DB DRAFT OF 10/16/97
U.S. Vision, Inc.
4,000,000 Shares/1
Common Stock
($.01 par value per share)
Underwriting Agreement
New York, New York
, 1997
Salomon Brothers Inc
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
--------
/1 Plus an option to purchase up to 300,000 additional shares
from the Company and up to an aggregate of 300,000 additional shares
from certain Selling Stockholders to cover over-allotments.
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U.S. Vision, Inc., a Delaware corporation (the "Company"), proposes to sell to
the underwriters named in Schedule I hereto (the "Underwriters"), for whom you
(the "Representatives") are acting as representatives, 2,500,000 shares of
Common Stock, $.01 par value per share ("Common Stock"), of the Company, and the
persons named in Schedule II hereto (the "Selling Stockholders") propose to sell
to the Underwriters 1,500,000 shares of Common Stock (said shares to be issued
and sold by the Company and shares to be sold by the Selling Stockholders
collectively being hereinafter called the "Underwritten Securities"). The
Company (as to 300,000 additional shares) and the Selling Stockholders named in
Schedule III hereto (as to an aggregate of 300,000 additional shares) also
propose to grant to the Underwriters an option to purchase up to an aggregate of
600,000 additional shares of Common Stock (the "Option Securities"; the Option
Securities, together with the Underwritten Securities, being hereinafter called
the "Securities"). To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires.
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1. Representations and Warranties.
(a)__ The Company and the Selling Stockholders jointly and severally
represent and warrant to, and agree with, each Underwriter as set forth below in
this Section 1. Certain terms used in this Section 1 are defined in Section 17
hereof.
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (file
number ) on Form S-1, including a related preliminary
prospectus, for the registration under the Act of the offering and sale
of the Securities. The Company may have filed one or more amendments
thereto, including a related preliminary prospectus, each of which has
previously been furnished to you. The Company will next file with the
Commission either (A) prior to the Effective Date of such registration
statement, a further amendment to such registration statement
(including the form of final prospectus) or (B) after the Effective
Date of such registration statement, a final prospectus in accordance
with Rules 430A and 424(b)(1) or (4). In the case of clause (B), the
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in such
registration statement and the Prospectus. As filed, such amendment and
form of final prospectus, or such final prospectus, shall contain all
Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(ii) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which shares sold in respect of the Underwriters'
over-allotment option are purchased, if such date is not the Closing
Date (a "settlement date"), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement did not or will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and, on the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), will not,
and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date and any settlement date, the Prospectus (together with any
supplement thereto) will not, 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; provided, however, that the
Company and the Selling Stockholders make no representations or
warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement thereto)
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in reliance upon and in conformity with information furnished herein or
in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(iii) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own its properties
and conduct its business as described in the prospectus, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification.
(iv) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any security interests, claims, liens or
encumbrances.
(v) The Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities being sold hereunder have been duly and validly authorized,
and, when issued and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable; the Securities have been duly authorized for listing,
subject to official notice of issuance, on the Nasdaq National Market;
the certificates for the Securities are in valid and sufficient form;
the holders of outstanding shares of capital stock of the Company are
not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in
the Company are outstanding.
(vi) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public
policy and subject to the qualification that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by
general equitable principles.
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(viii) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(ix) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriters in the manner contemplated herein
and in the Prospectus.
(x) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
subsidiaries or (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
or their properties.
(xi) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(xii) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Prospectus
and the Registration Statement present fairly in all material respects
the financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and the
rules and regulations thereunder and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Selected Financial Information" in the Prospectus and Registration
Statement fairly present, on the basis stated in the Prospectus and the
Registration Statement, the information included therein.
(xiii) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
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or threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation
of any of the transactions contemplated hereby or (ii) could reasonably
be expected to have a material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) (except, in the case of this clause (ii), for those
that have been disclosed in the Prospectus).
(xiv) Each of the Company and each of its subsidiaries owns or
leases all such properties as are necessary to the conduct of its
operations as presently conducted; neither the Company nor any
subsidiary is in violation of any law, rule or regulation of any
Federal, state or local governmental or regulatory authority applicable
to it or is in non-compliance with any term or condition of, or has
failed to obtain and maintain in effect, any license, certificate,
permit or other governmental authorization required for the ownership
or lease of its property or the conduct of its business, which
violation, non-compliance or failure would individually or in the
aggregate have a material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto); and the Company has not received notice of any proceedings
relating to the revocation or material modification of any such
license, certificate, permit or other authorization.
