1
EXHIBIT 1.1
EXHIBIT A
4,000,000 SHARES(1)
LASON, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
, 1997
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, INC.,
as Representatives of the several Underwriters
(the "Representatives")
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Lason, Inc., a Delaware corporation (the "Company"), and certain
stockholders of the Company named in Schedule B hereto address you as the
Representatives of each of the persons, firms and corporations listed in
Schedule A hereto (hereinafter collectively called the "Underwriters") and
hereby confirm their respective agreements with the several Underwriters as
follows:
1. Description of Shares. The Company proposes to issue and sell
2,200,000 shares of its authorized and unissued Common Stock, par value $0.01
per share, to the several Underwriters. Certain stockholders of the Company
named in Schedule B hereto (hereinafter collectively called the "Firm Selling
Stockholders"), acting severally and not jointly, propose to sell an aggregate
of 1,800,000 shares of the Company's authorized and outstanding Common Stock,
par value $0.01 per share, to the several Underwriters. The 2,200,000 shares
of the Company's Common Stock, par value $0.01 per share, to be sold by the
Company are hereinafter collectively called the "Company Shares" and the
1,800,000 shares of the Company's Common Stock, par value $0.01 per share, to
be sold by the Firm Selling Stockholders are hereinafter collectively called
the "Selling Stockholders Firm Shares". The Company Shares and the Selling
Stockholders Firm Shares are hereinafter collectively
----------------------------------
(1)
Plus an option to purchase up to 330,000 and 270,000
additional shares from the Company and certain stockholders of the Company
named in Schedule B hereto, respectively, to cover over-allotments, if any.
2
referred to as the "Firm Shares". The Company and certain stockholders of the
Company named in Schedule B hereto (hereinafter collectively called the "Option
Selling Stockholders", and together with the Firm Selling Stockholders, the
"Selling Stockholders") also propose to grant, acting severally and not
jointly, to the Underwriters an option to purchase up to 330,000 and 270,000
additional shares of the Company's Common Stock, par value $0.01 per share,
respectively, as provided in Section 7 hereof. The up to 330,000 additional
shares of the Company's Common Stock, par value $0.01 per share, to be sold by
the Company and the up to 270,000 additional shares of the Company's Common
Stock, par value $0.01 per share, to be sold by the Option Selling Stockholders
if the Underwriters exercise such option pursuant to Section 7 are hereinafter
collectively called the "Company Option Shares" and the "Selling Stockholders
Option Shares", respectively. The Company Option Shares and the Selling
Stockholders Option Shares are hereinafter collectively called the "Option
Shares". The Selling Stockholders Firm Shares and the Selling Stockholders
Option Shares are hereinafter collectively called the "Selling Stockholders
Shares". As used in this Agreement, the term "Shares" shall include the Firm
Shares and the Option Shares. All shares of the Company's Common Stock, par
value $0.01 per share, to be outstanding after giving effect to the sales
contemplated hereby, including the Shares, are hereinafter referred to as
"Common Stock".
2. Representations, Warranties and Agreements of the Company and
the Selling Stockholders.
I. The Company represents and warrants to and agrees
with each of the Underwriters that:
(a) A registration statement on Form S-1 (File
No. 333-32747) with respect to the Shares, including a prospectus subject to
completion, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
applicable rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the Act and has
been filed with the Commission; such amendments to such registration statement,
such amended prospectuses subject to completion and such abbreviated
registration statements pursuant to Rule 462(b) of the Rules and Regulations as
may have been required prior to the date hereof have been similarly prepared
and filed with the Commission; and the Company will file such additional
amendments to such registration statement, such amended prospectuses subject to
completion and such abbreviated registration statements as may hereafter be
required. Copies of such registration statement and amendments, of each
related prospectus subject to completion (the "Preliminary Prospectuses") and
of any abbreviated registration statement pursuant to Rule 462(b) of the Rules
and Regulations have been delivered to you.
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If the registration statement relating to the Shares
has been declared effective under the Act by the Commission, the Company will
prepare and promptly file with the Commission the information omitted from the
registration statement pursuant to Rule 43OA(a) or, if ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
Company LLC, on behalf of the several Underwriters, shall agree to the
utilization of Rule 434 of the Rules and Regulations, the information required
to be included in any term sheet filed pursuant to Rule 434(b) or (c), as
applicable, of the Rules and Regulations pursuant to subparagraph (1), (4) or
(7) of Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to the registration statement (including a final form of prospectus).
If the registration statement relating to the Shares has not been declared
effective under the Act by the Commission, the Company will prepare and
promptly file an amendment to the registration statement, including a final
form of prospectus, or, if ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC, on behalf of the
several Underwriters, shall agree to the utilization of Rule 434 of the Rules
and Regulations, the information required to be included in any term sheet
filed pursuant to Rule 434(b) or (c), as applicable, of the Rules and
Regulations. The term "Registration Statement" as used in this Agreement shall
mean such registration statement, including financial statements, schedules and
exhibits, in the form in which it became or becomes, as the case may be,
effective (including, if the Company omitted information from the registration
statement pursuant to Rule 43OA(a) or files a term sheet pursuant to Rule 434
of the Rules and Regulations, the information deemed to be a part of the
registration statement at the time it became effective pursuant to Rule 43OA(b)
or Rule 434(d) of the Rules and Regulations) and, in the event of any amendment
thereto or the filing of any abbreviated registration statement pursuant to
Rule 462(b) of the Rules and Regulations relating thereto after the effective
date of such registration statement, shall also mean (from and after the
effectiveness of such amendment or the filing of such abbreviated registration
statement) such registration statement as so amended, together with any such
abbreviated registration statement. The term "Prospectus" as used in this
Agreement shall mean the prospectus relating to the Shares as included in such
Registration Statement at the time it becomes effective (including, if the
Company omitted information from the Registration Statement pursuant to Rule
43OA(a) of the Rules and Regulations, the information deemed to be a part of
the Registration Statement at the time it became effective pursuant to Rule
43OA(b) of the Rules and Regulations); provided, however, that if in reliance
on Rule 434 of the Rules and Regulations and with the consent of ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & Company LLC, on behalf of the several Underwriters, the Company
shall have provided to the Underwriters a term sheet pursuant to Rule 434(b) or
(c), as applicable, prior to the time that a confirmation is sent or given for
purposes of Section 2(10)(a) of the Act, the term "Prospectus" shall mean the
"prospectus subject to completion" (as defined in Rule 434(g) of the Rules and
Regulations) last provided to the
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Underwriters by the Company and circulated by the Underwriters to all
prospective purchasers of the Shares (including the information deemed to be a
part of the Registration Statement at the time it became effective pursuant to
Rule 434(d) of the Rules and Regulations). Notwithstanding the foregoing, if
any revised prospectus shall be provided to the Underwriters by the Company for
use in connection with the offering of the Shares that differs from the
prospectus referred to in the immediately preceding sentence (whether or not
such revised prospectus is required to be filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Underwriters for such use. If in reliance on Rule 434 of the Rules and
Regulations and with the consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC, on
behalf of the several Underwriters, the Company shall have provided to the
Underwriters a term sheet pursuant to Rule 434(b) or (c), as applicable, prior
to the time that a confirmation is sent or given for purposes of Section
2(10)(a) of the Act, the Prospectus and the term sheet, together, will not be
materially different from the prospectus in the Registration Statement.
(b) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus or instituted
proceedings for that purpose, and each such Preliminary Prospectus has
conformed in all material respects to the requirements of the Act and the Rules
and Regulations and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and at the time the Registration Statement became or
becomes, as the case may be, effective and at all times subsequent thereto up
to and on the Closing Date (as hereinafter defined) and on any later date on
which Option Shares are to be purchased, (i) the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained and will
contain all material information required to be included therein by the Act and
the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, (ii) the Registration
Statement, and any amendments or supplements thereto, did not and will not
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading and (iii) the Prospectus, and any amendments or supplements
thereto, did not and will not include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that none of the representations and warranties contained in
this subparagraph (b) shall apply to information contained in or omitted from
the Registration Statement or the Prospectus, or any amendments or supplements
thereto, in reliance upon, and in
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conformity with, written information relating to any Underwriter furnished to
the Company by such Underwriter specifically for use in the preparation
thereof.
(c) 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 of its incorporation with full
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Prospectus; the Company
owns all of the outstanding capital stock of its subsidiaries free and clear of
any pledge, lien, security interest, encumbrance, claim or equitable interest;
each of the Company and its subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise; no proceeding has
been instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification;
each of the Company and its subsidiaries is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents, orders
and permits from state, federal and other regulatory authorities which are
material to the conduct of its business, all of which are valid and in full
force and effect; neither the Company nor any of its subsidiaries is in
violation of its respective charter or bylaws or in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any material bond, debenture, note or other evidence of
indebtedness, or in any material lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective properties may be bound; and neither the
Company nor any of its subsidiaries is in material violation of any law, order,
rule, regulation, writ, injunction, judgment or decree of any court, government
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or over their respective properties of
which it has knowledge. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than Lason
Systems, Inc., American Micro Image, Inc., Automated Enterprises, Inc.,
▇▇▇▇▇▇▇▇▇ Communications Corporation, Corporate Copies, Inc., Delaware Legal
Copy, Inc., Great Lakes Micrographics Corporation, Image Conversion Systems,
Inc., Information & Image Technology of America, Inc., Micro-Pro, Inc., MP
Services, Inc., National Reproductions Corp. and Premier Copy Group, Inc., and
all references in this Agreement to "subsidiaries" refer to the foregoing
entities.
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(d) The Company has full legal right, power and
authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of
the Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; the performance
of this Agreement and the consummation of the transactions herein contemplated
will not result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any bond, debenture, note or
other evidence of indebtedness, or under any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of its subsidiaries or their respective properties may be
bound, (ii) the charter or bylaws of the Company or any of its subsidiaries or
(iii) any law, order, rule, regulation, writ, injunction, judgment or decree of
any court, government or governmental agency or body, domestic or foreign,
having jurisdiction over the Company or any of its subsidiaries or over their
respective properties. No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective properties is required for the execution
and delivery of this Agreement and the consummation by the Company or any of
its subsidiaries of the transactions herein contemplated, except such as may be
required under the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or state or other securities or Blue Sky laws, all of which
requirements have been satisfied in all material respects.
(e) There is not any pending or, to the best of
the Company's knowledge, threatened action, suit, claim or proceeding against
the Company, any of its subsidiaries or any of their respective officers or any
of their respective properties, assets or rights before any court, government
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or over their respective officers or
properties or otherwise which (i) might result in any material adverse change
in the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise or might materially and adversely affect their properties, assets or
rights, (ii) might prevent consummation of the transactions contemplated hereby
or (iii) is required to be disclosed in the Registration Statement or the
Prospectus and is not so disclosed; and there are no agreements, contracts,
leases or documents of the Company or any of its subsidiaries of a character
required to be described or
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referred to in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement by the Act or the Rules and
Regulations which have not been accurately described in all material respects
in the Registration Statement or the Prospectus or filed as exhibits to the
Registration Statement.
