Exhibit 1.1
1,500,000 SHARES
COMMON STOCK
($0.01 PAR VALUE)
UNDERWRITING AGREEMENT
__________________, 2001
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇▇ & COMPANY, INC.
As Representatives of the Several Underwriters
c/o ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned, EPIQ Systems, Inc., a Missouri corporation (the
"Company"), and the persons listed on Schedule I hereto (the "Selling
Shareholders"), hereby address you as the representatives (the
"Representatives") of each of the persons, firms and corporations listed on
Schedule II hereto (collectively, the "Underwriters") and hereby confirm their
agreement with the several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell to the
Underwriters 1,025,000 shares of its Common Stock, par value $0.01 per share,
and the Selling Shareholders propose to sell to the Underwriters a total of
475,000 shares of the Company's Common Stock, par value $0.01 per share, as set
forth on Schedule I hereto (such 1,500,000 shares of Common Stock are herein
collectively referred to as the "Firm Shares"). Solely for the purpose of
covering over-allotments in the sale of the Firm Shares, the Company further
proposes to grant to the Underwriters the right to purchase up to an additional
225,000 shares of Common Stock (the "Option Shares"), as provided in Section 3
of this Agreement. The Firm Shares and the Option Shares are herein sometimes
referred to as the "Shares" and are more fully described in the Prospectus
hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees and each Selling
Shareholder agrees, severally and not jointly, to sell to the Underwriters, and
each such Underwriter agrees, severally and not jointly, (a) to purchase from
the Company and from each of the Selling Shareholders, pro rata, at a purchase
price of $___ per share, the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule II hereto and (b) to purchase from the Company
any additional number of Option Shares which such Underwriter may become
obligated to purchase pursuant to Section 3 hereof.
The Company and the Selling Shareholders will deliver definitive
certificates for the Firm Shares at the office of ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("▇▇▇▇▇▇▇' Office"), or such other place as you
and the Company may mutually agree upon, for the accounts of the Underwriters
against payment to the Company and the Selling Shareholders of the purchase
price for the Firm Shares sold by them to the several Underwriters by wire
transfer of immediately available funds payable to the order of the Company and
the Selling Shareholders, as their respective interests may appear, and
delivered to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other place as may be agreed upon between you and the Company (the "Place of
Closing"), at 10:00 a.m., St. Louis time, on ____________, 2001, or at such
other time and date not later than five full business days thereafter as you and
the Company may agree, such time and date of payment and delivery being herein
called the "Closing Date."
The certificates for the Firm Shares so to be delivered will be made
available to you for inspection at ▇▇▇▇▇▇▇' Office (or such other place as you
and the Company may mutually agree upon) at least one full business day prior to
the Closing Date and will be in such names and denominations as you may request
at least forty-eight hours prior to the Closing Date.
It is understood that an Underwriter, individually, may (but shall not
be obligated to) make payment on behalf of the other Underwriters whose funds
shall not have been received prior to the Closing Date for Shares to be
purchased by such Underwriter. Any such payment by an Underwriter shall not
relieve the other Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Shares to
the public upon the terms and conditions set forth in the Registration Statement
hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. The Company hereby
grants an option to the Underwriters to purchase from them on a pro rata basis
up to 225,000 Option Shares, respectively, on the same terms and conditions as
the Firm Shares; provided, however, that such option may be exercised only for
the purpose of covering any over-allotments which may be made by them in the
sale of the Firm Shares. No Option Shares shall be sold or delivered unless the
Firm Shares previously have been, or simultaneously are, sold and delivered.
The option is exercisable on behalf of the several Underwriters by you,
as Representatives, at any time, and from time to time, before the expiration of
30 days from the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next day thereafter when The Nasdaq
National Market is open for trading), for the purchase of all or part of the
Option Shares covered thereby, by notice given by you to the Company and in the
manner provided in Section 13 hereof, setting forth the number of Option Shares
as to which the Underwriters are exercising the option, and the date of delivery
of said Option Shares, which date shall not be more than five business days
after such notice unless otherwise agreed to by the parties. You may terminate
the option at any time, as to any unexercised portion thereof, by giving written
notice to the Company to such effect.
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You, as Representatives, shall make such allocation of the Option
Shares among the Underwriters as may be required to eliminate purchases of
fractional Shares.
Delivery of the Option Shares with respect to which the option shall
have been exercised shall be made to or upon your order at ▇▇▇▇▇▇▇' Office (or
at such other place as you and the Company may mutually agree upon), against
payment by you of the per share purchase price to the Company by wire transfer
of immediately available funds. Such payment and delivery shall be made at 10:00
a.m., St. Louis time, on the date designated in the notice given by you as above
provided for (which may be the same as the Closing Date), unless some other date
and time are agreed upon, which date and time of payment and delivery are called
the "Option Closing Date." The certificates for the Option Shares so to be
delivered will be made available to you for inspection at ▇▇▇▇▇▇▇' Office at
least one full business day prior to the Option Closing Date and will be in such
names and denominations as you may request at least forty-eight hours prior to
the Option Closing Date. On the Option Closing Date, the Company shall provide
the Underwriters such representations, warranties, agreements, opinions,
letters, certificates and covenants with respect to the Option Shares as are
required to be delivered on the Closing Date with respect to the Firm Shares.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
SELLING SHAREHOLDERS. (a) The Company represents and warrants to and agrees with
each Underwriter that:
(i) A registration statement (Registration No. 333-_____) on
Form S-3 with respect to the Shares, including a preliminary
prospectus, and such amendments to such registration statement as may
have been required to the date of this Agreement, has been carefully
prepared by the Company pursuant to and in conformity with the
requirements of the Securities Act of 1933, as amended (the "1933
Act"), and the rules and regulations thereunder (the "1933 Act Rules
and Regulations") of the Securities and Exchange Commission (the "SEC")
and has been filed with the SEC under the 1933 Act. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Copies of such
registration statement, including any amendments thereto, each related
preliminary prospectus (meeting the requirements of Rule 430 or 430A of
the 1933 Act Rules and Regulations) contained therein, and the
exhibits, financial statements and schedules thereto have heretofore
been delivered by the Company to you. If such registration statement
has not become effective under the 1933 Act, 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 SEC. If such
registration statement has become effective under the 1933 Act, a final
prospectus containing information permitted to be omitted at the time
of effectiveness by Rule 430A of the 1933 Act Rules and Regulations
will be filed promptly by the Company with the SEC in accordance with
Rule 424(b) of the 1933 Act Rules and Regulations. The term
"Registration Statement" as used herein means the registration
statement as amended at the time it becomes effective under the 1933
Act (the "Effective Date"), including financial statements and all
exhibits and all documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act and, if applicable,
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the information deemed to be included by Rule 430A of the 1933 Act
Rules and Regulations. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to such
registration statement will be filed and must be declared effective
before the offering of Shares may commence, the term "Registration
Statement" as used herein means the registration statement as amended
by said post-effective amendment. If an abbreviated registration
statement is prepared and filed with the SEC in accordance with Rule
462(b) under the 1933 Act (an "Abbreviated Registration Statement"),
the term "Registration Statement" as used in this Agreement includes
the Abbreviated Registration Statement. The term "Prospectus" as used
herein means (i) the prospectus as first filed with the SEC pursuant to
Rule 424(b) of the 1933 Act Rules and Regulations, or (ii) if no such
filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date or (iii) if a Term Sheet
or Abbreviated Term Sheet (as such terms are defined in Rule 434(b) and
434(c), respectively, of the 1933 Act Rules and Regulations) is filed
with the SEC pursuant to Rule 424(b)(7) of the 1933 Act Rules and
Regulations, the Term Sheet or Abbreviated Term Sheet and the last
Preliminary Prospectus filed with the SEC prior to the time the
Registration Statement became effective, taken together, including, in
each case, the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act. The term "Preliminary
Prospectus" as used herein shall mean a preliminary prospectus as
contemplated by Rule 430 or 430A of the 1933 Act Rules and Regulations
included at any time in the Registration Statement. For purposes of
this Agreement, the words "amend," "amendment," "amended," "supplement"
or "supplemented" with respect to the Registration Statement or the
Prospectus shall mean amendments or supplements to the Registration
Statement or the Prospectus, as the case may be; as well as documents
filed after the date of this Agreement and prior to the completion of
the distribution of the Shares and incorporated by reference therein as
described above.
(ii) Neither the SEC nor any state or other jurisdiction or
other regulatory body has issued, and neither is, to the knowledge of
the Company, threatening to issue, any stop order under the 1933 Act or
other order suspending the effectiveness of the Registration Statement
(as amended or supplemented) or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending the
qualification or registration of the Shares for offering or sale in any
jurisdiction nor instituted or, to the knowledge of the Company,
threatened to institute proceedings for any such purpose. Each
Preliminary Prospectus at its date of issue, the Registration Statement
and the Prospectus and any amendments or supplements thereto contain or
will contain, as the case may be, all statements which are required to
be stated therein by, and in all material respects conform or will
conform, as the case may be, to the requirements of, the 1933 Act and
the 1933 Act Rules and Regulations. Neither the Registration Statement
nor any amendment thereto, as of the applicable effective date,
contains or will contain, as the case may be, any untrue statement of a
material fact or omits or will omit to state any material fact required
to be stated therein or necessary to make the statements therein, not
misleading, and neither any Preliminary Prospectus, the Prospectus nor
any supplement thereto contains or will contain, as the case may be,
any untrue statement of a material fact or omits or will omit to state
any material fact required to be stated therein or
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necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement or
the Prospectus, or any such amendment or supplement, in reliance upon,
and in conformity with, written information furnished to the Company
relating to the Underwriters by or on behalf of the Underwriters
expressly for use in the preparation thereof (as provided in Section 14
hereof). There is no contract or document required to be described in
the Registration Statement or Prospectus or to be filed as an exhibit
to the Registration Statement which is not described or filed as
required. The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time they
were filed with the SEC, complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and the rules and regulations adopted by the SEC
thereunder (the "1934 Act Rules and Regulations"); any future documents
incorporated by reference so filed, when they are filed, will comply in
all material respects with the requirements of the 1934 Act and the
1934 Act Rules and Regulations; no such incorporated document contained
or will contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and, when read together and
with the other information in the Prospectus, at the time the
Registration Statement became effective and at the Closing Date, each
such incorporated document did not or will not, as the case may be,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
by general principles of equity (the "Exceptions") and except to the
extent the enforceability of the indemnification and contribution
provisions hereof may be limited by public policy considerations as
expressed in the 1933 Act as construed by courts of competent
jurisdiction.