(xv) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its
properties, as applicable.
(xvi) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(xvii) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company and the Selling Stockholders of the Securities,
except for stock transfer taxes payable by the Selling Stockholders,
which will be discharged thereby in a timely manner.
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(xviii) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto)
and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as
described in or as would not have a material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xix) No labor disturbance by or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent
that could result in a material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(xx) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any 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 cause a material adverse change in
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xxi) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the Prospectus.
(xxii) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
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foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary 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), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xxiii) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to
occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials and the Company and its
subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct their
respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, result in a
material adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(xxiv) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only
in accordance with management's general or specific authorization; and
(D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxv) The subsidiaries listed on Annex A attached hereto are the
only subsidiaries of the Company (the "Subsidiaries").
(xxvi) The Company owns or has obtained licenses for the patents,
patent applications, trade and service marks, trade secrets and other
intellectual properties referenced or described in the Prospectus as
being owned by or licensed to it (collectively, the "Intellectual
Property"). Except as set forth in the Prospectus (a) there are no
rights of third parties to any such Intellectual Property; (b) there is
no material infringement by third parties of any such Intellectual
Property; (c) there is no pending or threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to
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any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (d) there is no
pending or threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable
basis for any such claim; and (e) there is no pending or threatened
action, suit, proceeding or claim by others that the Company infringes
or otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company is unaware of any
other fact which would form a reasonable basis for any such claim. Each
of the Company and each of its subsidiaries owns the Intellectual
Property or has the rights to the Intellectual Property that is
necessary to conduct its business as described in the Prospectus
(b)__ Each Selling Stockholder further represents and warrants to, and
agrees with, each Underwriter that:
(i) Such Selling Stockholder is the lawful owner of the Securities
to be sold by such Selling Stockholder hereunder, and upon sale and
delivery of, and payment for, such Securities, as provided herein, such
Selling Stockholder will convey good and marketable title to such
Securities, free and clear of all liens, encumbrances, equities and
claims whatsoever.
(ii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities and has not effected any sales of shares of Common
Stock which, if effected by the issuer, would be required to be
disclosed in response to Item 701 of Regulation S-K.
(iii) Certificates in negotiable form for such Selling
Stockholder's Securities have been placed in custody, for delivery
pursuant to the terms of this Agreement, under a Custody Agreement duly
authorized, executed and delivered by such Selling Stockholders, in the
form heretofore furnished to you (the "Custody Agreement") with of , as
Custodian (the "Custodian"); the Securities represented by the
certificates so held in custody for each Selling Stockholder are
subject to the interests hereunder of the Underwriters, the Company and
the other Selling Stockholders; the arrangements for custody and
delivery of such certificates, made by such Selling Stockholder
hereunder and under the Custody Agreement, are not subject to
termination by any acts of such Selling Stockholder, or by operation of
law, whether by the death or incapacity of such Selling Stockholder or
the occurrence of any other event; and if any such death, incapacity or
any other such event shall occur before the delivery of such Securities
hereunder, certificates for the Securities will be delivered by the
Custodian in accordance with the terms and conditions of this Agreement
and the Custody Agreement as if such death, incapacity or other event
had not occurred, regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
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(iv) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
such as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters and
such other approvals as have been obtained.
(v) Neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions
herein contemplated by such Selling Stockholder or the fulfillment of
the terms hereof by such Selling Stockholder will conflict with, result
in a breach or violation of, or constitute a default under any law or
the charter, by-laws or other organizational document (if such Selling
Stockholder is not a natural person) of such Selling Stockholder or the
terms of any indenture or other agreement or instrument to which such
Selling Stockholder or any of its subsidiaries (if such Selling
Stockholder is not a natural person) is a party or bound, or any
judgment, order or decree applicable to such Selling Stockholder or any
of its subsidiaries (if such Selling Stockholder is not a natural
person) of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder or any of its subsidiaries (if such Selling Stockholder is
not a natural person).