(f) All outstanding shares of capital stock of
the Company (including the Selling Stockholders Shares) have been duly
authorized and validly issued and are fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and the authorized and outstanding
capital stock of the Company is as set forth in the Prospectus under the
caption "Capitalization" and conforms in all material respects to the
statements relating thereto contained in the Registration Statement and the
Prospectus (and such statements correctly state the substance of the
instruments defining the capitalization of the Company); the Company Shares and
the Company Option Shares to be purchased from the Company hereunder have been
duly authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company against payment
therefor in accordance with the terms of this Agreement, will be duly and
validly issued and fully paid and nonassessable, and will be sold free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest; and no preemptive right, co-sale right, registration right, right of
first refusal or other similar right of stockholders exists with respect to any
of the Company Shares or the Company Option Shares to be purchased from the
Company hereunder or the issuance and sale thereof other than those that have
been expressly waived prior to the date hereof and those that will
automatically expire upon and will not apply to the consummation of the
transactions contemplated on the Closing Date. No further approval or
authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale or transfer of the Shares except
as may be required under the Act, the Exchange Act or state or other securities
or Blue Sky laws. All issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable, and were not issued in violation of or subject to
any preemptive right, or other rights to subscribe for or purchase shares and
are owned by the Company free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest. Except as disclosed in the
Prospectus and the financial statements of the Company, and the related notes
thereto, included in the Prospectus, neither the Company nor any subsidiary has
outstanding any options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its capital
stock or any such options, rights, convertible securities or obligations. The
description of the Company's stock option, stock bonus and other
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stock plans or arrangements, and the options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(g) Coopers & ▇▇▇▇▇▇▇ L.L.P., which has examined
the consolidated financial statements, together with the related schedules and
notes, of the Company as of December 31, 1996 and 1995 and for each of the
years in the two (2) years ended December 31, 1996 and the financial
statements, together with the related schedules and notes, of Lason Systems,
Inc., a Michigan corporation (the "Predecessor"), as of December 31, 1994 and
for the year ended December 31, 1994 filed with the Commission as a part of the
Registration Statement, which are included in the Prospectus, are independent
accountants within the meaning of the Act and the Rules and Regulations; the
audited consolidated financial statements of the Company and the Predecessor,
together with the related schedules and notes, and the unaudited consolidated
financial statements, including pro forma financial information, forming part
of the Registration Statement and the Prospectus, fairly present, on a pro
forma condensed consolidated, consolidated or individual basis, as the case may
be, the financial position, the results of operations, the results of cash
flows and the changes in stockholders' equity and the other information
purported to be shown therein of the Company and the Predecessor at the
respective dates and for the respective periods to which they apply; and all
audited consolidated financial statements, together with the related schedules
and notes, of the Company and the Predecessor and the unaudited consolidated
financial statements, filed with the Commission as part of the Registration
Statement, have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as may
be otherwise stated therein. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. LLP, which has examined the
financial statements, together with the related schedules and notes, of Image
Conversion Systems, Inc. ("ICS") as of October 31, 1996 and for the year ended
October 31, 1996 filed with the Commission as a part of the Registration
Statement, which are included in the Prospectus, are independent accountants
within the meaning of the Act and the Rules and Regulations; the audited
financial statements of ICS, together with the related schedules and
notes and the unaudited financial statements, forming part of the Registration
Statement and the Prospectus, fairly present, on an individual basis, the
financial position, the results or operations, the results of cash flows and
the changes in stockholders' equity and the other information purported to be
shown therein of ICS at the respective dates and for the respective periods to
which they apply; and all audited financial statements, together with the
related schedules and notes, of ICS and the unaudited financial statements,
filed with the Commission as part of the Registration Statement, have been
prepared in accordance with generally accepted accounting principals
consistently applied throughout the periods involved,
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except as may be otherwise stated therein. All pro forma financial
information required to be included in the Prospectus has been included therein
and such information has been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial information. The
selected and summary financial and statistical data included in the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with the audited financial statements and unaudited financial
statements presented therein. No other financial statements, schedules or
information is required to be included in the Registration Statement.
(h) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been (i) any material adverse change in the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise, (ii) any transaction
that is material to the Company and its subsidiaries considered as one
enterprise, except transactions entered in the ordinary course of business,
(iii) any obligation, direct or contingent, that is material to the Company and
its subsidiaries considered as one enterprise, incurred by the Company or its
subsidiaries, except obligations incurred in the ordinary course of business,
(iv) any change in the capital stock or outstanding indebtedness of the Company
or any of its subsidiaries that is material to the Company and its subsidiaries
considered as one enterprise, (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its
subsidiaries or (vi) any loss or damage (whether or not insured) to the
property of the Company or any of its subsidiaries which has been sustained or
will have been sustained that has a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and its subsidiaries considered as one enterprise.
(i) Except as set forth in the Registration
Statement and the Prospectus, (i) each of the Company and its subsidiaries has
good and marketable title to all properties and assets described in the
Registration Statement and the Prospectus as owned by it, free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest,
other than such as would not have a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and its subsidiaries considered as one enterprise, (ii) the
agreements to which the Company or any of its subsidiaries is a party described
in the Registration Statement and the Prospectus are valid agreements,
enforceable by the Company and its subsidiaries (as applicable), except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles, and, to the
best of the Company's knowledge,
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the other contracting party or parties thereto are not in material breach or
material default under any of such agreements and (iii) each of the Company and
its subsidiaries has valid and enforceable leases for all properties described
in the Registration Statement and the Prospectus as leased by it, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles. Except as set
forth in the Registration Statement and the Prospectus, the Company owns or
leases all such properties as are necessary to its operations as now conducted
or as proposed to be conducted.
(j) The Company and its subsidiaries have timely
filed all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes shown thereon as due, and there is no tax deficiency
that has been or, to the best of the Company's knowledge, might be asserted
against the Company or any of its subsidiaries that might have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries considered
as one enterprise; and all tax liabilities are adequately provided for on the
books of the Company and its subsidiaries.
(k) The Company and its subsidiaries maintain
insurance with insurers of recognized financial responsibility of the types and
in the amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company or any of its subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect; 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 materially and adversely affect the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise.
(l) To the best of Company's knowledge, no labor
disturbance by the employees of the Company or any of its subsidiaries exists
or is imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, subassemblers,
value added resellers, subcontractors, original equipment manufacturers,
authorized dealers or international distributors that might be expected to
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result in a material adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise. No collective bargaining agreement
exists with any of the Company's employees and, to the best of the Company's
knowledge, no such agreement is imminent.
(m) Each of the Company and its subsidiaries owns
or possesses adequate rights to use all patents, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names and copyrights
which are necessary to conduct its businesses as described in the Registration
Statement and the Prospectus; the expiration of any patents, patent rights,
trade secrets, trademarks, service marks, trade names or copyrights would not
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise; neither the Company nor any of its
subsidiaries has received any notice of, or has any knowledge of, any
infringement of or conflict with asserted rights of the Company or any of its
subsidiaries by others with respect to any patent, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names or copyrights;
and neither the Company nor any of its subsidiaries has received any notice of,
or has any knowledge of, any infringement of or conflict with asserted rights
of others with respect to any patent, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names or copyrights which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
might have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise.
(n) The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is listed on The Nasdaq National Market,
and the Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from The Nasdaq National Market, nor has the Company
received any notification that the Commission or the National Association of
Securities Dealers, Inc. (the "NASD") is contemplating terminating such
registration or listing.
(o) The Company has been advised concerning the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and has in the past conducted, and intends in the
future, to conduct its affairs in such a manner as to ensure that it will not
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and regulations.
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(p) The Company has not distributed and will not
distribute prior to the later of (i) the Closing Date, or any date on which
Option Shares are to be purchased, as the case may be, and (ii) the completion
of the distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectuses, the
Prospectus, the Registration Statement and other materials, if any, permitted
by the Act.
(q) Neither the Company nor any of its
subsidiaries has at any time during the last five (5) years (i) made any
unlawful contribution to any candidate for foreign office or failed to disclose
fully any contribution in violation of law or (ii) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(r) The Company has not taken and will not take,
directly or indirectly, any action resulting in a violation of Rule 102 of
Regulation M under the Exchange Act or designed to, or that might reasonably be
expected to, cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
(s) Each officer and director of the Company,
each Selling Stockholder and each of certain other beneficial owners of Common
Stock named in Schedule C hereto have agreed in writing that such person will
not, for a period of 90 days from the date that the Registration Statement is
declared effective by the Commission (the "Lock-up Period"), offer to sell,
contract to sell, or otherwise sell, dispose of, loan, pledge or grant any
rights with respect to (collectively, a "Disposition"), any shares of Common
Stock, any options or warrants to purchase any shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock
(collectively, the "Securities") now owned or hereafter acquired directly by
such person or with respect to which such person has or hereafter acquires the
power of disposition, other than (i) as a bona fide gift or gifts, provided the
donee or donees thereof agree in writing to be bound by this restriction, (ii)
as a distribution to partners or stockholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction or (iii) with the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
Company LLC. The foregoing restriction has been expressly agreed to preclude
the holder of the Securities from engaging in any hedging or other transaction
which is designed to or reasonably expected to lead to or result in a
Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than such holder. Such prohibited
hedging or other transactions would include, without limitation, any short sale
(whether or not against the box)
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13
or any purchase, sale or grant of any right (including, without limitation, any
put or call option) with respect to any Securities or with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from Securities.
Furthermore, such person has also agreed and consented to the entry of stop
transfer instructions with the Company's transfer agent against the transfer of
the Securities held by such person except in compliance with this restriction.
The Company has provided to counsel for the Underwriters a complete and
accurate list of all securityholders of the Company and the number and type of
securities held by each securityholder. The Company has provided to counsel
for the Underwriters true, accurate and complete copies of all of the
agreements pursuant to which its officers and directors and certain of its
stockholders have agreed to such or similar restrictions (the "Lock-up
Agreements") presently in effect or effected hereby. The Company hereby
represents and warrants that it will not release any of its officers or
directors or other stockholders from any Lock-up Agreements currently existing
or hereafter effected without the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& Company LLC.
(t) Except as set forth in the Registration
Statement and the Prospectus, (i) the Company and its subsidiaries are in
compliance with all rules, laws and regulations relating to the use, treatment,
storage and disposal of toxic substances and protection of health or the
environment ("Environmental Laws") which are applicable to their businesses,
(ii) neither the Company nor any of its subsidiaries has received notice from
any governmental authority or third party of an asserted claim under
Environmental Laws, which claim is required to be disclosed in the Registration
Statement and the Prospectus, (iii) neither the Company nor any of its
subsidiaries will be required to make future material capital expenditures to
comply with Environmental Laws and (iv) no property which is owned, leased or
occupied by the Company or any of its subsidiaries has been designated as a
Superfund site pursuant to the Comprehensive Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), or
otherwise designated as a contaminated site under applicable state or local
law.
(u) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances 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 accountability for
assets, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
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14
(v) There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of the members of the
families of any of them, except as disclosed in the Registration Statement and
the Prospectus.