(iv) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Missouri, with full power and authority (corporate and other) to
own, lease and operate its properties and conduct its business as
described in the Prospectus and to execute and deliver, and perform the
Company's obligations under, this Agreement; the Company is duly
qualified to do business as a foreign corporation in good standing in
each state or other jurisdiction in which its ownership or leasing of
property or conduct of business legally requires such qualification,
except where the failure to be so qualified, individually or in the
aggregate, would not have a Material Adverse Effect. The term "Material
Adverse Effect" as used herein means any material adverse effect on the
condition (financial or other), net worth,
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business, affairs, management, prospects, results of operations or cash
flow of the Company.
(v) The Company has not sustained since the date of the latest
audited financial statements included or incorporated by reference in
the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth in the Prospectus and,
since the respective dates as of which information is given in the
Prospectus, there has not been any change in the capital stock or
long-term debt of the Company or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise
than as set forth in the Prospectus.
(vi) The issuance and sale of the Shares and the execution,
delivery and performance by the Company of this Agreement, and the
consummation of the transactions herein contemplated, will not conflict
with or result in a 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 lien, charge or encumbrance upon any properties or
assets of the Company under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of the
properties or assets of the Company is subject, except to such extent
as, individually or in the aggregate, does not have a Material Adverse
Effect, nor will such action result in any violation of the provisions
of the Company's articles of incorporation or bylaws or any statute,
rule, regulation or other law, or any order or judgment, of any court
or governmental agency or body having jurisdiction over the Company or
any of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the issuance and sale of the Shares or the
consummation of the transactions contemplated hereby, except such as
have been, or will be prior to the Closing Date, obtained under the
1933 Act or as may be required by the National Association of
Securities Dealers, Inc. (the "NASD") and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or blue sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(vii) The Company has duly and validly authorized capital
stock as set forth in the Prospectus; all outstanding shares of Common
Stock of the Company and the Shares conform, or when issued will
conform, to the description thereof in the Prospectus and have been,
or, when issued and paid for in the manner described herein will be,
duly authorized, validly issued, fully paid and non-assessable; and the
issuance of the Shares to be purchased from the Company hereunder is
not subject to preemptive or other similar rights, or any restriction
upon the voting or transfer thereof pursuant to applicable law or the
Company's articles of incorporation, by-laws or governing documents or
any agreement to which the Company is a party or by which it may be
bound. All corporate
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action required to be taken by the Company for the authorization,
issuance and sale of the Shares has been duly and validly taken. Except
as disclosed in the Prospectus, there are no outstanding subscriptions,
rights, warrants, options, calls, convertible securities, commitments
of sale or rights related to or entitling any person to purchase or
otherwise to acquire any shares of, or any security convertible into or
exchangeable or exercisable for, the capital stock of, or other
ownership interest in, the Company.
(viii) The statements set forth in the Prospectus describing
the Shares and this Agreement, insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair.
(ix) The Company is in possession of and is operating in
compliance with all franchises, grants, authorizations, licenses,
certificates, permits, easements, consents, orders and approvals
("Permits") from all state, federal, foreign and other regulatory
authorities, and has satisfied the requirements imposed by regulatory
bodies, administrative agencies or other governmental bodies, agencies
or officials, that are required for the Company lawfully to own, lease
and operate its properties and conduct its business as described in the
Prospectus, and, the Company is conducting its business in compliance
with all of the laws, rules and regulations of each jurisdiction in
which it conducts its business, in each case with such exceptions,
individually or in the aggregate, as would not have a Material Adverse
Effect; the Company has filed all notices, reports, documents or other
information ("Notices") required to be filed under applicable laws,
rules and regulations, in each case, with such exceptions, individually
or in the aggregate, as would not have a Material Adverse Effect; and,
except as otherwise specifically described in the Prospectus, the
Company has not received any notification from any court or
governmental body, authority or agency, relating to the revocation or
modification of any such Permit or, to the effect that any additional
authorization, approval, order, consent, license, certificate, permit,
registration or qualification ("Approvals") from such regulatory
authority is needed to be obtained by any of them, in any case where it
could be reasonably expected that obtaining such Approvals or the
failure to obtain such Approvals, individually or in the aggregate,
would have a Material Adverse Effect.
(x) Other than calendar year 2000 federal and state income
tax returns, for which the Company has filed timely extensions, the
Company has filed all necessary federal, state and foreign income and
franchise tax returns and paid all taxes shown as due thereon; all
such tax returns are complete and correct in all material respects;
all tax liabilities are adequately provided for on the books of the
Company except to such extent as would not have a Material Adverse
Effect; the Company has made all necessary payroll tax payments and
are current and up-to-date; and the Company has no knowledge of any
tax proceeding or action pending or threatened against the Company
which, individually or in the aggregate, might have a Material
Adverse Effect.
(xi) Except as described in the Prospectus, the Company owns
or possesses, or can acquire on reasonable terms, adequate patents,
patent licenses, trademarks, service marks and trade names necessary to
conduct the business now operated by it, and the
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Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, patent licenses,
trademarks, service marks or trade names which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(xii) The Company has good and marketable title in fee simple
to all items of real property and good and marketable title to all
personal property owned by it, in each case free and clear of all
liens, encumbrances, restrictions and defects except such as are
described in the Prospectus or do not materially affect the value of
such property and do not interfere with the use made and proposed to be
made of such property; and any property held under lease or sublease by
the Company is held under valid, subsisting and enforceable leases or
subleases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property by the
Company; and the Company does not have any notice or knowledge of any
material claim of any sort which has been, or may be, asserted by
anyone adverse to the Company's rights as lessee or sublessee under any
lease or sublease described above, or affecting or questioning the
Company's rights to the continued possession of the leased or subleased
premises under any such lease or sublease in conflict with the terms
thereof.
(xiii) Except as described in the Prospectus, there is no
factual basis for any action, suit or other proceeding involving the
Company or any of its material assets for any failure of the Company,
or any predecessor thereof, to comply with any requirements of federal,
state or local regulation relating to air, water, solid waste
management, hazardous or toxic substances, or the protection of health
or the environment. Except as described in the Prospectus, none of the
property owned or leased by the Company is, to the best knowledge of
the Company, contaminated with any waste or hazardous substances, and
the Company may not be deemed an "owner or operator" of a "facility" or
"vessel" which owns, possesses, transports, generates or disposes of a
"hazardous substance" as those terms are defined in Section 9601 of the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 9601 ET SEQ.
(xiv) No labor disturbance exists with the employees of the
Company or is imminent which, individually or in the aggregate, would
have a Material Adverse Effect. None of the employees of the Company is
represented by a union and, to the best knowledge of the Company, no
union organizing activities are taking place. The Company has not
violated any federal, state or local law or foreign law relating to
discrimination in hiring, promotion or pay of employees, nor any
applicable wage or hour laws, or the rules and regulations thereunder,
or analogous foreign laws and regulations, which might, individually or
in the aggregate, result in a Material Adverse Effect.
(xv) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability;
the
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Company has not incurred and does not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all
material respects, and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(xvi) The Company maintains insurance of the types and in the
amounts generally deemed adequate for its business, including, but not
limited to, directors' and officers' insurance, insurance covering real
and personal property owned or leased by the Company against theft,
damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect.
The Company has not been refused any insurance coverage sought or
applied for, and the Company has no reason to believe that it will not
be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not have
a Material Adverse Effect.
(xvii) The Company is not, nor with the giving of notice or
lapse of time or both would be, in default or violation with respect to
its articles of incorporation or by-laws. The Company is not, nor with
the giving of notice or lapse of time or both would be, in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
the Company is a party or by which the Company is bound or to which any
of the properties or assets of the Company is subject, or in violation
of any statutes, laws, ordinances or governmental rules or regulations
or any orders or decrees to which it is subject, including, without
limitation, Section 13 of the 1934 Act, which default or violation,
individually or in the aggregate, would have a Material Adverse Effect.
The Company has not, at any time during the past five years, (A) made
any unlawful contributions to any candidate for any political office,
or failed fully to disclose any contribution in violation of law, or
(B) made any payment to any state, federal or foreign government
official, or other person charged with similar public or quasi-public
duty (other than payment required or permitted by applicable law).
(xviii) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject that, if
determined adversely to the Company, would individually or in the
aggregate have a Material Adverse Effect or which would materially and
adversely affect the consummation of the transactions contemplated
hereby or which is required to be disclosed in the Prospectus; to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated.