Any certificate signed by a Selling Stockholder or any officer
of the Company or any Selling Stockholder and delivered to the Representatives
or counsel for the Underwriters in connection with the offering of the
Securities shall be deemed a representation and warranty by such party, as to
matters covered thereby, to each Underwriter.
2. Purchase and Sale.
(a)__ Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company and the
Selling Stockholders agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company and the Selling Stockholders named in Schedule II hereto, at a
purchase price of $ per share, the amount of the Underwritten Securities set
forth opposite such Underwriter's name in Schedule I hereto.
(b)__ Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company and the Selling
Stockholders named in Schedule III hereto hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to 300,000 of the Option
Securities from the Company and up to an aggregate of 300,000 Option Securities
from such Selling Stockholders at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Prospectus upon written or telegraphic notice by the Representatives to the
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Company and such Selling Stockholders setting forth the number of shares of the
Option Securities as to which the several Underwriters are exercising the option
and the settlement date. Delivery of certificates for the shares of Option
Securities by the Company and such Selling Stockholders and payment therefor to
the Company and such Selling Stockholders, shall be made as provided in Section
3 hereof. The maximum number of shares of the Option Securities to be sold by
the Company and each of such Selling Stockholders is set forth in Schedule III
hereto. In the event that the Underwriters exercise less than their full
over-allotment option, the number of shares of the Option Securities to be sold
by each party listed on Schedule III shall be, as nearly as practicable, in the
same proportion to each other as are the number of shares of the Option
Securities listed opposite their respective names on said Schedule III. The
number of shares of the Option Securities to be purchased by each Underwriter
shall be the same percentage of the total number of shares of the Option
Securities to be purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Securities, subject to such adjustments as you in
your absolute discretion shall make to eliminate any fractional shares.
3. Delivery and Payment.
Delivery of and payment for the Underwritten Securities and
the Option Securities (if the option provided for in Section 2(b) hereof shall
have been exercised on or before the third Business Day prior to the Closing
Date) shall be made at 10:00 AM, New York City time, on , 1997, or at such time
on such later date not more than three Business Days after the foregoing date as
the Representatives shall designate, which date and time may be postponed by
agreement among the Representatives, the Company and the Selling Stockholders or
as provided in Section 9 hereof (such date and time of delivery and payment for
the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the respective aggregate purchase prices of the Securities
being sold by the Company and each of the Selling Stockholders to or upon the
order of the Company and the Selling Stockholders by wire transfer payable in
same-day funds to an account specified by the Company. Delivery of the
Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
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Each Selling Stockholder will pay all applicable state transfer taxes, if any,
involved in the transfer to the several Underwriters of the Securities to be
purchased by them from such Selling Stockholder, and the respective Underwriters
will pay any additional stock transfer taxes involved in further transfers.
If the option provided for in Section 2(b) hereof is exercised after the third
business day prior to the Closing Date, the Company and the Selling Stockholders
named in Schedule III hereto will deliver the Option Securities (at the expense
of the Company) to the Representatives on the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company and the Selling Stockholders
identified in Schedule III by wire transfer payable in same-day funds to an
account specified by the Company and the Selling Stockholders named in Schedule
III hereto. If settlement for the Option Securities occurs after the Closing
Date, the Company and such Selling Stockholders will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters.
It is understood that the several Underwriters propose to offer the
Securities for sale to the public as set forth in the Prospectus.
5. Agreements.
(a)__ The Company agrees with the several Underwriters that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective as soon as practicable. Prior to
the termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless the Company
has furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Prospectus is otherwise required under Rule 424(b), the
Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. The Company will promptly advise the Representatives (A)
when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (B) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
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Statement shall have been filed with the Commission, (C) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (D)
of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or
for any supplement to the Prospectus or of any additional information,
(E) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (F) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company
promptly will (i) prepare and file with the Commission, subject to the
second sentence of paragraph (a)(i) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (ii) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(iv) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(v) The Company will arrange, if necessary, for the qualification
of the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, and will maintain such qualifications in
effect so long as required for the distribution of the Securities and
will pay any fee of the National Association of Securities Dealers,
Inc., in connection with its review of the offering and the reasonable
fees and expenses of counsel to the Underwriters in connection
therewith.
