EXHIBIT 19
▇▇▇▇▇▇=S FURNITURE, INC.
4,400,000 SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE
UNDERWRITING AGREEMENT
March 30, 1998
Cruttenden ▇▇▇▇ Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Group, LLC
Black & Company, Inc.
c/o Cruttenden ▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇=s Furniture, Inc., a Delaware corporation (the ACompany@),
proposes to sell to the Underwriters named in Schedule 1 hereto (the
AUnderwriters@) 2,303,889 shares (the AShares@) of the Company=s common stock,
par value $0.001 per share (ACommon Stock@), and Japan Omnibus Ltd. (the
ASelling Stockholder@) proposes to sell to the Underwriters 2,096,011 shares of
Common Stock (the ASelling Stockholder Shares@ and, collectively with the
Shares, the AFirm Shares@). In addition, the Company proposes to grant to the
Underwriters an option to purchase an additional 660,000 shares of Common Stock
(the AOption Shares@) on the terms and for the purposes set forth in Section 3
hereof. The Firm Shares and the Option Shares, if purchased, are hereinafter
collectively called the AUnderwritten Shares.@ This is to confirm the agreement
concerning the purchase of the Underwritten Shares from the Company and the
Selling Stockholder by the Underwriters.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and covenants with the Underwriters that:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the ACommission@) a registration statement on Form S-1
(Registration No. 333- 43111) which has or will become effective, covering the
registration of the Underwritten Shares under the Securities Act of 1933, as
amended (the A1933 Act@) and the rules and regulations of the Commission
thereunder (the A1933 Act Regulations@). The Commission has not issued any order
preventing or suspending the effectiveness or use of the Prospectus or the
Preliminary Prospectus (as defined below). The term APreliminary Prospectus@ as
used herein means a preliminary prospectus relating to the Underwritten Shares
as contemplated by Rule 430 or Rule ▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇@) ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇
Regulations included at any time as part of the Registration
Statement. Copies of such Registration Statement and amendments thereto and of
each related Preliminary Prospectus have been delivered to the Underwriters. If
such Registration Statement has not become effective, a further amendment to
such Registration Statement, including a form of final Prospectus, necessary to
permit such Registration Statement to become effective will be filed promptly by
the Company with the Commission. If such Registration Statement has become
effective, a final Prospectus relating to the Underwritten Shares containing
information permitted to be omitted at the time of effectiveness by Rule 430A
will be filed by the Company with the Commission in accordance with Rule 424(b)
of the 1933 Act Regulations promptly after execution and delivery of this
Agreement. The term ARegistration Statement@ means the registration statement as
amended at the time it became effective, including the most recent
post-effective amendment thereto at the time such post-effective amendment
became or becomes effective (the AEffective Date@), including all material
incorporated by reference therein and any information deemed to be included by
Rule 430A and any additional registration statement filed pursuant to Rule
462(b) of the Rules and Regulations (ARule 462(b)@) with respect to the
Underwritten Shares (ARule 462(b) Registration Statement@). The term
AProspectus@ means the prospectus relating to the Underwritten Shares as first
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
or, if no such filing is required, the form of final prospectus relating to the
Underwritten Shares included in the Registration Statement at the Effective
Date. Any reference herein to the Registration Statement, the Prospectus or any
Preliminary Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Form S-1 and Regulation S-K under
the 1933 Act which were filed under the Securities Exchange Act of 1934, as
amended (the A1934 Act@) and the rules and regulations of the Commission
thereunder (the A1934 Act Regulations@), on or before the date of this
Agreement, or the issue date of the Prospectus or any Preliminary Prospectus, as
the case may be; and any reference herein to the terms Aamend,@ Aamendment@ or
Asupplement@ with respect to the Registration Statement, the Prospectus or any
Preliminary Prospectus shall be deemed to refer to and include the filing of any
document under the 1934 Act after the date of this Agreement, or the issue date
of the Prospectus or any Preliminary Prospectus, as the case may be, and deemed
to be incorporated therein by reference. For purposes of this Agreement, all
references to the Registration Statement, any Preliminary Prospectus, or any
Prospectus, or any amendment or supplement to any of the foregoing, shall be
deemed to include the copy, if any, filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval system (AEDGAR@).
(b) On the first date that any Preliminary Prospectus was
used, the date the Prospectus is first filed with the Commission pursuant to
Rule 424(b) (if required), at all times subsequent to and including the Delivery
Date (as defined in Section 5 below) and when any post-effective amendment to
the Registration Statement becomes effective or any amendment or supplement to
the Prospectus is filed with the Commission, the Registration Statement, each
Preliminary Prospectus and the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included in the Prospectus, did or
will comply with all applicable provisions of the 1933 Act and the 1933 Act
Regulations and did or will contain all statements required to be stated therein
in accordance with the 1933 Act and the 1933 Act Regulations. On the Effective
Date and when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. At the Effective Date and at the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission and at
the Delivery Date the Prospectus did not or will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The Company has not distributed any written offering
material in connection with the offering or sale of the Underwritten Shares
other than the Registration Statement, the Preliminary Prospectus and the
Prospectus. Each Registration Statement, Preliminary Prospectus and Prospectus
filed with the Commission, including those filed by electronic transmission
pursuant to ▇▇▇▇▇ (except as may be permitted by Regulation S-T under the 1933
Act), was identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Underwritten Shares.
(c) Ernst & Young LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have
expressed their opinion with respect to the financial statements and supporting
schedules and related notes included in the Registration Statement and the
Prospectus, are independent public accountants with respect to the Company as
required by the 1933 Act and the 1933 Act Regulations.
(d) The financial statements of the Company and the related
notes thereto, included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the consolidated financial position
of the Company and its subsidiaries, ▇▇▇▇▇▇=s Custom Crafted Furniture Corp.
(formerly ▇▇▇▇▇▇=s Sofa Factory) and KMC Enterprises, Inc. (collectively, the
ASubsidiaries@ and each a ASubsidiary@) as of the respective dates of such
financial statements, and their consolidated statement of operations and
statement of cash flows for the respective periods covered thereby; said
financial statements and related notes have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis as certified by the independent accountants named in subsection 3(c)
above; and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. No other financial
statements or schedules are required to be included in the Registration
Statement. The selected financial and statistical data set forth in the
Prospectus under the captions ACapitalization@ and ASelected Financial Data@
fairly present the information set forth therein on the basis stated in the
Registration Statement and have been prepared on an accounting basis consistent
with the consolidated financial statements of the Company.
(e) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (i) there has been no material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, or in the earnings, business affairs, or business
prospects of the Company and the Subsidiaries, whether or not arising in the
ordinary course of business, (ii) there have been no transactions entered into
by the Company or the Subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and the Subsidiaries,
and (iii) there has been no dividend or distribution of any kind declared, paid
or made by the Company or the Subsidiaries on any class of their capital stock.
The Company and the Subsidiaries have no material contingent obligations which
are not disclosed in the Registration Statement.
(f) The Company and the Subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, with corporate power
and authority to own, lease and operate their properties and to conduct their
businesses as described in the Prospectus and, in the case of the Company, to
enter into and perform its obligations under this Agreement; the Company and the
Subsidiaries are duly qualified as foreign corporations to transact business and
are in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not, singly or
in the aggregate, have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs, results of operations or business
prospects of the Company and the Subsidiaries, taken as a whole (a AMaterial
Adverse Effect@). Other than in the Subsidiaries, or as disclosed in the
Registration Statement pursuant to Item 601 of Regulation S-K, the Company does
not own, directly or indirectly, any shares of capital stock or any other equity
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity.
(g) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under ACapitalization@ and
ADescription of Capital Stock@ (except for subsequent issuances, if any,
pursuant to this Agreement or pursuant to reservations, agreements, employee or
director benefit plans or the exercise of convertible securities referred to in
the Prospectus); the shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and have not been issued in violation of or are not otherwise
subject to any preemptive or other similar rights; the Company owns,
beneficially and of record, all of the outstanding capital stock of the
Subsidiaries; the Shares and the Option Shares have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued and fully paid and
nonassessable; the certificates evidencing the Underwritten Shares are in due
and proper form under Delaware law; the authorized capital stock of the Company,
including the Underwritten Shares, conforms to all statements relating thereto
contained in the Prospectus; and the issuance of the Underwritten Shares is not
subject to preemptive or other similar rights. There are no outstanding
subscriptions, options, warrants, convertible or exchangeable securities or
other rights granted to or by the Company to purchase shares of capital stock or
other securities of the Company and there are no commitments, plans or
arrangements to issue any shares of capital stock or any security convertible
into or exchangeable for capital stock, in each case other than as described in
the Prospectus.
(h) The Company and the Subsidiaries: (i) are in material
compliance with any and all applicable foreign, United States, state and local
environmental laws, rules, regulations, treaties, statutes and codes promulgated
by any and all governmental authorities relating to the protection of human
health and safety, the environment or toxic substances or wastes, pollutants or
contaminates, and all amendments or modifications thereto (AEnvironmental
Laws@); (ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their business as currently
conducted, the absence of which would have a Material Adverse Effect; and (iii)
are in compliance in all material respects with all terms and conditions of any
such permit, license or approval. No action, proceeding, revocation proceeding,
writ, injunction or claim is pending or, to the knowledge of the Company,
threatened against the Company or the Subsidiaries relating to the Environmental
Laws or to the activities of the Company or the Subsidiaries involving Hazardous
Materials. The terms AHazardous Materials@ as used in this Agreement means any
material or substance that: (i) is prohibited or regulated by any Environmental
Laws; or (ii) has been designated or regulated by any governmental authority as
radioactive, toxic, hazardous or otherwise a danger to health, reproduction or
the environment.
