EXHIBIT 1.01
____ Shares
U.S.A. FLORAL PRODUCTS, INC.
COMMON STOCK (par value $.001 per share)
UNDERWRITING AGREEMENT
, 1997
, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
c/o Morgan ▇▇▇▇▇▇▇ & Co.
Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
U.S.A. FLORAL PRODUCTS, INC., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") _________ shares of its common stock (par value
$.001 per share) (the "Firm Shares"). The Company also proposes to issue and
sell to the several Underwriters not more than an additional ______________
shares of its common stock (par value $.001 per share) (the "Additional Shares")
if and to the extent that you, as Managers of the offering, shall have
determined to exercise, on behalf of the Underwriters, the right to purchase
such shares of common stock granted to the Underwriters in Section hereof. The
Firm Shares and the Additional Shares are hereinafter collectively referred to
as the "Shares." The shares of common stock (par value $.001 per share) of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "Common Stock."
As part of the offering contemplated by this Agreement, the Underwriters
have agreed to reserve out of the Shares, up to _______ shares, for sale to the
Company's employees, officers, and directors and other parties associated with
the Company (collectively, "Participants"), as set forth in the Prospectus under
the heading "Underwriters" (the "Directed Share Program"). The Shares to be sold
by the Underwriters pursuant to the Directed Share Program (the "Directed
Shares") will be sold by the Underwriters pursuant to this Agreement at the
public offering price. Any Directed Shares not orally confirmed for purchase by
any Participants by the end of the first business day after the date on which
this Agreement is executed will be offered to the public by the Underwriters as
set forth in the Prospectus.
It is understood that the Company and its subsidiaries set forth on
Schedule II hereto (the "Merger Subsidiaries") have entered into the Agreements
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and Plans of Contribution identified on Exhibit A attached hereto (the "Merger
Agreements") with each of The ▇▇▇ ▇▇▇▇▇ Company, CFX, Inc., Bay State Florist
Supply, Inc., United Wholesale Florists, Inc., United Wholesale Florists of
America, Inc., American Florist Supply, Inc., Monterey Bay Bouquet, Inc., Bay
Area Bouquets, Inc. ("BAB"), Alpine Gem Flower Shippers, Inc. and Flowtrad
Corporation N.V. (each a "Founding Company" and together, the "Founding
Companies") in which each Merger Subsidiary will be merged with and into one or
more Founding Companies (each such transaction, a "Merger" and collectively, the
"Mergers") simultaneously with the closing of the sale of the Shares. The
Founding Companies will be the surviving corporations following the Mergers
(other than BAB, which will be merged with and into Monterey Bay Bouquet, Inc.
prior to the consummation of the Merger with Monterey Bay Bouquet, Inc.), and
will become wholly owned subsidiaries of the Company simultaneously with the
closing of the sale of the Shares (other than BAB as aforesaid). For the
purposes of this Agreement, unless the context expressly otherwise requires,
references to "the Company and its subsidiaries, taken as a whole" shall be
deemed to include the Founding Companies as if the Mergers had already been
completed.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the best
knowledge of the Company, threatened by the Commission.
(b) (i) the Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
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therein not misleading, (ii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable,
will comply, in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and
(iii) the Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(c) The information contained in the Prospectus with respect
to each of the Founding Companies does not contain, and as amended or
supplemented, if applicable, will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein with respect to each Founding Company, not
misleading.
(d) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of Delaware,
has, and after giving effect to the Mergers will have, the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus and is, and after giving effect to the
Mergers will be, duly qualified to transact business and in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(e) The Merger Subsidiaries are the only subsidiaries of the
Company; each of the Merger Subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus, and none of such Merger Subsidiaries qualifies as a
"significant subsidiary" within the meaning of Rule 1-02 of Regulation
S-X promulgated by the Commission; all of the issued shares of capital
stock of each Merger Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly
by the Company, free and clear of all liens, encumbrances, equities or
claims; pursuant to the Merger Agreements, each of the Merger
Subsidiaries will
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merge with and into a respective Founding Company (except as aforesaid
with respect to BAB) and, upon consummation of the Mergers, each of
the Merger Subsidiaries will cease to exist as a separate entity and
the Founding Companies (except as aforesaid with respect to BAB) will
be the only subsidiaries of the Company.