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(xix) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xx) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ and Deloitte & Touche LLP, the
accounting firms which have certified the financial statements filed
with or incorporated by reference in and as a part of the Registration
Statement, are independent public accounting firms within the meaning
of the 1933 Act and the 1933 Act Rules and Regulations. The Company
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that: (1) transactions are executed in
accordance with management's general or specific authorizations; (2)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (3) access to
assets is permitted only in accordance with management's general or
specific authorization; and (4) the recorded accounts for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto. The financial
statements and schedules of the Company, including the notes thereto,
filed with (or incorporated by reference) and as a part of the
Registration Statement or Prospectus, are accurate in all material
respects and present fairly the financial condition of the Company as
of the respective dates thereof and the results of operations and
changes in financial position and statements of cash flow for the
respective periods covered thereby, all in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved except as otherwise disclosed therein. All
adjustments necessary for a fair presentation of results for such
periods have been made. The selected financial data included or
incorporated by reference in the Registration Statement and Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements. Any
operating or other statistical data of the Company included or
incorporated by reference in the Registration Statement and Prospectus
comply in all material respects with the 1933 Act and the 1933 Act
Rules and Regulations and present fairly the information shown
therein.
(xxi) Except as disclosed in the Prospectus, no holder of any
security of the Company has any right to require registration of shares
of Common Stock or any other security of the Company because of the
filing of the Registration Statement or the consummation of the
transactions contemplated hereby and, except as disclosed in the
Prospectus, no person has the right to require registration under the
1933 Act of any shares of Common Stock or other securities of the
Company. No person has the right, contractual or otherwise, to cause
the Company to permit such person to underwrite the sale of any of the
Shares. Except for this Agreement, there are no contracts, agreements
or understandings between the Company and any person that would give
rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Shares.
10
(xxii) The Company has not distributed and, prior to the later
to occur of (i) the Closing Date or the Option Closing Date, if any,
and (ii) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the
Preliminary Prospectus and the Prospectus.
(xxiii) The Company has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of the Company's Common Stock, and the Company is not aware of
any such action taken or to be taken by affiliates of the Company.
(xxiv) The Company has no subsidiaries and, except as
disclosed in the Prospectus, is not affiliated with any corporation,
partnership, limited liability company or other business entity.
(xxv) The Company' Common Stock is included on The Nasdaq
National Market and the Shares have been approved for inclusion, subject to
official notice of issuance of the Shares.
(b) Each Selling Shareholder severally represents and warrants to and
agrees with each Underwriter and the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by it of this Agreement, and
the Custody Agreement and Power of Attorney (as defined herein) and the
sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder and thereunder have been given and are in full force and
effect on the date hereof and will be in full force and effect on the
Closing Date. This Agreement and the Custody Agreement and Power of
Attorney have been duly authorized, executed and delivered by or on
behalf of such Selling Shareholder and are the valid and legally
binding obligations of such Selling Shareholder enforceable in
accordance with their terms except as enforceability may be limited by
the Exceptions and except to the extent the enforceability of the
indemnification and contribution provisions hereof and thereof may be
limited by public policy considerations as expressed in the 1933 Act as
construed by courts of competent jurisdiction.
(ii) Such Selling Shareholder has, and on the Closing Date
will have good, valid and marketable title to the Shares to be sold by
such Selling Shareholder, free and clear of all liens, mortgages,
pledges, encumbrances, claims, equities and security interests
whatsoever, including any restriction on transfer other than pursuant
to this Agreement and the Custody Agreement and Power of Attorney
referred to herein, and now has, and on the Closing Date, will have,
full right, power and authority, and any approval required by law, to
enter into this Agreement and the Custody Agreement and Power of
Attorney and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder hereunder.
11
(iii) Upon delivery of and payment for such Shares hereunder,
the several Underwriters will acquire good, valid and marketable title
to such Shares to be sold by such Selling Shareholder hereunder, free
and clear of all liens, mortgages, pledges, encumbrances, claims,
equities and security interests whatsoever.
(iv) The execution, delivery and performance of this Agreement
and the Custody Agreement and Power of Attorney by such Selling
Shareholder, and the consummation by such Selling Shareholder of the
transactions contemplated herein and therein will not conflict with or
result in a 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 lien, charge or encumbrance upon any of the properties or assets
of such Selling Shareholder under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such
Selling Shareholder is a party or by which it is bound or to which any
of the properties or assets of such Selling Shareholder is subject (or
any certificate or articles of incorporation or bylaws, partnership
agreement, trust document or articles of association of such Selling
Shareholder, as applicable), or any order or decree, or statute, law,
ordinance, rule or regulation applicable to such Selling Shareholder of
any court or of any governmental agency, authority or body having
jurisdiction over such Selling Shareholder or its properties or assets.
(v) Such Selling Shareholder does not have any knowledge or
any reason to believe that the Registration Statement or the Prospectus
(or any amendment or supplement thereto) contains any untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading. The representations and warranties of such Selling
Shareholder in the Custody Agreement and Power of Attorney are, and on
the Closing Date will be, true and correct.
(vi) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to or which might be
reasonably expected to cause or result in stabilization or manipulation
of the price of the Common Stock, and such Selling Shareholder is not
aware of any such action taken or to be taken by affiliates of such
Selling Shareholder.
(vii) When the Registration Statement becomes effective and at
all times subsequent thereto until the expiration of the period when a
prospectus relating to any of the Shares is required to be delivered
under the 1933 Act by any Underwriter or dealer, such information in
the Registration Statement and Prospectus and any amendments or
supplements thereto as specifically relates to such Selling Shareholder
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(viii) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Shareholder hereunder have been
placed in the custody of ▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Custodian") under a
Custody Agreement and Power of Attorney (the "Custody
12
Agreement and Power of Attorney"), duly executed and delivered by such
Selling Shareholder, with the Custodian having the authority to deliver
the Shares to be sold by such Selling Shareholder hereunder, and such
Selling Shareholder has duly executed and delivered the Custody
Agreement and Power of Attorney appointing ▇▇▇ ▇. ▇▇▇▇▇▇▇ as such
Selling Shareholder's agent and attorney-in-fact (the
"Attorney-in-Fact") with the Attorney-in-Fact having authority to
execute and deliver this Agreement on behalf of such Selling
Shareholder, to determine the purchase price to be paid by the
Underwriters to the Selling Shareholders as provided in Section 2, to
authorize the delivery of the Shares to be sold by it hereunder and
otherwise to act on behalf of such Selling Shareholder in connection
with the transactions contemplated by this Agreement and such Custody
Agreement.
(ix) The Shares represented by the certificates held in
custody for such Selling Shareholder under the Custody Agreement and
Power of Attorney are subject to the interests of the Underwriters
hereunder, and the arrangements made by such Selling Shareholder for
such custody, and the appointment by such Selling Shareholder of the
Custodian and of the Attorney-in-Fact under the Custody Agreement and
Power of Attorney, are, except as specifically provided therein,
irrevocable.
(x) The obligations of such Selling Shareholder hereunder and
under the Custody Agreement and Power of Attorney shall not be
terminated by any Selling Shareholder or operation of law, whether by
the death or incapacity of any individual Selling Shareholder or, in
the case of an estate or trust, by the death or incapacity of any
executor or trustee or the termination of such estate or trust, or, in
the case of a partnership, corporation or other entity, upon any
dissolution, winding up, distribution of assets or other event
affecting the legal existence of such Selling Shareholder, or by the
occurrence of any other event; and if any individual Selling
Shareholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or
if any such partnership, corporation or other entity should dissolve,
wind up or distribute assets or any other event affecting the legal
existence of such Selling Shareholder should occur, or if any other
such event should occur before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or on behalf
of each Selling Shareholder in accordance with the terms and conditions
of this Agreement and of the Custody Agreement; and actions taken by
the Custodian or by the Attorney-in-Fact pursuant to the Custody
Agreement and Power of Attorney shall be as valid as if such death,
incapacity, termination, dissolution, winding up, distribution of
assets or other event had not occurred, regardless of whether or not
the Custodian or Attorney-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution, winding up,
distribution of assets or other event.
(xi) Such Selling Shareholder is not prompted to sell shares
of Common Stock by any information concerning the Company which is not
included in the Registration Statement.
13
(c) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
and any certificate signed by or on behalf of the Selling Shareholders as such
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Selling Shareholders to each Underwriter as
to the matters covered thereby.
5. ADDITIONAL COVENANTS. The Company and, where expressly indicated,
the Selling Shareholders, covenant and agree with the several Underwriters that:
(a) The Company will timely transmit copies of the Prospectus, and any
amendments or supplements thereto, or a Term Sheet or Abbreviated Term Sheet, as
applicable, to the SEC for filing pursuant to Rule 424(b) of the 1933 Act Rules
and Regulations.
(b) The Company will deliver to each of the Representatives, and to
counsel for the Underwriters (i) three signed copies of the Registration
Statement as originally filed, including copies of exhibits thereto (other than
any exhibits incorporated by reference therein), of any amendments and
supplements to the Registration Statement (including all documents incorporated
by reference therein) and (ii) a signed copy of each consent and certificate
included or incorporated by reference in, or filed as an exhibit to, the
Registration Statement as so amended or supplemented; the Company will deliver
to the Underwriters through the Representatives as soon as practicable after the
date of this Agreement as many copies of the Prospectus (including all documents
incorporated by reference therein) as the Representatives may reasonably request
for the purposes contemplated by the 1933 Act and the 1933 Act Rules and
Regulations; if the Registration Statement is not effective under the 1933 Act,
the Company will use its best efforts to cause the Registration Statement to
become effective as promptly as possible, and it will notify you, promptly after
it shall receive notice thereof, of the time when the Registration Statement has
become effective; the Company will promptly advise the Representatives of any
request of the SEC for amendment of the Registration Statement or for supplement
to the Prospectus or for any additional information, and of the issuance by the
SEC or any state or other jurisdiction or other regulatory body of any stop
order under the 1933 Act or other order suspending the effectiveness of the
Registration Statement (as amended or supplemented) or preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending the
qualification or registration of the Shares for offering or sale in any
jurisdiction, and of the institution or threat of any proceedings therefor, of
which the Company shall have received notice or otherwise have knowledge prior
to the completion of the distribution of the Shares; and the Company will use
its best efforts to prevent the issuance of any such stop order or other order
and, if issued, to secure the prompt removal thereof.
