or by which it or any of them may be bound or to
which any of the property or assets of the Company or such Subsidiary is
subject (each, an "EXISTING INSTRUMENT"), except for such Defaults as would
not, individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of this Agreement and the
Pricing Agreement and consummation of the transactions contemplated hereby
and by the Prospectus (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions of
the charter or by-laws of the Company or any Subsidiary, (ii) will not
conflict with or constitute a breach of, or Default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Subsidiary pursuant to, or require the
consent of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances (A) as to
which the Company has obtained prior to the date hereof a valid waiver or
consent, a copy of which has been delivered to counsel for the
Underwriters, or (B) as would not, individually or in the aggregate, result
in a Material Adverse Change, and (iii) will not result in any violation of
any law, administrative regulation or administrative or court decree
applicable to the Company or any Subsidiary. No consent, approval,
authorization or other order of, or registration or filing with, any court
or other governmental or regulatory authority or agency, is required for
the Company's execution, delivery and performance of this Agreement and the
Pricing Agreement and consummation of the transactions contemplated hereby
and thereby and by the Prospectus, except such as have been obtained or
made by the Company and are in full force and effect under the Securities
Act or applicable state securities or blue sky laws and from the NASD.
(p) NO MATERIAL ACTIONS OR PROCEEDINGS. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened (i) against the Company or any Subsidiary,
(ii) which has as the subject thereof any officer or director of, or
property owned or leased by, the Company or any Subsidiary or (iii)
relating to environmental or discrimination matters, where in any such case
(A) there is a reasonable
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possibility that such action, suit or proceeding might be determined
adversely to the Company or any Subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of
the transactions contemplated by this Agreement. No material labor dispute
with the employees of the Company or any Subsidiary exists or, to the best
of the Company's knowledge, is threatened or imminent.
(q) INTELLECTUAL PROPERTY RIGHTS. The Company and each Subsidiary
own or possess sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "INTELLECTUAL PROPERTY RIGHTS") reasonably necessary to
conduct their businesses as now conducted; and the expected expiration of
any of such Intellectual Property Rights would not result in a Material
Adverse Change. Neither the Company nor any Subsidiary has received any
notice of infringement or conflict with asserted Intellectual Property
Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.
(r) ALL NECESSARY PERMITS, ETC. The Company and each Subsidiary
possess such valid and current certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct their respective businesses, except where any
failure to possess the same, individually or in the aggregate, would not
result in a Material Adverse Change, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could result in
a Material Adverse Change.
(s) TITLE TO PROPERTIES. The Company and each Subsidiary have
good and marketable title to all the properties and assets reflected as
owned in the financial statements referred to in Section 2(j) above (or
elsewhere in the Prospectus), in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as are disclosed in the Prospectus or as do not
materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such
property by the Company or such Subsidiary. The real property,
improvements, equipment and personal property held under lease by the
Company or any Subsidiary are held under valid and enforceable leases, with
such exceptions as are not material and do not materially interfere with
the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such Subsidiary.
(t) TAX LAW COMPLIANCE. The Company and each Subsidiary have
filed all necessary federal, state and foreign income and franchise tax
returns and have paid all taxes due and payable by any of them and, if due
and payable, any related or similar assessment, fine or
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penalty levied against any of them, except as may be being contested in
good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements
referred to in Section 2(j) above in respect of all federal, state and
foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any Subsidiary has not been finally determined.
(u) COMPANY NOT AN "INVESTMENT COMPANY". The Company has been
advised of the rules and requirements under the Investment Company Act of
1940, as amended (the "INVESTMENT COMPANY ACT"). The Company is not, and
after receipt of payment for the Shares will not be, an "investment
company" within the meaning of the Investment Company Act and will conduct
its business in a manner so that it will not become subject to the
Investment Company Act.
(v) INSURANCE. The Company and each Subsidiary are insured by
recognized, financially sound and reputable institutions with policies in
such amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their businesses including, but
not limited to, policies covering real and personal property owned or
leased by the Company and any Subsidiary against theft, damage,
destruction, acts of vandalism and earthquakes. The Company has no reason
to believe that it or the Subsidiaries will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change. Since April 23, 1998,
neither the Company nor any Subsidiary has been denied any insurance
coverage which it has sought or for which it has applied.
(w) NO PRICE STABILIZATION OR MANIPULATION. The Company has not
taken and will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares.
(x) RELATED PARTY TRANSACTIONS. There are no business
relationships or related-party transactions involving the Company or any
Subsidiary or any other person required to be described in the Prospectus
which have not been described as required.
(y) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither the
Company nor any Subsidiary nor, to the best of the Company's knowledge, any
employee or agent of the Company or any Subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Prospectus.
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(z) ERISA COMPLIANCE. The Company and each Subsidiary and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company, any Subsidiary or their "ERISA AFFILIATES" (as
defined below) are in compliance in all material respects with ERISA.
"ERISA Affiliate" means, with respect to the Company or any Subsidiary, any
member of any group of organizations described in Sections 414(b), (c), (m)
or (o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the "CODE") of which
the Company or any Subsidiary is a member. No "reportable event" (as
defined under ERISA) has occurred or is reasonably expected to occur with
respect to any "employee benefit plan" established or maintained by the
Company, any Subsidiary or any of their ERISA Affiliates. No "employee
benefit plan" established or maintained by the Company, any Subsidiary or
any of their ERISA Affiliates, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as
defined under ERISA). Neither the Company, any Subsidiary nor any of their
ERISA Affiliates has incurred or reasonably expects to incur any liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B
of the Code. Each "employee benefit plan" established or maintained by the
Company, any Subsidiary or any of their ERISA Affiliates that is intended
to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, which would
cause the loss of such qualification.
(aa) EXCHANGE ACT COMPLIANCE. The Company has filed on a timely
basis all reports and other documents required to be filed by it under the
Exchange Act. All such reports and documents, as well as any such reports
and documents filed by the Company from the date of this Agreement through
the Second Closing Date, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the Exchange Act, and when filed, did not or will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(bb) ACCOUNTING CONTROLS AND METHODOLOGY. Each of the Company and
the Subsidiaries has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the Exchange Act);
such disclosure controls and procedures are designed to ensure that
information required to be disclosed in the reports filed or submitted
under the Exchange Act is accumulated and communicated to the Company's and
the Subsidiaries' management, including their respective principal
executive officers and principal financial officers, as appropriate, to
allow timely decisions regarding required disclosure; and such disclosure
controls and procedures are effective in all material respects to perform
the functions for which they were established. Since the date of the most
recent balance sheet reviewed or audited by the Company's auditors, there
have been no significant changes in
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internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses. Since the date of the
most recent balance sheet reviewed or audited by the Company's and the
Subsidiaries' auditors, the audit committee of the board of directors of
the Company has not been advised of (i) any significant deficiencies in the
design or operation of internal controls which could adversely affect the
Company's and the Subsidiaries' ability to record, process, summarize and
report financial data nor any material weaknesses in internal controls; and
(ii) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's and the
Subsidiaries' internal controls.
