EXHIBIT 1.1
2,000,000 SHARES/1/
TALX CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
OCTOBER __, 1996
FIRST ALBANY CORPORATION
PRINCIPAL FINANCIAL SECURITIES, INC.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o First Albany Corporation
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▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
TALX Corporation, a Missouri corporation (the "Company"), proposes to sell
to the several Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 2,000,000 shares (the "Firm Shares") of Common Stock, $0.01 par
value (the "Common Stock"), of the Company. In addition, the Company has granted
to the several Underwriters an option to purchase up to 300,000 additional
shares of Common Stock, on the terms and for the purposes set forth in Section 3
hereof (such 300,000 shares being referred to hereinafter as the "Option
Shares"). The Firm Shares and any Option Shares purchased pursuant to this
Underwriting Agreement are herein collectively called the "Securities."
References to the "Company" herein, unless the context requires otherwise, refer
to the Company and its subsidiaries as a consolidated operation.
The Company hereby confirms its agreement with respect to the sale of the
Securities to the several Underwriters, for whom you are acting as
Representatives (the "Representatives").
1. Registration Statement. A registration statement on Form S-1 (File
No. 333-________) with respect to the Securities, including a prospectus subject
to completion, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations ("Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has been filed with the Commission;
such amendments to such registration statement, such amended prospectuses
subject to completion and such abbreviated registration statements pursuant to
Rule 462(b) of the Rules and Regulations as may have been required prior to the
date hereof have been similarly prepared and filed with the Commission; and the
Company will file such additional amendments to the registration statement, such
amended prospectuses subject to completion and such abbreviated registration
statements as may hereafter be required. Copies of such registration statement
and
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/1/ Plus an option to purchase up to 300,000 additional shares to cover
over-allotments.
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amendments, of each related prospectus subject to completion sent or given to
any person prior to the effective date of such registration statement, including
all documents incorporated by reference therein, and of any abbreviated
registration statement filed pursuant to Rule 462(b) have been delivered to you.
If the registration statement relating to the Securities has been
declared effective under the Act by the Commission, the Company will, pursuant
to Rule 424(b) of the Rules and Regulations or by means of a post-effective
amendment to the registration statement that includes a final form of
prospectus, prepare and promptly file with the Commission the information
omitted from the registration statement pursuant to Rule 430A(a) of the Rules
and Regulations or, if First Albany Corporation, on behalf of the several
Underwriters, shall have agreed to the utilization of a term sheet pursuant to
and satisfying the requirements of Rule 434 of the Rules and Regulations ("Term
Sheet"), the information required to be included in such Term Sheet. If the
registration statement relating to the Securities has not been declared
effective under the Act by the Commission, the Company will prepare and promptly
file an amendment to the registration statement, including a final form of
prospectus, or, if First Albany Corporation, on behalf of the several
Underwriters, shall have agreed to the utilization of a Term Sheet, including
the information required to be included in such Term Sheet. The Company will
file any such Term Sheet with the Commission in a timely manner pursuant to Rule
424(b). The term "Registration Statement" as used herein shall mean such
registration statement, including financial statements, schedules and exhibits,
in the form in which it became or becomes, as the case may be, effective
(including, if the Company omitted information from the registration statement
pursuant to Rule 430A(a) or if the Company utilizes a Term Sheet, the
information deemed to be a part of the registration statement at the time it
became effective pursuant to Rule 430A(b) or Rule 434(d)) and, in the event of
any amendment thereto or the filing of any abbreviated registration statement
pursuant to Rule 462(b) relating thereto after the effective date of such
registration statement, shall also mean (from and after the effectiveness of
such amendment or the filing of such abbreviated registration statement) such
registration statement as so amended, together with any such abbreviated
registration statement. The term "Prospectus" as used herein shall mean the
prospectus relating to the Securities included in the Registration Statement at
the time it became or becomes, as the case may be, effective (including, if the
Company omitted information from the Registration Statement pursuant to Rule
430A(a), the information deemed to be a part of the Registration Statement at
the time it became effective pursuant to Rule 430A(b)); provided, however, that
if in reliance on Rule 434 and with the consent of First Albany Corporation, on
behalf of the several Underwriters, the Company shall have provided to the
Underwriters for use in connection with the offering of the Securities a Term
Sheet, the term "Prospectus" shall mean the "prospectus subject to completion"
(as defined in Rule 434(g)) last provided to the Underwriters by the Company and
circulated by the Underwriters to all prospective purchasers of the Securities,
together with such Term Sheet (including the information deemed to be a part of
the Registration Statement at the time it became effective pursuant to Rule
434(d)). Notwithstanding the foregoing, if any revised prospectus shall be
provided to the Underwriters by the Company for use in connection with the
offering of the Securities that differs from the prospectus referred to in the
immediately preceding sentence (whether or not such revised prospectus is
required to be filed with the Commission pursuant to Rule 424(b)), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriters for such use. If in reliance on Rule 434
and with the consent of First Albany Corporation, on behalf of the several
Underwriters, the Company shall have provided to the Underwriters for use in
connection with the offering of the Securities a Term Sheet, the Prospectus and
the Term Sheet, taken together, will not be materially different from the
prospectus in the Registration Statement. The term "Preliminary Prospectus" as
used herein means (i) any prospectus subject to completion included in the
Registration Statement prior to the time it became or becomes, as the case may
be, effective under the Act, except that if any prospectus subject to completion
filed by the Company with the Commission pursuant to Rule 424(a) or any other
prospectus subject to completion provided to the Underwriters by the Company for
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use in connection with the offering of the Securities (whether or not required
to be filed by the Company with the Commission pursuant to Rule 424(a)) differs
from the prospectus subject to completion included in the Registration Statement
prior to the time it became or becomes, as the case may be, effective under the
Act, the term "Preliminary Prospectus" shall refer to such differing prospectus
subject to completion from and after the time such prospectus subject to
completion is filed with the Commission or transmitted to the Commission for
filing pursuant to Rule 424(a) or from and after the time it is first provided
to the Underwriters by the Company for such use, and (ii) any prospectus subject
to completion as described in Rule 430A or Rule 434(g).
2. Representations and Warranties of the Company.
---------------------------------------------
(a) The Company represents and warrants to, and agrees with, the
several Underwriters as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and each Preliminary Prospectus, at
the time of filing thereof (or, if not filed, at the time it is first provided
to the Underwriters by the Company for use in connection with the offering of
the Securities), did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; except that the foregoing shall not apply to statements in
or omissions from any Preliminary Prospectus in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of you, or by
or on behalf of any Underwriter through you, specifically for use in the
preparation thereof.
(ii) As of the time the Registration Statement (or any post-
effective amendment thereto) is or was declared effective by the Commission,
upon the filing or first delivery to the Underwriters of the Prospectus (or any
supplement to the Prospectus) and at the First Closing Date and Second Closing
Date (as hereinafter defined), (A) the Registration Statement and Prospectus (in
each case, as so amended and/or supplemented) will conform or conformed in all
material respects to the requirements of the Act and the Rules and Regulations,
(B) the Registration Statement (as so amended) will not or did not include 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 not misleading,
and (C) the Prospectus (as so supplemented) will not or did not include 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 in which they are or were made, not misleading; except that the
foregoing shall not apply to statements in or omissions from any such document
in reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of you, or by or on behalf of any Underwriter through
you, specifically for use in the preparation thereof. If the Registration
Statement has been declared effective by the Commission, no stop order
suspending the effectiveness of the Registration Statement has been issued, and
no proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission.