(w) The Company has complied with all provisions
of Section 517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
II. Each Selling Stockholder, acting severally and not
jointly, represents and warrants to and agrees with each of the Underwriters
and the Company that:
(a) Such Selling Stockholder now has and on the
Closing Date, and on any later date on which Option Shares are purchased, will
have valid marketable title to the Shares to be sold by such Selling
Stockholder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than pursuant to this Agreement;
and upon delivery of such Shares hereunder and payment of the purchase price as
herein contemplated, each of the Underwriters will obtain valid marketable
title to the Shares purchased by it from such Selling Stockholder, free and
clear of any pledge, lien, security interest pertaining to such Selling
Stockholder or such Selling Stockholder's property, encumbrance, claim or
equitable interest, including any liability for estate or inheritance taxes, or
any liability to or claims of any creditor, devisee, legatee or beneficiary of
such Selling Stockholder.
(b) Such Selling Stockholder has duly authorized
(if applicable), executed and delivered, in the form heretofore furnished to
the Representatives, a Custody Agreement and Power of Attorney (the "Custody
Agreement and Power of Attorney") with Lason, Inc., as custodian (the
"Custodian"), and appointing ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, as
attorneys-in-fact (collectively, the "Attorneys"), with respect to the sale of
the Shares to be sold by such Selling Stockholder hereunder; the Custody
Agreement and Power of Attorney constitutes a valid and binding agreement on
the part of such Selling Stockholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles; and
each of such Selling Stockholder's Attorneys, acting alone, is authorized to
execute and deliver this Agreement and the certificate referred to in Section
6(h) hereof on behalf of such Selling Stockholder, to determine the purchase
price to be paid by the several Underwriters to such Selling Stockholder as
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15
provided in Section 3 hereof, to authorize the delivery of the Selling
Stockholders Firm Shares and the Selling Stockholders Option Shares to be sold
by such Selling Stockholder under this Agreement and to duly endorse (in blank
or otherwise) the certificate or certificates representing such Selling
Stockholders Shares or a stock power or powers with respect thereto, to accept
payment therefor, and otherwise to act on behalf of such Selling Stockholder
in connection with this Agreement.
(c) All consents, approvals, authorizations and
orders required for the execution and delivery by such Selling Stockholder of
the Custody Agreement and Power of Attorney, the execution and delivery by or
on behalf of such Selling Stockholder of this Agreement and the sale and
delivery of the Selling Stockholders Firm Shares and the Selling Stockholders
Option Shares to be sold by such Selling Stockholder under this Agreement
(other than, at the time of the execution hereof (if the Registration Statement
has not yet been declared effective by the Commission, the issuance of the
order of the Commission declaring the Registration Statement effective and such
consents, approvals, authorizations or orders as may be necessary under state
or other securities or Blue Sky laws) have been obtained and are in full force
and effect; such Selling Stockholder, if other than a natural person, has been
duly organized and is validly existing in good standing under the laws of the
jurisdiction of its organization as the type of entity that it purports to be;
and such Selling Stockholder has full legal right, power and authority to enter
and perform its obligations under this Agreement and such Custody Agreement and
Power of Attorney, and to sell, assign, transfer and deliver the Selling
Stockholders Shares to be sold by such Selling Stockholder under this
Agreement.
(d) Such Selling Stockholder will not, during the
Lock-up Period, effect the Disposition of any Securities now owned or hereafter
acquired directly by such Selling Stockholder or with respect to which such
Selling Stockholder has or hereafter acquires the power of disposition, other
than (i) the sale of Selling Stockholders Shares by such Selling Stockholder
hereunder, (ii) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction or (iii) with the
prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC. The foregoing
restriction is expressly agreed to preclude the holder of the Securities from
engaging in any hedging or other transaction which is designed to or reasonably
expected to lead to or result in a Disposition of Securities during the Lock-up
Period, even if such Securities would be disposed of by someone other than the
Selling Stockholder. Such prohibited hedging or other transactions would
include, without limitation, any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including, without limitation, any
put or call option) with respect to any Securities or with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or
-15 -
16
derives any significant part of its value from Securities. Such Selling
Stockholder also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent against the transfer of the Securities held
by such Selling Stockholder except in compliance with this restriction.
(e) Certificates in negotiable form for all
Shares to be sold by such Selling Stockholder under this Agreement, together
with a stock power or powers duly endorsed in blank by such Selling
Stockholder, have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder.
(f) This Agreement has been duly authorized by
each Selling Stockholder that is not a natural person and has been duly
executed and delivered by or on behalf of such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of
any of the terms and provisions of or constitute a default under any bond,
debenture, note or other evidence of indebtedness, or under any lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder, or any Selling Stockholders Firm Shares or
any Selling Stockholders Option Shares to be sold by such Selling Stockholder
hereunder, may be bound or, to the best of such Selling Stockholder's
knowledge, result in any violation of any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over such Selling Stockholder
or over the properties of such Selling Stockholder or, if such Selling
Stockholder is other than a natural person, result in any violation of any
provisions of the charter, bylaws or other organizational documents of such
Selling Stockholder.
(g) Such Selling Stockholder has not taken and
will not take, directly or indirectly, any action resulting in a violation of
Rule 102 of Regulation M under the Exchange Act or designed to, or that might
reasonably be expected to, cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(h) Such Selling Stockholder has not distributed
and will not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares.
-16 -
17
(i) All information furnished by or on behalf of
such Selling Stockholder relating to such Selling Stockholder and the Selling
Stockholder Shares that is contained in the representations and warranties of
such Selling Stockholder in such Selling Stockholder's Power of Attorney or set
forth in the Registration Statement or the Prospectus is, and at the time the
Registration Statement became or becomes, as the case may be, effective and at
all times subsequent thereto up to and on the Closing Date, and on any later
date on which Option Shares are to be purchased, was or will be, true, correct
and complete, and does not, and at the time the Registration Statement became
or becomes, as the case may be, effective and at all times subsequent thereto
up to and on the Closing Date, and on any later date on which Option Shares are
to be purchased, 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 such information not misleading.
(j) Such Selling Stockholder will review the
Prospectus and will comply with all agreements and satisfy all conditions on
its part to be complied with or satisfied pursuant to this Agreement on or
prior to the Closing Date, or any later date on which Option Shares are to be
purchased, as the case may be, and will advise one of its Attorneys and
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC prior to the Closing Date, or such later date
on which Option Shares are to be purchased, as the case may be, if any
statement to be made on behalf of such Selling Stockholder in the certificate
contemplated by Section 6(h) would be inaccurate if made as of the Closing
Date, or such later date on which Option Shares are to be purchased, as the
case may be.
(k) Such Selling Stockholder does not have, or
has waived prior to the date hereof, any preemptive right, co-sale right or
right of first refusal or other similar right to purchase any of the Shares
that are to be sold by the Company or any of the other Selling Stockholders to
the Underwriters pursuant to this Agreement; such Selling Stockholder does not
have, or has waived prior to the date hereof, any registration right or other
similar right to participate in the offering made by the Prospectus, other than
such rights of participation as have been satisfied by the participation of
such Selling Stockholder in the transactions to which this Agreement relates in
accordance with the terms of this Agreement; and such Selling Stockholder does
not own any warrants, options or similar rights to acquire, and does not have
any right or arrangement to acquire, any capital stock, rights, warrants,
options or other securities from the Company, other than options issued
pursuant to the Company's presently authorized 1995 Stock Option Plan (the
"Stock Option Plan").
(l) In addition to the other representations and
warranties set forth in this Section 2.II, each Selling Stockholder, acting
severally and not jointly, further represents
-17 -
18
and warrants that, to its knowledge, (i) the representations and warranties of
the Company set forth in Section 2.I hereof are true and correct and (ii) each
Preliminary Prospectus, as of its date, has not included any untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements therein not misleading; and at the time the Registration Statement
became or becomes, as the case may be, effective, on the Closing Date and on
any later date on which Option Shares are to be purchased hereunder, neither
the Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, included or will include any untrue statement of a material fact or
omitted or will omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that none of the
representations and warranties contained in this subsection (l) shall apply to
information contained in or omitted from the Registration Statement or the
Prospectus or any such amendment or supplement thereto in reliance upon, and in
conformity with, information furnished to the Company by any Underwriter
through you specifically for inclusion therein.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Stockholders
agree, acting severally and not jointly, to sell to the Underwriters, and each
of the Underwriters agrees, acting severally and not jointly, to purchase from
the Company and the Selling Stockholders, respectively, at a purchase price of
$______ per share, the respective number of Company Shares and Selling
Stockholders Firm Shares as set forth opposite the names of the Company and the
Firm Selling Stockholders in Schedule B hereto. The obligation of each of the
Underwriters to the Company and to each Firm Selling Stockholder shall be to
purchase from the Company or such Firm Selling Stockholder that number of
Company Shares or Selling Stockholders Firm Shares, as the case may be, which
(as nearly as practicable, as determined by you) is in the same proportion to
the number of Company Shares or Selling Stockholders Firm Shares, as the case
may be, set forth opposite the name of the Company or such Firm Selling
Stockholder in Schedule B hereto as the number of Firm Shares which is set
forth opposite the name of such Underwriter in Schedule A hereto (subject to
adjustment as provided in Section 10) is to the total number of Firm Shares to
be purchased by all the Underwriters under this Agreement.
The certificates in negotiable form for the Selling
Stockholders Firm Shares and the Selling Stockholders Option Shares to be sold
hereunder have been placed in custody (for delivery under this Agreement) under
the Custody Agreement and Power of Attorney. Each Selling Stockholder agrees
that the certificates for the Selling Stockholders Firm Shares and the Selling
Stockholders Option Shares of such Selling Stockholder so held in
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custody are subject to the interests of the Underwriters hereunder, that the
arrangements made by such Selling Stockholder for such custody, including the
power of attorney included in the Custody Agreement and Power of Attorney, are
to that extent irrevocable, and that the obligations of such Selling
Stockholder hereunder shall not be terminated by the act 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, except as
specifically provided herein or in the Custody Agreement and Power of Attorney.
If any Selling Stockholder should die or become incapacitated, or if any other
such event should occur, before the delivery of the certificates for the
Selling Stockholders Shares hereunder, the Selling Stockholders Shares to be
sold by such Selling Stockholder shall, except as specifically provided herein
or in the Custody Agreement and Power of Attorney, be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death, incapacity or other event had not occurred, regardless of whether
the Custodian shall have received notice of such death or other event.
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 shall be made against
payment of the purchase price therefor by the several Underwriters by wire
transfer of immediately available funds to the Company with regard to the
Company Shares and to the Custodian for the respective accounts of the Firm
Selling Stockholders with regard to the Selling Stockholders Firm Shares. Such
delivery and payment shall take place at the Chicago office of Winston & ▇▇▇▇▇▇
(or at such other place as may be agreed upon among the Representatives, the
Company and the Attorneys), at 9:00 A.M. (Chicago time) on the third (3rd) full
business day following the date of this Agreement or at such other time and
date not later than seven (7) full business days following the first day that
Shares are traded as the Representatives, the Company and the Attorneys may
determine (or at such time and date to which payment and delivery shall have
been postponed pursuant to Section 10 hereof), such time and date of payment
and delivery being herein called the "Closing Date"; provided, however, that if
the Company has not made available to the Representatives copies of the
Prospectus within the time provided in Section 4(d) hereof, the Representatives
may, in their sole discretion, postpone the Closing Date until no later than
two (2) full business days following delivery of copies of the Prospectus to
the Representatives. The certificates for the Firm Shares to be so delivered
will be made available to you at such office or such other location, including,
without limitation, in New York City, as you may reasonably request for
checking at least one (1) full business day prior to the Closing Date and will
be in such names and denominations as you may request, such request to be made
at least two (2) full business days prior to the Closing Date. If the
Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast
-19 -
20
transfer to the accounts at The Depository Trust Company designated by the
Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
to) make payment of the purchase price on behalf of any Underwriter or
Underwriters whose check or checks shall not have been received by you prior to
the Closing Date for the Firm Shares to be purchased by such Underwriter or
Underwriters. Any such payment by you shall not relieve any such Underwriter
or Underwriters of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the
several Underwriters intend to make an initial public offering (as such term is
described in Section 11 hereof) of the Firm Shares at an initial public
offering price of $____________ per share. After the initial public offering,
the several Underwriters may, in their discretion, vary the public offering
price.