(cc) DOING BUSINESS WITH CUBA. The Company confirms as of the date
hereof that it is in compliance with all provisions of Section 517.075 of
the Florida Statutes, and the Company further agrees that if it commences
engaging in business with the government of Cuba or with any person or
affiliate located in Cuba after the date the Registration Statement becomes
or has become effective with the Commission or with the Florida Department
of Financial Services (the "Department"), whichever date is later, or if
the information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the Department
notice of such business or change, as appropriate, in a form acceptable to
the Department.
Any certificate signed by an officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters on the First Closing Date
or the Second Closing Date shall be deemed to be a representation and warranty
by the Company to each Underwriter as to the matters set forth therein.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING
STOCKHOLDERS. Each Selling Stockholder, severally and not jointly, hereby
represents, warrants and covenants to each Underwriter as follows:
(a) THE UNDERWRITING AGREEMENT AND THE PRICING AGREEMENT. This
Agreement and the Pricing Agreement have been duly executed and delivered
by or on behalf of such Selling Stockholder and are valid and binding
agreements of such Selling Stockholder, enforceable in accordance with
their terms, except as rights to indemnification or contribution hereunder
may be limited by applicable law and except as the enforcement hereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(b) THE CUSTODY AGREEMENT AND POWER OF ATTORNEY. Each of the (i)
Custody Agreement signed by or on behalf of such Selling Stockholder and
the Company, as custodian (the "CUSTODIAN"), relating to the deposit of the
Shares to be sold by such Selling Stockholder (the "CUSTODY AGREEMENT") and
(ii) Power of Attorney appointing certain individuals named
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therein as such Selling Stockholder's attorneys-in-fact (each, an "AGENT")
to the extent set forth therein relating to the transactions contemplated
hereby and by the Prospectus (the "POWER OF ATTORNEY"), has been duly
executed and delivered by or on behalf of such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification or
contribution thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(c) TITLE TO SHARES TO BE SOLD; ALL AUTHORIZATIONS OBTAINED. Such
Selling Stockholder has, and on the First Closing Date and the Second
Closing Date (as defined below) will have, good and valid title to all of
the Shares which may be sold by such Selling Stockholder pursuant to this
Agreement on such date or, in the case of Shares to be acquired by such
Selling Stockholder upon the exercise of stock options, the vested right to
acquire such Shares upon such exercise, and the legal right and power, and
all authorizations and approvals required by law to enter into this
Agreement, the Custody Agreement and its Power of Attorney, to sell,
transfer and deliver all of the Shares which may be sold by such Selling
Stockholder pursuant to this Agreement and to comply with its other
obligations hereunder and thereunder.
(d) DELIVERY OF THE SHARES TO BE SOLD. Delivery of the Shares
which are sold by such Selling Stockholder pursuant to this Agreement will
pass good and valid title to such Shares, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or other claim (other than
any arising out of an action taken by an Underwriter).
(e) NON-CONTRAVENTION; NO FURTHER AUTHORIZATIONS OR APPROVALS
REQUIRED. The execution and delivery by such Selling Stockholder of, and
the performance by such Selling Stockholder of its obligations under, this
Agreement, the Pricing Agreement, the Custody Agreement and its Power of
Attorney will not contravene or conflict with, result in a breach of, or
constitute a Default under, or require the consent of any other party to,
any agreement or instrument to which such Selling Stockholder is a party or
by which it is bound or under which it is entitled to any right or benefit,
any provision of applicable law or any judgment, order, decree or
regulation applicable to such Selling Stockholder of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder, except for any such
contravention, conflict, breach or Default as to which the Company has
obtained prior to the date hereof a valid waiver (a copy of which has been
delivered to counsel for the Underwriters) and any such consent as has been
obtained by the Company prior to the date hereof (a copy of which has been
delivered to counsel for the Underwriters). No consent, approval,
authorization or other order of, or registration or filing with, any court
or other governmental authority or agency, is required for the consummation
by such Selling Stockholder of the transactions contemplated in this
Agreement, except such as have been obtained or made
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and are in full force and effect under the Securities Act or applicable
state securities or blue sky laws and from the NASD.
(f) NO REGISTRATION OR OTHER SIMILAR RIGHTS. Such Selling
Stockholder does not have any registration or other similar rights to have
any equity or debt securities registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as have been duly waived or complied
with.
(g) NO FURTHER CONSENTS, ETC. No consent, approval or waiver is
required under any instrument or agreement to which such Selling
Stockholder is a party or by which it is bound or under which it is
entitled to any right or benefit, in connection with the offering, sale or
purchase by the Underwriters of any of the Shares which may be sold by such
Selling Stockholder under this Agreement or the consummation by such
Selling Stockholder of any of the other transactions contemplated hereby,
except any such consent, approval or waiver as has been obtained by such
Selling Stockholder prior to the date hereof, a copy of which has been
delivered to counsel for the Underwriters.
(h) DISCLOSURE MADE BY SUCH SELLING STOCKHOLDER IN THE
PROSPECTUS. All information furnished by or on behalf of such Selling
Stockholder in writing expressly for use in the Registration Statement and
Prospectus is, and on the First Closing Date and the Second Closing Date
will be, true, correct, and complete in all material respects, and does
not, and on the First Closing Date and the Second Closing Date will not,
contain any untrue statement of a material fact or omit to state any
material fact necessary to make such information not misleading. Such
Selling Stockholder confirms as accurate the number of shares of Common
Stock set forth opposite such Selling Stockholder's name in the Prospectus
under the caption "Principal and Selling Stockholders" (both prior to and
after giving effect to the sale of the Shares).
(i) NO PRICE STABILIZATION OR MANIPULATION. Such Selling
Stockholder has not taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result
in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(j) REGISTRATION STATEMENT AND PROSPECTUS. Such Selling
Stockholder has reviewed the Registration Statement and the Prospectus and,
to the knowledge of such Selling Stockholder, neither the Registration
Statement nor the Prospectus contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. Such Selling
Stockholder has no knowledge of any material fact, condition or information
not disclosed in the Registration Statement or the Prospectus which has had
or may have a Material Adverse Effect and is not prompted to sell shares of
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Common Stock by any information concerning the Company which is not set
forth in the Registration Statement and the Prospectus.
Any certificate signed by or on behalf of any Selling Stockholder and
delivered to the Underwriters or to counsel for the Underwriters on the First
Closing Date or the Second Closing Date shall be deemed to be a representation
and warranty by such Selling Stockholder to each Underwriter as to the matters
covered thereby.