(iii) The consolidated financial statements of the Company,
together with the notes thereto, set forth in the Registration Statement and
Prospectus comply in all material respects with the requirements of the Act and
fairly present the financial condition of the Company as of the dates indicated
and the results of operations and changes in stockholders' equity and cash flows
for the periods therein specified in conformity with generally accepted
accounting principles as in effect in the United States consistently applied
throughout the periods involved (except as otherwise stated therein); and the
supporting schedules, if any, included in the Registration Statement present
fairly the information required to be stated
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therein. No other financial statements or schedules are required to be included
in the Registration Statement or Prospectus. KPMG Peat Marwick LLP, who have
expressed their opinion with respect to the financial statements and schedules
filed as a part of the Registration Statement and included in the Registration
Statement and Prospectus, are independent public accountants as required by the
Act and the Rules and Regulations. The summary financial and statistical data
included in the Registration Statement fairly present the information shown
therein and, in the case of such information and data relating to the Company,
have been compiled on a basis consistent with the financial statements presented
in the Registration Statement or otherwise on the basis stated therein.
(iv) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries has full corporate power and authority to own, lease and operate
its properties and conduct its business as currently being carried on and as
described in the Registration Statement and Prospectus, and is duly qualified to
do business as a foreign corporation in good standing in each domestic and
foreign jurisdiction in which it owns or leases real property or in which the
conduct of its business makes such qualification necessary and in which the
failure to so qualify could have a material adverse effect upon the business,
prospects, condition (financial or otherwise) or properties of the Company and
its subsidiaries, taken as a whole or taken with respect to the Company
exclusive of the database and document services businesses of the Company (a
"Material Adverse Effect").
(v) Except as expressly contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company nor its
subsidiaries have incurred any liabilities or obligations, direct or contingent,
or entered into any material transactions, that in any such case are material to
the Company and its subsidiaries taken as a whole or to the Company exclusive of
the database and document services businesses of the Company, or declared or
paid any dividends or made any distribution of any kind with respect to its
capital stock; and there has not been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock due to the
issuance of shares upon the exercise of options or warrants outstanding as of
the date the Registration Statement was filed), or any material change in the
consolidated short-term or long-term debt, or any issuance of (or amendment to
or change in the terms of) options, warrants, convertible securities or other
rights to purchase the capital stock, of the Company or its subsidiaries, or any
Material Adverse Effect, or any development likely to involve a prospective
Material Adverse Effect. An amendment to or change in the terms of an employee
stock option that does not change the vesting schedule, exercise price or number
of shares underlying such option (a "Non-Material Employee Option Amendment")
shall not be a breach of the representation contained in the preceding sentence.
To the knowledge of the Company, the Company has no material contingent
obligations which are not disclosed in the Registration Statement, as it may be
amended or supplemented.
(vi) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of the Company, threatened or contemplated, any action,
suit or proceeding to which the Company or its subsidiaries or, to the best
knowledge of the Company after due inquiry, any of its or their officers or
directors, is a party before or by any domestic or foreign court or governmental
agency, authority or body, or any arbitrator, which might result in any Material
Adverse Effect or prevent the consummation of the transactions contemplated
hereby.
(vii) There are no contracts or documents of the Company or its
subsidiaries that are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations that have not been accurately described in all material respects or
so filed.
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(viii) This Agreement and the Warrant Agreement (as defined in
Section 4(a)(i) below) have been duly authorized, executed and delivered by the
Company, and each constitutes a valid, legal and binding obligation of the
Company, enforceable against the Company in accordance with its terms. The
execution, delivery and performance of this Agreement and the Warrant Agreement
and the consummation of the transactions herein and therein contemplated will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any material agreement or instrument to
which the Company is a party or by which it is bound or to which any of its
property is subject, the Company's Restated Articles of Incorporation or by-
laws, or any order, rule, regulation or decree of any court or governmental
agency or body having jurisdiction over the Company or any of its properties; no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement and the Warrant Agreement or for the consummation
of the transactions contemplated hereby or thereby, including the issuance or
sale of the Securities and the Warrants by the Company, except such as may be
required under any blue sky or state securities laws or regulations applicable
to the public offering of Common Stock by the several Underwriters contemplated
hereby ("Blue Sky Laws"), or the by-laws or rules of the National Association of
Securities Dealers, Inc. ("NASD") relating to the corporate financing
arrangements applicable to the transactions contemplated hereby; and the Company
has full corporate power and authority to enter into this Agreement and to
authorize, issue and sell the Securities as contemplated by this Agreement.
(ix) All of the issued and outstanding shares of capital stock of
the Company, including the outstanding shares of Common Stock, are duly
authorized and validly issued, fully paid and nonassessable, have been issued in
all material respects in compliance with all federal and state securities laws
and were not issued in violation of or subject to any preemptive rights, rights
of first refusal or other rights to subscribe for or purchase securities; the
Securities which may be sold hereunder by the Company have been duly authorized
and, when issued, delivered and paid for in accordance with the terms hereof,
will have been duly and validly issued and will be fully paid and nonassessable;
and the capital stock of the Company, including the Common Stock, and any
outstanding rights to acquire the capital stock of the Company, conform in all
material respects to the descriptions thereof in the Registration Statement and
Prospectus (and the Registration Statement and the Prospectus correctly state
and describe in all material respects the substance of the instruments defining
the capital stock of the Company and such rights, to the extent required).
Except as described in the Prospectus, there are no preemptive rights, rights of
first refusal or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock pursuant
to the Company's Restated Articles of Incorporation, by-laws or any material
agreement or other instrument to which the Company is a party or by which the
Company is bound. Neither the filing of the Registration Statement nor the
offering or sale of the Securities as contemplated by this Agreement gives rise
(after giving effect to any waivers or rights which may have been executed) to
any rights for or relating to (i) the inclusion and registration in the
Registration Statement of any shares of Common Stock or other security of the
Company or (ii) except as disclosed in the Registration Statement, the
registration of any shares of Common Stock or other securities of the Company on
a future registration statement to be filed under the Act by the Company. No
person or entity has a right of participation or first refusal with respect to
the sale of the Securities by the Company. All of the issued and outstanding
shares of capital stock of the Company's subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and the Company owns
of record and beneficially, free and clear of any security interests, claims,
liens, proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. Except as described in the Registration
Statement and the Prospectus, there are no options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from the Company
or any subsidiary of the Company any shares of the capital stock of the Company
or any
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subsidiary of the Company. The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement and the Prospectus.
(x) The Warrants (as defined in Section 4(a)(i) below) will conform
to the description thereof in the Prospectus and, when sold to and paid for by
the Representatives in accordance with the Warrant Agreement, will be duly
authorized and validly issued and will be valid and binding obligations of the
Company entitled to all the benefits of the Warrant Agreement. The Warrant
Shares (as defined in Section 4(a)(i) below) will be duly authorized and
reserved for issuance upon exercise of the Warrants and, when issued upon such
exercise in accordance with the terms of the Warrants and the Warrant Agreement,
will be duly and validly issued, fully paid and nonassessable, free of
preemptive rights and will conform to the description thereof in the Prospectus.