(f) Each of the Founding Companies has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has, and
after giving effect to the Mergers will have, the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is, and after giving effect to the Mergers will
be, duly qualified to transact business and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole; all of the issued shares of capital stock of each
Founding Company prior to its Merger have been duly and validly
authorized and issued, are fully paid and non-assessable; and, upon
consummation of the Mergers, all of the shares of capital stock of
each Founding Company will be duly and validly authorized and issued,
fully paid and non-assessable and owned directly by the Company, free
and clear of all liens, encumbrances, equities or claims.
(g) Each of the Merger Agreements has been duly authorized,
executed and delivered by each of the parties thereto, and constitutes
a valid and binding obligation of each such party and is enforceable
against each such party in accordance with its terms; the Merger
Agreements are in full force and effect on the date hereof, and
neither the Company nor any of the Merger Subsidiaries, nor, to the
knowledge of the Company, any of the Founding Companies, is in breach
of its obligations thereunder; and, when all of the conditions to each
Merger contained in the applicable Merger Agreement have been
fulfilled and the articles of merger relating to the applicable Merger
have been filed with and accepted for record by the relevant state
entity in accordance with the Merger Agreement, the applicable Merger
will be effective in accordance with the laws of the relevant state;
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus.
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(j) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(k) The shares of capital stock of the Company to be issued
pursuant to the Mergers have been duly authorized and, when issued
pursuant to the terms of the Merger Agreements, will be validly
issued, fully-paid and non-assessable and will not be subject to any
preemptive or similar rights.
(l) The Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.
(m) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of (i) the certificate of
incorporation or by-laws of the Company, (ii) any applicable law or
any agreement or other instrument binding upon the Company, the Merger
Subsidiaries or the Founding Companies that is material to the Company
and its subsidiaries, taken as a whole, except for such contraventions
that would not, individually or in the aggregate, have a material
adverse effect upon the Company and its subsidiaries taken as a whole
and except for such contraventions that would not materially and
adversely affect the consummation by the Company of the transactions
contemplated by this Agreement, or (iii) any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Company or any Merger Subsidiary or Founding Company, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(n) The execution and delivery by the Company, the Merger
Subsidiaries and the Founding Companies of, and the performance by the
Company, the Merger Subsidiaries and the Founding Companies, as
applicable, of their respective obligations under the Merger
Agreements and the Registration Rights Agreement and the consummation
of the Mergers will not contravene any provision of (i) the
certificate of incorporation or by-laws of the Company, the Merger
Subsidiaries or the Founding Companies, (ii) any applicable law or any
agreement or other instrument binding upon the Company, the Merger
Subsidiaries or the
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Founding Companies, except for such contraventions that would not,
individually or in the aggregate, have a material adverse effect upon
the Company and its subsidiaries taken as a whole and except for such
contraventions that would not materially and adversely affect the
consummation by the Company, the Founding Companies or the Merger
Subsidiaries of the transactions contemplated by the Merger Agreements
or the Registration Rights Agreement, as applicable, or (iii) any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Merger Subsidiary or
Founding Company, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by the Company, the Merger Subsidiaries or the
Founding Companies, as applicable, of their respective obligations
under the Merger Agreements or the Registration Rights Agreement other
than the filing with applicable state authorities of certificates of
merger or similar documents required under relevant state laws to
effect the consummation of the Mergers.