(i) Where the Company or any Subsidiary is engaged in the
generation, use, manufacture, transportation or storage of any Hazardous
Materials on any of the properties or former properties of the Company
or the Subsidiaries, the Company and its Subsidiaries have complied in all
material respects with all Environmental Laws relevant to such activities. No
Hazardous Materials have been treated or disposed of on any properties of the
Company or the Subsidiaries, or on properties formerly owned or leased by the
Company or the Subsidiaries, in each case by the Company or, to the knowledge of
the Company, by any other Person, except in material compliance with
Environmental Laws. No spills, discharges, releases, deposits, emplacements,
leaks or disposal of any Hazardous Materials have occurred on or under or have
emanated from any of the Company=s properties or former properties of the
Company or the Subsidiaries either as a result of actions by the Company or, to
the knowledge of the Company, by any other Person, for which the cost of
remediation would materially and adversely affect the Company.
(j) Neither the Company nor any Subsidiary is in violation of
its respective charter or bylaws or similar governing instruments or is in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
deed, trust, note, lease, sublease, voting agreement, voting trust, or other
instrument or agreement to which the Company or the Subsidiaries are a party or
by which the Company or the Subsidiaries may be bound, or to which any of the
property or assets of the Company or the Subsidiaries are subject, unless
irrevocable waiver shall have been obtained with respect to such default and
such default and the waiver thereof shall have been disclosed in writing to the
Underwriters, and the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or the Subsidiaries
pursuant to, any contract, indenture, mortgage, loan agreement, deed, trust,
note, lease, sublease, voting agreement, voting trust or other instrument or
agreement to which the Company or the Subsidiaries is a party or by which they
may be bound, or to which any of the property or assets of the Company or the
Subsidiaries are subject, nor will such action result in any violation of the
provisions of the charter or bylaws of the Company or any applicable statute,
law, rule, regulation, ordinance, decision, directive or order.
(k) No labor dispute with the employees of the Company or the
Subsidiaries exists or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors.
(l) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the Company or
the Subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which, singly or in the
aggregate, might result in any Material Adverse Effect or which might materially
and adversely affect the consummation of this Agreement; all pending legal or
governmental proceedings to which the Company or the Subsidiaries are a party or
of which any of their respective properties or assets is the subject which are
not described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the aggregate, not
material; and there are no contracts or documents of the Company or the
Subsidiaries which are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not been so
filed.
(m) No relationship, direct or indirect, exists between or
among the Company and any Subsidiary on the one hand, and the directors,
officers, shareholders, customers or suppliers of the Company and any Subsidiary
on the other hand, that is required by the 1933 Act or the 1933 Act Regulations
to be described in the Registration Statement and the Prospectus or
documents incorporated by reference therein that is not described as so
required.
(n) The Company and the Subsidiaries own or are licensed to
use all patents, patent applications, inventions, trademarks, trade
names, applications for registration of trademarks, service marks, service ▇▇▇▇
applications, copyrights, know-how, manufacturing processes, formulae, trade
secrets, licenses and rights in any thereof and any other similar intangible
property and assets (herein called the AProprietary Rights@) which are material
to the businesses of the Company or the Subsidiaries as now conducted and as
proposed to be conducted, in each case as described in the Prospectus. The
description of the Proprietary Rights is correct in all material respects and
fairly and correctly describes the Company=s rights with respect thereto.
Neither the Company nor any Subsidiary has any knowledge of, and neither the
Company nor any Subsidiary has given or received any notice of, any pending
conflicts with or infringement of the rights of others with respect to any
Proprietary Rights or with respect to any license of Proprietary Rights. No
action, suit, arbitration, or legal, administrative or other proceeding, or
investigation is pending, or, to the knowledge of the Company, threatened, which
involves any Proprietary Rights. Neither the Company nor any Subsidiary is
subject to any judgment, order, writ, injunction or decree of any court or any
Federal, state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
arbitrator, or has entered into or is a party to any contract which restricts or
impairs the use of any such Proprietary Rights in a manner which would adversely
affect the use of any of the material Proprietary Rights. To the knowledge of
the Company, no Proprietary Rights used by the Company or the Subsidiaries, and
no services or products sold by the Company or the Subsidiaries, conflict with
or infringe upon any proprietary rights available to any third party. The
Company has not received written notice of any pending conflict with or
infringement upon such third party proprietary rights. Neither the Company nor
any Subsidiary has entered into a consent, indemnification, forbearance to ▇▇▇
or settlement agreement with respect to Proprietary Rights. No claims have been
asserted against the Company by written notice or formal proceedings or, to the
knowledge of the Company, by other means, by any person with respect to the
validity of the ownership or right to use the Proprietary Rights of the Company
or the Subsidiaries and, to the knowledge of the Company, there is no reasonable
basis for any such claim to be successful. No registration relating to the
Proprietary Rights has lapsed, expired or been abandoned or canceled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and are in good standing. The Company and the Subsidiaries
have complied, in all material respects, with their respective contractual
obligations relating to the protection of the Proprietary Rights used pursuant
to licenses. To the knowledge of the Company, no person is infringing on or
violating the Proprietary Rights owned or used by the Company or the
Subsidiaries.
(o) No registration, authorization, approval, qualification or
consent of any court or governmental authority or agency is necessary
in connection with the offering, issuance or sale of the Underwritten Shares
hereunder, except such as may be required under the 1933 Act or the 1933 Act
Regulations or state securities or Blue Sky laws (or such as may be required by
the National Association of Securities Dealers, Inc. (ANASD@).
(p) Except as otherwise disclosed in the Prospectus, the
Company and the Subsidiaries now hold and at the Delivery Date will hold, all
licenses, certificates, approvals and permits from all state, United States,
foreign and other regulatory authorities, and any foreign regulatory authorities
performing similar functions, that are material to the conduct of the businesses
of the Company and the Subsidiaries (as such businesses are currently
conducted), except for such licenses, certificates, approvals and permits the
failure of which to hold would not have a Material Adverse Effect, all of which
are in effect (and there is no proceeding pending or, to the knowledge of the
Company, threatened which may cause any such license, certificate, approval or
permit to be withdrawn, canceled, suspended or not renewed). Neither the Company
nor any Subsidiary is in violation of any law, order, rule, regulation, writ,
injunction or decree of any court or governmental agency or body, and neither
the Company nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such permit or any circumstance which
would lead them to believe that such proceedings are, singularly or in
the aggregate, reasonably likely to have or which, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(q) The Company has all corporate power and authority to enter
into this Agreement and to perform its obligations hereunder, and all consents,
authorizations, approvals and orders required in connection herewith have been
obtained, except such as may be required under state securities or Blue Sky laws
or the bylaws and rules of the NASD and, if the Registration Statement is not
effective under the 1933 Act as of the time of execution hereof, such as may be
required (and shall be obtained as provided in this Agreement) under the 1933
Act. This Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws nor or
hereafter in effect relating to or affecting creditors, rights generally or by
general principles of equity relating to the availability of remedies and except
as rights to indemnity and contribution hereunder may be limited by federal or
state securities laws or the public policy underlying such laws.
(r) There are no persons with registration or other similar
rights to have any securities (i) registered pursuant to the Registration
Statement or (ii) otherwise registered by the Company under the 1933 Act, other
than, with respect to (i) and (ii) above, those rights whose holders have
received proper notice of the filing of the Registration Statement and have
declined to assert such registration rights (and who now no longer have a right
to do so), those rights which have been waived or are no longer entitled to be
asserted, or other than, with respect to (ii) above, those described in the
Prospectus.
(s) No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus has been issued and no proceedings for
that purpose are pending, or, to the knowledge of the Company, threatened or
contemplated by the Commission; and no order suspending the offering of the
Underwritten Shares in any jurisdiction designated by the Underwriters pursuant
to Section 6(f) of this Agreement has been issued and no proceeding
therefor has been instituted or, to the knowledge of the Company, are any such
proceedings threatened or contemplated. The Company has complied to the
Commission=s and any state securities commission=s satisfaction with all
requests of the Commission and such state securities commission with all
requests for additional or supplemental information.
(t) The Company and the Subsidiaries have good and marketable
title to their respective properties, free and clear of all material security
interests, mortgages, pledges, liens, charges, encumbrances, claims and equities
of record, except as disclosed in the Prospectus. The properties of the Company
and the Subsidiaries are, in the aggregate, in good repair (reasonable wear and
tear excepted), and suitable for their respective uses. Any real properties held
under lease by the Company and the Subsidiaries are held by it under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the conduct of the business of the Company or the
Subsidiaries.
(u) 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 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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(v) The Company and the Subsidiaries have conducted and are
conducting their businesses in material compliance with all applicable Federal,
state, local and foreign statutes, laws, rules, regulations, ordinances, codes,
decisions, decrees, directives and orders.