Such Selling Stockholder will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. ("▇▇▇▇▇▇▇ ▇▇▇▇▇") (which consent may be withheld
in its sole discretion), directly or indirectly, sell, offer, contract or grant
any option to sell (including without limitation any short sale), pledge,
transfer, establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of any shares of Common
Stock, options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Exchange Act, except that a 90-day period shall be used
rather than the 60-day period set forth therein) by the undersigned, or publicly
announce the undersigned's intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of trading on the
date 180 days after the date hereof; PROVIDED, HOWEVER, that such Selling
Stockholder may sell or otherwise transfer any such shares or securities (i) to
the Company, (ii) to an officer of the Company, provided such officer agrees in
writing with ▇▇▇▇▇▇▇ ▇▇▇▇▇ not to sell, offer, dispose of or otherwise transfer
any such shares or securities during such 180-day period without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (which consent may be withheld at the sole
discretion of ▇▇▇▇▇▇▇ ▇▇▇▇▇) and (iii) to immediate family members of such
Selling Stockholder as a bona fide gift, or to equity holders of such Selling
Stockholder, provided such persons agree in writing with ▇▇▇▇▇▇▇ ▇▇▇▇▇ not to
sell, offer, dispose of or otherwise transfer any such shares or securities
during such 180-day period without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇
(which consent may be withheld at the sole discretion of ▇▇▇▇▇▇▇ ▇▇▇▇▇).
In order to document the Underwriter's compliance with the reporting and
withholding provisions of the Internal Revenue Code of 1986, as amended, with
respect to the transactions herein contemplated, each of the Selling
Stockholders agrees to deliver to you prior to or on the First Closing Date, as
hereinafter defined, a properly completed and executed United States Treasury
Department Form W-8 or W-9 (or other applicable form of statement specified by
Treasury Department regulations in lieu thereof).
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company and the Selling Stockholders that the information set forth (a) on
the cover page of the Prospectus with respect to price, underwriting discount
and terms of the offering and (b) under "Underwriting" in the Prospectus was
furnished to the
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Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
SECTION 5. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Stockholders,
severally and not jointly, agree to sell to the Underwriters named in Schedule A
hereto, and the Underwriters agree, severally and not jointly, to purchase from
the Company and the Selling Stockholders, respectively, 400,000 Firm Shares from
the Company and the respective number of Firm Shares set forth opposite the
names of the Selling Stockholders in Schedule B hereto on the pricing terms as
set forth in the Pricing Agreement. The obligation of each Underwriter to the
Company shall be to purchase from the Company that number of full shares which
(as nearly as practicable, as determined by you) bears to 400,000, the same
proportion as the number of Shares set forth opposite the name of such
Underwriter in Schedule A hereto bears to the total number of Firm Shares to be
purchased by all Underwriters under this Agreement. The obligation of each
Underwriter to each Selling Stockholder shall be to purchase from such Selling
Stockholder the number of full shares which (as nearly as practicable, as
determined by you) bears to that number of Firm Shares set forth opposite the
name of such Selling Stockholder in Schedule B hereto, the same proportion as
the number of Shares set forth opposite the name of such Underwriter in Schedule
A hereto bears to the total number of Firm Shares to be purchased by all
Underwriters under this Agreement. The initial public offering price and the
purchase price and other pricing terms shall be set forth in the Pricing
Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act, (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section 12) following the date the Registration Statement becomes
effective (or, if the Company has elected to rely upon Rule 430A, the fourth
business day, if permitted under Rule 15c6-1 under the Exchange Act, (or the
third business day if required under Rule 15c6-1 under the Exchange Act) after
execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company, the Company and the Custodian will deliver to you at the offices of
counsel for the Company or through the facilities of The Depository Trust
Company for the accounts of the several Underwriters, certificates representing
the Firm Shares to be sold by them, respectively, against payment of the
purchase price therefor by delivery of federal or other immediately available
funds, by wire transfer or otherwise, to the Company and the Custodian. Such
time of delivery and payment is herein referred to as the "FIRST CLOSING DATE."
The certificates for the Firm Shares so to be delivered will be in such
denominations and registered in such names as you request by notice to the
Company and the Custodian prior to 10:00 A.M., Chicago Time, on the second
business day preceding the First Closing Date, and will be made available at the
Company's expense for checking and packaging by the Representatives at 10:00
A.M., Chicago Time, on the business day preceding the First Closing Date.
Payment for the Firm Shares so to be delivered shall be made at the time and in
the manner described above at the offices of counsel for the Company.
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In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company and the Selling Stockholders hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
309,150 Option Shares, on the same pricing terms as the Firm Shares, for use
solely in covering any overallotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the date of the
initial public offering upon notice by you to the Company and the Agents setting
forth the aggregate number of Option Shares as to which the Underwriters are
exercising the option, the names and denominations in which the certificates for
such shares are to be registered and the time and place at which such
certificates will be delivered. Such time of delivery (which may not be earlier
than the First Closing Date), being herein referred to as the "SECOND CLOSING
DATE," shall be determined by you, but if at any time other than the First
Closing Date, shall not be earlier than three nor later than 10 full business
days after delivery of such notice of exercise. The number of Option Shares to
be purchased from the Company and the Selling Stockholders shall be the
respective number of Option Shares set forth opposite the Company and the names
of the Selling Stockholders in Schedule B hereto at the price per share set
forth in the Pricing Agreement. The number of Option Shares to be purchased by
each Underwriter shall be determined by multiplying the number of Option Shares
to be sold by the Company and the Selling Stockholders pursuant to such notice
of exercise by a fraction, the numerator of which is the number of Firm Shares
to be purchased by such Underwriter as set forth opposite its name in Schedule A
and the denominator of which is the total number of Firm Shares (subject to such
adjustments to eliminate any fractional share purchases as you in your absolute
discretion may make). Certificates for the Option Shares will be made available
at the Company's expense for checking and packaging at 10:00 A.M., Chicago Time,
on the business day preceding the Second Closing Date. The manner of payment for
and delivery of the Option Shares shall be the same as for the Firm Shares as
specified in the preceding paragraph.
You have advised the Company and the Selling Stockholders that each
Underwriter has authorized you to accept delivery of its Shares, to make payment
and to give receipt therefor. You, individually and not as the Representatives
of the Underwriters, may make payment for any Shares to be purchased by any
Underwriter whose funds shall not have been received by you by the First Closing
Date or the Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any
obligation hereunder.