(o) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company or any of the Founding Companies, from that
set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(p) There are no legal or governmental proceedings
(including investigations and reviews of anti-dumping issues by the
U.S. Commerce Department) pending or to the Company's best knowledge,
threatened to which the Company or any of the Founding Companies is a
party or to which any of the properties of the Company or any of the
Founding Companies is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(q) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder.
(r) The Company is not and, after giving effect to the
Mergers and the offering and sale of the Shares and the application of
the proceeds
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thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended.
(s) The Company and the Founding Companies are and will be,
as of the Closing Date, after giving effect to the Mergers (i) in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) in
receipt of all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; there are no costs or liabilities
associated with Environmental Laws (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties) which would, singly or
in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(t) All outstanding options, warrants and other rights to
purchase, sell or otherwise transfer shares of Common Stock and all
employee benefit plans, stock option plans and other employee
compensation plans or arrangements pursuant to which such options,
warrants and other rights may be granted have been described in the
Prospectus to the extent required therein; there are not, and upon
consummation of the Mergers, there will not be, any contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company other than as described in the Registration
Statement, or to require the Company to include such securities with
the Shares registered pursuant to the Registration Statement.
(u) The pro forma combined financial statements of the
Company and the historical financial statements of each of the Company
and the Founding Companies, and the related notes thereto, included in
the Registration Statements and the Prospectus present fairly in all
material
8
respects the pro forma combined or historical financial position of
the Company and each of the Founding Companies, as the case may be, as
of the dates indicated and the results of their operations and changes
in their consolidated cash flows for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis, and the
supporting schedules included in the Registration Statement present
fairly in all material respects the information required to be stated
therein; and the pro forma combined financial information, and the
related notes thereto, included in the Registration Statement and the
Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and is based upon good faith
estimates and assumptions believed by the Company to be reasonable.
(v) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and through the Closing Date, (i) none of the Company, the Merger
Subsidiaries or the Founding Companies have incurred or will incur, as
the case may be, any material liability or obligation, direct or
contingent, nor entered or will enter, as the case may be, into any
material transaction, not in the ordinary course of business; (ii)
none of the Company, the Merger Subsidiaries or the Founding Companies
has purchased or will purchase, as the case may be, any of its
outstanding capital stock; (iii) the Company, the Merger Subsidiaries
and the Founding Companies have not, and will not, declare, pay or
otherwise make any dividend or distribution of any kind on its capital
stock; and (iv) there has not been any material change in the capital
stock, short-term debt or long-term debt of the Company or any of the
Founding Companies, except in each case as described in or
contemplated by the Registration Statement (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) and except for the merger of BAB with and into Monterey Bay
Bouquet, Inc. to be effected prior to the Monterey Bay Bouquet, Inc.
Merger.
(w) The Company and the Founding Companies own or possess,
or can acquire on reasonable terms, and, after giving effect to the
Mergers, will own or possess or have the capacity to acquire, all
material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names currently
employed by them in connection with the business now operated by them,
and neither the Company nor any of the Founding Companies has received
any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision,
9
ruling or finding, would result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole.
(x) No material labor dispute with the employees of the
Company or any of the Founding Companies exists, except as described
in or contemplated by the Prospectus, or, to the knowledge of the
Company, is imminent; and the Company is not currently aware of any
existing, overtly threatened or imminent labor disturbance by the
employees of any of the principal suppliers, manufacturers or
contractors of the Founding Companies that could result in any
material adverse change in the condition, financial or otherwise, or
in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
(y) The Company and each of the Founding Companies are and,
after giving effect to the Mergers will be, insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as the Company and such Founding Companies believe to
be prudent and customary in the businesses in which they are engaged;
(z) The Company and the Founding Companies are, and after
giving effect to the Mergers will be, in possession of all material
certificates, authorizations and permits issued by the appropriate
federal, state or local regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any Founding
Company has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries,
taken as a whole.
(aa) The Company and each of the Founding Companies maintain
a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
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(bb) Except as described in the Prospectus, the Company has
not sold, issued or distributed any shares of Common Stock.