(w) Neither the Company nor any Subsidiary nor, to the
Company=s or any Subsidiary=s knowledge, any employee or agent of the Company or
any Subsidiary, has, directly or indirectly, made any payment of funds of the
Company or the Subsidiaries or received or retained any funds in violation of
any law, rule or regulation, which payment, receipt or retention
of funds is of a character required to be disclosed in the Prospectus,
including, without limitation, any unlawful contribution to any candidate for
public office, or failed to disclose fully contributions in violation of law, or
other payments to any federal, state or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States, any
foreign jurisdiction, or any jurisdiction thereof.
(x) The Company is not now, and after sale of the Shares or
the Option Shares to be sold by it hereunder and application of the net proceeds
from such sale as described in the Prospectus under the caption AUse of
Proceeds@ will not be, an Ainvestment company@ within the meaning of the
Investment Company Act of 1940, as amended.
(y) All offers and sales of capital stock and other securities
of the Company made within the three years prior to the date hereof were at all
relevant times duly registered or exempt from the registration requirements of
the 1933 Act and were duly registered or qualified or subject to an available
exemption from the registration or qualification requirements of the applicable
state securities or Blue Sky laws. No Person who purchased a security from the
Company prior to the date hereof has any right to rescind his or her purchase or
otherwise seek recovery of the purchase price from the Company.
(z) The Common Stock is registered pursuant to Section 12(b)
of the 1934 Act. The Underwritten Shares have been accepted for listing on the
American Stock Exchange (AAMEX@). The Company has taken no action designed to,
or likely to have the effect of, terminating the registration of the
Underwritten Shares or the Common Stock under the 1934 Act or delisting the
Underwritten Shares or the Common Stock from the AMEX, nor has the Company
received any notification that the Commission or the AMEX is contemplating
terminating such registration or listing.
(aa) Neither the Company, nor, to its knowledge, any of its
officers, directors or affiliates has taken and at the Delivery Date, neither
the Company nor, to its knowledge, any of its officers, directors or affiliates
will have taken, directly or indirectly, any action which has constituted, or
might reasonably be expected to constitute, the stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the
Underwritten Shares in connection with the offering of the Underwritten Shares
pursuant to the Registration Statement.
(ab) The Company maintains insurance of the types and in
amounts that it reasonably believes are adequate for its and its Subsidiaries=
businesses and are consistent with insurance coverage maintained by similar
companies in similar businesses, including but not limited to, insurance
covering product liability and real and personal property owned or leased
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and effect.
(ac) The Company and the Subsidiaries have filed all necessary
federal, state and foreign tax returns required to be filed by them and have
paid or accrued all taxes shown as due thereon, which returns are true and
correct in all material respects, and neither the Company nor any Subsidiary is
in default in the payment of any taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or otherwise assessed,
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without interest which were
payable pursuant to said returns or any assessments with respect thereto.
(ad) To the knowledge of the Company, if any full-time
employee identified in the Prospectus has entered into any non-competition,
non-disclosure, confidentiality or other similar agreement with any party other
than the Company or any Subsidiaries, such employee is neither in violation
thereof nor is expected to be in violation thereof as a result of the business
conducted or expected to be conducted by the Company or the Subsidiaries as
described in the Prospectus or such person=s performance of his obligations to
the Company or any Subsidiaries; neither the Company nor any Subsidiary has
received written notice that any consultant or employee of the Company or the
Subsidiaries is in violation of any noncompetition, non-disclosure,
confidentiality or similar agreement.
(ae) The Company has delivered or caused to be delivered to
the Underwriters an agreement in the form of Attachment A hereto (with respect
to the Company) and in the form of Attachment B hereto (with respect to the
officers, directors and certain affiliates of the Company listed on Attachment C
hereto) to the effect that neither the Company nor any of the officers,
directors or affiliates listed on Attachment C hereto will, without the prior
written consent of the Underwriters, offer, sell, or otherwise dispose of any
shares of capital stock or equity securities of the Company or securities
convertible into, or exchangeable or exercisable for, shares of capital stock of
the Company (other than the Underwritten Shares) for a period of 180 days (with
respect to the Company) and 120 days (with respect to the officers, directors
and affiliates of the Company) after the Delivery Date, subject to the
exceptions set forth in Attachment A with respect to the Company.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLING STOCKHOLDER. The Selling Stockholder represents, warrants and covenants
to the Company and to the Underwriters that:
(a) The Selling Stockholder is, and at the First Delivery Date
(as defined in Section 5 below) will be, duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization with
corporate power and authority to own, lease and operate its properties and to
conduct its business.
(b) The Selling Stockholder has all corporate power and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. All authorizations and consents
necessary for the execution and delivery by the Selling Stockholder of this
Agreement have been given. This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder and constitutes the valid
and binding agreement of the Selling Stockholder and is enforceable against the
Selling Stockholder in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws now
or hereafter in effect relating to or affecting creditors= rights generally or
by general principles of equity relating to the availability of remedies and
except as rights to indemnity or contribution may be limited by federal or state
securities laws and the public policy underlying such laws.
(c) The Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement") with BankBoston, N.A. (c/o Boston
EquiServe), as custodian (the "Custodian"), for delivery under this Agreement,
certificates in negotiable form (with signature guaranteed by a commercial bank
or trust company having an office or correspondent in the United States or a
member firm of the New York or American Stock Exchange) representing the Firm
Shares to be sold by the Selling Stockholder hereunder.
(d) The Selling Stockholder has duly and irrevocably executed
and delivered a power of attorney (the "Power of Attorney") appointing the
Custodian and one or more other persons, as attorneys-in-fact, with full power
of substitution, and with full authority (exercisable by any one or more of
them) to execute and deliver this Agreement and to take such other action as may
be necessary or desirable to carry out the provisions hereof on behalf of the
Selling Stockholder.
(e) The Selling Stockholder has full power and authority to
enter into the Power of Attorney in the form heretofore furnished to the Selling
Stockholder and the Custody Agreement in the form heretofore furnished to the
Selling Stockholder and to carry out all the terms and provisions thereof to be
carried out by it. All authorizations and consents necessary for the execution
and delivery by the Selling Stockholder of the Power of Attorney and the Custody
Agreement have been given. Each of the Power of Attorney and the Custody
Agreement has been duly authorized, executed and delivered by the Selling
Stockholder and is enforceable against the Selling Stockholder in accordance
with the terms thereof, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect relating to
or affecting creditors= rights generally or by general principles of equity
relating to the availability of remedies.
(f) The Selling Stockholder now has, and at the First Delivery
Date will have, (i) good and marketable title to the Selling Stockholder Shares
to be sold to the Underwriters by the Selling Stockholder hereunder, free and
clear of all encumbrances and adverse claims, and (ii) full legal right and
power, and all authorizations and approvals required by law, to sell, transfer
and deliver the Selling Stockholder Shares to the Underwriters and to make the
representations, warranties and agreements made by the Selling Stockholder
herein, and upon delivery of such Selling Stockholder Shares and payment
therefor pursuant hereto, good and marketable title to such shares, free and
clear of all encumbrances and adverse claims, will pass to the Underwriters.
(g) None of the execution, delivery or performance of this
Agreement, the Power of Attorney or the Custody Agreement or the consummation of
the transactions contemplated herein or therein by the Selling Stockholder
conflicts or will conflict with or results or will result in any breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any encumbrance upon, any property or
assets of the Selling Stockholder pursuant to (i) the terms of its
organizational documents; (ii) the terms of any contract or other agreement to
which the Selling Stockholder is a party or by which it is bound or to which any
of its properties is subject, which conflict, breach, violation or default would
adversely affect the Selling Stockholder=s ability to perform its obligations
hereunder; (iii) any statute, rule or regulation of any governmental body having
jurisdiction over the Selling Stockholder or any of its activities or
properties; or (iv) the terms of any judgment, decree or order of any
arbitration or governmental body having such jurisdiction.
(h) No consent, approval, authorization or order of, or any
filing or declaration with any governmental body is required for the
consummation by the Selling Stockholder of the transactions on its part
contemplated herein or in the Power of Attorney or Custody Agreement, except
such as may be required under the Exchange Act and applicable state securities
laws in connection with the purchase and distribution of the Underwritten Shares
by the Underwriters, and such as have been obtained under the state securities
or Blue Sky laws and under the NASD rules.
(i) The sale of the Selling Stockholder Shares proposed to be
sold by the Selling Stockholder is not prompted by the Selling Stockholder=s
knowledge of any material adverse information concerning the Company or its
Subsidiaries which is not set forth or described in the Prospectus.
(j) On the Effective Date, the date of the Preliminary
Prospectus and the date of the Prospectus, and on the First Delivery Date, the
information with respect to the Selling Stockholder included therein under the
caption APrincipal and Selling Stockholders@ was complete and accurate in all
respects and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, and the Selling Stockholder has no
reason to believe that the other information in the Preliminary Prospectus or
the Prospectus with respect to it is untrue or misleading in any material
respect.