(c) The Company will not file any amendment or supplement to the
Registration Statement or the Prospectus (or any other prospectus relating to
the Shares filed pursuant to Rule 424(b) of the 1933 Act Rules and Regulations)
that differs from the Prospectus as filed pursuant to such Rule 424(b) and will
not file any document under the 1934 Act before the termination of the offering
of the Shares by the Underwriters if the document would be deemed to be
incorporated by reference into the Registration Statement or the Prospectus, of
which the
14
Underwriters shall not previously have been advised and furnished with a copy or
to which the Underwriters shall have reasonably objected or which is not in
compliance with the 1934 Act Rules and Regulations; and the Company will
promptly notify you after it shall have received notice thereof of the time when
any amendment to the Registration Statement becomes effective or when any
supplement to the Prospectus has been filed.
(d) During the period when a prospectus relating to any of the Shares
is required to be delivered under the 1933 Act by any Underwriter or dealer, the
Company will comply, at its own expense, with all requirements imposed by the
1933 Act and the 1933 Act Rules and Regulations, as now and hereafter amended,
and by the rules and regulations of the SEC thereunder, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealing in
the Shares during such period in accordance with the provisions hereof and as
contemplated by the Prospectus.
(e) If, during the period when a prospectus relating to any of the
Shares is required to be delivered under the 1933 Act by any Underwriter or
dealer, (i) any event relating to or affecting the Company or of which the
Company shall be advised in writing by the Representatives shall occur as a
result of which, in the opinion of the Company or the Representatives, the
Prospectus as then amended or supplemented would 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 (ii) it shall be necessary to amend or supplement the
Registration Statement or the Prospectus to comply with the 1933 Act, the 1933
Act Rules and Regulations, the 1934 Act or the 1934 Act Rules and Regulations,
the Company will forthwith at its expense prepare and file with the SEC, and
furnish to the Representatives a reasonable number of copies of, such amendment
or supplement or other filing that will correct such statement or omission or
effect such compliance.
(f) During the period when a prospectus relating to any of the Shares
is required to be delivered under the 1933 Act by any Underwriter or dealer, the
Company will furnish such proper information as may be lawfully required and
otherwise cooperate in qualifying the Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as the Representatives may
reasonably designate and will file and make in each year such statements or
reports as are or may be reasonably required by the laws of such jurisdictions;
PROVIDED, HOWEVER, that the Company shall not be required to qualify as a
foreign corporation or shall not be required to qualify as a dealer in
securities or to file a general consent to service of process under the laws
of any jurisdiction.
(g) In accordance with Section 11(a) of the 1933 Act and Rule 158 of
the 1933 Act Rules and Regulations, the Company will make generally available to
its security holders and to holders of the Shares, as soon as practicable, an
earning statement (which need not be audited) in reasonable detail covering the
12 months beginning not later than the first day of the month next succeeding
the month in which occurred the effective date (within the meaning of Rule 158)
of the Registration Statement.
15
(h) So long as the Company is subject to the reporting requirements
of the 1934 Act, the Company will furnish to its security holders annual
reports containing financial statements audited by independent public
accountants and quarterly reports containing financial statements and
financial information which may be unaudited. The Company will, for a period
of five years from the Closing Date, deliver to the Underwriters at their
principal executive offices a reasonable number of copies of annual reports,
quarterly reports, current reports and copies of all other documents, reports
and information furnished by the Company to its shareholders or filed with
any securities exchange or market pursuant to the requirements of such
exchange or market or with the SEC pursuant to the 1933 Act or the 1934 Act.
(i) During the period beginning from the date of this Agreement and
continuing to and including the earlier of (i) the termination of trading
restrictions on the Shares, as determined by the Underwriters, and (ii) 90 days
after the Closing Date, the Company will not, without the prior written consent
of the Representatives, offer for sale, sell or enter into any agreement to
sell, or otherwise dispose of, any equity securities of the Company, except for
the Shares and issuances of shares and options under the Company's stock
option plan.
(j) The Company will apply the proceeds from the sale of the Shares as
set forth in the description under "Use of Proceeds" in the Prospectus, which
description complies in all respects with the requirements of Item 504 of
Regulation S-K.
(k) The Company will promptly provide you with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Shares under the 1933 Act or relating to
any documents incorporated by reference into the Registration Statement or the
Prospectus.
(l) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will furnish to you, as soon as they have been prepared,
copies of any unaudited interim 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.
(m) Prior to the Closing Date (and, if applicable, the Option Closing
Date), neither the Company nor any Selling Shareholder will issue any press
releases or other communications directly or indirectly and will hold no press
conferences with respect to the Company, the financial condition, results of
operations, business, properties, assets or liabilities of the Company, or the
offering of the Shares, without your prior written consent.
(n) The Company will use its best efforts to obtain approval for, and
maintain the inclusion of the Shares on, The Nasdaq National Market.
(o) The Company will cause its directors and officers to furnish to
you, on or prior to the date of this Agreement, a letter or letters, in form and
substance satisfactory to counsel for the Underwriters, pursuant to which each
such person shall agree not to, and the Company will not, directly or
indirectly, offer for sale, contract to sell, sell, distribute, grant any
option, right or
16
warrant to purchase, pledge, hypothecate or otherwise dispose of any shares
of Common Stock, any securities convertible into, or exercisable or
exchangeable for, Common Stock or any other rights to acquire such shares,
for a period of 90 days from the Effective Date, without the prior written
consent of ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., except for the Shares sold hereunder,
except for sales of shares of Common Stock to the Company's employees
pursuant to the exercise of options under the Company's stock option plan
and except for sales of shares in accordance with the Company's effective
Registration Statement on Form S-3 (Registration No. 333-57786).
(p) The Company will maintain and keep accurate books and records
reflecting its assets and maintain internal accounting controls which provide
reasonable assurance that (1) transactions are executed in accordance with
management's authorization, (2) transactions are recorded as necessary to permit
the preparation of the Company's consolidated financial statements and to
maintain accountability for the assets of the Company, (3) access to the assets
of the Company is permitted only in accordance with management's authorization,
and (4) the recorded accounts of the assets of the Company are compared with
existing assets at reasonable intervals.
(q) During any period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, the Company will promptly file all
documents required to be filed with the SEC pursuant to Sections 13, 14 or 15(d)
of the 1934 Act.
(r) If the Company elects to rely on Rule 462(b) under the 1933 Act,
the Company shall both file an Abbreviated Registration Statement with the SEC
in compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 of the 1933 Act by the earlier of (i) 9:00 p.m., St. Louis time, on the
date of this Agreement, and (ii) the time that confirmations are given or sent,
as specified by Rule 462(b)(2).
(s) Each of the Selling Shareholders severally agrees with the several
Underwriters as follows:
(i) Such Selling Shareholder will cooperate to the extent
necessary to cause the Registration Statement or any post-effective
amendment thereto to become effective at the earliest possible time.
(ii) Such Selling Shareholder will pay all Federal and other
taxes, if any, on the transfer or sale of the Shares being sold by the
Selling Shareholder to the Underwriters.
(iii) Such Selling Shareholder will do or perform all things
required to be done or performed by the Selling Shareholder prior to
the Closing Date to satisfy all conditions precedent to the delivery of
the Shares pursuant to this Agreement.
(iv) For a period of 90 days from the Effective Date, the
Selling Shareholders will not directly or indirectly offer for sale,
contract to sell, sell, distribute, grant any option, right or warrant
to purchase, pledge, hypothecate or otherwise dispose of any shares of
Common Stock, any securities convertible into, or exercisable or
exchangeable
17
for, Common Stock or rights to acquire such shares, without the prior
written consent of ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., except for the Shares
sold hereunder by the Selling Shareholders.
(v) Except as stated in this Agreement and in the Preliminary
Prospectus and the Prospectus, such Selling Shareholder has not taken
and will not take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Stock to facilitate the sale
or resale of the Shares.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase and pay for the Shares, as provided herein, shall
be subject to the accuracy, as of the date hereof and as of the Closing Date
(and, if applicable, the Option Closing Date), of the representations and
warranties of the Company and the Selling Shareholders contained herein, to the
performance by the Company and the Selling Shareholders of their covenants and
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective not later than 1:00 p.m., St. Louis time, on
the date hereof, or, with your consent, at a later date and time, not later than
10:00 a.m., St. Louis time, on the first business day following the date hereof,
or at such later date and time as may be approved by the Representatives; if the
Company has elected to rely on Rule 462(b) under the 1933 Act, the Abbreviated
Registration Statement shall have become effective not later than the earlier of
(x) 10:00 p.m. St. Louis time, on the date hereof, or (y) at such later date and
time as may be approved by the Representatives. All filings required by Rule 424
and Rule 430A of the 1933 Act Rules and Regulations shall have been made. No
stop order suspending the effectiveness of the Registration Statement, as
amended from time to time, shall have been issued and no proceeding for that
purpose shall have been initiated or, to the knowledge of the Company or any
Underwriter, threatened or contemplated by the SEC, and any request of the SEC
for additional
18
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the reasonable satisfaction of the
Underwriters.