The information set forth in the last paragraph on the front
cover page, the two legends on the bottom of page 3 and under the caption
"Underwriting" (insofar as such information relates to the Underwriters) in any
Preliminary Prospectus and in the Prospectus constitutes the only information
furnished by the Underwriters to the Company for inclusion in any Preliminary
Prospectus, the Prospectus or the Registration Statement, and you, on behalf of
the respective Underwriters, represent and warrant to the Company and the
Selling Stockholders that the statements made therein do not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
4. Further Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to
cause the Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the parties
hereto, to become effective as promptly as possible; the Company will use its
best efforts to cause any abbreviated registration statement pursuant to Rule
462(b) of the Rules and Regulations as may be required subsequent to the date
the Registration Statement is declared effective to become effective as
promptly as possible; the Company will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement, any
subsequent amendment to the Registration Statement or any abbreviated
registration statement has become effective or any supplement to the Prospectus
has been filed; if the Company omitted information from the Registration
Statement at the time it was originally declared effective in reliance upon
Rule 43OA(a) of the Rules and Regulations, the Company will provide evidence
-20 -
21
satisfactory to you that the Prospectus contains such information and has been
filed, within the time period prescribed, with the Commission pursuant to
subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations or as part
of a post-effective amendment to such Registration Statement as originally
declared effective which is declared effective by the Commission; if the
Company files a term sheet pursuant to Rule 434 of the Rules and Regulations,
the Company will provide evidence satisfactory to you that the Prospectus and
the term sheet meeting the requirements of Rule 434(b) or (c), as applicable,
of the Rules and Regulations, have been filed, within the time period
prescribed, with the Commission pursuant to subparagraph (7) of Rule 424(b) of
the Rules and Regulations; if for any reason the filing of the final form of
the Prospectus is required under Rule 424(b)(3) of the Rules and Regulations,
it will provide evidence satisfactory to you that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed; it will notify you promptly of any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus
or for additional information; promptly upon your request, it will prepare and
file with the Commission any amendments or supplements to the Registration
Statement or the Prospectus which, in the opinion of Winston & ▇▇▇▇▇▇, counsel
for the several Underwriters ("Underwriters' Counsel"), may be necessary or
advisable in connection with the distribution of the Shares by the
Underwriters; it will promptly prepare and file with the Commission, and
promptly notify you of the filing of, any amendments or supplements to the
Registration Statement or the Prospectus which may be necessary to correct any
statements or omissions, if, at any time when a prospectus relating to the
Shares is required to be delivered under the Act, any event shall have occurred
as a result of which the Prospectus or any other prospectus relating to the
Shares as then in effect would include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; in
case any Underwriter is required to deliver a prospectus nine (9) months or
more after the effective date of the Registration Statement in connection with
the sale of the Shares, it will prepare promptly upon request, but at the
expense of such Underwriter, such amendment or amendments to the Registration
Statement and such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act; and it will
file no amendment or supplement to the Registration Statement or the Prospectus
which shall not previously have been submitted to you a reasonable time prior
to the proposed filing thereof or to which you shall reasonably object in
writing, subject, however, to compliance with the Act and the Rules and
Regulations, the Exchange Act and the rules and regulations of the Commission
thereunder and the provisions of this Agreement.
-21 -
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(b) The Company will advise you, promptly after
it shall receive notice or obtain knowledge, of the issuance of any stop order
by the Commission suspending the effectiveness of the Registration Statement or
of the initiation or threat of any proceeding for that purpose; and it will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued.
(c) The Company will use its best efforts to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in
effect for so long as may be required for purposes of the distribution of the
Shares, except that the Company shall not be required in connection therewith
or as a condition thereof to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction in which it is not
otherwise required to be so qualified or to so execute a general consent to
service of process. In each jurisdiction in which the Shares shall have been
qualified as above provided, the Company will make and file such statements and
reports in each year as are or may be required by the laws of such
jurisdiction.
(d) The Company will furnish to you, as soon as
available, and, in the case of the Prospectus and any term sheet or abbreviated
term sheet under Rule 434, in no event later than the first (1st) full business
day following the first (1st) day that Shares are traded, copies of the
Registration Statement (three of which will be signed and which will include
all exhibits), each Preliminary Prospectus, the Prospectus and any amendments
or supplements to such documents, including any prospectus prepared to permit
compliance with Section 10(a)(3) of the Act, all in such quantities as you may
from time to time reasonably request. Notwithstanding the foregoing, if
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC, on behalf of the several Underwriters, shall
agree to the utilization of Rule 434 of the Rules and Regulations, the Company
shall provide to you copies of a Preliminary Prospectus updated in all respects
through the date specified by you in such quantities as you may from time to
time reasonably request.
(e) The Company will make generally available to
its securityholders as soon as practicable, but in any event not later than the
45th day following the end of the fiscal quarter first occurring after the
first anniversary of the effective date of the Registration Statement, an
earnings statement (which will be in reasonable detail but need not be audited)
complying with the provisions of Section 11(a) of the Act and covering a twelve
(12) month period beginning after the effective date of the Registration
Statement.
(f) During a period of five (5) years after the
date hereof, the Company will furnish to its stockholders as soon
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23
as practicable after the end of each respective period, annual reports
(including financial statements audited by independent certified public
accountants) and unaudited quarterly reports of operations for each of the
first three quarters of the fiscal year, and will furnish to you and the other
several Underwriters hereunder, upon request (i) concurrently with furnishing
such reports to its stockholders, statements of operations of the Company for
each of the first three (3) quarters in the form furnished to the Company's
stockholders, (ii) concurrently with furnishing to its stockholders, a balance
sheet of the Company as of the end of such fiscal year, together with
statements of operations, stockholders' equity and cash flows of the Company
for such fiscal year, accompanied by a copy of the certificate or report
thereon of independent certified public accountants, (iii) as soon as they are
available, copies of all reports (financial or other) mailed to stockholders,
(iv) as soon as they are available, copies of all reports and financial
statements furnished to or filed with the Commission, any securities exchange
or the NASD, (v) every material press release and every material news item or
article in respect of the Company or its affairs which was generally released
to stockholders or prepared by the Company or any of its subsidiaries and (vi)
any additional information of a public nature concerning the Company or any of
its subsidiaries or their businesses which you may reasonably request. During
such five (5) year period, if the Company shall have active subsidiaries, the
foregoing financial statements shall be on a consolidated basis to the extent
that the accounts of the Company and its subsidiaries are consolidated and
shall be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated.
(g) The Company will apply the net proceeds from
the sale of the Shares being sold by it in the manner set forth under the
caption "Use of Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent
and, if necessary under the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for its Common
Stock.
(i) The Company will use its best efforts to
comply with all criteria to have its Common Stock listed on the NASDAQ National
Market or any other national securities exchange on which the Common Stock is
then listed.
(j) If the transactions contemplated hereby are
not consummated by reason of any failure, refusal or inability on the part of
the Company or any Selling Stockholder to perform any agreement on their
respective parts to be performed hereunder or to fulfill any condition of the
Underwriters' obligations hereunder, or if the Company shall terminate this
Agreement pursuant to Section 11(a) hereof, or if the Underwriters shall
terminate this
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Agreement pursuant to Section 11(b)(i), the Company shall reimburse the several
Underwriters for all out-of-pocket expenses (including fees and disbursements
of Underwriters' Counsel) incurred by the Underwriters in investigating or
preparing to market or marketing the Shares.
(k) If at any time during the 90-day period after
the Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the Company will,
after written notice from you advising the Company to the effect set forth
above, forthwith prepare, consult with you concerning the substance of and
disseminate a press release or other public statement, reasonably satisfactory
to you, responding to or commenting on such rumor, publication or event.
(l) During the Lock-up Period, the Company will
not, without the prior written consent of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company LLC,
effect the Disposition of, directly or indirectly, any Securities other than
the sale of Company Shares and Company Option Shares and the Company's issuance
of options or Common Stock under the Stock Option Plan.
(m) During a period of 90 days from the effective
date of the Registration Statement, the Company will not file a registration
statement registering shares under the Stock Option Plan or other employee
benefit plan.
5. Expenses.
(a) The Company agrees with each of the
Underwriters that:
(i) The Company will pay and bear all
costs and expenses in connection with the preparation, printing and filing of
the Registration Statement (including financial statements, schedules and
exhibits), Preliminary Prospectuses and the Prospectus, and any amendments or
supplements thereto; the printing of this Agreement, the Agreement Among
Underwriters, the Selected Dealers Agreement, the Preliminary Blue Sky Survey
and any Supplemental Blue Sky Survey, the Underwriters' Questionnaire and Power
of Attorney, and any instruments related to any of the foregoing; the issuance
and delivery of the Shares hereunder to the several Underwriters, including
transfer taxes, if any, the cost of all certificates representing the Shares
and transfer agent's and registrar's fees; the fees and disbursements of
counsel for the Company; all fees and other charges of the Company's
independent certified public accountants; the cost of furnishing to the several
Underwriters copies of the Registration Statement (including
-24 -
25
appropriate exhibits), Preliminary Prospectus and the Prospectus, and any
amendments or supplements to any of the foregoing; NASD filing fees and the
cost of qualifying the Shares under the laws of such jurisdictions as you may
designate (including filing fees and fees and disbursements of Underwriters'
Counsel in connection with such NASD filings and Blue Sky qualifications not to
exceed $10,000); and all other expenses directly incurred by the Company and
the Selling Stockholders in connection with the performance of their
obligations hereunder. Any additional expenses incurred as a result of the
sale of the Selling Stockholders Shares by the Selling Stockholders will be
borne collectively by the Company and the Selling Stockholders. The provisions
of this Section 5(a)(i) are intended to relieve the Underwriters from the
payment of the expenses and costs which the Selling Stockholders and the
Company hereby agree to pay, but shall not affect any agreement which the
Selling Stockholders and the Company may make, or may have made, for the
sharing of any of such expenses and costs. Such agreements shall not impair
the obligations of the Company and the Selling Stockholders hereunder to the
several Underwriters;
(ii) In addition to its other obligations
under Section 8(a) hereof, the Company agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 8(a) hereof, it will reimburse the Underwriters
on a monthly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Underwriters shall promptly
return such payment to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) listed from time to time in The Wall
Street Journal which represents the base rate on corporate loans posted by a
substantial majority of the nation's 30 largest banks (the "Prime Rate"). Any
such interim reimbursement payments which are not made to the Underwriters
within 30 days of a request for reimbursement shall bear interest at the Prime
Rate from the date of such request; and
(iii) In addition to their other
obligations under Section 8(b) hereof, each Selling Stockholder (other than
Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV, L.P.) agrees that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding described in Section 8(b) hereof relating to such Selling
Stockholder, it will reimburse the Underwriters on a monthly basis for all
reasonable legal or other expenses incurred in connection with investigating
-25 -
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or defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of such Selling Stockholder's obligation to
reimburse the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, the Underwriters shall promptly return such payment
to the Selling Stockholders, together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Underwriters within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
(b) In addition to their other obligations under
Section 8(c) hereof, the Underwriters, acting severally and not jointly, agree
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding described in Section 8(c) hereof,
they will reimburse the Company and each Selling Stockholder on a monthly basis
for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Underwriters' obligation to reimburse
the Company and each such Selling Stockholder for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company and each
such Selling Stockholder shall promptly return such payment to the Underwriters
together with interest, compounded daily, determined on the basis of the Prime
Rate. Any such interim reimbursement payments which are not made to the
Company and each such Selling Stockholder within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
(c) It is agreed that any controversy arising out
of the operation of the interim reimbursement arrangements set forth in
Sections 5(a)(ii), 5(a)(iii) and 5(b) hereof, including the amounts of any
requested reimbursement payments, the method of determining such amounts and
the basis on which such amounts shall be apportioned among the reimbursing
parties, shall be settled by arbitration conducted under the provisions of the
Constitution and Rules of the Board of Governors of the New York Stock
Exchange, Inc. or pursuant to the Code of Arbitration Procedure of the NASD.