(k) On the first date that any Preliminary Prospectus was
used, the date the Prospectus is first filed with the Commission pursuant to
Rule 424(b) (if required), at all times subsequent to and including the First
Delivery Date, all information with respect to the Selling Stockholder included
in the Registration Statement, each Preliminary Prospectus and the Prospectus
(as amended or as supplemented if the Company shall have filed with the
Commission any amendment or supplement thereto) under the caption APrincipal and
Selling Stockholders,@ did or will comply with all applicable provisions of the
1933 Act and the 1933 Act Regulations and did or will contain all statements
required to be stated therein in accordance with the 1933 Act and the 1933 Act
Regulations.
(l) The Selling Stockholder has delivered to the Underwriters
an agreement in the form of Attachment B hereto to the effect that it will not,
without the prior written consent of Cruttenden ▇▇▇▇ Incorporated, Black &
Company, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Group LLC, as representatives of the
several Underwriters (the ARepresentatives@), offer, sell, or otherwise dispose
of any shares of capital stock or equity securities of the Company or securities
convertible into, or exchangeable or exercisable for, shares of capital stock of
the Company (excluding the Selling Stockholder Shares) for a period of 120 days
after the Delivery Date.
(m) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which has constituted, or might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Underwritten Shares in
connection with the offering thereof pursuant to the Registration Statement.
3. PURCHASE OF THE UNDERWRITTEN SHARES BY THE Underwriters. On the
basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company hereby agrees to sell
2,303,889 shares of the Firm Shares and the Selling Stockholder hereby agrees to
sell 2,096,111 shares of the Firm Shares, severally and not jointly, to the
several Underwriters and each of the Underwriters, severally and not jointly,
agrees to purchase the number of the Firm Shares set opposite that Underwriter's
name in Schedule 1 hereto. Each Underwriter shall be obligated to purchase from
the Company, and from the Selling Stockholder, that number of Firm Shares which
represents the same proportion of the number of Firm Shares to be sold by the
Company, and by the Selling Stockholder, as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule 1 represents of the total
number of shares of the Firm Shares to be purchased by all of the Underwriters
pursuant to this Agreement. The respective purchase obligations of the
Underwriters with respect to the Firm Shares shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 660,000 Option Shares. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Shares and is
exercisable as provided in Section 5 hereof. Option Shares shall be purchased
severally for the account of the Underwriters in proportion to the number of
Firm Shares Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Shares shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Shares other than in 100 share
amounts. The price of both the Firm Shares and any Option Shares payable to the
Company and the Selling Stockholder, as applicable, shall be $2.76 per share.
The Company and the Selling Stockholder shall not be obligated to
deliver any of the Underwritten Shares to be delivered on the First Delivery
Date or the Second Delivery Date (as hereinafter defined), as the case may be,
except upon payment for the Underwritten Shares to be purchased on such Delivery
Date as provided herein.
4. OFFERING OF STOCK BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale at the public offering price set forth
on the cover page of and on the terms and conditions set forth in the
Prospectus.
5. DELIVERY OF AND PAYMENT FOR THE UNDERWRITTEN SHARES. Delivery of and
payment for the Firm Shares shall be made at the office of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, at 7:00 a.m., New York City time, on the fourth full business day following
the date of this Agreement or at such other date or place as shall be determined
by agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company and the Selling Stockholder shall deliver or cause to be delivered
certificates representing the Firm Shares to the Representatives for the account
of each Underwriter against payment to or upon the order of the Company and the
Selling Stockholder of the purchase price by wire transfer of immediately
available (same day) funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Firm Shares
shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Shares, the Company and the Selling
Stockholder shall make the certificates representing the Firm Stock available
for inspection by the Representatives in Los Angeles, California, not later than
2:00 p.m., New York City time, on the business day prior to the First Delivery
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 Depositary Trust
Company designated by the Representatives.
At any time on or before the forty-fifth day after the date of this
Agreement the option granted in Section 3 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of Option Shares as to which the option is being exercised,
the names in which the Option Shares are to be registered, the denominations in
which the Option Shares are to be issued and the date and time, as determined by
the Representatives, when the Option Shares are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the Option
Shares are delivered are sometimes referred to as the "Second Delivery Date,"
and the First Delivery Date and the Second Delivery Date are sometimes each
referred to as a "Delivery Date.@
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 7:00 a.m., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Company shall deliver or cause
to be delivered the certificates representing the Option Shares to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of immediately
available (same day) funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Option Shares
shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Shares, the Company shall make the certificates representing the Option Shares
available for inspection by the Representatives in Los Angeles, California not
later than 2:00 p.m., New York City time, on the business day prior to the
Second Delivery Date. If the Representatives so elect, delivery of the Option
Shares may be made by credit through full fast transfer to the accounts at the
Depositary Trust Company designated by the Representatives.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING STOCKHOLDER. The
Company (as to Sections 6(a)-(l)) and the Selling Stockholder (as to Sections
6(i), 6(k), 6(m)) and 6(n) covenant and agree with the Underwriters as follows:
(a) The Company will not, either prior to the Effective Date
or thereafter during such period as, in the opinion of counsel for the
Underwriters, the Prospectus would be required by law to be delivered in
connection with sales of the Underwritten Shares by an underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Underwriters within a reasonable period of time prior to the filing thereof and
the Underwriters shall not have objected thereto in good faith.
(b) If the Registration Statement has not been declared
effective prior to the execution of this Agreement, the Company will
use its best commercial efforts to cause the Registration Statement to become
effective, and will notify the Underwriters promptly, and will confirm such
advice in writing, (1) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective, (2) of any request
by the securities or other governmental authority (including, without
limitation, the Commission) of any jurisdiction for amendments or supplements to
the Registration Statement or the Prospectus or for additional or supplemental
information, (3) of the issuance by any securities or other governmental
authority (including, without limitation, the Commission) of any jurisdiction of
any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose or the threat thereof, (4) of the
happening of any event during the period mentioned in Section 6(a) that in the
judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (5) of receipt by the Company or any representative or attorney of the
Company of any other communication from the securities or other governmental
authority (including, without limitation, the Commission) of any jurisdiction
relating to any of the Registration Statement, any Preliminary Prospectus or the
Prospectus. If at any time any securities or other governmental authority
(including, without limitation, the Commission) of any jurisdiction shall issue
any order suspending the effectiveness of the Registration Statement, the
Company will make every reasonable effort to obtain the withdrawal of such order
at the earliest possible moment. If the Company has omitted any information from
the Registration Statement, pursuant to Rule 430A, it will use its best efforts
to comply with the provisions of and make all requisite filings with the
Commission pursuant to said Rule 430A and to notify the Underwriters promptly of
all such filings. If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable filing fees in accordance
with Rule 111 of the 1933 Act Regulations by the earlier of (A) 10:00 p.m., New
York time, on the date of this Agreement and (B) the time confirmations are sent
or given, as specified by Rule 462(b)(2).
(c) If, at any time when a Prospectus relating to the
Underwritten Shares is required to be delivered under the 1933 Act, any event
occurs as a result of which the Prospectus, as then amended or supplemented,
would, in the judgment of counsel to the Company or counsel to the Underwriters,
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or the Registration
Statement, as then amended or supplemented, would, in the judgment of counsel to
the Company or counsel to the Underwriters, include any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading, or if for any other reason it is necessary, in the
judgment of counsel to the Company or counsel to the Underwriters, at any time
to amend or supplement the Prospectus or the Registration Statement to comply
with the 1933 Act or the 1933 Act Regulations, the Company will promptly notify
the Underwriters and, subject to Section 6(a) hereof, will promptly prepare and
file with the Commission, at the Company=s expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance and will deliver
to the Underwriters, without charge, such number of copies thereof as the
Underwriters may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Underwriters.
(d) The Company will furnish to the Underwriters and their
counsel, without charge, (i) an aggregate of three manually signed copies of the
registration statement described in Section 3(a) hereof and each pre-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto, and any registration statement filed pursuant to Rule 462(b)
and (ii) so long as a prospectus relating to the Underwritten Shares is required
to be delivered under the 1933 Act, as many copies of each Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto as the
Underwriters may reasonably request.
(e) The Company will comply with all the undertakings
contained in the Registration Statement and shall file, on a timely basis, with
the Commission, the NASD, the AMEX and any other securities exchange on which
the securities of the Company are then listed, all periodic and other reports
and documents required to be filed under the Exchange Act.
(f) Prior to the sale of the Underwritten Shares to the
Underwriters, the Company and the Selling Stockholder will cooperate with the
Underwriters and their counsel in connection with the registration or
qualification of the Underwritten Shares for offer and sale under the state
securities or Blue Sky laws of such jurisdictions as the Underwriters may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject. The Company will advise the Underwriters
promptly of the suspension of the qualification or registration of (or any
exemption relating to) the Underwritten Shares for offering, sale or trading in
any jurisdiction or any initiation or threat of any proceedings for such
purpose, and in the event of the issuance of any order suspending such
qualification or registration or exemption, the Company shall use its best
efforts to obtain the withdrawal thereof at the earliest possible time.