SECTION 6. COVENANTS OF THE COMPANY. The Company covenants and agrees
that:
(a) The Company will notify you and the Selling Stockholders
promptly of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of any
proceedings for that purpose, or of any notification of the suspension of
qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceedings for that purpose, and will also notify
you and the Selling
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Stockholders promptly of any request of the Commission for amendment or
supplement of the Registration Statement, of any preliminary prospectus or
of the Prospectus, or for additional information.
(b) The Company will give you and the Selling Stockholders notice
of its intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any Rule 462(b)
Registration Statement or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file at the Commission at the time the Registration
Statement became or becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b), and any term
sheet as contemplated by Rule 434) and will furnish you and the Selling
Stockholders with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which you or counsel for the Underwriters shall reasonably
object.
(c) If the Company elects to rely on Rule 434 of the Securities
Act, the Company will prepare a term sheet that complies with the
requirements of Rule 434. If the Company elects not to rely on Rule 434,
the Company will provide the Underwriters with copies of the form of
prospectus, in such numbers as the Underwriters may reasonably request, and
file with the Commission such prospectus in accordance with Rule 424(b) of
the Securities Act by the close of business in New York City on the second
business day immediately succeeding the date of the Pricing Agreement. If
the Company elects to rely on Rule 434, the Company will provide the
Underwriters with copies of the form of Rule 434 Prospectus, in such
numbers as the Underwriters may reasonably request, by the close of
business in New York City on the business day immediately succeeding the
date of the Pricing Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act any event occurs as a
result of which the Prospectus, including any amendments or supplements,
would include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the Securities Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to
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deliver a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Securities Act.
(e) Neither the Company nor any of the Subsidiaries will, prior
to the earlier of the Second Closing Date or termination or expiration of
the related option, incur any liability or obligation, direct or
contingent, or enter into any material transaction, other than in the
ordinary course of business, except as contemplated by the Prospectus.
(f) Neither the Company nor any of the Subsidiaries will acquire
any capital stock of the Company prior to the earlier of the Second Closing
Date or termination or expiration of the related option nor will the
Company declare or pay any dividend or make any other distribution upon the
Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the
related option, except in either case as contemplated by the Prospectus.
(g) Not later than October 15, 2004 the Company will make
generally available to its security holders an earnings statement (which
need not be audited) covering a period of at least 12 months beginning
after the effective date of the Registration Statement, which will satisfy
the provisions of the last paragraph of Section 11(a) of the Securities
Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus, the
Incorporated Documents and all amendments and supplements to any such
documents in each case as soon as available and in such quantities as you
may reasonably request, for the purposes contemplated by the Securities
Act.
(i) The Company will cooperate with the Underwriters in
qualifying or registering the Shares for sale under the blue sky laws of
such jurisdictions as you designate, and will continue such qualifications
in effect so long as reasonably required for the distribution of the
Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not currently qualified or where it would be
subject to taxation as a foreign corporation.
(j) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon as
practicable after the filing thereof, of each report filed by the Company
with the Commission, any securities exchange or the NASD; (ii) as
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soon as practicable after the release thereof, of each material press
release in respect of the Company; and (iii) as soon as available, of each
report of the Company mailed to stockholders. Any report or release
accessible to the public in electronic format on the website of the
Commission or the Company shall be deemed furnished hereunder.
(k) The Company will use the net proceeds received by it from the
sale of the Shares being sold by it in the manner specified in the
Prospectus.
(l) If, at the time of effectiveness of the Registration
Statement, any information shall have been omitted therefrom in reliance
upon Rule 430A and/or Rule 434, then immediately following the execution of
the Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A, Rule 424(b)
and/or Rule 434, copies of an amended Prospectus, or, if required by such
Rule 430A and/or Rule 434, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file, or transmit for
filing, a Rule 462(b) Registration Statement not later than the date of the
execution of the Pricing Agreement. If a Rule 462(b) Registration Statement
is filed, the Company shall make payment of, or arrange for payment of, the
additional registration fee owing to the Commission required by Rule 111.
(m) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will comply with all registration,
filing and reporting requirements of the Exchange Act and the Nasdaq
National Market.
(n) During the period of 180 days following the date of the
Prospectus, the Company will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ (which consent may be withheld at the sole discretion of
▇▇▇▇▇▇▇ ▇▇▇▇▇), directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any shares
of Common Stock, options or warrants to acquire shares of the Common Stock
or securities exchangeable or exercisable for or convertible into shares of
Common Stock (other than as contemplated by this Agreement with respect to
the Shares); PROVIDED, HOWEVER, that the Company may: (i) issue shares of
its Common Stock or options to purchase its Common Stock, or Common Stock
upon exercise of options, pursuant to any stock option, stock bonus or
other stock plan or arrangement described in the Prospectus; (ii) file one
or more registration statements on Form S-8 covering shares of Common Stock
issuable pursuant to any stock option or stock purchase plan described in
the Prospectus; or (iii) issue shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock,
as
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payment for all or part of the purchase price of an acquisition by the
Company of another company or business, provided the total number of shares
of Common Stock issuable in connection with such acquisition (including
shares issuable upon exchange, exercise or conversion of any other
securities of the Company issued in connection with such acquisition) does
not exceed 15% of the number of shares of Common Stock outstanding
immediately prior to such acquisition.
SECTION 7. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company agrees to pay (i) all costs,
fees and expenses (other than legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution of the Registration Statement, each
preliminary prospectus and the Prospectus (including all Incorporated Documents,
exhibits and financial statements) and all amendments and supplements provided
for herein, this Agreement, the Pricing Agreement and a blue sky memorandum
relating to the Shares, (ii) all costs, fees and expenses (including legal fees
not to exceed $3,000 and disbursements of counsel for the Underwriters) incurred
by the Underwriters in connection with qualifying or registering all or any part
of the Shares for offer and sale under blue sky laws, including the preparation
of a blue sky memorandum relating to the Shares and clearance of such offering
with the NASD, and (iii) all fees and expenses of the Company's transfer agent,
printing of the certificates for the Shares and all transfer taxes, if any, with
respect to the sale and delivery of the Shares to the several Underwriters.
The provisions of this Section shall not affect any agreement which the
Company and the Selling Stockholders may make for the allocation or sharing of
such expenses and costs.
SECTION 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company and the Selling Stockholders herein set forth as of the date hereof
and as of the First Closing Date or the Second Closing Date, as the case may be,
to the accuracy of the statements of officers of the Company made pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the
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date hereof; and prior to the First Closing Date or the Second Closing
Date, as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or, to the knowledge
of the Company, the Selling Stockholders or you, shall be contemplated by
the Commission. If the Company has elected to rely upon Rule 430A and/or
Rule 434, the information concerning the initial public offering price of
the Shares and price-related information shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within the prescribed period
and the Company will provide evidence satisfactory to the Representatives
of such timely filing (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been
transmitted to the Commission for filing and become effective within the
prescribed time period and, prior to the First Closing Date, the Company
shall have provided evidence of such filing and effectiveness in accordance
with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue
sky laws of such states as shall have been specified by the
Representatives.