Any such arbitration must be commenced by service of a written demand for
arbitration or a written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding arbitration does not
make such designation of an arbitration tribunal in such demand or notice, then
the party responding to said demand or notice is authorized to do so. Any
-26 -
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such arbitration will be limited to the operation of the interim reimbursement
provisions contained in Sections 5(a)(ii), 5(a)(iii) and 5(b) and will not
resolve the ultimate propriety or enforceability of the obligation to indemnify
for expenses which is created by the provisions of Sections 8(a), 8(b) and 8(c)
hereof or the obligation to contribute to expenses which is created by the
provisions of Section 8(e) hereof.
6. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Shares as provided herein
shall be subject to the accuracy, as of the date hereof and the Closing Date
and any later date on which Option Shares are to be purchased, as the case may
be, of the representations and warranties of the Company and the Selling
Stockholders herein, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become
effective not later than 2:00 P.M., San Francisco time, on the date following
the date of this Agreement, or such later date as shall be consented to in
writing by you; and no stop order suspending the effectiveness thereof shall
have been issued and no proceedings for that purpose shall have been initiated
or, to the knowledge of the Company, any Selling Stockholder or any
Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
Underwriters' Counsel.
(b) All corporate proceedings and other legal
matters in connection with this Agreement, the form of the Registration
Statement and the Prospectus, and the registration, authorization, issue, sale
and delivery of the Shares, shall have been reasonably satisfactory to
Underwriters' Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them to
pass upon the matters referred to in this Section 6.
(c) Subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, or any later date on which Option
Shares are to be purchased, as the case may be, there shall not have been any
change in the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries considered
as one enterprise from that set forth in the Registration Statement or the
Prospectus, which, in your sole judgment, is material and adverse and that
makes it, in your sole judgment, impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the Prospectus.
-27 -
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(d) (i) You shall have received on the Closing
Date and on any later date on which Option Shares are to be purchased, as the
case may be, the following opinion of counsel for the Company and the Selling
Stockholders (other than Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV, L.P.),
Seyburn, Kahn, Ginn, Bess, ▇▇▇▇▇▇ and ▇▇▇▇▇▇, P.C., dated the Closing Date or
such later date on which Option Shares are to be purchased addressed to the
Underwriters and with reproduced copies or signed counterparts thereof for each
of the Underwriters, to the effect that:
(A) 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 of its
incorporation;
(B) Each of the Company and its
subsidiaries has the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus;
(C) Each of the Company and its
subsidiaries is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified or be in good standing would not have a
material adverse effect on the condition (financial or otherwise), earnings,
operations or business of the Company and its subsidiaries considered as one
enterprise. To such counsel's knowledge, the Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
Lason Systems, Inc., American Micro Image, Inc., Automated Enterprises, Inc.,
▇▇▇▇▇▇▇▇▇ Communications Corporation, Corporate Copies, Inc., Delaware Legal
Copy, Inc., Great Lakes Micrographics Corporation, Image Conversion Systems,
Inc., Information & Image Technology of America, Inc., Micro-Pro, Inc., MP
Services, Inc., National Reproductions Corp. and Premier Copy Group, Inc.;
(D) The authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus
under the caption "Capitalization" as of the dates stated therein, the issued
and outstanding shares of capital stock of the Company (including the Selling
Stockholders Shares) have been duly and validly issued and are fully paid and
nonassessable, and, to such counsel's knowledge, will not have been issued in
violation of or subject to any preemptive right, co-sale right, registration
right, right of first refusal or other similar right;
(E) All issued and outstanding shares
of capital stock of each subsidiary of the Company have been duly
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authorized and validly issued and are fully paid and nonassessable, and, to
such counsel's knowledge, have not been issued in violation of or subject to
any preemptive right, co-sale right, registration right, right of first refusal
or other similar right and are owned by the Company free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest;
(F) The Company Shares or the Company
Option Shares, as the case may be, to be issued by the Company pursuant to the
terms of this Agreement have been duly authorized and, upon issuance and
delivery against payment therefor in accordance with the terms hereof, will be
duly and validly issued and fully paid and nonassessable, and will not have
been issued in violation of or subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar right;
(G) The Company has the corporate power
and authority to enter this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder;
(H) This Agreement has been duly
authorized by all necessary corporate action on the part of the Company and has
been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and binding agreement
of the Company, enforceable in accordance with its terms, except insofar as
indemnification provisions may be limited by applicable law and except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
or by general equitable principles;
(I) The Registration Statement has
become effective under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or
threatened under the Act;
(J) The Registration Statement and the
Prospectus, and each amendment or supplement thereto (other than the financial
statements (including supporting schedules) and financial data derived
therefrom as to which such counsel need express no opinion), as of the
effective date of the Registration Statement, complied as to form in all
material respects with the requirements of the Act and the applicable Rules and
Regulations;
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(K) The information in the Prospectus
under the caption "Description of Capital Stock", to the extent that it
constitutes matters of law or legal conclusions, has been reviewed by such
counsel and is a fair summary of such matters and conclusions; and the forms of
certificates evidencing the Common Stock and filed as exhibits to the
Registration Statement comply with Delaware law;
(L) The descriptions in the Registration
Statement and the Prospectus of the charter and bylaws of the Company and of
statutes are accurate and fairly present the information required to be
presented by the Act and the applicable Rules and Regulations;
(M) To such counsel's knowledge, there
are no agreements, contracts, leases or documents to which the Company is a
party of a character required to be described or referred to in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which are not described or referred to therein or filed
as required;
(N) The performance of this Agreement
and the consummation of the transactions herein contemplated (other than
performance of the Company's indemnification obligations hereunder, concerning
which no opinion need be expressed) will not (a) result in any violation of the
Company's charter or bylaws or (b) to such counsel's knowledge, result in a
material breach or violation of any of the terms and provisions of, or
constitute a default under, any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument known to such counsel
to which the Company is a party or by which its properties are bound, or any
applicable statute, rule or regulation known to such counsel or, to such
counsel's knowledge, any order, writ or decree of any court, government or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or over any of their properties or operations;
(O) No consent, approval, authorization
or order of or qualification with any court, government or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or over
any of their properties or operations is necessary in connection with the
consummation by the Company of the transactions herein contemplated, except
such as have been obtained under the Act or such as may be required under state
or other securities or Blue Sky laws in connection with the purchase and the
distribution of the Shares by the Underwriters;
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31
(P) To such counsel's knowledge, there
are no legal or governmental proceedings pending or threatened against the
Company or any of its subsidiaries of a character required to be disclosed in
the Registration Statement or the Prospectus by the Act or the Rules and
Regulations or by the Exchange Act or the applicable rules and regulations of
the Commission thereunder, other than those described therein;
(Q) To such counsel's knowledge, neither
the Company nor any of its subsidiaries is presently (a) in material violation
of its respective charter or bylaws or (b) in material breach of any applicable
statute, rule or regulation known to such counsel or, to such counsel's
knowledge, any order, writ or decree of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or over
any of their properties or operations;
(R) To such counsel's knowledge, except
as set forth in the Registration Statement and the Prospectus, no holders of
shares of Common Stock or other securities of the Company have registration
rights with respect to securities of the Company and, except as set forth in
the Registration Statement and the Prospectus, all holders of securities of the
Company having rights known to such counsel to registration of such shares of
Common Stock or other securities, because of the filing of the Registration
Statement by the Company have, with respect to the offering contemplated
thereby, waived such rights or such rights have expired by reason of lapse of
time following notification of the Company's intent to file the Registration
Statement or have included securities in the Registration Statement pursuant to
the exercise of and in full satisfaction of such rights;
(S) Each Selling Stockholder which is
not a natural person has full right, power and authority to enter and to
perform its obligations under the Custody Agreement and Power of Attorney to be
executed and delivered by it in connection with the transactions contemplated
herein; the Custody Agreement and Power of Attorney of each Selling Stockholder
that is not a natural person has been duly authorized by such Selling
Stockholder; the Custody Agreement and Power of Attorney of each Selling
Stockholder has been duly executed and delivered by or on behalf of such
Selling Stockholder; and the Custody Agreement and Power of Attorney of each
Selling Stockholder constitutes the valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
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creditors' rights generally or by general equitable principles;
(T) Each of the Selling Stockholders
has full right, power and authority to enter and to perform its
obligations under this Agreement and to sell, transfer, assign and
deliver the Selling Stockholders Shares to be sold by such Selling
Stockholder hereunder;
(U) This Agreement has been duly
authorized by each Selling Stockholder that is not a natural
person and has been duly executed and delivered by or on behalf of each
Selling Stockholder; and
(V) Upon the delivery of and payment for
the Selling Stockholders Shares as contemplated in this
Agreement, each of the Underwriters will receive valid marketable title
to the Selling Stockholders Shares purchased by it from such Selling
Stockholder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest. In rendering such opinion,
such counsel may assume that the Underwriters are without notice of any
defect in the title of the Shares being purchased from the Selling
Stockholders.