(cc) Price Waterhouse LLP who has certified certain
financial statements of the Company and the Founding Companies, and
Madsen, Sapp, ▇▇▇▇▇▇▇▇▇ & Co., P.A., who has certified certain
financial statements of CFX, Inc., are and, during the periods covered
by their reports, were, independent public accountants as required by
the Securities Act.
(dd) The Company has not and, to the Company's knowledge,
none of the Founding Companies have, taken nor will take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Common Stock in contravention of the provisions of
Regulation M.
(ee) The directors and officers and shareholders of the
Company and those persons who are expected to become directors,
officers and shareholders of the Company, pursuant to the consummation
of the Mergers, have each entered into a written agreement with the
Company in the form of Exhibit B attached hereto (each such agreement,
a "Lock-up Agreement"), and executed originals of each Lock-up
Agreement have been delivered to you.
(ff) None of the Shares distributed in connection with the
Directed Share Program will be offered or sold outside of the United
States.
2. Agreements to Sell and Purchase. The Company hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective numbers of Firm Shares set forth
in Schedule I hereto opposite its name at $______ a share (the "Purchase
Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to
sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to
_______________ Additional Shares at the Purchase Price. If you, on behalf
of the Underwriters, elect to exercise such option, you shall so notify the
Company in writing not later than 30 days after the date of this Agreement,
which notice shall specify the number of Additional Shares to be purchased
by the Underwriters and the date on which such shares are to be purchased.
Such date may be the same as the Closing
11
Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may
be purchased as provided in Section 4 hereof solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional
Shares (subject to such adjustments to eliminate fractional shares as you
may determine) that bears the same proportion to the total number of
Additional Shares to be purchased as the number of Firm Shares set forth in
Schedule I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it will
not, during the period ending 180 days after the date of the Prospectus,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, lend, or otherwise transfer or dispose of, directly
or indirectly, or file or cause to be filed a registration statement in
respect of, any shares of Common Stock or any securities convertible into
or exercisable or exchangeable for Common Stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) the issuance by the Company of shares of Common Stock upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriters have been advised
in writing, (C) the issuance of shares of Common Stock to be used as
consideration in connection with future acquisitions, or (D) the grant of
options to purchase shares of Common Stock under the Company's 1997 Long-
Term Incentive Plan or 1997 Non-Employee Directors' Stock Plan provided
such options do not vest prior to the expiration of the 180-day period
referenced herein, and provided further, that in the case of subclauses (B)
and (C) of this paragraph, the recipient of any such shares agrees to
execute a lock-up agreement in the form of Exhibit B hereof.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement
have become effective as in your judgment is advisable. The Company is
further advised by you that the Shares are to be offered to the public
initially at $_____________ a share (the "Public Offering Price") and to
certain dealers selected by you at a price that represents a concession not
in excess of $______ a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may
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reallow, a concession, not in excess of $_____ a share, to any Underwriter
or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made
to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on
____________, 1997, or at such other time on the same or such other date,
not later than _________, 1997, as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the
"Closing Date."
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section 2 or at such other time on the
same or on such other date, in any event not later than _______, 1997, as
shall be designated in writing by you. The time and date of such payment
are hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to
the Closing Date or the Option Closing Date, as the case may be. The
certificates evidencing the Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with
any transfer taxes payable in connection with the transfer of the Shares to
the Underwriters duly paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of
the Company to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 5:30 p.m. (New York City time)
on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date there shall not have occurred
any change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company or any of the Founding Companies, from that
set forth in the Prospectus (exclusive of any amendments or
supplements thereto
13
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
the chief executive officer of the Company and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
the chief financial officer of the Company, to the effect set forth in
Section 5(a) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and
correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied hereunder on or before the Closing Date.