(c) The legality and sufficiency of the authorization, issuance
and sale or transfer and sale of the Shares hereunder, the validity and
form of the certificates representing the Shares, the execution and
delivery of this Agreement and the Pricing Agreement, and all corporate
proceedings and other legal matters incident thereto, and the form of the
Registration Statement and the Prospectus (except financial statements)
shall have been approved by counsel for the Underwriters exercising
reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or the Subsidiaries, whether or not arising in the ordinary
course of business, which, in the judgment of the Representatives, makes it
impractical or inadvisable to proceed with the public offering or purchase
of the Shares as contemplated hereby.
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(f) There shall have been furnished to you, as Representatives of
the Underwriters, on the First Closing Date or the Second Closing Date, as
the case may be, except as otherwise expressly provided below:
(i) An opinion of ▇▇▇▇▇ ▇▇▇▇ LLP, counsel for the Company
and for the Selling Stockholders, addressed to you and dated the
First Closing Date or the Second Closing Date, as the case may be,
to the effect that:
(1) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of The Commonwealth of Massachusetts;
(2) The Company has corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into
and perform its obligations under this Agreement;
(3) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
the States of California, Pennsylvania, Texas and Utah and in
the District of Columbia;
(4) Each of CRA Security Corporation and NeuCo, Inc.
has been duly organized and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its organization, has the power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus and, to the best
knowledge of such counsel, is duly qualified to transact
business and is in good standing in the Commonwealth of
Massachusetts;
(5) The Company is the record owner of all of the
outstanding capital stock of CRA Security Corporation, and to
the best knowledge of such counsel, such stock is owned free
and clear of any perfected encumbrances or security
interests; all of the issued and outstanding capital stock of
each Subsidiary has been duly authorized, validly issued and
is fully paid and nonassessable;
(6) Immediately prior to the issuance and sale of the
Shares pursuant to this Agreement on the date hereof, the
authorized capital stock of the Company was comprised of
25,000,000 shares of Common Stock, without par value, and
1,000,000 shares of Preferred Stock, without par value, none
of which were outstanding of record. The capital stock of the
Company (including the
-22-
Common Stock) conforms to the descriptions thereof set forth
in the Prospectus under the heading "Description of Capital
Stock." The form of certificate used to evidence the Common
Stock is in due and proper form and complies with all
applicable requirements of the charter and by-laws of the
Company and the Business Corporation Law of The Commonwealth
of Massachusetts. The description of the Company's stock
option and stock purchase plans, set forth in the Prospectus
is an accurate and fair description in all material respects
of such plans;
(7) No stockholder of the Company or any other person
has any preemptive right, right of first refusal or other
similar right to subscribe for or purchase securities of the
Company arising (i) by operation of the charter or by-laws of
the Company or the Business Corporation Law of The
Commonwealth of Massachusetts or (ii) to the best knowledge
of such counsel, otherwise;
(8) The execution and delivery of this Agreement and
the Pricing Agreement by the Company and the performance by
the Company of its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action, and
this Agreement and the Pricing Agreement have been duly
executed and delivered by and on behalf of the Company, and
are legal, valid and binding agreements of the Company,
enforceable against the Company in accordance with their
respective terms, except as rights to indemnification or
contribution thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights
generally or by general equitable principles;
(9) The Shares to be purchased by the Underwriters
from the Company have been duly authorized for issuance and
sale pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against
payment of the consideration set forth therein, will be
validly issued, fully paid and nonassessable;
(10) Based solely on the oral advice of the staff of
the Commission, the Registration Statement has been declared
effective by the Commission under the Securities Act. To the
best knowledge of such counsel, no stop order suspending the
effectiveness of either the Registration Statement or the
Rule 462(b) Registration Statement, if any, has been issued
under the Securities Act and, to the best knowledge of such
counsel, no proceedings for such purpose have been instituted
or are pending or are contemplated or threatened by the
-23-
Commission. Any required filing of the Prospectus under Rule
424(b) under the Securities Act has been made in the manner
and within the time period required by such Rule 424(b);
(11) The Registration Statement, the Prospectus and
each amendment or supplement to the Registration Statement
and the Prospectus (including any document incorporated by
reference therein), as of their respective effective or issue
dates (other than the financial statements and supporting
schedules included or incorporated by reference therein, as
to which no opinion need be rendered), comply as to form in
all material respects with the applicable requirements of the
Securities Act and the Exchange Act. Such counsel may state
that it is rendering no opinion as to the accuracy of any
financial or accounting data contained therein;
(12) The Shares are eligible for trading on the Nasdaq
National Market;
(13) The statements (i) in the Prospectus under the
captions "Description of Capital Stock," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," and
"Business--Legal Proceedings," and (ii) in Item 15 of the
Registration Statement, insofar as such statements constitute
matters of law, summaries of legal matters, the Company's
charter or by-law provisions, documents or legal proceedings,
or legal conclusions, have been reviewed by such counsel and
fairly present and summarize, in all material respects, the
matters referred to therein;
(14) To the best knowledge of such counsel, there are
no legal or governmental actions, suits or proceedings
pending or threatened which are required to be disclosed in
the Registration Statement, other than those disclosed
therein;
(15) To the best knowledge of such counsel, there are
no Existing Instruments required to be described or referred
to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto; and
the descriptions thereof and references thereto are correct
in all material respects;
(16) No consent, approval, authorization or other
order of, or registration or filing with, any court or other
governmental authority or agency,
-24-
is required for the execution, delivery and performance by
the Company of the Underwriting Agreement and consummation by
the Company of the transactions contemplated thereby and by
the Prospectus, except as required under the Securities Act
or applicable state securities or blue sky laws and from the
NASD;
(17) The execution and delivery of this Agreement by
the Company and the performance by the Company of its
obligations thereunder (other than performance by the Company
of its obligations under the indemnification and contribution
sections of this Agreement, as to which no opinion need be
rendered) (i) will not result in any violation of the
provisions of the charter, bylaws or other organizational
documents of the Company; (ii) will not constitute a breach
of, or Default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, any agreement filed as an
exhibit to any annual, quarterly or current report
incorporated by reference in the Prospectus; or (iii) to the
best knowledge of such counsel, will not result in any
violation of any law, administrative regulation or
administrative or court decree applicable to the Company;
(18) The Company is not, and after receipt of payment
for the Shares sold by it will not be, an "investment
company" within the meaning of the Investment Company Act;