In addition, such counsel shall state that such
counsel has participated in conferences with officials and other
representatives of the Company, the Representatives, Underwriters' Counsel and
the independent certified public accountants of the Company, at which such
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed, and although they have not verified the
accuracy or completeness of the statements contained in the Registration
Statement or the Prospectus, nothing has come to the attention of such counsel
which leads them to believe that, at the time the Registration Statement became
effective and at all times subsequent thereto up to and on the Closing Date and
on any later date on which Option Shares are to be purchased, the Registration
Statement and any amendment or supplement thereto (other than the financial
statements including supporting schedules and other financial and statistical
information derived therefrom, as to which such counsel need express no
comment) contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or at the Closing Date or any later date on
which the Option Shares are to be purchased, as the case may be, the
Registration Statement, the Prospectus and any amendment or supplement thereto
(except as aforesaid) contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
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Counsel rendering the foregoing opinion may rely as
to questions of law not involving the laws of the United States of America or
the States of Delaware and Michigan upon opinions of local counsel, and as to
questions of fact upon representations or certificates of officers of the
Company, the Selling Stockholders or officers of the Selling Stockholders (when
the Selling Stockholder is not a natural person), and of government officials,
in which case their opinion is to state that they are so relying and that they
have no knowledge of any material misstatement or inaccuracy in any such
opinion, representation or certificate. Copies of any opinion, representation
or certificate so relied upon shall be delivered to you, as Representatives of
the Underwriters, and to Underwriters' Counsel.
(ii) You shall have received on the Closing Date
an opinion from counsel for Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV, L.P.,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, dated the Closing Date and addressed to the Underwriters
(with reproduced copies or signed counterparts thereof for each of the
Underwriters), to the effect that:
(A) Such Selling Stockholder has full right, power and
authority to enter and to perform its obligations under the
Custody Agreement and Power of Attorney to be executed and delivered by
it in connection with the transactions contemplated herein; the Custody
Agreement and power of Attorney of such Selling Stockholder has been
duly authorized by such Selling Stockholder; the Custody Agreement and
Power of Attorney has been duly executed and delivered by or on behalf
of such Selling Stockholder, and the Custody Agreement and Power of
Attorney of such Selling Stockholder constitutes the valid and binding
agreement of such Selling Stockholder, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights and remedies generally
or by general equitable principles;
(B) Such Selling Stockholder has full right, power and
authority to enter and to perform its obligations under this
Agreement and to sell, transfer, assign and deliver the Selling
Stockholders Shares to be sold by such Selling Stockholder hereunder;
(C) This Agreement has been duly authorized by such
Selling Stockholder and has been duly executed and delivered by
or on behalf of such Selling Stockholder; and
(D) Upon the delivery of and payment for the Selling
Stockholders Shares as contemplated in this Agreement, each of
the Underwriters will receive valid marketable title to the Selling
Stockholders Shares purchased by it from such Selling Stockholder, free
and clear of any pledge, lien,
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security interest, encumbrance, claim or equitable interest.
In rendering such opinion, such counsel may assume that the
Underwriters are without notice of any defect in the title of such
Selling Stockholder to the Selling Stockholders Shares being purchased
form such Selling Stockholder.
Counsel rendering the foregoing opinion may rely as to
questions of law not involving the laws of the United States of America or the
States of Delaware and Illinois upon opinions of local counsel (or in lieu
thereof, deliver copies of such local counsel opinions, addressed to the
Underwriters, directly to the Underwriters and Underwriters' Counsel), and as
to questions of fact upon representations or certificates of such Selling
Stockholder, and of government officials, in which case their opinion is to
state that they are so relying and that they have no knowledge of any material
misstatement or inaccuracy in such opinions, representations or certificate.
Copies of any opinion, representation or certificate so relied upon shall be
delivered to you, as Representatives of the Underwriters, and to Underwriters'
Counsel.
(e) You shall have received on the Closing Date
and on any later date on which Option Shares are to be purchased, as the case
may be, an opinion of Winston & ▇▇▇▇▇▇, in form and substance satisfactory to
you, with respect to the sufficiency of all such corporate proceedings and
other legal matters relating to this Agreement and the transactions
contemplated hereby as you may reasonably require, and the Company shall have
furnished to such counsel such documents as they may have requested for the
purpose of enabling them to pass upon such matters.
(f) (i) You shall have received on the Closing
Date and on any later date on which Option Shares are to be purchased, as the
case may be, a letter from Coopers & ▇▇▇▇▇▇▇ L.L.P. addressed to the
Underwriters, dated the Closing Date or such later date on which Option Shares
are to be purchased, as the case may be, confirming that they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the applicable published Rules and Regulations and based upon the
procedures described in such letter delivered to you concurrently with the
execution of this Agreement (hereinafter called the "Original Letter"), but
carried out to a date not more than five (5) business days prior to the Closing
Date or such later date on which Option Shares are to be purchased, as the case
may be, (i) confirming, to the extent true, that the statements and conclusions
set forth in the Original Letter are accurate as of the Closing Date or such
later date on which Option Shares are to be purchased, as the case may be, and
(ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter which are necessary to reflect any
changes in the facts described in the Original Letter since the date of such
letter, or to reflect the availability of more recent financial
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35
statements, data or information. The letter shall not disclose any change in
the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise from that set forth in the Registration Statement or the Prospectus,
which, in your sole judgment, is material and adverse and that makes it, in
your sole judgment, impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Prospectus. The Original Letter
from Coopers & ▇▇▇▇▇▇▇ L.L.P. shall be addressed to or for the use of the
Underwriters in form and substance satisfactory to the Underwriters and shall
(i) represent, to the extent true, that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations, (ii) set forth their opinion with
respect to their examination of (A) the consolidated balance sheet of the
Company as of December 31, 1996 and 1995 and the related consolidated
statements of income, stockholders' equity and cash flows for the years ended
December 31, 1996 and 1995 and (B) the balance sheet of the Predecessor as of
December 31, 1994 and the related statements of income, stockholders' equity
and cash flows for the year ended December 31, 1994, (iii) state that Coopers &
▇▇▇▇▇▇▇ L.L.P. has performed the procedures set forth in Statement on Auditing
Standards No. 71 ("SAS 71") for a review of interim financial information and
provide the report of Coopers & ▇▇▇▇▇▇▇ L.L.P. described in SAS 71 on the
financial statements for each of the quarters in the second (2nd) quarter
period ended June 30, 1997 (the "Quarterly Financial Statements"), (iv)
state that in the course of such review, nothing came to their attention that
leads them to believe that any material modifications need to be made to any of
the Quarterly Financial Statements in order for them to be in compliance with
generally accepted accounting principles consistently applied across the
periods presented and (v) address other matters agreed upon by Coopers &
▇▇▇▇▇▇▇ L.L.P. and you. In addition, you shall have received from Coopers &
▇▇▇▇▇▇▇ L.L.P. a letter addressed to the Company and made available to you for
the use of the Underwriters stating that their review of the Company's system
of internal accounting controls, to the extent they deemed necessary in
establishing the scope of their examination of the Company's consolidated
financial statements as of December 31, 1996, 1995 and 1994, did not disclose
any weaknesses in internal controls that they considered to be material
weaknesses.
(ii) You shall have received on the date hereof a
letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. LLP, which has examined financial statements
of ICS that are filed with the Commission as a part of the Registration
Statement and are included in the Prospectus, addressed to the Company and the
Underwriters, dated the date hereof, confirming that (i) they are independent
accountants with respect to ICS within the meaning of the Act and the
applicable published Rules and Regulations, (ii) the balance sheet of ICS as of
October 31, 1996 and the related statements of
-35 -
36
income, stockholders' equity and cash flows for the year ended October 31, 1996
audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. LLP and included in the Registration Statement
and the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the applicable published
Rules and Regulations, (iii) state that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. LLP has performed
the procedures set forth in Statement on Auditing Standards No. 71 ("SAS 71")
for a review of interim financial information and provide the report of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co. LLP described in SAS 71 on the financial statements for each of
the quarters in the second (2nd) quarter period ended April 30, 1997 (the
"Quarterly Financial Statements"), (iv) state that in the course of such
review, nothing came to their attention that leads them to believe that any
material modifications need to be made to any of the Quarterly Financial
Staetments in order for them to be in compliance with generally accepted
accounting principles consistently applied across the periods presented and (v)
address other matters agreed upon by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. LLP and you.
(g) You shall have received on the Closing Date
and on any later date on which Option Shares are to be purchased, as the case
may be, a certificate of the Company, dated the Closing Date or such later date
on which Option Shares are to be purchased, as the case may be, signed by the
Chief Executive Officer and Chief Financial Officer of the Company, to the
effect that, and you shall be satisfied that:
(i) The representations and warranties of the
Company in this Agreement are true and correct, as if made on
and as of the Closing Date or any later date on which Option
Shares are to be purchased, as the case may be, 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 or any later date on which Option Shares are
to be purchased, as the case may be;
(ii) No stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending
or threatened under the Act;
(iii) When the Registration Statement became
effective and at all times subsequent thereto up to the
delivery of such certificate, the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained
all material information required to be included therein by the
Act and the Rules and Regulations and in all material respects
conformed to the requirements of the Act and the Rules and
Regulations, the Registration Statement, and any amendment or
supplement thereto, did not and does not include any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, the Prospectus, and any
amendment or supplement thereto, did not and does not
-36 -
37
include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading, and, since the effective date of the
Registration Statement, there has occurred no event required to
be set forth in an amended or supplemented Prospectus which has
not been so set forth; and
(iv) Subsequent to the respective dates as of
which information is given in the Registration Statement and
the Prospectus, there has not been (a) any material adverse
change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and
its subsidiaries considered as one enterprise, (b) any
transaction that is material to the Company and its subsidiaries
considered as one enterprise, except transactions entered in the
ordinary course of business, (c) any obligation, direct or
contingent, that is material to the Company and its subsidiaries
considered as one enterprise, incurred by the Company or its
subsidiaries, except obligations incurred in the ordinary course
of business, (d) any change in the capital stock or outstanding
indebtedness of the Company or any of its subsidiaries that is
material to the Company and its subsidiaries considered as one
enterprise, (e) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or
any of its subsidiaries or (f) any loss or damage (whether or
not insured) to the property of the Company or any of its
subsidiaries which has been sustained or will have been
sustained which has a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(h) You shall be satisfied that, and you shall
have received a certificate, dated the Closing Date, or any later date on which
Option Shares are to be purchased, as the case may be, from the Attorneys for
each Selling Stockholder to the effect that, as of the Closing Date, or any
later date on which Option Shares are to be purchased, as the case may be, they
have not been informed that:
(i) The representations and warranties made by
such Selling Stockholder herein are not true or correct in any
material respect on the Closing Date or on
-37 -
38
any later date on which Option Shares are to be purchased, as
the case may be; or
(ii) Such Selling Stockholder has not complied
with any obligation or satisfied any condition which is
required to be performed or satisfied on the part of such
Selling Stockholder at or prior to the Closing Date or any later
date on which Option Shares are to be purchased, as the case may
be.