(xi) Each of the Company and its subsidiaries holds, and is operating
in compliance in all material respects with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates and orders
of any governmental or self-regulatory body required for the conduct of its
business and all such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders that are material to the conduct
of its business are valid and in full force and effect; and neither the Company
nor its subsidiaries has been advised, or has reason to believe, that it is not
in compliance with all applicable federal, state, local and foreign laws,
regulations, orders and decrees, except, in any of the foregoing cases, where
the failure to be so in compliance would not have a Material Adverse Effect.
(xii) The Company and its subsidiaries have good and marketable title
to all property and assets described in the Registration Statement and
Prospectus as being owned by them, in each case free and clear of all liens,
claims, security interests or other encumbrances except such as (i) are
described in the Registration Statement and the Prospectus or (ii) are not
material in amount and could not give rise to a Material Adverse Effect; the
property held under lease by the Company and its subsidiaries is held by them
under valid, subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material respect with
the conduct of the business of the Company or its subsidiaries; and the
agreements to which the Company is a party described in the Registration
Statement and Prospectus are valid agreements, enforceable by the Company and
its subsidiaries (as applicable), except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles and, to the Company's knowledge, the other
contracting party or parties thereto are not in material breach or material
default under any of such agreements.
(xiii) Each of the Company and its subsidiaries owns or possesses
adequate rights to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, inventions, know-how, trade secrets and rights
("Intellectual Property") necessary for the conduct of the business of the
Company and its subsidiaries as currently carried on and as proposed to be
carried on and as described in the Registration Statement and Prospectus,
including the Intellectual Property described or referred to in the Prospectus
as being owned or used by the Company or its subsidiaries. Except as stated in
the Registration Statement and Prospectus, no activity engaged in by, and no
aspect of the business of, the Company or its subsidiaries uses or involves or
gives rise to any infringement of, or license or similar fees for, any
Intellectual Property or other similar rights of others; and neither the Company
nor its subsidiaries have received any notice alleging any such infringement or
that any such fee is due which could be expected to have a Material Adverse
Effect. No executive officer of the Company or, to the knowledge of the
Company, no other officer or employee of the Company or officer or employee of
any of its subsidiaries is obligated under any contract or subject to any
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judgment, decree or order of any court or administrative agency that would
interfere in any material respect with the use of such person's best efforts to
promote the interests of the Company and its subsidiaries or which would
conflict in any material respect with the business of the Company and its
subsidiaries as described in the Registration Statement. No prior or subsequent
employer of any executive officer of the Company or, to the knowledge of the
Company, no prior or subsequent employer of any other officer or employee of the
Company or officer or employee of any of its subsidiaries, has any right to or
interest in any inventions, improvements, discoveries or other information
assigned to or owned by the Company or its subsidiaries.
(xiv) Neither the Company nor its subsidiaries is in violation of its
respective charter or by-laws or in breach of or otherwise in default in the
performance of any material obligation, agreement or condition contained in any
bond, debenture, note, indenture, loan agreement or any other material contract,
lease or other instrument to which it is subject or by which any of them may be
bound, or to which any of the material property or assets of the Company or its
subsidiaries is subject.
(xv) The Company and its subsidiaries have filed on a timely basis
all federal, state, local and foreign income, franchise and other tax returns
required to be filed (or timely filed for extensions thereof) and are not in
default in the payment of any taxes which were payable pursuant to said returns
or any assessments with respect thereto, and the Company has no knowledge of any
tax penalties or other deficiency that has been or might be asserted against the
Company or any subsidiary which could have a Material Adverse Effect; all tax
liabilities are adequately provided for in all material respects on the books of
the Company.
(xvi) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Securities other than any Preliminary Prospectus or the Prospectus or
other materials permitted by the Act.
(xvii) The Company has filed a registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to register the Common Stock, has filed an application to list the
Securities and the Warrant Shares on the Nasdaq National Market and has received
notification that such listing application has been approved, subject to notice
of issuance of the Securities.
(xviii) Other than its wholly owned subsidiaries, TALX Information
Services Corporation and TALX Document Services Corporation and TALX Ltd., the
Company owns no capital stock or other equity or ownership or proprietary
interest in any corporation, partnership, association, trust or other entity.
(xix) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles applied
on a consistent basis and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is promptly taken
with respect to any differences.
(xx) Other than as expressly contemplated by this Agreement, the
Company has not incurred and will not incur any liability for any finder's or
broker's fee or agent's commission in
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connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(xxi) The Company and its subsidiaries maintain property, liability
and other insurance of the types and in the amounts reasonably deemed by the
Company to be adequate for their respective businesses and to be consistent with
insurance coverage maintained by similar companies in similar business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company or its subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(xxii) The Company and its subsidiaries are not involved in any labor
dispute or disturbance nor, to the knowledge of the Company, is any such dispute
or disturbance threatened, except, in either case, with respect to the matters
set forth on Schedule II hereto. The Company has provided the Representatives
or their counsel with all correspondence and memoranda relating to the matters
set forth on Schedule II.
(xxiii) The Company has been advised concerning the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to conduct,
its affairs in such a manner as to ensure that it will not become an "investment
company" within the meaning of the 1940 Act and such rules and regulations.
(xxiv) Neither the Company nor its subsidiaries have at any time, (i)
made any unlawful contribution to any candidate for foreign office, or failed to
disclose fully any contribution in violation of law, or (ii) made any payment to
any federal or state governmental officer of official, or other person charged
with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(xxv) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock, to
facilitate the sale or resale of the Securities.
(xxvi) Each director and executive officer of the Company, and each
holder of capital stock of the Company who is listed on Schedule V hereto, has
executed and delivered to the Representatives a letter in the form attached
hereto as Schedule VI. The Company has given or will give prior to the Closing
Date stop transfer instructions to the Company's transfer agent with respect to
the shares of Common Stock held by such persons.
(xxvii) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of Cuba
or with any person or affiliate located in Cuba.
3. Purchase, Sale and Delivery of Securities.
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(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell the Firm Shares to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto. The purchase price for each Firm Share shall
be $_____ per share. In making this
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Agreement, each Underwriter is contracting severally and not jointly; except as
provided in paragraph (c) of this Section 3 and in Section 8 hereof, the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares specified in Schedule I.
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 and for the Warrants
shall be made against payment of the purchase price therefor by the several
underwriters (or by the Representatives in the case of the warrants) by
certified or official bank check or other next day funds payable to the order of
the Company, at the offices of First Albany Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other location as may be mutually acceptable, at
9:00 a.m., New York time, (a) if this Agreement is executed and delivered after
4:30 p.m., New York time, on the fourth (4th) full business day following the
day that this Agreement is executed and delivered, (b) if clause (a) of this
sentence is inapplicable, then on the third (3rd) full business day following
the first day on which the Securities are traded (or at such time and date to
which payment and delivery shall have been postponed pursuant to Section 8
hereof), such time and date of delivery being herein referred to as the "First
Closing Date"; provided, however, that if the Company has not made available to
the Representatives copies of the Prospectus within the time provided in Section
4(a)(vi) hereof, the Representatives may, in their sole discretion, postpone the
First Closing Date until no later than two (2) full business days following
delivery of copies of the Prospectus to the Representatives. The certificates
for the Firm Shares and the Warrants, in definitive form and in such
denominations and registered in such names as you may request upon at least
three (3) business days' prior notice to the Company and the Custodian, will be
made available for checking and packaging at the offices of First Albany
Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other
location as may be mutually acceptable, at least one (1) business day prior to
the First Closing Date. If the Representatives so elect, delivery of the Firm
Shares may be made by credit through full fast transfer to the accounts at the
Depository Trust Company designated by the Representatives.