(g) During the period of three years commencing on the
Effective Date, the Company will furnish to the Underwriters: (i) as soon as
practicable after the end of each fiscal year of the Company, copies of the
Annual Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholders= equity and
cash flows for the fiscal year then ended and the opinion thereon of the
Company=s independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K (or Form 10-KSB, if applicable), Quarterly Report on Form
10-Q (or Form 10-QSB, if applicable), Current Report on Form 8-K, or other
report filed by the Company with the Commission, the NASD, the AMEX, or any
other securities exchange; and (iii) as soon as available, copies of any reports
or communications of the Company mailed generally to holders of its capital
stock.
(h) As soon as practicable, but in any event not later than 45
days after the end of the 12-month period beginning on the day after the end of
the fiscal quarter of the Company during which the Effective Date of the
Registration Statement occurs (90 days in the event that the end of such fiscal
quarter is the end of the Company=s fiscal year), the Company will make
generally available to its security holders, in the manner specified in Rule
158(b) of the 1933 Act Regulations, and to the Underwriters, an earnings
statement which will be in the detail required by, and will otherwise comply
with, the provisions of Section 11(a) of the 1933 Act and Rule 158(a) of the
19933 Act Regulations, which statement need not be audited unless required by
the 1933 Act or the 1933 Act Regulations, covering a period of at least 12
consecutive months after the Effective Date of the Registration Statement.
(i) Neither the Company nor the Selling Stockholder will, at
any time, directly or indirectly, take any action intended, or which might
reasonably be expected, to cause or result in, or which will constitute,
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of any of the Underwritten Shares.
(j) Prior to the Delivery Date, the Company shall furnish to
the Underwriters, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company, for any
periods subsequent to the periods covered by the financial statements appearing
in the Registration Statement and the Prospectus.
(k) Prior to the Delivery Date, the Company and the Selling
Stockholder will issue no press release or other communications directly or
indirectly and hold no press conferences with respect to the Company, the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company, or the offering of the Underwritten Shares, without
the prior written consent of the Underwriters unless in the opinion of legal
counsel to the Company, and after reasonable advance notification to the
Underwriters, such press release or communication is required by law.
(l) The Company will apply the net proceeds from the offering
and sale of the Shares in the manner set forth in the Prospectus under the
caption AUse of Proceeds.@
(m) The Selling Stockholder will deliver to the
Representatives prior to or on the First Delivery Date a properly completed and
executed United States Treasury Department Form W-9 or W-8, as applicable (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
(n) The Selling Stockholder agrees that the Selling
Stockholder Shares, which are represented by certificates held in custody for
the Selling Stockholder, is subject to the interest of the Underwriters, and
that the arrangements made by the Selling Stockholder for such custody are to
that extent irrevocable, and that the obligations of the Selling Stockholder
hereunder shall not be terminated by any act of the Selling Stockholder, by
operation of law, or the occurrence of any other event.
You may waive in writing the performance by the Company of any one or
more of the foregoing covenants or extend the time for their performance.
7. EXPENSES.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay
all accountable out-of- pocket costs and Expenses incident to the performance of
the obligations of the Company and the Underwriters under this Agreement,
including but not limited to costs and Expenses of or relating to (1) the
preparation, printing and filing of the Registration Statement (including each
pre- and post-effective amendment thereto) and exhibits thereto, any
registration statement filed pursuant to Rule 462(b), each Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
including all fees, disbursements and other charges of counsel to the Company,
(2) the preparation and delivery of certificates representing the Underwritten
Shares, (3) furnishing (including costs of shipping and mailing) such copies of
the Registration Statement (including all pre- and post-effective amendments
thereto), the Prospectus and any Preliminary Prospectus, and all amendments and
supplements to the Prospectus, as may reasonably be requested for use in
connection with the offering and sale of the Underwritten Shares, (4) the
listing of the Common Stock on the AMEX and withdrawal of the Common Stock from
the Nasdaq SmallCap Market, (5) any filings required to be made by the
Underwriters with the NASD and the registration or qualification of the
Underwritten Shares for offer and sale under the state securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 6(f), including the
reasonable fees, disbursements and other charges of counsel to the Underwriters
in connection therewith and with the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (6) fees, disbursements
and other charges of counsel to the Company and the Company=s independent public
or certified public accountants and other advisors, (7) all expenses incident to
the issuance and delivery of the Underwritten Shares (including all printing and
engraving costs), (8) all fees and expenses of the registrar and transfer agent
of the Common Stock, (9) all necessary issue, transfer and other stamp taxes in
connection with the delivery of the Underwritten Shares, and (10) all other
fees, costs and expenses referred to in Item 13 of Part II of the Registration
Statement. The Company shall reimburse the Underwriters for all their
accountable travel expenses, reasonable legal fees, disbursements and other
charges and other out-of-pocket Expenses incurred in connection with the
engagement hereunder, up to a maximum of $100,000, regardless of whether or not
the public offering of the Underwritten Shares is consummated as contemplated
hereby.
(b) The Company (in addition to its other obligations under
Section 7(a) above) and the Selling Stockholder will pay to the Representatives
(individually and not in their capacity as Representatives) a nonaccountable
expense allowance equal to 1.0% of the gross sales price of the Underwritten
Shares to the public, each to pay on a pro rata basis in proportion to the
number of Underwritten Shares sold by each to the Underwriters. This
nonaccountable expense allowance with respect to the Firm Shares shall be paid
to the Representatives on the First Delivery Date and the nonaccountable
expenses with respect to the Option Shares, if any, shall be paid to the
Representatives on the Second Delivery Date (and shall be contingent on the
closing of the sale of the Option Shares), and liability for such payment shall
be several and not joint. If the sale of the Firm Shares is not completed for
any reason, including the failure of the Underwriters to complete the offering
contemplated by this Agreement (except if the Company prevents such completion
or if the failure to complete the offering is the result of the breach by the
Company of any representation, warranty or agreement contained herein), the
Representatives will return any deposited amounts of the nonaccountable expense
allowance, less any actual out-of-pocket expenses incurred by the Underwriters.
(c) If, within three months after the termination of this
Agreement, the Company or the Selling Stockholders shall sell any shares of
Common Stock to investors previously identified and/or contacted by the
Underwriters in their capacity as such, as set forth on a list furnished to the
Company and the Selling Stockholder within a reasonable period of time after
such termination, then the Company and/or the Selling Stockholder, as
appropriate, shall pay the Underwriters, at the time of each such sale, an
amount equal to the underwriting discounts or commissions otherwise contemplated
with respect to the gross proceeds to the Company or the Selling Stockholder
from each such sale.
8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Underwriters not later than 5:30 p.m., Los
Angeles time, on the date of this Agreement or at such later date and time as
shall be consented to by the Representatives and all filings required by Rule
424 of the Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued, and no proceedings for that
purpose shall be pending or threatened by any securities or other governmental
authority (including, without limitation, the Commission), (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Underwritten Shares under the securities or Blue Sky laws
of any jurisdiction shall be in effect and no proceeding for such purpose shall
be pending before or threatened or contemplated by any securities or other
governmental authority (including, without limitation, the Commission), (iii)
any request for additional information on the part of the staff of any
securities or other governmental authority (including, without limitation, the
Commission) shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and (iv) after the date hereof no amendment
or supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Underwriters and the
Underwriters did not object thereto in good faith, and the Underwriters shall
have received certificates, dated the Delivery Date and signed by the President
and Chief Executive Officer or the Chairman of the Board of Directors of the
Company, and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii) above.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) neither the Company nor any Subsidiary shall have sustained
any material loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in the judgment of the Underwriters any such development makes it
impracticable or inadvisable to consummate the sale and delivery of the
Underwritten Shares to the public at the public offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or the
Subsidiaries or any of its officers or directors in their capacities as such,
before or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling decision or finding would have a
Material Adverse Effect.
(e) Each of the representations and warranties of the Company
and the Selling Stockholder contained herein shall be true and correct at the
Delivery Date, as if made on such date, and all covenants and agreements herein
contained to be performed on the part of the Company and the Selling Stockholder
and all conditions herein contained to be fulfilled or complied with by the
Company at or prior to the Delivery Date shall have been duly performed,
fulfilled or complied with.
(f) The Underwriters shall have received:
(i) The favorable opinion, dated as of the Delivery
Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(A) The Company and the Subsidiaries have
been duly incorporated and are validly existing as
corporations in good standing under the laws of their
respective jurisdictions of incorporation.
(B) The Company and the Subsidiaries have
corporate power and authority to own their properties and
carry on their businesses as described in the Registration
Statement and the Prospectus and the Company has corporate
power and authority to enter into and perform its obligations
under this Agreement.
(C) The Company is duly qualified to
transact business and is in good standing in each state of the
United States in which the conduct of its
business or the ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not materially
and adversely affect the Company or its business, properties,
financial condition or results of operations.
(D) The authorized, issued and outstanding
number of shares of capital stock of the Company is as set
forth under the caption ACapitalization@ in the Prospectus and
in the Preliminary Prospectus as of the dates therein. The
issued and outstanding capital stock of the Company has been
duly authorized, validly issued, fully paid and is
non-assessable and has not been issued in violation of or is
not otherwise subject to any preemptive rights set forth in
the Certificate of Incorporation, Bylaws or any agreement or
other arrangement known to counsel. All offers and sales of
the Company=s capital stock or securities since January 1,
1992, including all offers and sales of securities described
in Item 15 of Part II of the Registration Statement, were
either duly registered or qualified under the 1933 Act and
state securities or Blue Sky laws or were exempt from the
registration requirements of the 1933 Act, assuming that all
representations made to the Company by any purchaser of such
capital stock were true and correct when made.