The officers signing and delivering such certificate may
rely upon the best of their knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, outside counsel for the
Company, dated the Closing Date, confirming the consummation of the
Mergers, and to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business in each jurisdiction in which it is required to do so by
reason of its ownership or leasing of real property located in
such jurisdiction or maintaining an office in such jurisdiction
and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires
it to be so, except to the extent that the failure to be in good
standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company (which shall be
deemed to include the Founding Companies, the "Subsidiaries") has
been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus and is duly qualified to transact business in each
jurisdiction in
14
which it is required to do so by reason of its ownership or
leasing of real property located in such jurisdiction or
maintaining an office in such jurisdiction and is in good
standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires it to
be so, except to the extent that the failure be in good standing
would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole;
(iii) the authorized capital stock of the Company
conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock;";
(iv) the shares of Common Stock outstanding prior to
the issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) the shares of capital stock issued and sold by the
Company pursuant to the Mergers have been duly authorized and are
validly issued, fully paid and non-assessable and are not subject
to any preemptive or similar rights arising by statutes or, to
such counsel's knowledge (after due inquiry), under any contract;
(vi) all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens,
encumbrances, equities or claims [other than the pledge of such
shares pursuant to the Company's credit facility];
(vii) the Shares have been duly authorized and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Shares will not be subject to any
preemptive or similar rights arising by statutes or, to such
counsel's knowledge (after due inquiry), under any contract;
(viii) this Agreement has been duly authorized,
executed and delivered by the Company;
(ix) each of the Merger Agreements has been duly
authorized, executed and delivered by each of the parties
thereto, and constitutes a legally valid and binding obligation
of each such party and is enforceable against each such party in
accordance with
15
its terms, subject to (A) the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws
affecting the rights and remedies of creditors generally and (B) the
effect of general principles of equity, whether applied by a court of
law or equity; and, each Merger has been duly consummated and is
effective in accordance with all applicable law and with the terms of
the applicable Merger Agreement;
(x) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, each of the
Merger Agreements, the Registration Rights Agreement and this
Agreement will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or, to the best
of such counsel's knowledge, result in a breach or default under any
agreement or other instrument binding upon the Company or any of its
Subsidiaries that is material to the Company and its Subsidiaries,
taken as a whole, or, to the best of such counsel's knowledge, violate
any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any Subsidiary, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency of the United States of America or the
State of New York is required for the performance by the Company of
its obligations under this Agreement, the Merger Agreements or the
Registration Rights Agreement or the transactions contemplated
therein, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of
the Shares;
(xi) the statements (A) in the Prospectus under the captions
"Prospectus Summary--The Mergers," "Formation of the Company,"
"Certain Relationships and Related Party Transactions" and
"Description of Capital Stock" and (B) in the Registration Statement
in Items 14 and 15, in each case solely insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly summarize the information called for with
respect to such legal matters, documents and proceedings;
(xii) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or (based solely upon inquiry by
such counsel of officers of the Company) threatened to which the
Company or any of its Subsidiaries is a party or to which any of the
properties of the Company or any of its Subsidiaries is
16
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations or contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required;
(xiii) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended;
(xiv) such counsel is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder;
(xv) the offer and sale of the shares of capital stock in the
Mergers, and all other offers and sales of securities of the Company
on or prior to the Closing Date, are exempt from the registration
requirements of Section 5 of the Securities Act and are exempt from
registration under all applicable securities or Blue Sky laws of the
various states.
In addition, such counsel shall state that, during the course of
preparation of the Registration Statement and the Prospectus, such counsel
has participated in conferences with you, officers and representatives of
the Company and representatives of the independent certified public
accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were
discussed, and, although such counsel does not pass upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, on
the basis of the foregoing, no facts have come to such counsel's attention
which cause such counsel to believe that the Registration Statement at the
effective date of the Registration Statement and at the Closing Date
contained or contains an 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 not misleading or that the Prospectus, as
amended or supplemented, if applicable, on the date of this Agreement and
on the Closing Date, included or includes any untrue statement of a
17
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that such counsel need
express no comment with respect to the financial statements, the notes
thereto, or any other financial or statistical information contained in the
Registration Statement or the Prospectus or incorporated by reference
therein.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the States of Pennsylvania and Delaware, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon
an opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws; (B) as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The
opinion of such counsel for the Company shall state that the opinion of any
such other counsel upon which they relied is in form satisfactory to such
counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon.
The opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(d) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the
Closing Date, in form and substance satisfactory to the Underwriters.
(e) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from each of Price Waterhouse LLP, independent public accountants, and
Madsen, Sapp, ▇▇▇▇▇▇▇▇▇ & Co., P.A. containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
(f) The "lock-up" agreements, each substantially in the form of
Exhibit B hereto, between you and the shareholders, officers and directors
of the Company relating to sales and certain other dispositions of shares
of
18
Common Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date.
(g) The Shares to be delivered on the Closing Date, or the Option
Closing Date, as the case may be, shall have been approved for listing on
the Nasdaq National Market, subject to official notice of issuance.
(h) Each of the conditions to the closing of the Mergers shall have
been satisfied by the applicable party and not waived by the Company
(except with the Underwriters' reasonable consent) as of the Closing Date,
and, none of the Merger Agreements shall have been amended as of the
Closing Date; the articles of merger (or similar documents required under
relevant state laws relating to each Merger shall have been filed with and
accepted for record by the relevant state entities in accordance with each
Merger Agreement, and each of the Mergers shall be effective in accordance
with all applicable law and the terms of the applicable Merger Agreement;
(i) [The closing of the credit facility shall have been consummated.]
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
6. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 5:00 p.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed
19
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the
Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To cooperate with the Underwriters to qualify the Shares
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request, provided that the
Company shall not be required to file a general consent to service of
process or be required to qualify as a foreign corporation in any
jurisdiction.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period beginning with the first fiscal
quarter of the Company occurring after the effective date of the
Registration Statement that satisfies the provisions of Section 11(a)
of the Securities Act and the rules and regulations of the Commission
thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing
20
of the Registration Statement, any preliminary prospectus, the
Prospectus and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the
quantities herein above specified, (ii) all costs and expenses related
to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost
of printing or producing any Blue Sky or Legal Investment memorandum
in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification
of the Shares for offer and sale under state securities laws as
provided in Section 6(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the
offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to
listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Company relating to investor presentations
on any "road show" undertaken in connection with the marketing of the
offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses
incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
(g) In connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the
extent required by the National Association of Securities Dealers,
Inc. or the rules of such association from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the
date of the effectiveness of the Registration Statement, and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated will notify the Company as to which
Participants will need to be so restricted. At the request of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, the Company will direct the transfer agent
to place stop transfer restrictions upon such securities for such
period of time; the Company will pay all fees and
21
disbursements of counsel incurred by the Underwriters in connection
with the Directed Share Program and stamp duties, similar taxes or
duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program.
7. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale of
the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
(b) The Company agrees to indemnify and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated and each person, if any, who controls ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities"), from the
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) (i)
caused by the failure of any Participant to pay for and accept delivery of
the shares sold pursuant to the Directed Share Program which, immediately
following the effectiveness of the Registration Statement, were subject to
a properly confirmed agreement to purchase or (ii) related to, arising out
of, or in connection with the Directed Share Program, provided that, the
Company shall not be responsible under this subparagraph (ii)
22
for any losses, claim, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the
bad faith or gross negligence of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 7(a) or 7(c), such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any
such proceeding (including any impeded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would in the reasonable opinion of counsel to
the indemnified party be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, in the case of parties indemnified pursuant to Section 7(a),
and by the Company, in the case of parties indemnified pursuant to Section
7(c). Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to Section 7(b) hereof in respect of such
action or proceeding, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for the
reasonable fees and expenses of not more than one separate firm (in
addition to any local counsel) for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ for the defense of any
losses, claims, damages and
23
liabilities arising out of the Directed Share Program, and all persons, if
any, who control ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ within the meaning of either Section 15 of
the Act or Section 20 of the Exchange Act. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in Section
7(a) or 7(c) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 7(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(e)i above but also the
relative fault of the Company on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. The relative fault of
the Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
24
(f) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 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 in Section 7(e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7, 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
8. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the
case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago
Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have
been declared by either Federal or New York State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change
in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses 8(a)(i) through 8(a)(iv), such event, singly or together with any
other
25
such event, makes it, in your judgment, impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it has or they have agreed to purchase hereunder on
such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate number of the Shares to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their
respective names in Schedule I bears to the aggregate number of Firm Shares
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as you may specify, to purchase the Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Shares
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If,
on the Closing Date, any Underwriter or Underwriters shall fail or refuse
to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares to be purchased, and arrangements
satisfactory to you and the Company for the purchase of such Firm Shares
are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case either you or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements
may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares
to be purchased, the non-defaulting Underwriters shall have the option to
(i) terminate their obligation hereunder to purchase Additional Shares or
(ii) purchase not less than the number of Additional Shares that such non-
defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to
comply with the
26
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally,
for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
Very truly yours,
U.S.A. FLORAL PRODUCTS, INC.
By: __________________________________
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By: _________________________________
Name:
Title:
27
SCHEDULE I
Underwriter Number of Firm Shares
To Be Purchased
----------------------------------------- ---------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.......
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC.......
▇▇▇▇▇ ▇▇▇▇▇▇ Inc........................
[NAMES OF OTHER UNDERWRITERS].
---------------------
Total:............................... =====================
28
SCHEDULE II
1. BSF Acquisition Corp.
2. RHI Acquisition Corp.
3. AFS Acquisition Corp.
4. USA Floral Acquisition Co.
5. AGFS Acquisition Corp.
6. Floral Acquisition Corporation
7. UWF Acquisition Corp.
8. UWFA Acquisition Corp.
9. FT Acquisition Corp.
29
EXHIBIT A
Agreements and Plans of Contribution
------------------------------------
1. Amended and Restated Agreement and Plan of Contribution by and
among U.S.A. Floral Products, Inc., BSF Acquisition Corp. and Bay State
Florist Supply, Inc. dated as of August 6, 1997.
2. Amended and Restated Agreement and Plan of Contribution by and
among U.S.A. Floral Products, Inc., RHI Acquisition Corp., The ▇▇▇ ▇▇▇▇▇
Company and ▇▇▇ ▇▇▇▇▇, dated as of August 5, 1997.
3. Amended and Restated Agreement and Plan of Contribution by and
among U.S.A. Floral Products, Inc., AFS Acquisition Corp., American Florist
Supply, Inc., and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, dated as of August 5, 1997.
4. Amended and Restated Agreement and Plan of Contribution by and
among U.S.A. Floral Products, Inc., USA Floral Acquisition Co., Monterey
Bay Bouquet, Inc., Bay Area Bouquets, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, dated as of August 5, 1997.
5. Amended and Restated Agreement and Plan of Contribution by and
among U.S.A. Floral Products, Inc., AGFS Acquisition Corp., Alpine Gem
Flower Shippers, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇, dated
as of August 5, 1997.
6. Amended and Restated Agreement and Plan of Contribution by and
among U.S.A. Floral Products, Inc., Floral Acquisition Corporation, CFX,
Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, dated as of August
5, 1997.
7. Agreement and Plan of Contribution by and among U.S.A. Floral
Products, Inc., UWF Acquisition Corp., United Wholesale Florists, Inc.,
United Wholesale Florists of America, Inc., and UWFA Acquisition Corp.,
dated as of August 5, 1997.