(b) No Underwriter shall have advised the Company on or prior to the
Closing Date (and, if applicable, the Option Closing Date), that the
Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to the
Underwriters, is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing Date),
you shall have received the opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇, P.C., counsel for the
Company, addressed to you and dated the Closing Date (and, if applicable, the
Option Closing Date), to the effect that:
(i) The Registration Statement and all post-effective
amendments thereto and the Abbreviated Registration Statement, if any,
have become effective under the 1933 Act; any required filing of the
Prospectus or any supplement thereto pursuant to Rule 424(b) or
otherwise has been made in the manner and within the time period
required thereby; and, to the knowledge of such counsel after due
inquiry, no stop or other order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
1933 Act or under the securities laws of any jurisdiction.
(ii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (including any document incorporated by
reference into the Prospectus), as of their respective effective or
issue date, comply as to form and appear on their face to be
appropriately responsive in all material respects to the requirements
of Form S-3 under the 1933 Act and the applicable 1933 Act Rules and
Regulations (except that such counsel need express no opinion as to the
financial statements or other financial data); the conditions for use
of Form S-3 have been satisfied; and, as of the date they were filed
with the SEC, the documents incorporated by reference in the Prospectus
appear on their face to comply as to form and be appropriately
responsive in all material respects with the requirements of the 1934
Act and the applicable 1934 Act Rules and Regulations (except that such
counsel need express no opinion as to the financial statements or other
financial data).
(iii) The descriptions in the Registration Statement and
Prospectus of proceedings, contracts and other documents are accurate
in all material respects and fairly present the information required
to be shown under the 1933 Act and the 1933 Act Rules and Regulations.
(iv) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by the
Exceptions and except to the extent the enforceability of the
19
indemnification and contribution provisions of Section 7 of the
Agreement may be limited by public policy considerations as expressed
in the 1933 Act as construed by courts of competent jurisdiction.
(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Missouri, with full power and authority (corporate and other) to
own, lease and operate its properties and conduct its businesses as
described in the Prospectus and, with respect to the Company, to
execute and deliver, and perform the Company's obligations under, this
Agreement; the Company is duly qualified to do business as a foreign
corporation in good standing in each state or other jurisdiction in
which its ownership or leasing of property or conduct of business
legally requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect. The Company has no
subsidiaries and, to the knowledge of such counsel and except as
disclosed in the Prospectus, is not affiliated with any corporation,
partnership, limited liability company or other business entity.
(vi) The issuance and sale of the Shares and the execution,
delivery and performance by the Company of this Agreement, and the
consummation of the transactions herein contemplated, will not conflict
with or result in a 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 lien, charge or encumbrance upon any properties or
assets of the Company under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel
after due inquiry to which the Company is a party or by which the
Company is bound or to which any of the properties or assets of the
Company is subject, except to such extent as does not have a Material
Adverse Effect, nor will such action result in any violation of the
provisions of the Company's articles of incorporation or bylaws or any
statute, rule, regulation or other law, or any order or judgment known
to such counsel after due inquiry, of any court or governmental agency
or body having jurisdiction over the Company or any of its properties.
(vii) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is
required in connection with the execution, delivery and performance of
this Agreement, and the issuance and sale of the Shares or the
consummation of the transactions contemplated hereby, except such as
may be required under the 1933 Act or the 1933 Act Rules and
Regulations and have been obtained, or as may be required by the NASD
or under state securities or blue sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(viii) To the knowledge of such counsel after due inquiry and
other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company is the subject; and, to the knowledge
of
20
such counsel after due inquiry, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(ix) The Company has duly and validly authorized capital stock
as set forth under the caption "Capitalization" in the Prospectus; all
outstanding shares of Common Stock of the Company and the Shares
conform, or when issued will conform, as to legal matters to the
description thereof in the Prospectus and have been duly authorized,
validly issued, fully paid and non-assessable; and the Shares to be
sold by the Company have been duly authorized and, when delivered and
paid for in accordance with this Agreement, will be validly issued,
fully paid and non-assessable. All corporate action required to be
taken by the Company for the authorization, issue and sale of the
Shares has been duly and validly taken. The Shares are duly authorized
for inclusion, subject to official notice of issuance and evidence of
satisfactory distribution, on The Nasdaq National Market. The issuance
of the Shares to be purchased from the Company hereunder is not subject
to preemptive or other similar rights, or any restriction upon the
voting or transfer thereof pursuant to applicable law or the articles
of incorporation, bylaws or governing documents of the Company or any
agreement known to us to which the Company is a party or by which it
may be bound; and, to such counsel's knowledge, except as described in
the Prospectus, there are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale
or rights related to or entitling any person to purchase or otherwise
acquire any shares of, or any security convertible into or exercisable
or exchangeable for, the capital stock of, or other ownership interest
in, the Company.
(x) To the knowledge of such counsel after due inquiry, the
Company holds all licenses, certificates, permits and approvals from
all state, federal and other regulatory authorities, and have satisfied
in all material respects the requirements imposed by regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, that are required for the Company lawfully to own, lease and
operate its properties and conduct its business as described in the
Prospectus, and, to the knowledge of such counsel after due inquiry,
the Company is conducting its business in compliance in all material
respects with all of the laws, rules and regulations of each
jurisdiction in which it conducts its business; provided, however, that
such counsel need not express an opinion as to the compliance of the
Company's software products with the U.S. Bankruptcy Code, any rules or
regulations thereunder or any rules, regulations, procedures or
practices of any local jurisdiction of the federal bankruptcy courts.
(xi) The statements made in the Prospectus under the captions
"Risk Factors - We rely on our national marketing arrangement for
Chapter 7 revenue and - Our directors and executive officers will
continue to have a substantial influence over matters requiring a
shareholder vote," "Description of Capital Stock," "Management - Stock
Option Plan," "Certain Relationships and Related Transactions," and
"Shares Eligible for Future Sale," Item 15 of Part II of the
Registration Statement, to the extent that they constitute summaries of
documents referred to therein or matters of law or legal conclusions,
have been reviewed by such counsel and are accurate summaries and
fairly present the information disclosed therein.
21
(xii) To the knowledge of such counsel after due inquiry, the
Company is not, nor with the giving of notice or lapse of time or both
would be, in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the properties or assets of the
Company is subject, or in violation of any statutes, laws, ordinances
or governmental rules or regulations or any orders or decrees to which
it is subject, including, without limitation, Section 13 of the 1934
Act, which default or violation would have a Material Adverse Effect.
(xiii) To the knowledge of such counsel after due inquiry,
there are no contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which are not
described or filed as required.
(xiv) The Company is not and, after giving effect to the
offering and sale of the Shares and application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds," will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the 1940 Act.
(xv) To the knowledge of such counsel after due inquiry and
except as disclosed in the Prospectus, no holder of any security of the
Company has any right to require registration of shares of Common Stock
or any other security of the Company because of the filing of the
Registration Statement or the consummation of the transactions
contemplated hereby and, except as disclosed in the Prospectus, no
person has the right to require registration under the 1933 Act of any
shares of Common Stock or other securities of the Company.
Such counsel shall confirm that during the preparation of the
Registration Statement and Prospectus, such counsel participated in conferences
with the Representatives and their counsel and with officers and representatives
of the Company and its independent accountants, at which conferences the
contents of the Registration Statement and the Prospectus were discussed,
reviewed and revised. On the basis of the information which was developed in the
course thereof, considered in light of such counsel's understanding of
applicable law and the experience gained by such counsel through their practice
thereunder, without such counsel assuming responsibility for the accuracy and
completeness of such statements except to the extent
22
expressly provided above, such counsel shall confirm that nothing came to their
attention that would lead them to believe that either the Registration Statement
(including any document filed under the 1934 Act and deemed incorporated by
reference therein), as of the Effective Date, 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 the light of the circumstances
under which they were made, not misleading, or the Prospectus or any amendment
or supplement thereto (including any document filed under the 1934 Act and
deemed incorporated by reference therein) as of its respective issue date and as
of the Closing Date, or, if applicable, the Option Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than the financial statements or other financial data as to
which such counsel need express no opinion).
In rendering the foregoing opinion, such counsel may rely, (1) as to
matters involving laws of any jurisdiction other than Missouri or the United
States, upon opinions addressed to the Underwriters of other counsel
satisfactory to them and ▇▇▇▇▇ ▇▇▇▇ LLP, and (2) as to all matters of fact, upon
certificates and written statements of the executive officers of, and
accountants for, the Company, provided, in either case, that such counsel shall
state in their opinion that they and the Underwriters are justified in relying
thereon.
(d) On the Closing Date, you shall have received the opinion of ▇▇▇▇▇▇▇
& ▇▇▇▇, P.C., counsel to the Selling Shareholders, addressed to you and dated
the Closing Date, to the effect that:
(i) The Custody Agreement and Power of Attorney has been duly
executed and delivered by such Selling Shareholders and constitutes a
legal, valid and binding agreement of such Selling Shareholders
enforceable in accordance with its terms.
(ii) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Shareholders, and is a legal, valid
and binding obligation of the Selling Shareholders enforceable against
the Selling Shareholders in accordance with its terms, except as
enforceability may be limited by the Exceptions and except to the
extent the enforceability of the indemnification and contribution
provisions of Section 7 of the Agreement may be limited by public
policy considerations as expressed in the 1933 Act as construed by
courts of competent jurisdiction. The execution and delivery of this
Agreement and the Custody Agreement and Power of Attorney by such
Selling Shareholders, the consummation by such Selling Shareholders of
the transactions contemplated herein and therein and the fulfillment by
such Selling Shareholders of the terms hereof and thereof will not
result in a breach or violation of any terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the properties or assets of
such Selling Shareholders under any bond, debenture, note or other
evidence of indebtedness or any indenture, mortgage, deed of trust,
sale and leaseback arrangement, joint venture or any other agreement or
instrument known to such counsel to which any such Selling Shareholder
is a party, or by which it is bound or to which any of the properties
or assets of any such Selling
23
Shareholder is subject (or any certificate or articles of incorporation
or bylaws, partnership agreement, trust document or articles of
association of any such Selling Shareholder, as applicable), or any
order or decree, or statute, law, ordinance, rule or regulation
applicable to any such Selling Shareholder of any court or of any
governmental agency, authority or body having jurisdiction over any
such Selling Shareholder or its properties.