(E) Issuance and sale of the Underwritten
Shares to be sold by the Company to the Underwriters under the
terms of this Agreement have been duly authorized by the
Company and, when such shares are issued and delivered by the
Company, pursuant to the terms of this Agreement and the
Company receives the consideration recited herein, such
Underwritten Shares will be validly issued, and fully paid and
non-assessable and the issuance of the Underwritten Shares is
not subject to preemptive or, to their knowledge, other
similar rights granted by the Company.
(F) To their knowledge, except as described
in the Prospectus, (i) there are no outstanding options,
warrants or other rights granted to or by the
Company to purchase shares of Common Stock or other
securities of the Company or the Subsidiaries, and (ii) there
are no commitments, plans or arrangements to issue any shares
of Common Stock or other securities of the Company or the
Subsidiaries.
(G) This Agreement has been duly authorized,
executed and delivered by the Company.
(H) The form of certificate evidencing the
Underwritten Shares is in due and proper form under Delaware
law.
(I) To their knowledge, except as described
in the Registration Statement or in the Prospectus, there are
no actions, suits or proceedings pending or threatened to
which the Company or the Subsidiaries are a party that are
required to be described in the Registration Statement or the
Prospectus and are not so described.
(J) The information set forth in the
Prospectus under the captions ARisk Factors - Control by
Principal Stockholders,@ ARisk Factors - Potential Adverse
Market Impact of Shares Eligible for Future Sale,@ ARisk
Factors - Antitakeover Effects of Certain Charter Provisions,
and Delaware Law,@ ABusiness - Trademarks and Patents,@
ABusiness Governmental Regulations,@ ABusiness - Legal
Proceedings,@ AManagement - 1997 Management Committee
Incentive Award Program,@ AManagement - Stock Plans,@
AManagement - Employment Agreements,@ ACertain Transactions,@
and ADescription of Capital Stock,@ and in Part II of the
Registration Statement under the captions AIndemnification of
Directors and Officers,@ and ARecent Sales of Unregistered
Securities,@ to the extent that they constitute a summary of
legal matters, documents or proceedings referred to therein,
have been reviewed by us and fairly present and summarize, in
all material respects, the information called for respect to
such legal matters, documents and proceedings under the 1933
Act and the 1933 Act Regulations.
(K) To their knowledge, there are no
agreements, contracts, leases or other documents to which the
Company is a party of a character required to be described or
referred to in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which are
not described or referred to therein or filed as required and,
to their knowledge, the Company is not in default in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any material
instrument or agreement filed as an exhibit to the
Registration Statement.
(L) No consent, approval, authorization or
order of or qualification with any court, government or
governmental agency or body having jurisdiction over the
Company or over any of its properties or operations is
necessary in connection with the consummation by the Company
of the transactions contemplated in this Agreement and the
compliance by the Company with its obligations thereunder on
the Delivery Date, other than the filing of the Registration
Statement and the Prospectus with the Commission and the
issuance of an effectiveness order by the Commission with
respect to the Registration Statement, all of which have been,
or will prior to the Delivery Date be, completed.
(M) Neither the execution and delivery nor
the performance of this Agreement by the Company (i) conflicts
with any provision of the Certificate Incorporation or Bylaws
of the Company, (ii) violates any law applicable to the
Company, or (iii) results in a breach or violation of, or
constitutes a default under, any term of any agreement or
instrument filed as an exhibit to the Registration Statement
or of any order, writ or decree, of which they have knowledge,
of any court, governmental agency or body.
(N) To their knowledge, there are no
proceedings, pending or threatened before any regulatory body
or agency, which if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
(O) To their knowledge, all holders of
securities of the Company who have rights to the registration
of Common Stock or other securities because of the filing of
the Registration Statement by the Company have waived such
rights or have received proper notice of the filing of the
Registration Statement and have not asserted, and no longer
have the right to assert, such rights.
(P) The Company is not an Ainvestment
company@ or a company Acontrolled@ by an Ainvestment company@
within the meaning of the Investment Company Act of 1940, as
amended.
(Q) The Registration Statement has become
effective under the 1933 Act; any required filing of the
Prospectus, and any supplements thereto pursuant to Rule
424(b) has been made in the manner and within the time period
required; and to their knowledge and information, no stop
order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no
proceedings therefor have been instituted or are pending or
contemplated under the 1933 Act.
Following their opinions required by subsection
(f)(i) of this Section 8, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP shall additionally
state that nothing has come to their attention
that leads them to believe that the Registration Statement (except for
financial statements and schedules and other financial and statistical
information included therein, as to which counsel need make no
statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or that the Prospectus (except for financial statements and
schedules and other financial and statistical information included
therein, as to which counsel need make no statement), as of its date
(unless the term AProspectus@ refers to a prospectus which has been
provided to the Underwriters by the Company for use in connection with
the offering of the Underwritten Shares which differs from the
Prospectus on file at the Commission at the time the Registration
Statement becomes effective, in which case at the time it is first
provided to the Underwriters for such use) or at the Delivery Date,
included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(ii) The favorable opinion, dated the Delivery Date,
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire, counsel for the Company, in form and
substance satisfactory to the Underwriters, to the effect that:
(A) Except as described in the Registration
Statement or in the Prospectus, there are no actions, suits or
proceedings pending or, to counsel's knowledge, threatened to
which the Company or the Subsidiaries are a party that are
reasonably likely to have a Material Adverse Effect.
(B) There are no proceedings, pending or, to
counsel's knowledge, threatened before any regulatory body or
agency to which the Company is a party or otherwise involving
the Company, except as disclosed in writing to the
Representatives.
(C) The Company is in compliance with and
has conducted its businesses (and the businesses of its
Subsidiaries) in material conformity with all applicable laws
and regulations relating to the operation of such businesses
as described in the Registration Statement.
Following her opinions required by subsection (f)(ii)
of this Section 8, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire shall additionally state
that nothing has come to her attention that leads her to believe that
the Registration Statement (except for financial statements and
schedules and other financial and statistical information included
therein, as to which counsel need make no statement), at the time it
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading or that the Prospectus
(except for financial statements and schedules and other financial and
statistical information included therein, as to which counsel need make
no statement), as of its date (unless the term AProspectus@ refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Underwritten Shares
which differs from the Prospectus on file at the Commission at the time
the Registration Statement becomes effective, in which case at the time
it is first provided to the Underwriters for such use) or at the
Delivery Date, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(iii) The favorable opinion, dated the Delivery Date,
of Stroock & Stroock & ▇▇▇▇▇ LLP, counsel for the Selling Stockholder,
in form and substance satisfactory to the Underwriters, to the effect
that:
(A) To such counsel's knowledge, the Selling
Stockholder has full right, power and authority to enter into
this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by
the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any statute, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which the Selling Stockholder is a party or
by which the Selling Stockholder is bound or to which any of
the property or assets of the Selling Stockholder is subject,
which breach, violation or default is reasonably likely to
have a material adverse effect on the performance of such
Selling Stockholder=s obligations hereunder, nor will such
actions result in any violation of any statute or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Selling Stockholder or the property or assets of the Selling
Stockholder, and, except for the registration of the Selling
Stockholder Shares under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state
securities laws in connection with the purchase of the Selling
Stockholder Shares by the Underwriters and the distribution of
such shares by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any
such court or governmental agency or body (except for those
consents, approvals, authorizations, orders, filings or
registrations, which, if not secured, filed or registered, as
applicable, would not have a material adverse effect on the
performance of such Selling Stockholder=s obligations
hereunder) is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the
Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby;
(B) This Agreement has been duly executed
and delivered by or on behalf of the Selling Stockholder;
(C) A Power-of-Attorney and a Custody
Agreement have been duly executed and delivered by the Selling
Stockholder and, to such counsel's knowledge, constitute valid
and binding agreements of such Selling Stockholder,
enforceable in accordance with their respective terms subject
to the effect of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws
relating to or affecting creditor=s rights generally (and
court decisions with respect thereto), equitable principles
(whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing;
(D) Immediately prior to the date of this
Agreement and the First Delivery Date, the Selling Stockholder
had, to such counsel's knowledge, full right, power and
authority to sell, assign, transfer and deliver such shares to
be sold by such Selling Stockholder hereunder; and
(E) Assuming that The Depository Trust
Company (ADTC@) has indicated by book entry that the Selling
Stockholder Shares have been credited to the securities
account of each Underwriter or its nominee maintained with DTC
and assuming that each Underwriter has acquired its interest
therein without notice of Aadverse claim@ (as such term is
defined in the Uniform Commercial Code as in effect in the
State of New York), no action based on an adverse claim to the
Selling Stockholder Shares may be asserted against such
Underwriter.
Following their opinions required by subsection (f)(iii) of
this ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇ shall additionally state that no
facts have come to the attention of such counsel which lead it to believe that
the information in the Registration Statement under the caption APrincipal and
Selling Stockholders,@ as of the Effective Date, contained any untrue statement
of a material fact relating to the Selling Stockholder or omitted to state such
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the information in the Prospectus
under the caption APrincipal and Selling Stockholders@ contains any untrue
statement of a material fact relating to the Selling Stockholder or omits to
state such a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and counsel has no knowledge (without investigation)
that the other information in the Registration Statement and the Prospectus with
respect to the Selling Stockholder is untrue or misleading in any material
respect.