(b) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants to the several Underwriters an option to purchase all or
any portion of the Option Shares at the same purchase price as the Firm Shares,
for use solely in covering any over-allotments 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
effective date of this Agreement upon written notice by the Representatives to
the Company setting forth the aggregate number of Option Shares as to which the
several Underwriters are exercising the option, the names and denominations in
which the certificates for the Option Shares are to be registered and the date
and time, as determined by you, when the Option Shares are to be delivered, such
time and date being herein referred to as the "Second Closing" and "Second
Closing Date," respectively; provided, however, that the Second Closing Date
shall not be earlier than the First Closing Date nor earlier than the third
(3rd) business day after the date on which the option shall have been exercised.
If the option granted hereunder is exercised, the number of Option Shares to be
purchased by each Underwriter shall be the same percentage of the total number
of Option Shares to be purchased by the several Underwriters as the number of
Firm Shares to be purchased by such Underwriter is of the total number of Firm
Shares to be purchased by the several Underwriters, as adjusted by the
Representatives in such manner as the Representatives deem advisable to avoid
fractional shares. You, as Representatives of the several Underwriters, may
cancel such option at any time prior to its expiration by giving written notice
of such cancellation to the Company. No Option Shares shall be sold and
delivered unless the Firm Shares previously have been, or simultaneously are,
sold and delivered.
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The Option Shares will be delivered to you for the accounts of the
several Underwriters against payment of the purchase price therefor by certified
or official bank check or other next day funds payable to the order of the
Company at the offices of First Albany Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other location as may be mutually acceptable at
9:00 a.m. on the Second Closing Date. The Option Shares in definitive form and
in such denominations and registered in such names as you have set forth in your
notice of option exercise, will be made available for checking and packaging at
the office of First Albany Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ or such other location as may be mutually acceptable, at least one (1)
business day prior to the Second Closing Date. If the Representatives so elect,
delivery of the Option Shares may be made by credit through full fast transfer
to the accounts of The Depositary Trust Company designated by the
Representatives.
(c) It is understood that you, individually and not as Representatives
of the several Underwriters, may (but shall not be obligated to) make payment to
the Company on behalf of any Underwriter for the Securities to be purchased by
such Underwriter. Any such payment by you shall not relieve any such
Underwriter of any of its obligations hereunder. Nothing herein contained shall
constitute any of the Underwriters an unincorporated association or partner with
the Company.
(d) The Representatives shall advise the Company if the distribution
of the Securities is complete upon a written request by the Company for such
information made at any time following the tenth business day after the earlier
of (i) the exercise of the option described in Section 3(b) or (ii) the
expiration of the period during which such option can be exercised.
4. Covenants.
---------
(a) The Company covenants and agrees with the several Underwriters as
follows:
(i) At the Closing Date, the Company will further issue and sell
to the Representatives or, at their direction, to their bona fide officers or
partners, as described below, for a total purchase price of $______ warrants
(the "Warrants") entitling the holders thereof to purchase up to an aggregate of
100,000 shares of Common Stock (subject to adjustment) (the "Warrant Shares")
for a period of four (4) years, such period to commence one year after the
effective date of the Registration Statement (except as otherwise set forth in
the Warrant Agreement referred to below). Said Warrants shall contain terms and
provisions set forth in the Warrant Agreement of even date among the Company and
the Representatives (the "Warrant Agreement"). As provided in the Warrant
Agreement, the Representatives may designate that some of all of the Warrants be
issued in varying amounts directly to their bona fide officers or partners and
not to the Representatives. Such designation will be made by the Representatives
only if they determine that such issuances would not violate the rules and
interpretations of the Board of Governors of the NASD relating to the review of
corporate financing arrangements and subject to applicable federal and state
securities laws. As further provided, no transfer, assignment or hypothecation
of the Warrants shall be made by the Representatives for a period of 12 months
from the issuance of the Warrants, except to their respective bona fide officers
or partners and subject to applicable federal and state securities laws.
(ii) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective as promptly as possible; the Company will use its best efforts
to cause any abbreviated registration statement filed pursuant to Rule 462(b) as
may be required subsequent to the date the Registration Statement is declared
effective to become effective as promptly as possible; the
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Company will notify you, promptly after it shall receive notice thereof, of the
time when the Registration Statement, any subsequent amendment to the
Registration Statement or any abbreviated registration statement has become
effective or any supplement to the Prospectus has been filed; if the Company
omitted information from the Registration Statement at the time it was
originally declared effective in reliance upon Rule 430A of the Rules and
Regulations, the Company will provide evidence reasonably satisfactory to you
that the Prospectus contains such information and has been filed, within the
time period prescribed, with the Commission pursuant to Rule 424(b) or as part
of a post-effective amendment to such Registration Statement as originally
declared effective which is declared effective by the Commission; if the Company
utilizes a Term Sheet, the Company will provide evidence reasonably satisfactory
to you that the Prospectus and Term Sheet meeting the requirements of Rule 434
have been filed within the time period prescribed, with the Commission pursuant
to Rule 424(b); if for any reason the filing of the final form of Prospectus is
required under Rule 424(b), it will provide evidence satisfactory to you that
that Prospectus contains such information as may be required by Rule 424(b) and
the Rules and Regulations and has been filed with the Commission within the time
period prescribed; it will notify you promptly of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; promptly upon your request, it will
prepare and file with the Commission any amendments or supplements to the
Registration Statement or Prospectus which, in your reasonable opinion, may be
necessary or advisable in connection with the distribution of the Securities by
the Underwriters; it will promptly prepare and file with the Commission, and
promptly notify you of the filing of, any amendments or supplements to the
Registration Statement or Prospectus which may be necessary to correct any
statements or omissions, if, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event shall have
occurred as a result of which the Prospectus or any other prospectus relating to
the Securities as then in effect would include any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading; and it will file no amendment or supplement to the Registration
Statement or Prospectus which shall not previously have been submitted to you a
reasonable time prior to the proposed filing thereof or to which you shall
reasonably object in writing, subject, however to compliance with the Act and
the Rules and Regulations, and the provisions of this Agreement.
(iii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
suspending the use of the Prospectus, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; and the Company will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such a stop order
should be issued.
(iv) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will comply
with all requirements imposed upon it by the Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in the Securities as
contemplated by the provisions hereof and the Prospectus. If during such period
any event occurs as a result of which the Prospectus or any other prospectus
relating to the Securities as then in effect would include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act, the Company will
promptly notify you and will promptly amend the Registration Statement or
supplement the Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
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(v) The Company will use its best efforts in cooperation with you
to qualify the Securities for offering and sale under the securities laws of
such jurisdictions as you reasonably designate and to continue such
qualifications in effect so long as required for the distribution of the
Securities, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general consent to
service of process in any state.
(vi) The Company will furnish to the Underwriters, as soon as
available, and, in the case of the Prospectus and any Term Sheet, in no event
later than the first full business day following the first day that the
Securities are traded, copies of the Registration Statement (one of which will
be manually signed and will include all exhibits), each Preliminary Prospectus,
the Prospectus, and all amendments and supplements to such documents, in each
case in such quantities as you may from time to time reasonably request.
Notwithstanding the foregoing, if First Albany Corporation, on behalf of the
several Underwriters, shall agree to the utilization of a Term Sheet, the
Company shall provide to you copies of the Preliminary Prospectus updated in all
respects through the date specified by you in such quantities as you may from
time to time reasonably request.