(19) To the best knowledge of such counsel, there are
no persons with registration or other similar rights to have
any equity or debt securities registered for sale under the
Registration Statement or included in the offering
contemplated by the Underwriting Agreement, except for such
rights as have been duly waived or complied with;
(20) This Agreement and the Pricing Agreement have
been duly executed and delivered by or on behalf of, and are
valid and binding agreements of, each Selling Stockholder,
enforceable against each Selling Stockholder in accordance
with their respective terms, except as rights to
indemnification or contribution thereunder may be limited by
applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles;
(21) The execution and delivery by each Selling
Stockholder of, and the performance by such Selling
Stockholder of his or her obligations under, this
-25-
Agreement, the Pricing Agreement and the Custody Agreement
and his or her Power of Attorney will not, to the best of
such counsel's knowledge, violate or contravene any provision
of applicable law or regulation;
(22) Each Selling Stockholder is the sole record owner
of all of the Shares which may be sold by such Selling
Stockholder under this Agreement and, to the best of such
counsel's knowledge, has the legal right and power to enter
into this Agreement and the Custody Agreement and his or her
Power of Attorney, to sell, transfer and deliver all of the
Shares which may sold by such Selling Stockholder under this
Agreement and to comply with his or her other obligations
under this Agreement, the Custody Agreement and his or her
Power of Attorney;
(23) Each of the Custody Agreement and the Power of
Attorney of each Selling Stockholder has been duly executed
and delivered by or on behalf of such Selling Stockholder and
is a valid and binding agreement of such Selling Stockholder,
enforceable against such Selling Stockholder in accordance
with its terms, except as rights to indemnification or
contribution thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights
generally or by general equitable principles;
(24) Assuming that the Underwriters purchase the
Shares which are sold by such Selling Stockholder pursuant to
this Agreement for value and without notice of any adverse
claim (within the meaning of Section 8-303 of Chapter 106 of
the Massachusetts General Laws) to the Shares, the delivery
of such Shares pursuant to this Agreement will pass good and
valid title to such Shares, free and clear of any such
adverse claim; and
(25) To the best of such counsel's knowledge, no
consent, approval, authorization or other order of, or
registration or filing with, any court or governmental
authority or agency, is required for the consummation by such
Selling Stockholder of the transactions contemplated in this
Agreement, except as required under the Securities Act or
applicable state securities or blue sky laws, and from the
NASD.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants
for the Company and with representatives of the Underwriters at
-26-
which the contents of the Registration Statement and the Prospectus, and
any supplements or amendments thereto, and related matters were discussed
and, 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 or the Prospectus (other than as
specified above), and any supplements or amendments thereto, and (except as
specifically set forth in this opinion) have not made any independent
confirmation or verification thereof, on the basis of the foregoing (and
relying, as to materiality, upon the statements of officers and other
representatives of the Company), nothing has come to their attention which
would lead them to believe either that the Registration Statement or any
amendments thereto, at the time the Registration Statement or such
amendments became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the Second
Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
express no belief as to the financial statements or schedules or other
financial or statistical data derived therefrom, included in the
Registration Statement or the Prospectus or any amendments or supplements
thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than those of
The Commonwealth of Massachusetts, the General Corporation Law of the State
of Delaware and the federal law of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may
be, shall be satisfactory in form and substance to the Representatives,
shall expressly state that the Underwriters may rely on such opinion as if
it were addressed to them and shall be furnished to the Representatives) of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters; PROVIDED, HOWEVER, that such
counsel shall further state that they believe that they and the
Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
(ii) Such opinion or opinions of Winston & ▇▇▇▇▇▇ LLP,
counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to such matters
as may be reasonably requested by the Underwriters, and the Company
shall have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they reasonably request
for the purpose of enabling them to pass upon such matters.
-27-
(iii) A certificate of the chief executive officer and
the principal financial officer of the Company, dated the First
Closing Date or the Second Closing Date, as the case may be, to the
effect that:
(1) the representations and warranties of the
Company set forth in Section 2 of this Agreement are true
and correct as of the date of this Agreement and as of the
First Closing Date or the Second Closing Date, as the case
may be, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied at or prior to such Closing Date; and
(2) the Commission has not issued an order
preventing or suspending the use of the Prospectus or any
preliminary prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the best knowledge of the respective signers,
no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty of the
Company as to the facts required in the immediately foregoing clauses (1)
and (2) of this subparagraph to be set forth in said certificate.
(iv) A certificate of each Selling Stockholder dated the
First Closing Date or the Second Closing Date, as the case may be, to
the effect that the representations, warranties and covenants of such
Selling Stockholder set forth in Section 3 of this Agreement are true
and correct as of such date and the Selling Stockholder has complied
with all the agreements and satisfied all the conditions on the part
of such Selling Stockholder to be performed or satisfied at or prior
to such date.
(v) At the time the Pricing Agreement is executed and
also on the First Closing Date or the Second Closing Date, as the case
may be, there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Ernst & Young LLP,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, to the effect set forth in Schedule C. There
shall not have been any change or decrease specified in the letters
referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with the
public offering or purchase of the Shares as contemplated hereby.
-28-
(vi) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Winston & ▇▇▇▇▇▇ LLP, counsel for the Underwriters, which approval shall not
be unreasonably withheld. The Company shall furnish you with such manually
signed or conformed copies of such opinions, certificates, letters and documents
as you reasonably request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company and the Selling
Stockholders without liability on the part of any Underwriter or the Company or
any Selling Stockholder, except for the expenses to be paid or reimbursed by the
Company pursuant to Sections 7 and 9 hereof and except to the extent provided in
Section 11 hereof.
SECTION 9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company or the
Selling Stockholders to perform any agreement herein or to comply with any
provision hereof, unless such failure to satisfy such condition or to comply
with any provision hereof is due to the default or omission of any Underwriter,
the Company agrees to reimburse you upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by you in connection with the proposed purchase and the sale
of the Shares. Any such termination shall be without liability of any party to
any other party except that the provisions of this Section, Section 7 and
Section 11 shall at all times be effective and shall apply.