(g) At the time of the execution of this Agreement, the
Underwriters shall have received from Ernst & Young LLP, former independent
public accountants for the Company, and from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent
accountants for the Company, as
appropriate, a letter dated such date and addressed to the Underwriters, in
form and substance satisfactory to the Underwriters, containing statements and
information of the type ordinarily included in accountants= Acomfort letters@ to
underwriters, delivered according to Statement of Auditing Standards No. 72 (or
any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial and capital stock information contained in the
Registration Statement and the Prospectus.
(h) The Underwriters shall have received from Ernst & Young
LLP, former independent accountants for the Company, and from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, independent accountants for the Company, as appropriate, a letter addressed
to the Underwriters, and in form and substance satisfactory to the Underwriters,
dated as of the Delivery Date, to the effect that they reaffirm the statements
made in the letters furnished pursuant to subsection (g) of this Section 8.
(i) At the Delivery Date, there shall be furnished to the
Underwriters a certificate, dated the date of its delivery, signed by each of
the Chief Executive Officer and the Chief Financial Officer of the company, in
form and substance satisfactory to the Underwriters, to the effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and (i) as of
the date of such certificate, (x) the Registration Statement does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading and (y) the Prospectus does not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading and (ii) since the Effective Date, no event
has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect.
(ii) Each of the representations and warranties of
the Company contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct in all
material respects.
(iii) Each of the covenants required herein to be
performed by the Company on or prior to the date of such certificate
has been duly, timely and fully performed and each condition herein
required to be complied with by the Company on or prior to the delivery
of such certificate has been duly, timely and fully complied with.
(iv) No stop order suspending the effectiveness of
the Registration Statement or of any part thereof has been issued and
no proceedings for that purpose have been instituted or, to their
knowledge, are contemplated by the Commission.
(v) Subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operations of
the Company or the Subsidiaries, except as set forth in or contemplated
by the Prospectus.
(j) The Underwritten Shares shall be qualified for sale in
such states as the Underwriters may reasonably request, each such qualification
shall be in effect and not subject to any stop order or other proceeding on the
Delivery Date.
(k) The Common Stock (including Underwritten Shares) shall
have been approved for listing on the AMEX, and, contingent upon such approval,
withdrawn from the Nasdaq SmallCap Market.
(l) The Underwriters and counsel for the Underwriters shall
have been furnished with such documents and opinions as they may require in
order to evidence the accuracy of any of the representations or warranties or
the fulfillment of any of the conditions herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Underwritten Shares as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters. Any certificate
or document signed by any officer of the Company and delivered to you or to your
counsel shall be deemed a representation and warranty by the Company to each of
you as to the statements made therein and such statements are true and correct
except where the inaccuracy of such statements alone or in the aggregate would
not have a Material Adverse Effect.
(m) The Selling Stockholder shall have furnished to the
Underwriters such certificates, in addition to those specifically mentioned
herein, as the Underwriters may have reasonably requested as to the accuracy and
completeness at the Delivery Date of any statement in the Registration Statement
or the Prospectus regarding the Selling Stockholder, as to the accuracy at the
Delivery Date of the representations and warranties of the Selling Stockholder,
as to the performance by the Selling Stockholder of its obligations hereunder,
or as to the fulfillment of the conditions concurrent and precedent to the
obligations hereunder of the Underwriters.
(n) The NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and agreements.
(o) As of the date hereof the Company, its directors and
officers, and certain affiliates of the Company (as designated on Attachment C
hereto by the Company), and the Selling Stockholder, shall have furnished to the
Underwriters Alock-up@ agreements substantially in the forms of Attachment A and
Attachment B hereto, and such agreements shall be in full force and effect on
the Delivery Date.
9. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless the
Underwriters and the Selling Stockholder, the directors, officers, employees and
agents of the Underwriters and the Selling Stockholder and each person, if any,
who controls the Underwriters or the Selling Stockholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any
and all losses, claims, liabilities, expenses and damages, joint or several
(including any and all investigative, reasonable legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted), to which any of them may
become subject under the 1933 Act, the 1934 Act, or other Federal or state
statutory law or regulation, at common law or otherwise. Such indemnity shall
not, however, cover any such loss, claim, damage, liability, cost or expense
which is held in a final judgment of a court to have arisen primarily out of the
gross negligence or willful misconduct of the Underwriters, or the failure of
the Underwriters to deliver a Prospectus if it fails to correct such deficiency
under the 1933 Act. This indemnity agreement will be in addition to any
liability which the Company may otherwise have. The Company will not, without
the prior written consent of the Underwriters or the Selling Stockholder (which
consent shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification has been sought hereunder
(whether or not such Underwriters or the Selling Stockholder or any person who
controls such Underwriters or the Selling Stockholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act is a party to each
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of the Underwriters and the Selling
Stockholder and each such controlling person from all liability arising out of
such claim, action, suit or proceeding and does not impair or alter the business
or affairs of the Underwriters or the Selling Stockholder.
(b) The Selling Stockholder shall indemnify and hold harmless
the Underwriters and the Company, the directors, officers, employees and agents
of the Underwriters and the Company and each person, if any, who controls the
Underwriters or the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act from and against any and all losses, claims,
liabilities, expenses and damages, joint or several (including any and all
investigative, reasonable legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which any of them may become subject under
the 1933 Act, the 1934 Act, or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Selling Stockholder expressly for use therein, and provided
further that, in the event the sale of the Selling Stockholder Shares is not
consummated and this Agreement is terminated, the liability of the Selling
Stockholder shall be limited to the reimbursement of the Selling Stockholder=s
proportionate share of the accountable expenses of the Underwriters as provided
in Section 7 hereof. The parties acknowledge that the only information in the
Registration Statement, the Prospectus, or any amendment or supplement thereto
furnished to the Company by or on behalf of the Selling Stockholder expressly
for use therein is set forth therein under the caption APrincipal and Selling
Stockholders.@ This indemnity agreement will be in addition to any liability
which the Selling Stockholder may otherwise have, including any liability
arising out of or based upon a breach of the terms and conditions of this
Agreement or the inaccuracy of any representation made by the Selling
Stockholder herein. The Selling Stockholder will not, without the prior written
consent of the Underwriters or the Company (which consent will not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification has been sought hereunder (whether or not such
Underwriters or the Company or any person who controls such Underwriters or the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of the
Underwriters and the Company and each such controlling person from all liability
arising out of such claim, action, suit or proceeding. Such indemnity shall not,
however, cover any such loss, claim, damage, liability, cost or expense which is
held in a final judgment of a court to have arisen primarily out of the gross
negligence or willful misconduct of the Underwriters or the failure of the
Underwriters to deliver a Prospectus if it fails to correct such deficiency
under the ▇▇▇▇ ▇▇▇. The liability of the Selling Stockholder under this section
shall be limited to an amount equal to the aggregate public offering price of
the Selling Stockholder Shares sold by the Selling Stockholder.
(c) Each Underwriter will severally (and not jointly)
indemnify and hold harmless the Company, its directors, each of its officers who
signed the Registration Statement, the Selling Stockholder and each person, if
any, who controls the Company or the Selling Stockholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any
losses, claims, liabilities, expenses and damages (including any and all
investigative, reasonable legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted if such settlement is effected with the written
consent of the Underwriters), to which any of them may become subject under the
1933 Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which it was made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives by or on
behalf of that Underwriter expressly for use therein. It is expressly
acknowledged and agreed by the Company and the Selling Stockholder that the only
written or other information furnished to the Company and the Selling
Stockholder by or on behalf of the Underwriters for use in the Registration
Statement, the Prospectus, or any amendment or supplement thereto is the
information set forth on the cover page of the Prospectus with respect to the
public offering price, the legend concerning over-allotments on the inside front
cover page of the Prospectus, and the information set forth in the Prospectus
under the caption AUnderwriting.@ The liability of each Underwriter under this
section shall be limited to an amount equal to the underwriting discounts and
commissions received by it under this Agreement.
(d) Any party that proposes to assert the right to be
indemnified under this Section 9 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 9, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 9 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by, or otherwise prejudices, the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded that a conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party that would prevent the counsel selected by the
indemnifying party from representing the indemnified party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (3) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be
paid by the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred and demand delivered
therefor. No indemnifying party will, without the prior written consent of the
indemnified parties (which consent will not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification has been
sought hereunder (whether or not the indemnified parties are parties to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding. An indemnifying
party will not be liable for any settlement of any action or claim effected
without its written consent (which consent will not be unreasonably withheld).