(vii) During a period of five (5) years commencing with the date
hereof, the Company will furnish to the Representatives if requested in writing,
and to each Underwriter who may so request in writing, copies of all periodic
and special reports furnished to the stockholders of the Company and all
information, documents and reports filed with the Commission, the NASD, the
Nasdaq National Market or any securities exchange if such report, information or
document is not available to the public via the Commission's Internet web site.
(viii) The Company will make generally available to its security
holders as soon as reasonably practicable, but in any event not later than the
45th day after the end of the fiscal quarter of the Company first occurring
after the first anniversary of the effective date of the Registration Statement
(or not later than the 90th day after the end of such fiscal quarter, if such
quarter is the Company's fourth fiscal quarter), an earnings statement (which
will be in reasonable detail but need not be audited) covering a 12-month period
beginning after the effective date of the Registration Statement that shall
satisfy the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has been made
available.
(ix) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming effective
under the provisions of Section 9 hereof or is terminated, will pay or cause to
be paid (A) all expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the delivery to the Underwriters of the
Securities, (B) all expenses and fees (including, without limitation, fees and
expenses of the Company's accountants and counsel but, except as otherwise
provided below, not including fees of the Underwriters' counsel) in connection
with the preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein and all
amendments, schedules, and exhibits thereto), the Securities, each Preliminary
Prospectus, the Prospectus, any Term Sheet and any amendment thereof or
supplement to any of the foregoing, and the photocopying, delivery, and shipping
of this Agreement, the Agreement Among Underwriters, the Selected Dealer
Agreement, the Preliminary Blue Sky Survey and any Supplemental Blue Sky Survey,
the Underwriters' Questionnaire and Power of Attorney, and any instruments or
documents related to any of the foregoing, (C) all filing fees and reasonable
fees and disbursements of the Underwriters' counsel incurred in connection with
the qualification of the Securities for offering and sale by the Underwriters or
by dealers under the securities or blue sky laws of the states and other
jurisdictions which you shall designate in accordance with Section 4(a)(v)
hereof (such fees of
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counsel not to exceed $20,000), (D) the fees and expenses of any transfer agent
or registrar, (E) the filing fees incident to any required review by NASD of the
terms of the sale of the Securities, (F) listing fees, if any, and (G) all other
costs and expenses incident to the performance of its obligations hereunder that
are not otherwise specifically provided for herein. The Company will, in
addition to the expenses payable pursuant to the previous sentence, pay to the
Representatives a non-accountable expense allowance equal to $100,000, such
allowance to be paid on the Closing Date by certified or bank cashier's check
or, at the election of the Representatives, by deduction from the proceeds of
the offering contemplated herein. If the sale of the Securities provided for
herein is not consummated pursuant to a termination under Section 9 hereof, or
by reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its or their part to be performed, or because any other
condition of the Underwriters' obligations hereunder is not fulfilled, or
because the Company otherwise terminates the offering, the Company will
reimburse the several Underwriters for all out-of-pocket expenses and other
disbursements (including reasonable fees and disbursements of counsel) incurred
by the Underwriters in an amount not to exceed $150,000 in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Company shall not
in any event be liable to any of the Underwriters for loss of anticipated
profits from the transactions covered by this Agreement.
(x) The Company will apply the net proceeds from the sale of the
Securities to be sold by it hereunder for the purposes set forth in the
Prospectus under "Use of Proceeds" and will file such reports with the
Commission with respect to the sale of the Securities and the application of the
proceeds therefrom as may be required by the Rules and Regulations. Without
limiting the foregoing, on the First Closing Date the Company shall,
contemporaneous with the closing of the purchase of the Shares, use the proceeds
from such sale to repay in full the principal and all accrued interest on that
certain Secured Promissory Note dated June 28, 1996 in the principal amount of
$4,000,000 (as the same or interests therein may have been assigned to one or
more parties).
(xi) The Company will not, for a period of 180 days after the
commencement of the public offering of the Securities by the Underwriters,
without the prior written consent of First Albany Corporation on behalf of
itself and the other Representatives, offer for sale, sell, contract to sell,
grant any option for the sale of or otherwise issue or dispose of any Common
Stock or any securities convertible into or exchangeable for, or any options or
rights to purchase or acquire, Common Stock, except (i) to the Underwriters
pursuant to this Agreement, (ii) to the holders of options granted under the
Company's 1988 or 1994 Stock Option Plans (the "Plans"), (iii) pursuant to the
Company's 1996 employee stock purchase plan, (iv) to the holders of options,
warrants or convertible preferred stock outstanding as of the date hereof upon
the exercise or conversion of such securities, or (v) in connection with a
private acquisition of assets or property in which the acquiror of such shares
of Common Stock agrees to be bound by such restrictions, provided that prior
notice of such transaction is given to the Representatives and they are
reasonably satisfied that the acquiror of such shares will be so bound. The
Company will not, without the prior written consent of First Albany Corporation
on behalf of itself and the other Representatives, grant any new option under
the Plans or any similar plan (including the Outside Directors' Stock Option
Plan) which becomes exercisable during such 180 day period.
(xii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which constitutes the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of the Securities.
(xiii) If at any time during the 90-day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a
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result of which in your opinion the market price of the Common Stock has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will after written notice from you advising the Company
to the effect set forth above, forthwith prepare, consult with you concerning
the substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you, responding to or commenting on such rumor,
publication or event.
(xiv) The Company will have engaged, prior to the Closing Date,
Boatmen's Trust Company, St. Louis, Missouri, or another institution reasonably
satisfactory to the Representatives, to act as transfer agent and registrar for
a period of time following the Closing Date.
(xv) During a period of 180 days from the effective date of the
Registration Statement, the Company will not, without the consent of First
Albany Corporation, file a registration statement under the Act except for any
registration statement registering shares under any of the Plans or any other
employee benefit plan.
5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of, as of the date
hereof and at each of the First Closing Date and the Second Closing Date (as if
made at such Closing Date), as the case may be, and compliance with, all
representations, warranties and agreements of the Company contained herein, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective not later
than 2:00 p.m., New York time, on the date of this Agreement, or such later time
and date as First Albany on its own behalf and on behalf of the other
Representatives of the several Underwriters, shall approve, and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement or any amendment thereof shall have been issued; no proceedings for
the issuance of such an order shall have been initiated or threatened; and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto, contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your reasonable opinion, is
material and is required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(c) Except as expressly contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor its subsidiaries shall
have incurred any liabilities or obligations, direct or contingent, that are
material to the Company and its subsidiaries taken as a whole or to the Company
exclusive of the database and document services businesses of the Company, or
entered into any transactions that are material to the Company and its
subsidiaries taken as a whole or to the Company exclusive of the database and
document services businesses of the Company, or declared or paid any dividends
or made any distribution of any kind with respect to its capital stock; and,
except as contemplated by the Registration Statement and Prospectus, there shall
not have been any change in the capital stock (other than a change in the number
of outstanding shares of Common Stock due to the issuance of shares upon the
exercise of options or warrants outstanding as of the date the Registration
Statement was filed), or any material change in the consolidated short-term or
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long-term debt of the Company, or any issuance of (or, other than a Non-Material
Employee Option Amendment, as defined in Section 2(a)(v) hereof, any amendment
to or change in the terms of) options, warrants, convertible securities or other
rights to purchase the capital stock of the Company or its subsidiaries, or any
material adverse change or any development likely to involve a prospective
material adverse change (whether or not arising in the ordinary course of
business), in the general affairs, condition (financial or otherwise), business,
key personnel, property, prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, that, in your judgment, makes it
impractical or inadvisable to offer or deliver the Securities on the terms and
in the manner contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of ▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Company, dated such Closing Date and addressed to you,
to the effect set forth in Schedule IV hereof:
(e) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, such opinion or opinions from
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP, counsel for the several Underwriters, dated such
Closing Date and addressed to you, with respect to such matters as you
reasonably may request, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters.