SECTION 10. EFFECTIVENESS OF REGISTRATION STATEMENT. You, the Company and
the Selling Stockholders will use your, its and their reasonable best efforts to
cause the Registration Statement to become effective, if it has not yet become
effective, and to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
SECTION 11. INDEMNIFICATION. (a) The Company and each Selling
Stockholder, jointly and severally, agree to indemnify and hold harmless each
Underwriter, its officers and employees, and each person, if any, who controls
any Underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter or such controlling person may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company and/or such Selling Stockholders, as the case may be), 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
-29-
in the Registration Statement, including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to Rule 430A
and/or Rule 434, if applicable, any preliminary prospectus, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
will reimburse each Underwriter and each such controlling person for any legal
or other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that neither the Company nor any
Selling Stockholder will be liable in any such case to the extent that (i) any
such loss, claim, damage or liability (or action in respect thereof) 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, the Prospectus or any amendment or supplement thereto 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
therein; or (ii) if such statement or omission was contained or made in any
preliminary prospectus and corrected in the Prospectus and (1) any such loss,
claim, damage or liability suffered or incurred by any Underwriter (or any
person who controls any Underwriter) resulted from an action, claim or suit by
any person who purchased Shares which are the subject thereof from such
Underwriter in the offering and (2) such Underwriter failed to deliver or
provide a copy of the Prospectus to such person at or prior to the confirmation
of the sale of such Shares in any case where such delivery is required by the
Securities Act. In addition to their other obligations under this Section 11(a),
the Company and the Selling Stockholders agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(a), they will
reimburse the Underwriters on a monthly basis for all reasonable legal and other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Company's and the Selling Stockholders' obligation to reimburse the Underwriters
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. This indemnity
agreement will be in addition to any liability which the Company and the Selling
Stockholders may otherwise have.
Without limiting the full extent of the Company's agreement to indemnify
each Underwriter, as herein provided, the liability of each Selling Stockholder
under the indemnity and reimbursement agreements in this Section, or otherwise
for a breach of such Selling Stockholder's representations or warranties set
forth in this Agreement, shall be limited to an amount equal to the public
offering price of the Shares sold by such Selling Stockholder, less the
underwriting discount, as set forth on the front cover page of the Prospectus.
The Company and the Selling Stockholders may agree, among themselves and without
limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
-30-
(b) Each Underwriter will severally (but not jointly) indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement, each Selling Stockholder and each person, if any, who
controls the Company or any Selling Stockholder within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer, Selling
Stockholder or controlling person may become subject under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any preliminary
prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use in the preparation thereof; and
will reimburse any legal or other expenses reasonably incurred by the Company,
or any such director, officer, Selling Stockholder or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. In addition to their other obligations under this Section
11(b), the Underwriters agree that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 11(b), they will reimburse the Company and the Selling
Stockholders on a monthly basis for all reasonable legal and other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company and the Selling Stockholders
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(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 an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
PROVIDED, HOWEVER, if the defendants in any such action include both the
indemnified party and the indemnifying
-31-
party and the indemnified party shall have reasonably concluded that there may
be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, or
the indemnified and indemnifying parties may have conflicting interests which
would make it inappropriate for the same counsel to represent both of them, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defense and otherwise to participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defense in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Representatives in the case of paragraph (a) representing all indemnified
parties who are parties to such action), (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party shall have authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
Selling Stockholders and the Underwriters from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, the Selling Stockholders and the Underwriters in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
respective relative benefits received by the Company, the Selling Stockholders
and the Underwriters shall be deemed to be in the same proportion, in the case
of the Company and the Selling Stockholders, as the total price paid to the
Company and the Selling Stockholders for the Shares by the Underwriters (net of
underwriting discount but before deducting expenses), and, in the case of the
Underwriters, as the underwriting discount received by them bears to the total
of such amounts paid to the Company and the Selling Stockholders and received by
the Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault
-32-
of the Company, the Selling Stockholders and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, by the Selling
Stockholders or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section,
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, nor
shall any Selling Stockholder be required to contribute any amount in excess of
the public offering price of the Shares sold by such Selling Stockholder, less
the underwriting discount, as set forth on the front cover page of the
Prospectus. 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. The
Underwriters' obligations to contribute pursuant to this Section are several in
proportion to their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
SECTION 12. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Company and the Selling Stockholders to sell and
deliver the Shares hereunder, and of each Underwriter to purchase the Shares
hereunder, that, except as hereinafter in this paragraph provided, each of the
Underwriters shall purchase and pay for all Shares agreed to be purchased by
such Underwriter hereunder upon tender to the Representatives of all such Shares
in accordance with the terms hereof. If any Underwriter or Underwriters default
in their obligations to purchase Shares hereunder on the First Closing Date and
the aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the Representatives may make arrangements satisfactory to the Company and
the Selling Stockholders for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
date the nondefaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the Shares which such
defaulting Underwriters agreed but failed to purchase on such date. If any
Underwriter or Underwriters so default
-33-
and the aggregate number of Shares with respect to which such default or
defaults occur is more than the above percentage and arrangements satisfactory
to the Representatives and the Company and the Selling Stockholders for the
purchase of such Shares by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company or the Selling Stockholders, except for
the expenses to be paid by the Company pursuant to Section 7 hereof and except
to the extent provided in Section 11 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement, the
term "UNDERWRITER" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
SECTION 13. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 7, 9, 11 and 14 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall become effective at such hour on
the business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company and the Selling Stockholders or by release of any Shares
for sale to the public. For the purposes of this Section, the Shares shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Shares or upon the release by you of
telegrams (i) advising the Underwriters that the Shares are released for public
offering, or (ii) offering the Shares for sale to securities dealers, whichever
may occur first.
SECTION 14. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to
you and the Selling Stockholders, or by you by notice to the Company and
the Selling Stockholders, at any time prior to the time this Agreement
shall become effective as to all its provisions, and any such termination
shall be without liability on the part of the Company or the Selling
Stockholders to any Underwriter (except for the expenses to be paid or
reimbursed pursuant to Section 7 hereof and except to the extent provided
in Section 11 hereof) or of any Underwriter to the Company or the Selling
Stockholders (except to the extent provided in Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the
First Closing Date, and the option referred to in Section 5, if exercised,
may be cancelled at any time prior to the
-34-
Second Closing Date, if (i) trading in securities on the New York Stock
Exchange shall have been suspended or minimum prices shall have been
established on such exchange, or (ii) a banking moratorium shall have been
declared by Illinois, New York, or United States authorities, or (iii)
there shall have been any change in financial markets or in political,
economic or financial conditions which, in the opinion of the
Representatives, either renders it impracticable or inadvisable to proceed
with the offering and sale of the Shares on the terms set forth in the
Prospectus or materially and adversely affects the market for the Shares,
or (iv) there shall have been an outbreak of major armed hostilities
between the United States and any foreign power which in the opinion of the
Representatives makes it impractical or inadvisable to offer or sell the
Shares. Any termination pursuant to this paragraph (b) shall be without
liability on the part of any Underwriter to the Company or the Selling
Stockholders (except to the extent provided in Section 11 hereof) or on the
part of the Company or the Selling Stockholders to any Underwriter or the
Selling Stockholders (except for expenses to be paid or reimbursed pursuant
to Section 7 hereof and except to the extent provided in Section 11
hereof).
SECTION 15. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
principals, members, officers or directors or any controlling person, or the
Selling Stockholders, as the case may be, and will survive delivery of and
payment for the Shares sold hereunder.