8. Agreement and Plan of Contribution by and among U.S.A. Floral
Products, Inc., FT Acquisition Corp., Flowtrad Corporation N.V. and Flower
Trading Corporation, dated as of August 5, 1997.
EXHIBIT B
[FORM OF LOCK-UP LETTER]
_____________, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with U.S.A. Floral Products, Inc., a Delaware
corporation (the "Company"), providing for the public offering (the "Public
Offering") by the several Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"Underwriters"), of ___ shares (the "Shares") of the common stock (par
value $.001 per share) of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the
final prospectus relating to the Public Offering (the "Prospectus"), (1)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, lend, or otherwise transfer or dispose of, directly
or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (2) enter into any
swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled
by delivery of Common Stock or such other securities, in cash or otherwise.
In addition, the undersigned agrees that, without the prior written consent
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the
period commencing on the date hereof and ending 180 days after the date of
the Prospectus, make any demand for or exercise any right with respect to,
the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
___________________________________
(Name)
___________________________________
(Address)
2
CROSS-REFERENCE TARGET LIST
===========================
NOTE: Due to the number of targets some target names may not appear in the
target pull-down list.
(This list is for the use of the wordprocessor only, is not a part of this
document and may be discarded.)
ARTICLE/SECTION TARGET NAME
===========================
1................................represents warrants
1(a).......................................regst.eff
1(b).................................regstmnt untrue
1(d)...................................valid company
1(e)................................valid subsidiary
1(h)........................................agt auth
1(i)..............................auth capital stock
1(i).............................. auth common stock
1(l).................................... auth shares
1(m).......................... nonviolation cert inc
1(o)..................................adverse change
1(p)............................ no pending proceed
1(q)..................................prosp complies
1(r)..............................co. not investment
1(s).................................... co. and sub
1(s)(i)...................................compliance
1(s)(ii)................................ all permits
1(s)(iii).......................compliance all terms
1(t)....................................no contracts
2............................. agt to sell and purch
3...................................public off terms
4...............................payment and delivery
5.............................obligations underwrtrs
5(a)............................ subsequent to execu
5(b)............................cert of exec officer
5(c)................................ counsel opinion
5(c)(i)............................... company valid
5(c)(ii)................................subsid valid
5(c)(iii).....................capital stock conforms
5(c)(iv)................................ stock valid
5(c)(vi)........................ issued shares valid
5(c)(vii)............................... shares auth
5(c)(viii)................................ agt execu
5(c)(x)....................... contra applicable law
5(c)(xi)..................................statements
5(c)(xi)(A)...............................prospectus
5(c)(xi)(B)........................... reg statement
5(c)(xii)............................... due inquiry
5(c)(xiii)........................ not investment co
5(c)(xiv)...............................such counsel
5(c)(xiv)(A)........................regstmnt opinion
5(c)(xiv)(B)............................believe that
5(c)(xiv)(C)............................no reason to
5(d).................................... dpw opinion
5(e)..............................underwrtr received
5(f).................................... lock-up agt
6.......................................co covenants
6(a).............................. furnish signed cc
6(b)................................ cc before amend
6(c)................................ after pub offer
6(d)............................ endeavor to qualify
6(e)..................................make available
6(f)....................................pay expenses
7................................. indem and contrib
7(a).............................. company indemnify
7(b)............................ underwrtr indemnify
7(d)................................ promptly notify
7(d)................................ each contribute
7(e)(i)...................................proportion
7(f).............................. just or equitable
7(g)................................remain operative
8....................................... termination
8(a)................................ after execution
8(a)(ii)..........................tradign securities
8(a)(iii).................................moratorium
8(a)(iv)....................................outbreak
9.................................default underwrtrs
ARTICLE/SECTION TARGET NAME
===========================
10......................................counterparts
11....................................applicable law
12..........................................headings
ARTICLE/SECTION TARGET NAME
===========================
ARTICLE/SECTION TARGET NAME
===========================