(f) On each Closing Date you, as Representatives of the several
Underwriters, shall have received a letter of KPMG Peat Marwick LLP, dated such
Closing Date and addressed to you, confirming that they are independent public
accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five (5) days prior to the date of such
letter), the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and the effect of the letter
so to be delivered on such Closing Date shall be to confirm the conclusions and
findings set forth in such prior letter. All such letters shall be in a form
reasonably satisfactory to the Representatives and counsel thereto.
(g) On each Closing Date, there shall have been furnished to you, as
Representatives of the Underwriters, a certificate, dated such Closing Date and
addressed to you, signed by the chief executive officer and by the chief
financial officer of the Company acting in such capacity as such an officer of
the Company, to the effect that (and you shall be reasonably satisfied that as
of such date):
(i) The representations and warranties of the Company in this
Agreement are true and correct as if made at and as of such Closing Date, 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;
(ii) The Registration Statement has become effective and no stop
order or other order suspending the effectiveness of the Registration Statement
or any amendment thereof or the qualification of the Securities for offering or
sale has been issued, and no proceeding for that purpose has been instituted or,
to the best of their knowledge, is contemplated by the Commission or any state
or regulatory body; and
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(iii) The signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments thereof or
supplements thereto, and (A) such documents contain all statements and
information required to be included therein, the Registration Statement, or any
amendment thereof, does not contain any 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 not misleading, and the Prospectus, as amended or
supplemented, does not include any untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) since the
effective date of the Registration Statement there has occurred no event
required to be set forth in an amended or supplemented prospectus which has not
been so set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, neither
the Company nor its subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into any transactions, that in any such case
are material to the Company and its subsidiaries taken as a whole or to the
Company exclusive of its database and document services business or that are not
in the ordinary course of business, or declared or paid any dividends or made
any distribution of any kind with respect to its capital stock, and except as
contemplated by the Prospectus, there has not been any change in the capital
stock (other than a change in the number of outstanding shares of Common Stock
due to the issuance of shares upon the exercise of options or warrants
outstanding as of the date the Registration Statement was filed), or any
material change in the consolidated short-term or long-term debt, or any
issuance of (or, other than a Non-Material Employee Option Amendment, any
amendment to or change in the terms of) options, warrants, convertible
securities or other rights to purchase the capital stock, of the Company or its
subsidiaries, or any Material Adverse Effect, and (D) except as stated in the
Registration Statement and the Prospectus, there is not pending, or, to the
knowledge of the Company, threatened or contemplated, any action, suit or
proceeding to which the Company or its subsidiaries is a party before or by any
court or governmental agency, authority or body, or any arbitrator, which might
result in any Material Adverse Effect.
(h) The Company shall have furnished to you and counsel for the
Underwriters such additional documents and certificates and evidence as you or
they may have reasonably requested.
(i) The Securities shall be approved for listing, subject to notice of
official issuance, on the Nasdaq National Market.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and counsel for the Underwriters. The Company will furnish
you with such conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
If any of the conditions hereinabove provided for in this Section 5
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company and the Selling Stockholders of
such termination in writing or by telegram at or prior to the Closing Date or
the Option Closing Date, as the case may be.
In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 4(a)(ix) and
6 hereof).
6. Indemnification and Contribution.
--------------------------------
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(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of the
Act against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any breach of any representation, warranty, covenant or agreement of the Company
herein contained, (ii) any untrue statement 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 (iii) the
omission or alleged omission to state therein 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, 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, action
or proceeding; provided, however, that (i) the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of or through the Representatives specifically for use in the preparation
thereof, and (ii) the indemnity obligation contained in this paragraph (a) with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Securities which are the subject thereof (or to the
benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Securities a copy of the Prospectus (or
the Prospectus as amended or supplemented) was not sent or delivered to such
person and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with Section 4(a)(vi) hereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein in the
light of the circumstances under which they were made not misleading; and will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of or through the Representatives
specifically for use in the preparation thereof.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 6, such
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person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 6(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 6(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was substantially prejudiced by the failure to
give such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 6(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed in writing to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified 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 that
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified
pursuant to Section 6(a) and by the Company in the case of parties indemnified
pursuant to Section 6(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party to the extent
provided herein from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 6(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to in Section 6(a) or (b)
above in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 6(c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault 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
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supplied by the Company on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were determined by pro
rata allocation (even if the Underwriters were treated as an entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 6(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above in this Section 6(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the shares purchased by such Underwriter, and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in this
Section 6(d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including without limitation the
provisions of this Section 6, and are fully informed regarding such provisions.
They further acknowledge that the provisions of this Section 6 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement, any Preliminary Prospectus, the Prospectus and any
Supplement or amendment thereto, as required by the Act.
7. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons, and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
8. Substitution of Underwriters.
----------------------------
(a) If on the First Closing Date or the Second Closing Date, as the
case may be, any Underwriter or Underwriters shall fail to take up and pay for
the amount of the Securities agreed by such Underwriter or Underwriters to be
purchased hereunder upon tender of the Securities in accordance with the terms
hereof (otherwise than by reason of any default on the part of the Company),
you, as Representatives of the Underwriters, shall use your best efforts to
procure within 24 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company such amounts as may be agreed upon and upon
the terms set forth herein, the Firm Shares or Option Shares, as the case may
be, which the defaulting Underwriter or Underwriters failed to purchase.
(b) If during such 24 hours you, as such Representatives, shall not
have procured such other Underwriters, or any others, to purchase the Firm
Shares or Option Shares, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (i) if the aggregate number of
shares with respect to which such default shall occur does not exceed 10% of the
Firm Shares or Option
-19-
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (ii) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company or you
as the Representatives of the Underwriters will have the right, by written
notice given within the next 24-hour period to the parties to this Agreement, to
terminate this Agreement. In the event of any such termination the Company
shall not be under any liability to any Underwriter (except to the extent
provided in Section 4(a)(ix) and Section 6 hereof) nor shall any Underwriter
(other than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the amount of Firm Shares or Option
Shares, as the case may be, agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company and the other
Underwriters for damages, if any, resulting from such default) be under any
liability to the Company (except to the extent provided in Section 6 hereof).
If Firm Shares or Option Shares, as the case may be, to which a
default relates are to be purchased by the non-defaulting Underwriters or by any
other party or parties, the Representatives or the Company shall have the right
to postpone the First Closing Date or the Second Closing Date, as the case may
be, for not more than seven (7) 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 herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 6.