(iii) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as required by
the 1933 Act, the NASD and state securities and Blue Sky Laws) to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Shareholder.
(iv) No consent, approval, authorization or order of any
court, or governmental agency or body is required for consummation of
the transactions contemplated by this Agreement in connection with the
Shares to be sold by each Selling Shareholder hereunder except such as
may be required under the 1933 Act or the 1933 Act Rules and
Regulations or as may be required by the NASD or under state securities
laws.
(v) Each Selling Shareholder has good and valid
title to the Shares being sold by such Selling Shareholder hereunder,
free and clear of any "adverse claims" as defined in Section 400.8-102
of the Missouri UCC other than pursuant to this Agreement and the
Custody Agreement and Power of Attorney, and has transferred to the
Underwriters good and valid title to the Shares being sold by such
Selling Shareholder on the Closing Date, free and clear of any
adverse claims other than pursuant to this Agreement and the Custody
Agreement and Power of Attorney.
In rendering the foregoing opinion, such counsel may rely, (1) as to
matters involving laws of any jurisdiction other than Missouri or the United
States, upon opinions addressed to the Underwriters of other counsel
satisfactory to them and ▇▇▇▇▇ ▇▇▇▇ LLP, and (2) as to all matters of fact, upon
certificates and written statements of the Selling Shareholders, provided, in
either case, that such counsel shall state in their opinion that they and the
Underwriters are justified in relying thereon.
(e) You shall have received on the Closing Date (and, if applicable,
the Option Closing Date), from ▇▇▇▇▇ ▇▇▇▇ LLP, counsel to the Underwriters, such
opinion or opinions, dated the Closing Date (and, if applicable, the Option
Closing Date) with respect to such matters as you may reasonably require; and
the Company and Selling Shareholders shall have furnished to such counsel such
documents as they reasonably request for the purposes of enabling them to review
or pass on the matters referred to in this Section 6 and in order to evidence
the accuracy, completeness and satisfaction of the representations, warranties
and conditions herein contained.
(f) You shall have received at or prior to the Closing Date from ▇▇▇▇▇
▇▇▇▇ LLP a memorandum or memoranda, in form and substance satisfactory to you,
with respect to the
24
qualification for offering and sale by the Underwriters of the Shares under
state securities or Blue Sky laws of such jurisdictions as the Underwriters may
have designated to the Company.
(g) On the business day immediately preceding the date of this
Agreement and on the Closing Date (and, if applicable, the Option Closing Date),
you shall have received from Deloitte & Touche LLP, a letter or letters, dated
the date of this Agreement and the Closing Date (and, if applicable, the Option
Closing Date), respectively, in form and substance satisfactory to you,
confirming that they are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the 1933 Act Rules and
Regulations, and stating to the effect set forth in Schedule III hereto.
(h) Except as contemplated in the Prospectus, (i) the Company shall not
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree; and (ii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, the
Company shall not have incurred any liability or obligation, direct or
contingent, or entered into any transactions, and there shall not have been any
change in the capital stock or short-term or long-term debt of the Company or
any change, or any development involving or which might reasonably be expected
to involve a prospective change in the condition (financial or other), net
worth, business, affairs, management, prospects, results of operations or cash
flow of the Company, the effect of which, in any such case described in clause
(i) or (ii), is in your judgment so material or adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered on such Closing Date (and, if applicable, the
Option Closing Date) on the terms and in the manner contemplated in the
Prospectus.
(i) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or The Nasdaq National Market
or the establishing on such exchanges or market by the SEC or by such exchanges
or markets of minimum or maximum prices which are not in force and effect on the
date hereof; (ii) a suspension or material limitation in trading in the
Company's securities on The Nasdaq National Market or the establishing on such
market by the SEC or by such market of minimum or maximum prices which are not
in force and effect on the date hereof; (iii) a general moratorium on commercial
banking activities declared by either federal or any state authorities; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, which in your
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares in the manner contemplated in the
Prospectus; or (v) any calamity or crisis, change in national, international or
world affairs, act of God, change in the international or domestic markets, or
change in the existing financial, political or economic conditions in the United
States or elsewhere, which in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares in
the manner contemplated in the Prospectus.
25
(j) You shall have received certificates, dated the Closing Date (and,
if applicable, the Option Closing Date) and signed by the President and the
Chief Financial Officer of the Company, in their capacities as such, stating
that:
(i) the condition set forth in Section 6(a) has been fully
satisfied;
(ii) they have carefully examined the Registration Statement
and the Prospectus as amended or supplemented and all documents
incorporated by reference therein and nothing has come to their
attention that would lead them to believe that either the Registration
Statement or the Prospectus, or any amendment or supplement thereto or
any documents incorporated by reference therein as of their respective
effective, issue or filing dates, contained, and the Prospectus as
amended or supplemented and all documents incorporated by reference
therein and when read together with the documents incorporated by
reference therein, at such Closing Date, contains any untrue statement
of a material fact, or omits 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;
(iii) since the Effective Date, there has occurred no event
required to be set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been so set
forth and there has been no document required to be filed under the
1934 Act and the 1934 Act Rules and Regulations that upon such filing
would be deemed to be incorporated by reference into the Prospectus
that has not been so filed;
(iv) all representations and warranties made herein by the
Company are true and correct at such Closing Date, with the same effect
as if made on and as of such Closing Date, and all agreements herein to
be performed or complied with by the Company on or prior to such
Closing Date have been duly performed and complied with by the Company;
(v) the Company has not sustained since the date of the latest
audited financial statements included or incorporated by reference in
the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree;
(vi) except as disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, the Company has not incurred any
liabilities or obligations, direct or contingent, other than in the
ordinary course of business, or entered into any transactions not in
the ordinary course of business, which in either case are material to
the Company; and there has not been any change in the capital stock or
material increase in the short-term debt or long-term debt of the
Company or any material adverse change or any development involving or
which may reasonably be expected to involve a prospective material
adverse change, in the condition (financial or other), net worth,
business, affairs, management, prospects, results of
26
operations or cash flow of the Company; and there has been no dividend
or distribution of any kind, paid or made by the Company on any class
of its capital stock;
(vii) there has not been any change or decrease specified in
paragraph 5(a) of the letter or letters delivered to the Underwriters
referred to in Section 6(g) above, except those changes and decreases
that are disclosed therein; and
(viii) covering such other matters as you may reasonably
request.
(k) You shall have received certificates, dated the Closing Date signed
by each of the Selling Shareholders, stating that (i) all representations and
warranties made herein by such Selling Shareholder are true and correct at such
Closing Date, with the same effect as if made on and as of such Closing Date,
and all agreements herein to be performed or complied with by such Selling
Shareholder on or prior to such Closing Date have been duly performed or
complied with by such Selling Shareholder and (ii) covering such other matters
as you may reasonably request.
(l) The Company and each of the Selling Shareholders shall not have
failed, refused, or been unable, at or prior to the Closing Date (and, if
applicable, the Option Closing Date) to have performed any agreement on their
part to be performed or any of the conditions herein contained and required to
be performed or satisfied by them at or prior to such Closing Date.
(m) The Company and the Selling Shareholders shall have furnished to
you at the Closing Date (and, if applicable, the Option Closing Date) such
further information, opinions, certificates, letters and documents as you may
have reasonably requested.
(n) The Shares shall have been approved for inclusion upon official
notice of issuance on The Nasdaq National Market.
(o) You shall have received duly and validly executed letter agreements
referred to in Section 5(m) hereof.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and to ▇▇▇▇▇ ▇▇▇▇ LLP, counsel for the several Underwriters.
The Company and Selling Shareholders will furnish you with such signed and
conformed copies of such opinions, certificates, letters and documents as you
may request.
If any of the conditions specified above in this Section 6 shall not
have been satisfied at or prior to the Closing Date (and, if applicable, the
Option Closing Date) or waived by you in writing, this Agreement may be
terminated by you on notice to the Company and the Selling Shareholders.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and
hold harmless each Underwriter for and against any losses, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the 1933 Act or otherwise, insofar as such
27
losses, damages or liabilities (or actions or claims in respect thereof) arise
out of or are based upon (i) an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus or any other prospectus relating to the Shares, or any
amendment or supplement thereto, or in any blue sky application or other
document executed by the Company or based on any information furnished in
writing by the Company, filed in any state or other jurisdiction in order to
qualify any or all of the Shares under the securities laws thereof (the "Blue
Sky Application"), or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses incurred by such Underwriter in connection with investigating,
preparing, pursuing or defending against or appearing as a third party witness
in connection with any such loss, damage, liability or action or claim,
including, without limitation, any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to the indemnified party, as such expenses are
incurred (including such losses, damages, liabilities or expenses to the extent
of the aggregate amount paid in settlement of any such action or claim, provided
that (subject to Section 7(d) hereof) any such settlement is effected with the
written consent of the Company); PROVIDED, HOWEVER, that the Company shall not
be liable in any such case to the extent, but only to the extent, that any such
loss, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus or any other prospectus
relating to the Shares, or any such amendment or supplement, in reliance upon
and in conformity with written information relating to the Underwriter furnished
to the Company by you or by any Underwriter through you, expressly for use in
the preparation thereof (as provided in Section 14 hereof).