(i) In order to document the Underwriters'
compliance with the reporting and withholding provisions of the
Tax Equity and Fiscal Responsibility Act of 1982 and the
Interest and Dividend Tax Compliance Act of 1983 with respect to
the transactions herein contemplated, each of the Selling
Stockholders agrees to deliver to you prior to or at the Closing
Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
(j) The Company shall have obtained and delivered
to you an agreement from each officer and director of the Company, each Selling
Stockholder and each of other certain beneficial owners of Common Stock named
in Schedule C hereto in writing prior to the date hereof that such person will
not, during the Lock-up Period, effect the Disposition of any Securities now
owned or hereafter acquired directly by such person or with respect to which
such person has or hereafter acquires the power of disposition, other than (i)
the sale of Selling Stockholders Shares by such Selling Stockholder hereunder,
(ii) as a bona fide gift or gifts, provided the donee or donees thereof agree
in writing to be bound by this restriction or (iii) with the prior written
consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC. The foregoing restriction shall
have been expressly agreed to preclude the holder of the Securities from
engaging in any hedging or other transaction which is designed to or reasonably
expected to lead to or result in a Disposition of Securities during the Lock-up
Period, even if such Securities would be disposed of by someone other than the
such holder. Such prohibited hedging or other transactions would include,
without limitation, any short sale (whether or not against the box) or any
purchase, sale or grant of any right (including, without limitation, any put or
call option) with respect to any Securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from Securities. Furthermore, such
person will have also agreed and consented to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of the
Securities held by such person except in compliance with this restriction.
(k) The Company and the Selling Stockholders
shall have furnished to you such further certificates and documents as
-38 -
39
you shall reasonably request (including certificates of officers of the
Company, the Selling Stockholders or officers of the Selling Stockholders (when
the Selling Stockholder is not a natural person) as to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
herein, as to the performance by the Company and the Selling Stockholders of
their respective obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Underwriters hereunder.
All such opinions, certificates, letters and
documents will be in compliance with the provisions hereof only if they are
reasonably satisfactory to Underwriters' Counsel. The Company and the Selling
Stockholders will furnish you with such number of conformed copies of such
opinions, certificates, letters and documents as you shall reasonably request.
7. Option Shares.
On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company and the Option Selling Stockholders, acting severally and
not jointly, hereby grant to the several Underwriters, for the purpose of
covering over-allotments in connection with the distribution and sale of the
Firm Shares only, a nontransferable option to purchase up to 330,000 Company
Option Shares and 270,000 Selling Stockholders Option Shares, respectively, at
the purchase price per share for the Firm Shares set forth in Section 3 hereof.
Such option may be exercised by the Representatives on behalf of the several
Underwriters on one (1) or more occasions in whole or in part during the period
of 30 days after the date on which the Firm Shares are initially offered to the
public, by giving written notice to the Company. The number of Option Shares
to be purchased by each Underwriter upon the exercise of such option shall be
the same proportion of the total number of Option Shares to be purchased by the
several Underwriters pursuant to the exercise of such option as the number of
Firm Shares purchased by such Underwriter (set forth in Schedule A hereto)
bears to the total number of Firm Shares purchased by the several Underwriters
(set forth in Schedule A hereto), adjusted by the Representatives in such
manner as to avoid fractional shares. The number of Option Shares to be
purchased from the Company and each Option Selling Stockholder by each
Underwriter shall be the number of Option Shares determined by multiplying the
maximum number of Option Shares to be sold by the Company or such Option
Selling Stockholder set forth in Schedule B hereto by a fraction the numerator
of which is the aggregate number of Option Shares to be purchased by such
Underwriter as set forth in the immediately preceding sentence and the
denominator of which is the maximum number of Option Shares available to be
purchased by the Underwriters hereunder, adjusted by the Representatives in
such manner as to avoid fractional shares.
-39 -
40
Delivery of definitive certificates for the Option
Shares to be purchased by the several Underwriters pursuant to the exercise of
the option granted by this Section 7 shall be made against payment of the
purchase price therefor by the several Underwriters by wire transfer of
immediately available funds to the Company with regard to the Company Option
Shares and to the Attorneys for the respective accounts of the Selling
Stockholders Option Shares being purchased from such Option Selling
Stockholders. Such delivery and payment shall take place at the Chicago office
of Winston & ▇▇▇▇▇▇ (or at such other place as may be agreed upon among the
Representatives, the Company and the Attorneys) (i) on the Closing Date, if
written notice of the exercise of such option is received by the Company at
least two (2) full business days prior to the Closing Date or (ii) on a later
date which shall not be later than the third (3rd) full business day following
the date the Company receives written notice of the exercise of such option, if
such notice is received by the Company less than two (2) full business days
prior to the Closing Date.
The certificates for the Option Shares to be so
delivered will be made available to you at such office or such other location,
including, without limitation, in New York City, as you may reasonably request
for checking at least one (1) full business day prior to the date of payment
and delivery and will be in such names and denominations as you may request,
such request to be made at least two (2) full business days prior to such date
of payment and delivery. If the Representatives so elect, delivery of the
Option Shares may be made by credit through full fast transfer to the accounts
at The Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as
the Representatives of the several Underwriters, may (but shall not be
obligated to) make payment of the purchase price on behalf of any Underwriter
or Underwriters whose check or checks shall not have been received by you prior
to the date of payment and delivery for the Option Shares to be purchased by
such Underwriter or Underwriters. Any such payment by you shall not relieve
any such Underwriter or Underwriters of any of its or their obligations
hereunder.
Upon exercise of any option provided for in Section
7(a) hereof, the obligations of the several Underwriters to purchase such
Option Shares will be subject (as of the date hereof and as of the date of
payment and delivery for such Option Shares) to the accuracy of and compliance
with the representations, warranties and agreements of the Company and the
Selling Stockholders herein, to the accuracy of the statements of the Company,
the Selling Stockholders and officers of the Company made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder, to the conditions set
forth in Section 6
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41
hereof, and to the condition that all proceedings taken at or prior to the
payment date in connection with the sale and transfer of such Option Shares
shall be satisfactory in form and substance to you and to Underwriters'
Counsel, and you shall have been furnished with all such documents,
certificates and opinions as you may request in order to evidence the accuracy
and completeness of any of the representations, warranties or statements, the
performance of any of the covenants or agreements of the Company and the
Selling Stockholders or the satisfaction of any of the conditions herein
contained.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject (including,
without limitation, in its capacity as an Underwriter or as a "qualified
independent underwriter" pursuant to Rule 2720 of the NASD Conduct Rules),
under the Act, the Exchange Act or otherwise, specifically including, but not
limited to, losses, claims, damages or liabilities (or actions in respect
thereof) arising out of or based upon (i) any breach of any representation,
warranty, agreement or covenant of the Company herein contained, (ii) any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement or any amendment or supplement thereto, or 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, or
(iii) any untrue statement or alleged untrue statement of any material fact
contained in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and agrees to reimburse each Underwriter for any legal or other
expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or any such amendment or supplement thereto, in reliance upon, and
in conformity with, written information relating to any Underwriter furnished
to the Company by such Underwriter, directly or through you, specifically for
use in the preparation thereof and, provided further, that the indemnity
agreement provided in this Section 8(a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any losses, claims, damages, liabilities or actions based upon
any untrue statement or alleged untrue statement of material fact or
-41-
42
omission or alleged omission to state therein a material fact purchased Shares,
if a copy of the Prospectus in which such untrue statement or alleged untrue
statement or omission or alleged omission was corrected had not been sent or
given to such person within the time required by the Act and the Rules and
Regulations, unless such failure is the result of noncompliance by the Company
with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Selling Stockholder (other than Golder,
Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV, L.P.), severally and not jointly, agrees to
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject (including, without limitation, in its capacity as an Underwriter or as
a "qualified independent underwriter" pursuant to Rule 2720 of the NASD Conduct
Rules), under the Act, the Exchange Act or otherwise, specifically including,
but not limited to, losses, claims, damages or liabilities (or actions in
respect thereof) arising out of or based upon (i) any breach of any
representation, warranty, agreement or covenant of such Selling Stockholder
herein contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment or
supplement thereto, or 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, or (iii) any untrue statement or alleged untrue
statement of any material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in the case of subparagraphs (ii) and (iii) of this Section 8(b) to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or such
Underwriter by such Selling Stockholder, directly or through such Selling
Stockholder's representatives, specifically for use in the preparation thereof,
and agrees to reimburse each Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement provided in this Section 8(b) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any losses, claims, damages, liabilities or actions
based upon any untrue statement or
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43
alleged untrue statement of a material fact or omission or alleged omission to
state therein a material fact purchased Shares, if a copy of the Prospectus in
which such untrue statement or alleged untrue statement or omission or alleged
omission was corrected had not been sent or given to such person within the
time required by the Act and the Rules and Regulations, unless such failure is
the result of noncompliance by the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(b) shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which such Selling Stockholder may otherwise have.
(c) Each Underwriter, severally and not jointly,
agrees to indemnify and hold harmless the Company and each Selling Stockholder
against any losses, claims, damages or liabilities, joint or several, to which
the Company or such Selling Stockholder may become subject under the Act or
otherwise, specifically including, but not limited to, losses, claims, damages
or liabilities (or actions in respect thereof) arising out of or based upon (i)
any breach of any representation, warranty, agreement or covenant of such
Underwriter herein contained, (ii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment or supplement thereto, or 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, or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in the case of subparagraphs (ii) and (iii) of this
Section 8(c) to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter, directly or through you, specifically for use in
the preparation thereof, and agrees to reimburse the Company and each such
Selling Stockholder for any legal or other expenses reasonably incurred by the
Company and each such Selling Stockholder in connection with investigating or
defending any such loss, claim, damage, liability or action.
The indemnity agreement in this Section 8(c) shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each officer of the Company who signed the Registration Statement and each
director of the Company, each Selling Stockholder and each person, if any, who
controls the Company or any Selling Stockholder within the meaning of the Act
or
-▇▇ -
▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. This indemnity agreement shall be in addition to any
liabilities which each Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it shall elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in 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, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Section 8(a),
8(b) or 8(c) hereof who are parties to such action), (ii) 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
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of such settlement; provided that such
consent shall not be unreasonably withheld. 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
-44 -
45
which any indemnified party is or could have been a party and indemnification
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on all claims that are the subject matter of such proceeding.
(e) In order to provide for just and equitable
contribution in any action in which a claim for indemnification is made
pursuant to this Section 8 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 8 provides for indemnification in such case, all the parties
hereto shall contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (after contribution from others) in such
proportion so that, except as set forth in Section 8(f) hereof, the
Underwriters, acting severally and not jointly, are responsible pro rata for
the portion represented by the percentage that the underwriting discount bears
to the initial public offering price, and the Company and the Selling
Stockholders are responsible for the remaining portion, provided, however, that
(i) no Underwriter shall be required to contribute any amount in excess of the
amount by which the underwriting discount applicable to the Shares purchased by
such Underwriter exceeds the amount of damages which such Underwriter has
otherwise required to pay and (ii) no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 8(e) shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each person, if any, who controls any Underwriter, the Company or any
Selling Stockholder within the meaning of the Act or the Exchange Act and each
officer of the Company who signed the Registration Statement and each director
of the Company. This subparagraph (e) shall not be operative as to any
Underwriter to the extent that the Company or any Selling Stockholder has
received indemnity under this Section 8.
(f) The liability of each Selling Stockholder
(other than Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV, L.P.) under the
representations, warranties and agreements contained herein and under the
indemnity agreements contained in the provisions of this Section 8 shall be
limited to an amount equal to the initial public offering price of the Selling
Stockholders Shares sold by such Selling Stockholder to the Underwriters minus
the amount of the underwriting discount paid thereon to the Underwriters by
such Selling Stockholder. The Company and such 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.