9. Effective Date of this Agreement and Termination.
------------------------------------------------
(a) This Agreement shall become effective at 10:00 a.m., New York
time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as you in your discretion shall first release the
Securities for sale to the public; provided, that if the Registration Statement
is effective at the time this Agreement is executed, this Agreement shall become
effective at such time as you in your discretion shall first release the
Securities for sale to the public. For the purpose of this Section, the
Securities shall be deemed to have been released for sale to the public upon
release by you of the publication of a newspaper advertisement relating thereto
or upon release by you of telexes offering the Securities for sale to securities
dealers, whichever shall first occur. By giving notice as hereinafter specified
before the time this Agreement becomes effective, you, as Representatives of the
several Underwriters, or the Company may prevent this Agreement from becoming
effective without liability of any party to any other party, except that the
provisions of Section 4(a)(ix) and Section 6 hereof shall at all times be
effective.
(b) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time at or prior to the First Closing Date, and the option referred to in
Section 3(b), if exercised, may be canceled at any time prior to the Second
Closing Date, if (i) the Company shall have failed, refused or been unable, at
or prior to such Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall have occurred any material adverse change or any development likely to
involve a prospective material adverse change in or affecting the condition,
financial or otherwise, of the Company and its subsidiaries, taken as a whole,
or the earnings, business affairs, management, or business prospects of the
Company and its subsidiaries, taken as a whole,
-20-
in each case whether or not arising in the ordinary course of business, (iv) any
federal or state statute, regulation, rule or order of any court or other
governmental authority shall have been enacted, published, decreed or otherwise
promulgated which in your reasonable opinion materially and adversely affects or
will materially and adversely affect the business or operations of the Company
or its subsidiaries, (v) trading on the New York Stock Exchange or the Nasdaq
National Market shall have been wholly suspended, (vi) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the New York Stock Exchange or the Nasdaq National
Market, by such Exchange or Market or by order of the Commission or any other
governmental authority having jurisdiction, (vii) a banking moratorium shall
have been declared by federal or New York or Missouri authorities, or (viii)
there has occurred any material adverse change in the financial markets in the
United States or an outbreak of major hostilities (or an escalation thereof) in
which the United States is involved, a declaration of war by Congress, any other
substantial national calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(a)(ix) and Section 6 hereof shall at all times be
effective.
(c) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone or telegram, confirmed by letter. If the
Company elects to prevent this Agreement from becoming effective, you shall be
notified by the Company by telephone or telegram, confirmed by letter.
No action taken pursuant to this Section shall relieve the Company so
defaulting from liability, if any, in respect of such default.
10. Information Furnished by Underwriters. The statements set forth in
(i) footnote number one to the table and the first sentence of footnote number
three to the table, and (ii) in the last paragraph, in each case of the cover
page (to the extent related to the Underwriters) of any Preliminary Prospectus
and the Prospectus; in the stabilization legend on page 2 of the Preliminary
Prospectus and the Prospectus; and under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus constitute the only written
information furnished by or on behalf of the Underwriters referred to in Section
2 and Section 6 hereof.
11. Actions on behalf of Others. In all dealings hereunder, you as the
Representatives of the several Underwriters shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by any of you on behalf of you as the Representatives.
12. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to the Representatives c/o First Albany
Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (with a
copy to ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇. Cable, Esq.), except that notices given to an
Underwriter pursuant to Section 6 hereof shall be sent to the Representatives on
behalf of such Underwriter or, if the Representatives have advised the Company
in writing of an address for such Underwriter, to such Underwriter at such
address; if to the Company, shall be mailed, telegraphed or delivered to it at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President and Chief Executive Officer (with a copy to ▇▇▇▇▇ ▇▇▇▇ LLP, One
Metropolitan Square, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
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Esq.) All notices given by telegram shall be promptly confirmed by letter. Any
party to this Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such purpose.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14. Governing Law. This Agreement shall be governed and construed in
accordance with the substantive laws of the State of New York (without regard to
its choice of law rules).
15. Counterparts. This Agreement may be signed in several counterparts,
each of which will constitute an original.
-22-
Please sign and return to the Company the enclosed duplicates of this
Agreement whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
TALX CORPORATION
By:___________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman, President and Chief
Executive Officer
Confirmed as of the date first above
mentioned, on behalf of themselves
and the other several Underwriters
named in Schedule II hereto.
FIRST ALBANY CORPORATION
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
PRINCIPAL FINANCIAL SECURITIES, INC.
By:
--------------------------------
Name:
Title:
-23-
SCHEDULE I
Underwriters
Underwriter Number of Firm Shares/1/
----------- ---------------------
____________________
/1/ The Underwriters may purchase up to an additional 300,000 Option Shares, to
the extent the option described in Section 3 of the Agreement is exercised, in
the proportions and in the manner described in the Agreement.
-24-
SCHEDULE II
[description of non-material dispute with employee or former employee regarding
commissions]
-25-
SCHEDULE III
Foreign Qualification
---------------------
[List]
-26-
SCHEDULE IV
Opinion of ▇▇▇▇▇ ▇▇▇▇ LLP
-------------------------
On each Closing Date, there shall have been furnished to you, as Representatives
of the several Underwriters, the opinion of ▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for
the Company, dated such Closing Date and addressed to you, to the effect that:
(i) Each of the Company and its subsidiaries is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries has full corporate power
and authority to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and Prospectus, and
the Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction set forth on Schedule III to this Agreement.
(ii) The authorized and outstanding capital stock of the Company, and,
to the knowledge of such counsel, all securities convertible into or exercisable
for capital stock of the Company, as of the date indicated in the Prospectus, is
as set forth in the Prospectus under the caption "Capitalization," including the
footnotes to the table included under such caption; the capital stock of the
Company conforms as to legal matters to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock" (it being understood
that with respect to the fair presentation of such description and whether it is
an accurate summary such counsel's opinion is limited to that set forth in
clause (vi) below). All of the issued and outstanding shares of the capital
stock of the Company have been duly authorized and validly issued and are fully
paid and nonassessable. The Securities to be issued and sold by the Company
hereunder have been duly authorized and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will have been validly issued and
will be fully paid and nonassessable. The certificates for the Securities to be
issued and sold by the Company hereunder and delivered to the Underwriters are
in due and proper form and meet the requirements of the General Business and
Corporation Law of Missouri and the Nasdaq National Market. Except as described
in the Prospectus, there are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of, any
shares of Common Stock pursuant to the Company's Restated Articles of
Incorporation, by-laws or any agreement or other instrument known to such
counsel to which the Company is a party or by which the Company is bound. To the
knowledge of such counsel, neither the filing of the Registration Statement nor
the offering or sale of the Securities as contemplated by this Agreement gives
rise to any rights for or relating to the inclusion and registration in the
Registration Statement of any shares of Common Stock or other securities of the
Company.
(iii) All of the issued and outstanding shares of capital stock of the
Company's subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable, and, to the knowledge of such counsel, the Company
owns of record, free and clear of any security interests, claims, liens, proxies
or other encumbrances, all of the issued and outstanding shares of such stock.
(iv) The Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been instituted or, to the knowledge of such counsel,
threatened by the Commission; any required filing of the Prospectus and any
supplement thereto pursuant to
-27-
Rule 424(b) of the Rules and Regulations has been made in the manner and within
the time period required by Rule 424(b).