13
(vi) The Company will not, for a period of 180 days following the
Execution Time, without the prior written consent of Salomon Brothers
Inc, offer, sell or contract to sell, or otherwise dispose of (or enter
into any transaction which is designed to, or could be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with
the Company or any affiliate of the Company) directly or indirectly, or
announce the offering of, any other shares of Common Stock or any
securities convertible into, or exchangeable for, shares of Common
Stock; provided, however, that the Company may issue and sell Common
Stock pursuant to any employee stock option plan, stock ownership plan
or dividend reinvestment plan of the Company in effect at the Execution
Time and the Company may issue Common Stock issuable upon the
conversion of securities or the exercise of warrants outstanding at the
Execution Time, in each case to the extent such plans, securities or
warrants are described in the Prospectus.
(b)__ Each Selling Stockholder agrees with the several Underwriters
that such Selling Stockholder will not during the period of 180 days following
the Execution Time, without the prior written consent of the Representatives,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any other shares of Common Stock
beneficially owned by such person, or any securities convertible into, or
exchangeable for, shares of Common Stock.
6. Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Underwritten
Securities and the Option Securities, as the case may be, shall be subject to
the accuracy of the representations and warranties on the part of the Company
and the Selling Stockholders contained herein as of the Execution Time, the
Closing Date and any settlement date pursuant to Section 3 hereof, to the
accuracy of the statements of the Company and the Selling Stockholders made in
any certificates pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and to the following additional conditions:
(a)__ If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later time,
the Registration Statement will become effective not later than (i) 6:00 PM New
York City time on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 PM New York City time on such
date or (ii) 9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after 3:00 PM New
York City time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
14
(b)__ The Company shall have furnished to the Representatives the
opinion of ▇▇▇▇▇▇ & Lidji, counsel for the Company, dated the Closing Date, to
the effect that:
(i) each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such
qualification;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest and, to
the knowledge of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock (including the
Securities being sold hereunder by the Selling Stockholders) have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Securities being sold hereunder by the Company have
been duly and validly authorized, and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be
validly issued, fully paid and nonassessable; the Securities being sold
by the Selling Stockholders are duly listed and admitted for trading on
the Nasdaq National Market; the Securities being sold hereunder by the
Company are duly authorized for listing, subject to official notice of
issuance, on the certificates for the Securities are in valid and
sufficient form; and the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights to
subscribe for the Securities; and, except as set forth in the
Prospectus, to such counsel's knowledge, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are
outstanding;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit
thereto, which is not described or filed as required;
15
(v) the Registration Statement has become effective under the Act;
any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been instituted
or threatened, and the Registration Statement and the Prospectus (other
than the financial statements and other financial information contained
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements of the
Act and the rules thereunder;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or its subsidiaries pursuant
to, (i) the charter or by-laws of the Company or its subsidiaries or
(ii) the terms of any indenture contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or its
subsidiaries is a party or bound or to which its property is subject
that is made an exhibit to the Registration Statement or is otherwise
known to such counsel, or (iii) to such counsel's knowledge, any
statute, law, rule, regulation, judgment, order or decree applicable to
the Company or its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or its subsidiaries or any of its
or their properties; and
(x) to such counsel's knowledge, no holders of securities of the
Company have rights to the registration of such securities under the
Registration Statement.