-45 -
46
(g) The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented
by counsel during the negotiations regarding the provisions hereof, including,
without limitation, the provisions of this Section 8, and are fully informed
regarding said provisions. They further acknowledge that the provisions of
this Section 8 fairly allocate the risks in light of the ability of the parties
to investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and the Prospectus as required
by the Act and the Exchange Act. The parties hereto are hereby advised that
federal or state public policy, as interpreted by courts in certain
jurisdictions, may be contrary to certain of the provisions of this Section 8,
and the parties hereto hereby expressly waive and relinquish any right or
ability to assert such public policy as a defense to a claim under this Section
8 and hereby further agree not to attempt to assert any such defense.
9. Representations, Warranties, Covenants and Agreements to
Survive Delivery. All representations, warranties, covenants and agreements of
the Company, the Selling Stockholders and the Underwriters herein or in
certificates delivered pursuant hereto, and the indemnity and contribution
agreements contained in Section 8 hereof shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter within the meaning of the
Act or the Exchange Act, or by or on behalf of the Company or any Selling
Stockholder, or any of their officers, directors or controlling persons within
the meaning of the Act or the Exchange Act, and shall survive the delivery of
the Shares to the several Underwriters hereunder or termination of this
Agreement.
10. Substitution of Underwriters. If any Underwriter or
Underwriters shall fail to take up and pay for the number of Firm Shares agreed
by such Underwriter or Underwriters to be purchased hereunder upon tender of
such Firm Shares in accordance with the terms hereof, and if the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters so
agreed but failed to purchase does not exceed 10% of the Firm Shares, the
remaining Underwriters shall be obligated, severally in proportion to their
respective commitments hereunder, to take up and pay for the Firm Shares of
such defaulting Underwriter or Underwriters.
If any Underwriter or Underwriters so defaults and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed to take up and pay for exceeds 10% of the Firm
Shares, the remaining Underwriters shall have the right, but shall not be
obligated, to take up and pay for (in such proportions as may be agreed upon
among them) the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase. If such remaining Underwriters do not, at the
Closing
-46 -
47
Date, take up and pay for the Firm Shares which the defaulting Underwriter or
Underwriters so agreed but failed to purchase, the Closing Date shall be
postponed for 24 hours to allow the several Underwriters the privilege of
substituting within 24 hours (including non-business hours) another underwriter
or underwriters (which may include any nondefaulting Underwriter) satisfactory
to the Company. If no such underwriter or underwriters shall have been
substituted as aforesaid by such postponed Closing Date, the Closing Date may,
at the option of the Company, be postponed for a further 24 hours, if
necessary, to allow the Company the privilege of finding another underwriter or
underwriters, satisfactory to you, to purchase the Firm Shares which the
defaulting Underwriter or Underwriters so agreed but failed to purchase. If it
shall be arranged for the remaining Underwriters or substituted underwriter or
underwriters to take up the Firm Shares of the defaulting Underwriter or
Underwriters as provided in this Section 10, (i) the Company shall have the
right to postpone the time of delivery for a period of not more than seven (7)
full business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement, supplements to the Prospectus or
other such documents which may thereby be made necessary, and (ii) the
respective number of Firm Shares to be purchased by the remaining Underwriters
and substituted underwriter or underwriters shall be taken as the basis of
their underwriting obligation. If the remaining Underwriters shall not take up
and pay for all such Firm Shares so agreed to be purchased by the defaulting
Underwriter or Underwriters or substitute another underwriter or underwriters
as aforesaid and the Company shall not find or shall not elect to seek another
underwriter or underwriters for such Firm Shares as aforesaid, then this
Agreement shall terminate.
In the event of any termination of this Agreement pursuant to
the preceding paragraph of this Section 10, neither the Company nor any Selling
Stockholder shall be liable to any Underwriter (except as provided in Sections
5 and 8 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, other than for some reason permitted under this Agreement, to
purchase the number of Firm Shares agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company, the Selling
Stockholders and the other Underwriters for damages, if any, resulting from
such default) be liable to the Company or any Selling Stockholder (except to
the extent provided in Sections 5 and 8 hereof).
The term "Underwriter" in this Agreement shall include any
person substituted for an Underwriter under this Section 10.
-47 -
48
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the
earlier of (i) 6:30 A.M., San Francisco time, on the first full business day
following the effective date of the Registration Statement, or (ii) the time of
the initial public offering of any of the Shares by the Underwriters after the
Registration Statement becomes effective. The time of the initial public
offering shall mean the time of the release by you, for publication, of the
first newspaper advertisement relating to the Shares, or the time at which the
Shares are first generally offered by the Underwriters to the public by letter,
telephone, telegram or telecopy, whichever shall first occur. By giving notice
as set forth in Section 12 hereof before the time this Agreement becomes
effective, you, as Representatives of the several Underwriters, or the Company,
may prevent this Agreement from becoming effective without liability of any
party to any other party, except as provided in Sections 4(j), 5 and 8 hereof.
(b) You, as Representatives of the several
Underwriters, shall have the right to terminate this Agreement by giving notice
as hereinafter specified at any time on or prior to the Closing Date or on or
prior to any later date on which Option Shares are to be purchased, as the case
may be, (i) if the Company or any Selling Stockholder shall have failed,
refused or been unable to perform any agreement on its part to be performed, or
because any other condition of the Underwriters' obligations hereunder required
to be fulfilled is not fulfilled, including, without limitation, any change in
the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise from that set forth in the Registration Statement or the Prospectus,
which, in your sole judgment, is material and adverse, (ii) if additional
material governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum or
maximum prices shall have been generally established on the New York Stock
Exchange or on the American Stock Exchange or in the over the counter market by
the NASD, or trading in securities generally shall have been suspended on
either such exchange or in the over the counter market by the NASD, or if a
banking moratorium shall have been declared by federal, New York or California
authorities, (iii) if the Company shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as to interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured, (iv) if there
shall have been a material adverse change in the general political or economic
conditions or financial markets as in your reasonable judgment makes it
inadvisable or impracticable to proceed with the offering, sale and delivery of
the Shares or (v) if there shall have been an outbreak or escalation of
hostilities or of any other insurrection or armed
-48 -
49
conflict or the declaration by the United States of America of a national
emergency which, in the reasonable opinion of the Representatives, makes it
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus. In the event of termination pursuant to
subparagraph (i) above, the Company shall remain obligated to pay costs and
expenses pursuant to Sections 4(j), 5 and 8 hereof. Any termination pursuant
to any of subparagraphs (ii) through (v) above shall be without liability of
any party to any other party except as provided in Sections 5 and 8 hereof.
If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section 11, you shall
promptly notify the Company by telephone, telecopy or telegram, in each case
confirmed by letter. If the Company shall elect to prevent this Agreement from
becoming effective, the Company shall promptly notify you by telephone,
telecopy or telegram, in each case, confirmed by letter.
12. Notices. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to you
shall be mailed, delivered, telegraphed (and confirmed by letter) or telecopied
(and confirmed by letter) to you c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier
number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: General Counsel; if sent to the Company, such
notice shall be mailed, delivered, telegraphed (and confirmed by letter) or
telecopied (and confirmed by letter) to Lason, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇, President and Chief Executive Officer, with a copy to Seyburn, Kahn,
Ginn, Bess, ▇▇▇▇▇▇ and ▇▇▇▇▇▇, P.C., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq.; if sent to one or more of the Selling Stockholders, such notice
shall be sent mailed, delivered, telegraphed (and confirmed by letter) or
telecopied (and confirmed by letter) to ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, as Attorneys-in-Fact for the Selling Stockholders, at Lason, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier number (248)
597-3412.
13. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters and the Company and the Selling
Stockholders and their respective executors, administrators, successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or entity, other than the parties hereto and
their respective executors, administrators, successors and assigns, and the
controlling persons within the meaning of the Act or the Exchange Act, officers
and directors referred to in Section 8 hereof, any legal or equitable right,
remedy or claim in respect of this Agreement or any provisions herein
contained, this Agreement
-49 -
50
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of the parties hereto and their respective
executors, administrators, successors and assigns and said controlling persons
and said officers and directors, and for the benefit of no other person or
entity. No purchaser of any of the Shares from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
In all dealings with the Company and the Selling Stockholders
under this Agreement, you shall act on behalf of each of the several
Underwriters, and the Company and the Selling Stockholders shall be entitled to
act and rely upon any statement, request, notice or agreement made or given by
you jointly or by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC on behalf of you.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York.
15. Counterparts. This Agreement may be signed in several
counterparts, each of which will constitute an original.
[signature page follows]
-50 -
51
If the foregoing correctly sets forth the understanding among
the Company, the Selling Stockholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company, the Selling
Stockholders and the several Underwriters.
Very truly yours,
LASON, INC.
By:
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
SELLING STOCKHOLDERS
By:
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Attorney-in-Fact for the Selling
Stockholders named in Schedule B
hereto
By:
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Attorney-in-Fact for the Selling
Stockholders named in Schedule B
hereto
Accepted as of the date
first above written:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, INC.
On their behalf and on behalf of each
of the several Underwriters named in
Schedule A hereto:
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY GROUP, L.L.C.
By:
------------------------------
Authorized Signatory
-51 -
52
SCHEDULE A
Number of
Firm Shares
To Be
Underwriters Purchased
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC.................
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C....................
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc................
---------
Total............................................. 4,000,000
=========
53
SCHEDULE B
Number of
Number of Company
Company Shares Option Shares
To Be Sold To Be Sold
-------------- -------------
Lason, Inc. 2,200,000 330,000
Number of Number of Selling
Selling Stockholders Stockholders Option
Firm Shares Shares
To Be Sold To Be Sold
------------- ------------
Names of Firm Selling Stockholders
----------------------------------
Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Fund IV, L.P.................................................... 823,400
Colin ▇.▇. ▇▇▇▇▇▇▇▇▇, Trustee..................................... 286,417
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇................................................. 76,416
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.................................................. 290,376
▇▇▇▇ ▇. ▇▇▇▇▇▇.................................................... 33,090
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.................................................. 98,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇............................................... 65,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇.............................................. 15,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Irrevocable
Trust effective as of January 1, 1996
for the benefit of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇............................. 36,229
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Irrevocable
Trust effective as of January 1, 1996
for the benefit of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇......................................................... 36,229
▇▇▇▇▇ ▇. ▇▇▇▇▇.................................................... 21,313
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.................................................. 18,530
--------
Total Selling Stockholders Firm Shares............................ 1,800,000
Total Firm Shares................................................. 4,000,000
Names of Option Selling Stockholders
Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Fund IV, L.P.................................................... 143,517
Colin ▇.▇. ▇▇▇▇▇▇▇▇▇, Trustee..................................... 31,621
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇................................................. 31,621
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.................................................. 50,613
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Jennnifer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Irrevocable
Trust effective as of January 1, 1996
for the benefit of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇............................. 6,314
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Jennnifer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Irrevocable
Trust effective as of January 1, 1996
for the benefit of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇......................................................... 6,314
-------
Total Selling Stockholders Option Shares.......................... 270,000
Total Option Shares............................................... 600,000
54
SCHEDULE C