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 9 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company, the Selling
Stockholder or the Underwriters, each indemnifying party will contribute to the
total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company
from persons other than the Underwriters such as persons who control the Company
within the meaning of the 1933 Act or the 1934 Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company, the Selling Stockholder and the
Underwriters may be subject in proportion to the relative benefits received by
the Company, the Selling Stockholder and the Underwriters and the relative fault
of the Company, the Selling Stockholder and the Underwriters, with respect to
the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. The relative benefits
received by the Company, the Selling Stockholder and the Underwriters shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting Company expenses) received by the Company and the Selling
Stockholders as set forth in the table on the cover page of the Prospectus bear
to the underwriting discounts and commissions received by the Underwriters
hereunder. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Stockholder or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Selling Stockholder and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9(e) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. Notwithstanding the provisions of this
Section 9(e), the Underwriters shall not be required to contribute any amount in
excess of the underwriting discounts and commissions received by them under this
Agreement, the Selling Stockholder shall not be required to contribute any
amount in respect of which it would not have had an indemnification obligation
under Section 9(b) above, and no person found guilty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the ▇▇▇▇ ▇▇▇) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9(e), any person who controls a
party to this Agreement within the meaning of the 1933 Act or the 1934 Act will
have the same rights to contribution as that party, and each director of the
Company and each officer of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject in each case
to the provisions hereof. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 9(e), will notify
any such party or parties from whom contribution may be sought, but the omission
so to notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 9(e). No
party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be unreasonably
withheld).
10. TERMINATION. The obligations of the Underwriters under this
Agreement may be terminated at any time prior to the delivery of and payment for
the Underwritten Shares, by notice to the Company from the Representatives,
without liability on the part of the Underwriters to the Company or the Selling
Stockholder if, prior to delivery and payment for the Underwritten Shares, in
the sole judgment of the Representatives (i) trading in the Common Stock of the
Company shall have been suspended by the Commission, by Nasdaq, or by the AMEX,
(ii) trading in securities generally on the New York Stock Exchange, the AMEX,
or the Nasdaq National Market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on any of such exchanges,
or additional material governmental restrictions, not in force on the date of
this Agreement, shall have been imposed upon trading in securities generally by
any of such exchanges or by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by Federal or New York State authorities or (iv) any material adverse
change in the financial or securities markets in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred, the effect of any of which is such as to make it, in the sole judgment
of the Underwriters, impracticable or inadvisable to market the Underwritten
Shares on the terms and in the manner contemplated by the Prospectus.
11. DEFAULTING UNDERWRITERS. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Underwritten Shares which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the number of
Firm Shares set opposite the name of each remaining non-defaulting Underwriter
in Schedule 1 hereto bears to the total number of Firm Shares set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Underwritten Shares on such Delivery Date if
the total number of Underwritten Shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of Underwritten Shares to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of Underwritten Shares which it agreed to purchase on
such Delivery Date pursuant to the terms of Section 5. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Underwritten Shares to be purchased on such
Delivery Date. If the remaining Underwriters or other underwriters satisfactory
to the Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Shares)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company or the Selling Stockholder, except that the Company will continue
to be liable for the payment of expenses to the extent set forth in Section 7.
As used in this Agreement, the term "Underwriter" includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Underwritten
Shares which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for
damages caused by its default. If other Underwriters are obligated or agree to
purchase the Stock of a defaulting or withdrawing Underwriter, either the
Representatives or the Company may postpone the Delivery Date for up to seven
full business days in order to effect any changes that in the opinion of counsel
for the Company or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.
12. NOTICES. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
or (b) if to the Underwriters, at the office of Cruttenden ▇▇▇▇ Incorporated,
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or (c) if to the Selling Stockholder, at the
office of Worms & Co., Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇. Any such notice shall be effective only upon
receipt. Any notice under Section 9 may be made by facsimile or telephone, but
if so made shall be subsequently confirmed in writing.
13. SURVIVAL. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers, the
Selling Stockholder and the Underwriters set forth in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement shall remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of the Company, any of its officers or directors, the Selling Stockholder, the
Underwriters or any controlling person referred to in Section 9 hereof and (ii)
delivery of and payment for the Underwritten Shares. The respective agreements,
covenants, indemnities and other statements set forth in Sections 7 and 9 hereof
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
14. SUCCESSORS. This Agreement shall inure to the benefit of and shall
be binding upon the Underwriters, the Selling Stockholder, the Company and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnification and contribution contained in Sections 9(a) and (e) of this
Agreement shall also be for the benefit of the directors, officers, employees
and agents of the Underwriters and any person or persons who control the
Underwriters within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and (ii) the indemnification and contribution contained in Sections
9(b), (c) and (e) of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act. No Person shall be deemed a successor because of his or its purchase
of any Underwritten Shares.
15. HEADINGS. Section headings in this Agreement are for convenience of
reference only, do not constitute a part of this Agreement, and shall not affect
its interpretation.
16. CHANGES. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company, the Selling
Stockholder and the Underwriters.
17. APPLICABLE LAW. The validity and interpretations of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of California, without giving
effect to any provisions relating to conflicts of laws.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[SIGNATURES APPEAR ON FOLLOWING PAGE; REMAINDER OF THIS
PAGE LEFT INTENTIONALLY BLANK]
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Company, the Selling Stockholder
and the Underwriters in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇=S FURNITURE, INC.
By:
Name:
Title:
JAPAN OMNIBUS LTD.
By:
As Attorney-in Fact for the
Selling Stockholder
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the
date first above written.
CRUTTENDEN ▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇ CAPITAL GROUP, LLC
BLACK & COMPANY, INC.
By: Cruttenden ▇▇▇▇ Incorporated
By:
Name:
Title:
SCHEDULE 1
Number of Firm Shares
TO BE PURCHASED
UNDERWRITER
Cruttenden ▇▇▇▇ Incorporated 1,155,000
Black & Company, Inc. 1,155,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Group 1,155,000
Josephthal & Co. Inc. 205,000
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. 205,000
Branch, ▇▇▇▇▇▇ & Company 105,000
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Inc. 105,000
Genesis Merchant Group Securities 105,000
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc. 105,000
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Company, Inc. 105,000
=======
Total 4,400,000
ATTACHMENT A
Cruttenden ▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Group, LLC
[ADDRESS]
Black & Company, Inc.
[ADDRESS]
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement (the AUnderwriting
Agreement"), which will be executed between ▇▇▇▇▇▇=s Furniture, Inc., a Delaware
corporation (the "Company"), Japan Omnibus Ltd., and Cruttenden ▇▇▇▇
Incorporated, Black & Company, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Group LLC, as
Representatives of the several Underwriters named therein (the "Underwriters").
All capitalized terms not otherwise defined herein shall have the meanings given
to such terms in the Underwriting Agreement.
In consideration of the Underwriting Agreement, the undersigned hereby
agrees not to, without the prior written consent of the Underwriters, offer,
sell or otherwise dispose of any shares of the Company's Common Stock, par value
$0.001 per share (the "Common Stock") (other than the Shares or Option Shares)
or any other equity securities of the Company, including
securities convertible into or exercisable or exchangeable for Common Stock,
for a period of 180 days after the Delivery Date, except with respect to (i) the
issuance of securities pursuant to contractual obligations of the Company in
effect on November 10, 1997 to the extent disclosed in writing to the
Underwriters prior to the effective date of the Registration Statement , (ii)
the issuance of shares of Common Stock or stock options to purchase shares of
Common Stock under any employee benefit or purchase plan of the Company in
effect on November 10, 1997, or (iii) securities of the Company issued on a pro
rata basis to all holders of a class of outstanding equity securities of the
Company.
It is understood that, if the Underwriting Agreement does not become
effective, the undersigned will be released from his obligations under this
letter agreement.
Dated: _____________, 1998
Very truly yours,
▇▇▇▇▇▇=S FURNITURE, INC.
By:
Name:
Title:
ATTACHMENT B
Cruttenden ▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Group, LLC
[ADDRESS]
Black & Company, Inc.
[ADDRESS]
Ladies and Gentlemen:
Reference is made to an Underwriting Agreement (the AUnderwriting
Agreement"), which will be executed between ▇▇▇▇▇▇=s Furniture, Inc., a Delaware
corporation (the "Company"), Japan Omnibus Ltd., and Cruttenden ▇▇▇▇
Incorporated, Black & Company, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Group LLC, as
Representatives of the several Underwriters named therein (the "Underwriters").
All capitalized terms not otherwise defined herein shall have the meanings given
to such terms in the Underwriting Agreement.
In consideration of the Underwriting Agreement, the undersigned hereby
agrees not to, without the prior written consent of the Underwriters, offer,
sell or otherwise dispose of any shares of the Company's Common Stock, par value
$0.001 per share (the "Common Stock") (other than the Selling Stockholder
Shares), or any other equity securities of the Company, including securities
convertible into or exercisable or exchangeable for Common Stock, for a period
of 120 days after the Delivery Date.
It is understood that, if the Underwriting Agreement does not become
effective, the undersigned will be released from his or its obligations under
this letter agreement.
Dated: _____________, 1998
Very truly yours,
By:
Name:
Title:
ATTACHMENT C
List of persons from whom Lock-Up Letters received:
General Electric Capital Corporation
Permal Group
Permal Capital Management, Inc.
Permal Services, Inc.
Permal Capital Partners, L.P.
Permal Asset Management
Permal Special Opportunities, Ltd.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
United Gulf Bank (B.S.C.) B.C.
Kuwait Investment Projects
ATCO Holdings, Ltd.
ATCO Development, Inc.
Worms & Cie
Worms & Co., Inc.