In addition, such counsel shall state that although such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the statements
16
in the Registration Statement and the Prospectus, such counsel has participated
in the preparation of the Registration Statement and the Prospectus, including
review and discussion of the contents thereof with representations of the
Underwriters and their counsel, officers and representatives of the Company, and
representatives of the independent certified public accountants of the Company,
and such counsel has no reason to believe that on the Effective Date or at the
Execution Time the Registration Statement contains or contained any untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date and on the Closing Date
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case, other
than the financial statements and the notes thereto and the schedules and other
financial and statistical information contained therein, as to which such
counsel need express no opinion);
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
Delaware General Corporation Law or the Federal laws of the United States, to
the extent they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(c)__ The Selling Stockholders shall have furnished to the
Representatives the opinion of , counsel for the Selling Stockholders, dated the
Closing Date, to the effect that:
(i) this Agreement, the Custody Agreement and the
Power-of-Attorney have been duly authorized, executed and delivered by
the Selling Stockholders, the Custody Agreement is valid and binding on
the Selling Stockholders and each Selling Stockholder has full legal
right and authority to sell, transfer and deliver in the manner
provided in this Agreement and the Custody Agreement the Securities
being sold by such Selling Stockholder hereunder;
(ii) the delivery by each Selling Stockholder to the several
Underwriters of certificates for the Securities being sold hereunder by
such Selling Stockholder against payment therefor as provided herein,
will pass good and marketable title to such Securities to the several
Underwriters, free and clear of all liens, encumbrances, equities and
claims whatsoever;
(iii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by any
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters and
such other approvals (specified in such opinion) as have been obtained;
and
17
(iv) neither the sale of the Securities being sold by any Selling
Stockholder nor the consummation of any other of the transactions
herein contemplated by any Selling Stockholder or the fulfillment of
the terms hereof by any Selling Stockholder will conflict with, result
in a breach or violation of, or constitute a default under any law or
the charter or by-laws of the Selling Stockholder (if such Selling
Stockholder is other than a natural person) or the terms of any
indenture or other agreement or instrument known to such counsel and to
which any Selling Stockholder or any of its subsidiaries (if such
Selling Stockholder is other than a natural person) is a party or
bound, or any judgment, order or decree known to such counsel to be
applicable to any Selling Stockholder or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over any Selling Stockholder or any of
its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
Delaware General Corporation Law or the Federal laws of the United States, to
the extent they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Selling Stockholders and public officials.
(d)__ The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement thereto) and other
related matters as the Representatives may reasonably require, and the Company
and each Selling Stockholder shall have furnished to such counsel such documents
as they request for the purpose of enabling them to pass upon such matters.
(e)__ The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or to such officers' knowledge,
threatened; and
18
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(f)__ Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by such Selling Stockholder (or, if such
Selling Shareholder is other than a natural person by the Chairman of the Board
or the President and the principal financial or accounting officer of such
Selling Stockholder (or such other authorized personnel satisfactory to the
Representatives), dated the Closing Date, to the effect that the signer(s) of
such certificate have carefully examined the Registration Statement, the
Prospectus, any supplement to the Prospectus and this Agreement and that the
representations and warranties of such Selling Stockholder in this Agreement are
true and correct in all material respects on and as of the Closing Date to the
same effect as if made on the Closing Date.
(g)__ At the Execution Time and at the Closing Date, ▇▇▇▇▇ & Young LLP
shall have furnished to the Representatives letters, dated respectively as of
the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives.
(h)__ Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (g) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business or properties of the Company and
its subsidiaries taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto).
(i)__ On or prior to the Execution Time, the National Association of
Securities Dealers, Inc. shall have approved the Underwriters' participation in
the distribution of the Securities to be sold by the Selling Stockholders.
(j)__ At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from each
officer and director of the Company and certain shareholders addressed to the
Representatives, in which each such person agrees not to offer, sell, contract
to sell, pledge or otherwise dispose of, or exercise any registration rights
with respect to, or file a registration statement with the Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Exchange Act
19
with respect to, any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period of
180 days after the date of this Agreement, other than (i) any shares of Common
Stock to be sold hereunder, (ii) any option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectus to
which this Agreement relates and (iii) other than shares of Common Stock
disposed of as bona fide gifts approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
(k)__ The Company shall have caused the Securities to be eligible for
trading on the Nasdaq National Market upon issuance.
(l)__ On the Closing Date, the Company shall have furnished to the
Representatives evidence satisfactory to the Representatives of the application
of the net proceeds of this offering as set forth in "Use of Proceeds" in the
Prospectus;
(m)__ On the Closing Date, the Company shall have furnished to the
Representatives evidence satisfactory to the Representatives of the conversion
of all outstanding shares of Series A Cumulative Preferred Stock and Series C
Cumulative Preferred Stock.
(n)__ Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company and each Selling Stockholder in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at
the office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, at ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, on the Closing Date.