(b) Each Selling Shareholder will indemnify and hold harmless each
Underwriter for and against any losses, damages or liabilities to which the
Company may become subject, under the 1933 Act or otherwise, insofar as such
losses, damages or liabilities (or actions or claims in respect thereof) arise
out of or are based upon (i) an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus or any other prospectus relating to the Shares, or any
amendment or supplement thereto, or any Blue Sky Application, or (ii) 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 any
Preliminary Prospectus, the Registration Statement, the Prospectus or any other
prospectus relating to the Shares, or any such amendment or supplement, or any
Blue Sky Application, in reliance upon and in conformity with written
information furnished to the Company or any Underwriter by such Selling
Shareholder specifically for use in the preparation thereof, and will reimburse
each Underwriter for any legal or other expenses incurred by such Underwriter in
connection with investigating, preparing, pursuing or defending against or
appearing as a third party witness in connection with any such loss, damage,
liability or action or claim, including, without limitation, any investigation
or proceeding by any governmental agency or body, commenced or threatened,
including the reasonable fees and expenses of counsel to the indemnified party,
as such expenses are incurred (including such losses, damages, liabilities or
expenses to the extent of the aggregate
28
amount paid in settlement of any such action or claim, provided that (subject to
Section 7(d) hereof) any such settlement is effected with the written consent of
such Selling Shareholder).
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company and each Selling Shareholder for and against any
losses, damages or liabilities to which the Company may become subject, under
the 1933 Act or otherwise, insofar as such losses, damages or liabilities (or
actions or claims in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus or any other
prospectus relating to the Shares, or any amendment or supplement thereto, or
any Blue Sky Application, or arise out of 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 any Preliminary
Prospectus, the Registration Statement, the Prospectus or any other prospectus
relating to the Shares, or any such amendment or supplement, or any Blue Sky
Application, in reliance upon and in conformity with written information
relating to the Underwriter furnished to the Company by you or by any
Underwriter through you, expressly for use in the preparation thereof (as
provided in Section 14 hereof), and will reimburse the Company or any such
Selling Shareholder for any legal or other expenses incurred by the Company or
any such Selling Shareholder, as the case may be, in connection with
investigating or defending any such action or claim as such expenses are
incurred (including such losses, damages, liabilities or expenses to the extent
of the aggregate amount paid in settlement of any such action or claim, provided
that (subject to Section 7(d) hereof) any such settlement is effected with the
written consent of the Underwriters).
(d) Promptly after receipt by an indemnified party under Section 7(a),
7(b) or 7(c) hereof of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under Section 7(a), 7(b) or 7(c) hereof, notify each such
indemnifying party in writing of the commencement thereof, but the failure so to
notify such indemnifying party shall not relieve such indemnifying party from
any liability except to the extent that it has been prejudiced in any material
respect by such failure or from any liability that it may have to any such
indemnified party otherwise than under Section 7(a), 7(b) or 7(c) hereof. In
case any such action shall be brought against any such indemnified party and it
shall notify each indemnifying party of the commencement thereof, each such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party under Section
7(a), 7(b) or 7(c) hereof similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except with
the consent of such indemnified party, be counsel to such indemnifying party),
and, after notice from such indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party under Section 7(a), 7(b) or 7(c) hereof for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. The indemnified party shall have the
right to employ its own counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such
29
indemnified party at the expense of the indemnifying party has been authorized
by the indemnifying party, (ii) the indemnified party shall have been advised by
such counsel that there may be a conflict of interest between the indemnifying
party and the indemnified party in the conduct of the defense, or certain
aspects of the defense, of such action (in which case the indemnifying party
shall not have the right to direct the defense of such action with respect to
those matters or aspects of the defense on which a conflict exists or may exist
on behalf of the indemnified party) or (iii) the indemnifying party shall not in
fact have employed counsel reasonably satisfactory to such indemnified party to
assume the defense of such action, in any of which events such fees and expenses
to the extent applicable shall be borne, and shall be paid as incurred, by the
indemnifying party. No such indemnifying party shall, without the written
consent of such indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not such indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (A) includes an unconditional release of such indemnified party from
all liability arising out of such action or claim and (B) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any such indemnified party. In no event shall such indemnifying
parties be liable for the fees and expenses of more than one counsel, including
any local counsel, for all such indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(e) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to indemnify or hold harmless an indemnified
party under Section 7(a), 7(b) or 7(c) hereof in respect of any losses, damages
or liabilities (or actions or claims in respect thereof) referred to therein,
then each indemnifying party under Section 7(a), 7(b) or 7(c) hereof shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, damages or liabilities (or actions or claims in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Shareholders, on the one hand, and the
Underwriters, on the other hand, from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under Section 7(d) hereof and such indemnifying party was prejudiced in a
material respect by such failure, then each such indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault, as applicable, of the Company and the Selling Shareholders,
on the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions that resulted in such losses, damages or liabilities (or
actions or claims in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by, as applicable, the Company
and the Selling Shareholders, on the one hand, and the Underwriters, on the
other hand, shall be deemed to be in the same proportion as the total net
proceeds from such offering (before deducting expenses) received by the Company
and the Selling Shareholders bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault, as applicable, of
the Company or the Selling Shareholders, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether the untrue or
30
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Shareholders, on the one hand, or the Underwriters, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Selling Shareholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(e) were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above in this Section 7(e). The amount paid
or payable by such an indemnified party as a result of the losses, damages or
liabilities (or actions or claims in respect thereof) referred to above in this
Section 7(e) shall be deemed to include any legal or other expenses incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligations of the Underwriters in this
Section 7(e) to contribute are several in proportion to their respective
underwriting obligations with respect to the Shares and not joint.
(f) The obligations of the Company and the Selling Shareholders under
this Section 7 shall be in addition to any liability that the Company and the
Selling Shareholders may otherwise have and shall extend, upon the same terms
and conditions, to each officer, director, employee, agent or other
representative and to each person, if any, who controls any Underwriter within
the meaning of the 1933 Act; and the obligations of the Underwriters under this
Section 7 shall be in addition to any liability that the respective Underwriters
may otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company who signed the Registration Statement and to
each person, if any, who controls the Company within the meaning of the 1933 Act
and to each person, if any, who controls the Selling Shareholders within the
meaning of the 1933 Act.
(g) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including, without limitation, the
provisions of this Section 7, and are fully informed regarding such provisions.
They further acknowledge that the provisions of this Section 7 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, and any
supplement or amendment thereof, as required by the 1933 Act.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. The respective
representations, warranties, agreements and statements of the Company and the
Selling Shareholders and the Underwriters, as set forth in this Agreement or
made by or on behalf of
31
them, respectively, pursuant to this Agreement, shall remain operative and in
full force and effect regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, the Company or any of its officers, directors or any
controlling persons, or the Selling Shareholders, and shall survive delivery of
and payment for the Shares hereunder.
9. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter shall default
in its obligation to purchase the Shares which it has agreed to purchase
hereunder, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company and the Selling Shareholders shall
be entitled to a further period of thirty-six hours within which to procure
another party or parties reasonably satisfactory to you to purchase such Shares
on such terms. In the event that, within the respective prescribed periods, you
notify the Company and the Selling Shareholders that you have so arranged for
the purchase of such Shares, or the Company and the Selling Shareholders notify
you that they have so arranged for the purchase of such Shares, you or the
Company and the Selling Shareholders shall have the right to postpone the
Closing Date for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any persons substituted
under this Section 9 with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters made by you and the Company
and the Selling Shareholders as provided in subsection (a) above, the aggregate
number of Shares which remains unpurchased does not exceed one-eleventh of the
total Shares to be sold on the Closing Date, then the Company and the Selling
Shareholders shall have the right to require each non-defaulting Underwriter to
purchase the Shares which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters made by you and the Company
and the Selling Shareholders as provided in subsection (a) above, the number of
Shares which remains unpurchased exceeds one-eleventh of the total Shares to be
sold on the Closing Date, or if the Company and the Selling Shareholders shall
not exercise the right described in subsection (b) above to require the
non-defaulting Underwriters to purchase Shares of the defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Option Closing Date,
the obligations of the Underwriters to purchase and of the Company and the
Selling Shareholders to sell the Option Shares) shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company
and the Selling Shareholders except for the expenses
32
to be borne by the Company and the Underwriters as provided in Section 11 hereof
and the indemnity and contribution agreements in Section 7 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. EFFECTIVE DATE AND TERMINATION. (a) This Agreement shall become
effective at 1:00 p.m., St. Louis time, on the first business day following the
effective date of the Registration Statement, or at such earlier time after the
effective date of the Registration Statement as you in your discretion shall
first release the Shares for offering to the public; provided, however, that the
provisions of Section 7 and 11 shall at all times be effective. For the purposes
of this Section 10(a), the Shares shall be deemed to have been released to the
public upon release by you of the publication of a newspaper advertisement
relating to the Shares or upon release of telegrams, facsimile transmissions or
letters offering the Shares for sale to securities dealers, whichever shall
first occur.
(b) This Agreement may be terminated by you at any time before it
becomes effective in accordance with Section 10(a) by notice to the Company and
the Selling Shareholders; provided, however, that the provisions of this Section
10 and of Section 7 and Section 11 hereof shall at all times be effective. In
the event of any termination of this Agreement pursuant to Section 9 or this
Section 10(b) hereof, the Company and the Selling Shareholders shall not then be
under any liability to any Underwriter except as provided in Section 7 or
Section 11 hereof.
(c) This Agreement may be terminated by you at any time at or prior to
the Closing Date by notice to the Company and the Selling Shareholders if any
condition specified in Section 6 hereof shall not have been satisfied on or
prior to the Closing Date. Any such termination shall be without liability of
any party to any other party except as provided in Sections 7 and 11 hereof.
(d) This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option Shares,
if any condition specified in Section 6 hereof shall not have been satisfied at
or prior to the Option Closing Date or as provided in Section 9 of this
Agreement.
If you terminate this Agreement as provided in Sections 10(b), 10(c) or
10(d), you shall notify the Company and the Selling Shareholders by telephone or
telegram, confirmed by letter.