SECTION 16. NOTICES. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to Winston & ▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: R. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.; if sent to
the Company will be mailed, delivered or telegraphed and confirmed to the
Company at its corporate headquarters with a copy to ▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.; and
if sent to the Selling Stockholders will be mailed, delivered or telegraphed and
confirmed to the Agents and the Custodian at such address as they have
previously furnished to the Company and the Representatives, with a copy to
▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
SECTION 17. SUCCESSORS. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section 11,
and no other person will have any right or obligation hereunder. The term
"SUCCESSORS" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
-35-
SECTION 18. REPRESENTATION OF UNDERWRITERS. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 19. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 20. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
-36-
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company, the Selling Stockholders and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇ RIVER ASSOCIATES INCORPORATED
By:
---------------------------
President and Chief Executive Officer
EACH OF THE SELLING STOCKHOLDERS
By:
---------------------------
Agent and Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
Acting as Representatives of the
Several Underwriters named in
Schedule A
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
By:
--------------------------------
Principal
-37-
SCHEDULE A
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
---------------
TOTAL
---------------
SCHEDULE B
Number of Number of
Firm Shares Option Shares
to be Sold to be Sold
----------- -------------
Company 400,000
SELLING STOCKHOLDERS:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 92,725
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 100,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 96,583
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 100,000
▇▇▇▇ ▇▇▇▇▇▇▇ 11,922
C. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 36,312
▇▇▇▇ ▇▇▇▇▇▇ 46,783
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 27,700
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 10,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 100,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 63,869
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 67,620
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 62,400
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 33,046
Bridger ▇. ▇▇▇▇▇▇▇▇ 40,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 46,600
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 41,600
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 37,638
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Irrevocable Trust 1998 50,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 26,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 29,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 20,000
▇▇▇▇▇▇ ▇. ▇▇▇▇ 5,773
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 6,500
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Irrevocable Trust - 1998 32,275
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 30,000
▇▇▇▇ ▇▇▇▇▇ 26,000
W. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 28,720
▇▇▇▇ Family LLC 23,920
▇▇▇▇▇▇ ▇▇▇▇▇ 23,920
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 23,920
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee of the J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Irrevocable Trust, 2000 30,500
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 20,700
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 25,820
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 23,853
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee of the Salop Irrevocable GST - Exempt Trust 1998 24,327
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee of the Salop Irrevocable GST - Taxable Trust 1998 24,327
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 20,234
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 17,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 8,321
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 11,236
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 8,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇ 7,618
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee of the ▇▇▇▇▇▇ Children's Family Trust 11,591
▇▇▇▇▇▇▇ ▇▇▇▇▇, as Trustee of the Besen Family Trust 10,400
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,400
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 15,900
▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Irrevocable Trust 1998 11,044
▇▇▇▇ ▇▇▇▇▇▇▇ 6,567
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 5,200
The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ GST Trust 4,818
The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ GST Trust 2,500
The ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ GST Trust 4,818
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee of the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Trust DTD 8/21/90 5,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee of the ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Trust DTD 12/14/91 5,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Trust DTD 8/21/90 5,000
1,661,000
-----------
TOTAL 2,061,000 309,150
=========== =============
-2-
SCHEDULE C
Comfort Letter of Ernst & Young LLP
(1) They are independent public accountants with respect to the Company
and the Subsidiaries within the meaning of the Securities Act.
(2) In their opinion the consolidated financial statements of the Company
and the Subsidiaries included or incorporated by reference in the Registration
Statement and the consolidated financial statements of the Company from which
the information presented under the caption "Selected Consolidated Financial
Data" has been derived which are stated therein to have been examined by them
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and the Subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to November 30,
2002, a reading of minutes of meetings of the stockholders and directors of the
Company and the Subsidiaries since November 30, 2002, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
the Subsidiaries (with an indication of the date thereof) and other procedures
as specified in such letter, nothing came to their attention which caused them
to believe that (i) the unaudited consolidated financial statements of the
Company and the Subsidiaries included or incorporated by reference in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the Exchange
Act or that such unaudited financial statements are not fairly presented in
accordance with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement, and (ii) at a specified date not more than five
days prior to the date thereof in the case of the first letter and not more than
two business days prior to the date thereof in the case of the second and third
letters, there was any change in the capital stock or long-term debt or
short-term debt (other than normal payments) of the Company and the Subsidiaries
on a consolidated basis or any decrease in consolidated net current assets or
consolidated stockholders' equity as compared with amounts shown on the latest
unaudited balance sheet of the Company included in the Registration Statement or
for the period from the date of such balance sheet to a date not more than five
days prior to the date thereof in the case of the first letter and not more than
two business days prior to the date thereof in the case of the second and third
letters, there were any decreases, as compared with the corresponding period of
the prior year, in consolidated net sales, consolidated income before income
taxes or in the total or per share amounts of consolidated net income except, in
all instances, for changes or decreases which the Prospectus discloses have
occurred or may occur or which are set forth in such letter.
(4) They have carried out specified procedures, which have been agreed to
by the Representatives, with respect to certain information in the Prospectus
specified by the Representatives, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company and the Subsidiaries.
-2-
EXHIBIT A
▇▇▇▇▇▇▇ RIVER ASSOCIATES INCORPORATED
2,061,000 Shares Common Stock(2)
PRICING AGREEMENT
August ___, 2003
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
As Representatives of the Several
Underwriters
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the
Underwriting Agreement dated August ____, 2003
(the "
UNDERWRITING AGREEMENT") relating to the sale by the Company and the
Selling Stockholders and the purchase by the several Underwriters, for whom
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C., ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC are acting as representatives (the "REPRESENTATIVES"), of
the above Shares. All terms herein shall have the definitions contained in the
Underwriting Agreement except as otherwise defined herein.
Pursuant to Section 5 of the
Underwriting Agreement, the Company and each
of the Selling Stockholders agree with the Representatives as follows:
1. The initial public offering price per share for the Shares
shall be $_______________.
2. The purchase price per share for the Shares to be paid by
the Underwriters shall be $________, being an amount equal to the initial
public offering price set forth above less
----------
(2) Plus an option to acquire up to 309,150 additional shares to cover
overallotments.
$________ per share; provided, however, that with respect to Shares that
are currently represented by options that will be exercised concurrent with
the closing of the offering, the purchase price per share for such Shares
to be paid by the Underwriters shall be the initial public offering price
set forth above.
Schedule A is amended as follows:
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company, the Selling Stockholders and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇ RIVER ASSOCIATES INCORPORATED
By:
--------------------------------
President and Chief Executive Officer
EACH OF THE SELLING STOCKHOLDERS
By:
--------------------------------
Agent and Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
Acting as Representatives of the
Several Underwriters
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
By:
--------------------------------
Principal
-2-