7. Reimbursement of Underwriters' Expenses.
If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
the Company or any Selling Stockholder to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally through
Salomon Brothers Inc on demand for all out-of-pocket expenses (including
20
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities. If the
Company is required to make any payments to the Underwriters under this Section
7 because of any Selling Stockholder's refusal, inability or failure to satisfy
any condition to the obligations of the Underwriters set forth in Section 6, the
Selling Stockholders pro rata in proportion to the percentage of Securities to
be sold by each shall reimburse the Company on demand for all amounts so paid.
8. Indemnification and Contribution.
(a)__ The Company and the Selling Stockholders jointly and severally
agree to indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company and the Selling Stockholders will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company or the Selling
Stockholders may otherwise have.
(b)__ Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each Selling Stockholder, to
the same extent as the foregoing indemnity to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company and each Selling Stockholder
acknowledges that the statements set forth in the last paragraph of the cover
page regarding delivery of the Securities, the stabilization legend in block
capital letters on page 2, (i) the sentences related to concessions and
reallowances and (ii) the paragraph related to stabilization under the heading
"Underwriting" or "Plan of Distribution" in any Preliminary Prospectus and the
21
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c)__ Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above or (e) below. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d)__ In the event that the indemnity provided in paragraph (a), (b)
or (e) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Selling Stockholders,
jointly and severally, and the Underwriters agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, the Selling Stockholders and one
or more of the Underwriters may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
22
Stockholders on the one hand and by the Underwriters on the other from the
offering of the Securities; provided, however, that in no case shall (i) any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder or (ii) Salomon Brothers Inc in its
capacity as "qualified independent underwriter" (within the meaning of National
Association of Securities Dealers, Inc. Conduct Rule 2720) be responsible for
any amount in excess of the compensation received by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc for
acting in such capacity. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Selling
Stockholders, jointly and severally, and the Underwriters shall contribute in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Selling Stockholders on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Selling Stockholders
shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the Prospectus. Benefits received
by Salomon Brothers Inc in its capacity as "qualified independent underwriter"
shall be deemed to be equal to the compensation received by Salomon Brothers Inc
for acting in such capacity. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company, the Selling Stockholders
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
(e)__ Without limitation and in addition to its obligations under the
other paragraphs of this Section 8, the Company agrees to indemnify and hold
harmless Salomon Brothers Inc, its directors, officers, employees and agents and
each person who controls Salomon Brothers Inc within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject,
insofar as such losses, claims, damages or liabilities (or action in respect
23
thereof) arise out of or are based upon Salomon Brothers Inc's acting as a
"qualified independent underwriter" (within the meaning of National Association
of Securities Dealers, Inc. Conduct Rule 2720) in connection with the offering
contemplated by this Agreement, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
results from the gross negligence or willful misconduct of Salomon Brothers Inc.
(f)__ The liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the initial public offering price of the
Securities sold by such Selling Stockholder to the Underwriters. The Company and
the Selling Stockholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective amounts of
such liability for which they each shall be responsible.
9. Default by an Underwriter.
If any one or more Underwriters shall fail to purchase and pay for any
of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Securities set forth opposite their
names in Schedule I hereto bears to the aggregate amount of Securities set forth
opposite the names of all the remaining Underwriters) the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Securities set forth in Schedule I hereto,
the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter, the Selling
Stockholders or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Prospectus
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Company, the Selling Stockholders and any nondefaulting Underwriter
for damages occasioned by its default hereunder.
10. Termination.
This Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Common Stock shall have been suspended by the Commission or
24
the Nasdaq National Market or trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market shall
have been suspended or limited or minimum prices shall have been established on
such Exchanges or the Nasdaq National Market, (ii) a banking moratorium shall
have been declared either by Federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Prospectus
(exclusive of any supplement thereto).
11. Representations and Indemnities to Survive.
The respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers, of the Selling Stockholders
and of the Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, any Selling Stockholder or the Company or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices.
All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Representatives, will be mailed, delivered or
telefaxed to the Salomon Brothers Inc General Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇)
and confirmed to the General Counsel, care of Salomon Brothers Inc, at Seven
World Trade Center, New York, New York, 10048, Attention: General Counsel; or,
if sent to the Company, will be mailed, delivered or telefaxed to ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇., President and Chief Executive Officer (fax no. (▇▇▇) ▇▇▇-▇▇▇▇)
and confirmed to it at [address]; or if sent to the Selling Stockholders, will
be mailed, delivered or telefaxed to and confirmed to them at the addresses set
forth in Schedule II hereto.