11. COSTS AND EXPENSES. The Company, whether or not the transactions
contemplated hereby are consummated or this Agreement is prevented from
becoming effective under Section 10 hereof or is terminated, will bear and
pay the costs and expenses incident to the registration of the Shares and
public offering thereof, including, without limitation, (a) all expenses
(including stock transfer taxes) incurred in connection with the delivery to
the several Underwriters of the Shares, the filing fees of the SEC, the fees
and expenses of the Company's counsel and accountants and counsel to the
Selling Shareholders, (b) the preparation, printing, filing, delivery and
shipping of the Registration Statement, each Preliminary Prospectus, the
Prospectus and any amendments or supplements thereto (except as otherwise
expressly provided in Section 5(d) hereof) and the printing, delivery and
shipping of this Agreement and other underwriting documents, including
33
the Agreement Among Underwriters, the Selected Dealer Agreement,
Underwriters' Questionnaires and Powers of Attorney and Blue Sky Memoranda,
and any instruments or documents related to any of the foregoing, (c) the
furnishing of copies of such documents (except as otherwise expressly
provided in Section 5(d) hereof) to the Underwriters, (d) the registration or
qualification of the Shares for offering and sale under the securities laws
of the various states and other jurisdictions, including the fees and
disbursements of counsel to the Underwriters relating to such registration or
qualification and in connection with preparing any Blue Sky Memoranda or
related analysis, (e) the filing fees of the NASD (if any) and fees and
disbursements of counsel to the Underwriters relating to any review of the
offering by the NASD, (f) all printing and engraving costs related to
preparation of the certificates for the Shares, including transfer agent and
registrar fees, (g) all fees and expenses relating to the authorization of
the Shares for inclusion on The Nasdaq National Market, (h) all travel
expenses, including air fare and accommodation expenses, of representatives
of the Company in connection with the offering of the Shares, and (i) all of
the other costs and expenses incident to the performance by the Company of
the registration and offering of the Shares; provided, that each Selling
Shareholder, whether or not the transactions contemplated hereby are
consummated or this Agreement is prevented from becoming effective under
Section 10 hereof or is terminated, will pay or cause to be paid all costs
and expenses incident to the performance of such Selling Shareholder's
obligations hereunder which are not otherwise specifically provided for in
this Section; including (i) such Selling Shareholder's pro rata share of the
fees and expenses of the Attorney-in-fact and the Custodian, and (ii) all
expenses (including stock transfer taxes) incident to the sale and delivery
of the Shares to be sold by such Selling Shareholder to the Underwriters
hereunder; provided further, that the Underwriters will bear and pay the fees
and expenses of the Underwriters' counsel (except as provided in this Section
11), the Underwriters' out-of-pocket expenses, and any advertising costs and
expenses incurred by the Underwriters incident to the public offering of the
Shares.
If this Agreement is terminated by you in accordance with the
provisions of Section 10(c), the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the fees and disbursements of
counsel to the Underwriters.
12. DEFAULT OF SELLING SHAREHOLDERS. Failure or refusal by any of the
Selling Shareholders to sell and deliver on the Closing Date the Shares agreed
to be sold and delivered by such Selling Shareholder shall in no manner relieve
the other Selling Shareholders or the Company of their respective obligations
under this Agreement. If any Selling Shareholder should fail or refuse to sell
and deliver his Shares, the remaining Selling Shareholders shall have the right
hereby granted to increase, pro rata or otherwise, the number of Shares to be
sold by them hereunder to the total number of Shares to be sold by all Selling
Shareholders as set forth in Schedule I. If the remaining Selling Shareholders
do not fully exercise the right to increase the number of Shares to be sold by
them, the Underwriters, at your option, will have the right to elect to purchase
or not to purchase the Shares to be sold by the Company and the remaining
Selling Shareholders. In the event the Underwriters purchase the Shares of the
Company and such other
34
Selling Shareholders pursuant to this Section 12, the Closing Date shall be
postponed for a period of not more than seven days in order that the
Registration Statement and Prospectus or other documents may be amended or
supplemented to the extent necessary under the provisions of the 1933 Act and
the 1933 Act Rules and Regulations or under the securities laws of any
jurisdiction. If the Underwriters determine not to purchase the Shares of the
Company and the other Selling Shareholders, if any, this Agreement shall
terminate and neither the Company nor the Underwriters nor any other Selling
Shareholder shall be under any obligation under this Agreement except as
provided in Section 7 hereof and except for the obligation of the Company to pay
for such expenses as are set forth in Section 11 hereof. Nothing herein shall
relieve a defaulting Selling Shareholder from liability for his default or from
liability under Section 7 hereof or for expenses imposed by this Agreement upon
such Selling Shareholder.
13. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Director, Corporate Finance,
facsimile number (314) ___-____, with a copy to ___________________, Attention:
General Counsel, facsimile number [(314) ___-____], or if sent to the Company
shall be mailed, delivered, sent by facsimile transmission, or telegraphed and
confirmed to the Company at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, or if sent to any Selling Shareholder shall be
mailed, delivered, sent by facsimile transmission or telegraphed and confirmed
to such Selling Shareholder, c/o the Attorney-in-Fact at the address of the
Company. Notice to any Underwriter pursuant to Section 7 shall be mailed,
delivered, sent by facsimile transmission, or telegraphed and confirmed to such
Underwriter's address as it appears in the Underwriters' Questionnaire furnished
in connection with the offering of the Shares or as otherwise furnished to the
Company and the Selling Shareholder.
14. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth
in (i) the last paragraph of the cover page of the Prospectus and (ii) the
statements in the first, third and seventh paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished by
or on behalf of the Underwriters through you as such information is referred
to in Section 4(a)(ii) and Section 7 hereof.
15. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company, the Selling Shareholders and, to
the extent provided in Sections 7 and 8, the officers and directors of the
Company and each person who controls the Company, any Selling Shareholder or
any Underwriter and their respective heirs, executors, administrators,
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, corporation or other
entity any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of the parties hereto and their respective successors
and assigns and said controlling persons and said officers and directors, and
for the benefit of no other person, corporation or
35
other entity. No purchaser of any of the Shares from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
In all dealings hereunder, you shall act on behalf of each of the
several Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of the Underwriters,
made or given by you jointly or by ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. on behalf of you as
the representatives, as if the same shall have been made or given in writing by
the Underwriters; and in all dealings with any Selling Shareholders hereunder,
you and the Company shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of such Selling Shareholder made or given
by the Attorney-in-fact for such Selling Shareholder.
16. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
17. PRONOUNS. Whenever a pronoun of any gender or number is used
herein, it shall, where appropriate, be deemed to include any other gender and
number.
18. TIME OF ESSENCE. Time shall be of the essence of this Agreement.
19. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Missouri, without giving effect to
the choice of law or conflict of laws principles thereof.
36
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company, each of the Selling
Shareholders and the Underwriters.
EPIQ SYSTEMS, INC.
By: __________________________
Title: ________________________
Selling Shareholders Named in Schedule I Hereto
By: __________________________
Attorney-in-Fact
Accepted in St. Louis,
Missouri as of the date
first above written, on
behalf of ourselves and
each of the several
Underwriters named in
Schedule II hereto.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇▇ & COMPANY, INC.
As Representatives of the Several
Underwriters named on Schedule II hereto
By: ▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By:
------------------------
Title:
---------------------
37
SCHEDULE I
NUMBER OF
SELLING SHAREHOLDERS FIRM SHARES
-------------------- ------------
▇▇▇ ▇. ▇▇▇▇▇▇▇ 420,000
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 55,000
Total 475,000
38
SCHEDULE II
NUMBER OF
NAME SHARES
---- ---------
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇▇▇▇▇ & Company, Inc.
------------------------ ---------
------------------------ ---------
------------------------ ---------
------------------------ ---------
------------------------ ---------
------------------------ ---------
------------------------ ---------
------------------------ ---------
Total 1,500,000
39
SCHEDULE III
Pursuant to Section 6(g) of the Underwriting Agreement, Deloitte &
Touche LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company within the meaning of the 1933 Act and the 1933 Act Rules and
Regulations thereunder.
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included or incorporated by reference in the Prospectus or
the Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act Rules and
Regulations with respect to registration statements on Form S-3; and, if
applicable, they have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro forma
financial information, prospective financial statements and/or condensed
financial statements derived from audited financial statements of the Company
for the periods specified in such letter, as indicated in their reports thereon,
copies of which have been furnished to the Representatives of the Underwriters
(the "Representatives").
(iii) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred to
below, performing the procedures specified by the AICPA for a review of interim
financial information as discussed in SAS No. 71, Interim Financial Information,
on the latest available interim financial statements of the Company, inspection
of the minute books of the Company since the date of the latest audited
financial statements included in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) any material modifications should be made to the unaudited
statements of consolidated income, statements of consolidated financial
position and statements of consolidated cash flows included or
incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles, or the
unaudited statements of consolidated income, statements of consolidated
financial position and statements of consolidated cash flows included
in the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
1933 Act Rules and Regulations.
(B) any other unaudited income statement data and balance
sheet items included or incorporated by reference in the Prospectus do
not agree with the
40
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by reference
in the Prospectus.
(C) the unaudited financial statements which were not included
or incorporated by reference in the Prospectus but from which were
derived any unaudited condensed financial statements referred to in
Clause (A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectus.
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Rules and
Regulations or the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those statements.
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock or any increase in the consolidated
long-term debt of the Company, or any decreases in consolidated working
capital, net current assets or net assets, or any changes in any other
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter.
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or any changes in any other
items specified by the Representatives, in each case as compared with
the comparable period of the preceding year and with any other period
of corresponding length specified by the Representatives, except in
each case for changes, decreases or increases which the Prospectus
discloses have occurred or may occur or which are described in such
letter.
(iv) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraph (iii) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted
41
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the general
accounting records of the Company for the periods covered by their reports and
any interim or other periods since the latest period covered by their reports,
which appear or are incorporated by reference in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and have found
them to be in agreement.
42