(v) The descriptions in the Registration Statement and Prospectus of
statutes, of legal and governmental proceedings, and of contracts, insofar as
such descriptions purport to summarize matters of law, are reasonable summaries
and fairly present, in all material respects, the information required to be
presented by the Act or the Rules and Regulations;
(vi) The statement in the last sentence of the first paragraph of the
Prospectus cover page, and the statements under the captions "Business --
Facilities" (first two paragraphs only), "Management -- Benefit Plans,"
"Management -- Employment Agreements," "Management --Indemnification," "Certain
Relationships and Related Transactions," "Shares Eligible for Future Sale,"
"Description of Capital Stock," "Certain Charter and Bylaw Provisions" and
"Certain United States Federal Income Tax Considerations for Non-U.S. Holders"
in the Prospectus, as well as the statements in the second paragraph under, and
in the paragraph immediately preceding, the caption "Management --Directors'
Compensation" in the Prospectus, and under the caption "Item 14. Indemnification
of Directors and Officers" in the Registration Statement, insofar as such
statements constitute a summary of documents referred to therein or of statutes
or other matters of law, are reasonable summaries and fairly present, in all
material respects, the information called for with respect to such documents and
matters.
(vii) The Company has full corporate power and authority to enter into
this Agreement and the Warrant Agreement and to issue, sell and deliver to the
several Underwriters the Securities and the Warrant Shares to be issued and sold
by it hereunder and thereunder. This Agreement and the Warrant Agreement have
been duly authorized, executed and delivered by the Company and each constitutes
a valid, legal and binding obligation of the Company and, in the case of the
Warrant Agreement, enforceable against the Company in accordance with its terms
(except (1) as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent transfer, or other similar
laws now or hereinafter in effect relating to or affecting creditors' rights
generally and by general principles of equity, (2) that the remedies of specific
performance and injunctive and other forms of relief are subject to general
equitable principles, whether such enforcement is sought at law or in equity,
and such enforcement may be subject to the discretion of the court before which
any proceedings therefor may be brought and (3) as rights to indemnity and
contribution may be limited by state or federal laws or by policies underlying
such laws); the execution, delivery and performance of this Agreement and the
Warrant Agreement and the consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any rule, regulation,
license, authorization, approval or permit issued or promulgated by any
governmental agency or body having jurisdiction over the Company (which such
counsel would, in its experience, recognize as applicable) or any material
agreement or instrument known to such counsel to which the Company is a party or
by which it is bound or to which any of its property is subject, the Company's
Restated Articles of Incorporation, or by-laws, or any material order, judgment,
writ or decree known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its respective properties; and no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body (which such counsel would, in its experience,
recognize as applicable) is required for the execution, delivery and performance
of this Agreement and the Warrant Agreement or for the consummation of the
transactions contemplated hereby or thereby, including the issuance or sale of
the Securities and the Warrant Shares by the Company, except such as have been
obtained (specifying the same) or except such as may be required under the Act
(provided, that no opinion need be expressed in this
-28-
paragraph with respect to any Blue Sky Laws or the by-laws or rules of the NASD
applicable to the corporate finance arrangements of the transactions
contemplated hereby).
(viii) The Warrants conform to the description thereof in the
Prospectus (it being understood that with respect to the fair presentation of
such description and whether it is an accurate summary such counsel's opinion is
limited to that set forth in clause (vi) above) and have been duly authorized
and validly issued and are valid and binding obligations of the Company entitled
to all the benefits of the Warrant Agreement and are enforceable against the
Company, (except (1) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent transfer, or
other similar laws now or hereinafter in effect relating to or affecting
creditors' rights generally and by general principles of equity, (2) that the
remedies of specific performance and injunctive and other forms of relief are
subject to general equitable principles, whether such enforcement is sought at
law or in equity, and such enforcement may be subject to the discretion of the
court before which any proceedings therefor may be brought and (3) as rights to
indemnity and contribution may be limited by state or federal laws or by
policies underlying such laws). The Warrant Shares have been duly authorized and
reserved for issuance upon exercise of the Warrants and, when issued upon such
exercise in accordance with the terms of Warrants and the Warrant Agreement,
will be duly and validly issued, fully paid and nonassessable, free of
preemptive rights and will conform to the description thereof in the Prospectus.
(ix) The Registration Statement and the Prospectus, and any amendment
thereof or supplement thereto, comply as to form in all material respects with
the requirements of the Act and the Rules and Regulations, it being understood
that such counsel need express no opinion as to the financial statements and
notes thereto, financial statement schedules and other financial, statistical
and accounting data included in any of the documents mentioned in this clause.
(x) To the knowledge of such counsel, no holders of shares of Common
Stock or other securities of the Company have registration rights with respect
to securities of the Company, other than as described in the Prospectus.
(xi) Subject to appropriate assumptions and qualifications, the
Company is not an "Investment Company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder.
(xii) No sales of Common Stock completed subsequent to one year prior
to the effective date of the Registration Statement and referred to in Item 15
of the Registration Statement were made in violation of the Act, except that
insofar as the Act requires disclosure of accurate or complete information in
connection with such sales, no opinion is expressed as to such matter.
In addition to the matters set forth above, such opinion shall also include
a statement to the effect that, during such counsel's participation in the
preparation of the Registration Statement and Prospectus such counsel
participated in conferences with officers and representatives of the Company,
representatives of the independent accountants of the Company, and the
representatives of the Underwriters at which the contents of the Registration
Statement and Prospectus and related matters were discussed and, although such
counsel is not passing upon, and does not assume responsibility for the
accuracy, completeness or fairness of, any portion of the Registration Statement
or the Prospectus, as amended or supplemented, nothing has come to such
counsel's attention that causes such counsel to believe that, as of its date and
as of such Closing Date, the Registration Statement or any further amendment or
supplement thereto made by the Company prior to such Closing Date (other than
the financial statements and related
-29-
schedules therein and other financial, statistical and accounting data, as to
which such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Such statement shall also recite that such counsel does not know
of any statutes or legal or governmental proceedings required to be described in
the Prospectus that are not described, or of any contracts or documents of a
character required to be described in the Registration Statement or Prospectus
or included as exhibits to the Registration Statement that are not described or
so included. Such counsel shall also state that, to the knowledge of such
counsel, neither the Company nor its subsidiaries is in violation of its
respective charter or by-laws and the Company is not in breach of or otherwise
improperly in default in the performance of any material obligation, agreement
or condition contained in (i) any bond, debenture, note, contract, indenture or
loan agreement that is filed as an exhibit to the Registration Statement, or
(ii) any judgment, decree, order, statute, rule or regulation that such counsel
knows the Company or its subsidiaries is subject to. Such counsel shall further
state that such counsel knows of no pending or threatened action, suit, claim,
proceeding or investigation before any court or governmental agency or body
which would reasonably be expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
In rendering such opinion such counsel may rely as to matters of fact, to
the extent such counsel deems reasonable, upon certificates of officers of the
Company and its subsidiaries provided that the extent of such reliance is
specified in such opinion. Such opinions may contain reasonable and appropriate
recitals, conditions and qualifications. Such opinion shall specify that the
words "to the knowledge of such counsel" and similar language (collectively,
"knowledge qualifiers") used therein are intended to be limited to the actual
knowledge of the lawyers within such firm who gained such actual knowledge in
the course of providing substantive attention to matters on behalf of the
Company in areas relevant to the opinions being rendered therein. Such opinion
shall further state that it is further understood that, solely in connection
with the making of statements in such opinion that are qualified by knowledge
qualifiers (and without reference as to the kind of legal or document review
that such counsel may have undertaken for other purposes unrelated to the making
of such statements), such counsel has not undertaken any special audit or legal
or document review (including of documents in such counsel's possession) of the
Company and its subsidiaries.
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SCHEDULE V
Form of Lock-up Letter
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SCHEDULE VI
Holders of Capital Stock Who Will Sign Lock-Up Letters
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[List]
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