13. Successors.
This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers and directors
and controlling persons referred to in Section 8 hereof, and no other person
will have any right or obligation hereunder.
14. Applicable Law.
This Agreement will be governed by and construed in accordance with
the laws of the State of New York.
25
15. Counterparts.
This Agreement may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute
one and the same agreement.
16. Headings.
The section headings used herein are for convenience only and shall
not affect the construction hereof.
17. Definitions.
The terms which follow, when used in this Agreement, shall have the
meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as
the case may be. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule
430A.
26
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration statement.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
U.S. Vision, Inc.
By: ______________________
Name:
Title:
Selling Stockholders
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name:
Grotech Partners IV, L.P.
By:_________________________
Name:
Title:
27
Grotech Partners III, L.P.
By:__________________________
Name:
Title:
Grotech III Companion Fund, L.P.
By:_____________________________
Name:
Title:
Grotech III Pennsylvania Fund, L.P.
By:______________________________
Name:
Title:
▇▇▇▇▇▇▇▇ Partners, L.P.
By:______________________________
Name:
Title:
M&M General Partnership
By:______________________________
Name:
Title:
Constitution Partners I, L.P.
By:______________________________
Name:
Title:
28
Keystone Ventures IV L.P.
By:______________________________
Name:
Title:
Penn Janney Fund, INC.
By:______________________________
Name:
Title:
29
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
Salomon Brothers Inc
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
By: Salomon Brothers Inc
By:_______________________
Vice President
For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.
30
SCHEDULE I
Number of Shares
to be
Underwriters Purchased
------------ ----------------
Salomon Brothers Inc..................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc...........................
Total........................................ 4,000,000
SCHEDULE II
(Underwritten Securities)
Number of
Shares to be
Name Sold
---- ------------
U.S. Vision, Inc. 2,500,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 46,406
Grotech Partners IV, L.P. 393,220
Grotech Partners III, L.P. 74,450
Grotech III Companion Fund, L.P. 8,419
Grotech III Pennsylvania Fund, L.P. 4,836
▇▇▇▇▇▇▇▇ Partners, L.P. 660,000
M&M General Partnership 16,724
Constitution Partners I, L.P. 120,953
Keystone Ventures IV L.P. 127,697
Penn Janney Fund, Inc. 45,357
Total................................... 4,000,000
SCHEDULE III
(Option Securities)
Number of
Shares to be
Name Sold
---- ------------
U.S. Vision, Inc. 300,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 16,194
Grotech Partners IV, L.P. 140,436
Grotech Partners III, L.P. 27,661
Grotech III Companion Fund, L.P. 3,007
Grotech III Pennsylvania Fund, L.P. 1,727
▇▇▇▇▇▇▇▇ Partners, L.P. 0
M&M General Partnership 5,973
Constitution Partners I, L.P. 43,198
Keystone Ventures IV L.P. 45,605
Penn Janney Fund, Inc. 16,199
Total........................................ 600,000
ANNEX A
Subsidiaries
EXHIBIT A
U.S. Vision, Inc.
Public Offering of Common Stock
, 1997
Salomon Brothers Inc
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between U.S. Vision,
Inc., a Delaware corporation (the "Company"), and each of you as representatives
of a group of Underwriters named therein, relating to an underwritten public
offering of Common Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the Underwriting
Agreement, the undersigned will not, without the prior written consent of
Salomon Brothers Inc, offer, sell, contract to sell, pledge or otherwise dispose
of, or exercise any registration rights with respect to, or file a registration
statement with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act with respect to, any shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 180 days after the date of this
Agreement, other than (i) any shares of Common Stock to be sold hereunder, (ii)
any option or warrant or the conversion of a security outstanding on the date
hereof and referred to in the Prospectus to which this Agreement relates and
(iii) shares of Common Stock disposed of as bona fide gifts approved by Salomon
Brothers Inc.
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or major
shareholder]
[Name and address of officer, director or
major shareholder]
A-2