$100,000,000
MAY & ▇▇▇▇
% Convertible Subordinated Notes Due 2003
UNDERWRITING AGREEMENT
----------------------
__________, 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
ABN AMRO INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
MAY & ▇▇▇▇, INC., a Delaware corporation (the "Company"), proposes to issue
and sell $100,000,000 in aggregate principal amount of its % Convertible
Subordinated Notes Due 2003 (the "Firm Securities") to the several underwriters
named in Schedule I hereto (the "Underwriters"). The Company also proposes to
issue and sell to the several Underwriters not more than $15,000,000 in
aggregate principal amount of % Convertible Subordinated Notes Due 2003 (the
"Additional Securities"), if requested by the Underwriters as provided in
Section 2 hereof. The Firm Securities and the Additional Securities are herein
collectively called the Securities. The Securities are to be issued pursuant to
the provisions of an Indenture to be dated as of __________ __, 1998 (the
"Indenture") between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee
(the "Trustee").
Section 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3, including a
prospectus, relating to the Securities. The registration statement, as amended
at the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A or Rule 434 under the Act, is
hereinafter referred to as the "Registration Statement"; and the prospectus,
including any the prospectus subject to completion and the term sheet, taken
together, as described in Rule 434(a)(1) under the Act, in the form first used
to confirm sales of Securities is hereinafter referred to as the "Prospectus"
(including, in the case of all references to the Registration Statement or the
Prospectus, documents incorporated therein by reference). If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional %
Convertible Subordinated Notes Due 2003 (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. The terms "supplement" and "amendment" or "amend" as
used in this Agreement with respect to the Registration Statement or the
Prospectus shall include all documents subsequently filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") that are deemed to be incorporated by reference in the
Prospectus.
Section 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto at ____% of the principal amount thereof (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell up to all of the Additional Securities and (ii) the Underwriters
shall have the right to purchase, severally and not jointly, up to all of the
Additional Securities from the Company at the Purchase Price. Additional
Securities may be purchased (in integral multiples of $1,000), as provided for
in Section 4 hereof, solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Securities. The Underwriters may
exercise their right to purchase Additional Securities in whole or in part from
time to time by giving written notice thereof to the Company within 30 days
after the date of this Agreement. The Representatives shall give any such
notice on behalf of the Underwriters and such notice shall specify the aggregate
amount of Additional Securities to be purchased pursuant to such exercise and
the date for payment and delivery thereof. The date specified in any such
notice shall be a business day (i) no earlier than the Closing Date (as
hereinafter defined), (ii) no later than ten business days after such notice has
been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Securities are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase the number of Additional
Securities which bears the same proportion to the total amount of Additional
Securities to be purchased as the amount of Firm Securities set forth opposite
the name of such Underwriter in Schedule I bears to the total amount of Firm
Securities.
The Company hereby agrees not to (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common
2
Stock or (ii) enter into any swap or other arrangement that transfers all or a
portion of the economic consequences associated with the ownership of any Common
Stock (regardless of whether any of the transactions described in clause (i) or
(ii) is to be settled by the delivery of Common Stock, or such other securities,
in cash or otherwise), except to the Underwriters pursuant to this Agreement,
for a period of 90 days after the date of the Prospectus without the prior
written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation.
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's stock option and stock ownership plans
existing on the date hereof, (ii) the Company may issue shares of Common Stock
upon the exercise of an option or warrant outstanding on the date hereof, (iii)
the May & ▇▇▇▇, Inc. Employee Stock Ownership Plan (the "ESOP") may distribute
shares of Common Stock to participants or beneficiaries of the ESOP, and/or may
sell, contract to sell or otherwise dispose of any shares of Common Stock in
order to make cash distributions to participants or beneficiaries of the ESOP,
in accordance with the terms of the plan and trust documents governing the ESOP,
and (iv) Selling Stockholders who are individuals may transfer shares of Common
Stock to members of their immediate family or to trusts for the benefit of such
Selling Stockholders or trusts for the benefit of members of their immediate
family, provided such transferees agree in writing to be bound by the transfer
restrictions set forth herein.
The Company also agrees not to file any registration statement with respect
to any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock (other than a registration statement on Form
S-8 relating to the Company's stock option plans currently in effect) for a
period of 90 days after the date of the Prospectus without the prior written
consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation. The Company
shall, prior to or concurrently with the execution of this Agreement, deliver an
agreement executed by (i) each Selling Stockholder and (ii) each of the
directors and officers of the Company who is not a Selling Stockholder to the
effect that such person will not, during the period commencing on the date such
person signs such agreement and ending 180 days after the date of the Prospectus
(with respect to the Selling Stockholders) and ending 90 days after the date of
the Prospectus (with respect to each of the directors and officers who is not a
Selling Stockholder), without the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation, (A) engage in any of the transactions described
in the first sentence of this paragraph or (B) make any demand for, or exercise
any right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
Section 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Securities as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
Section 4. Delivery and Payment. A global certificate for the Securities
(the "Global Certificate") shall be registered in the name of Cede & Co.,
nominee of the Depository Trust Company ("DTC"), and issued not later than two
full business days prior to the Closing Date (as defined below) or, if
applicable, each Option Closing Date (as defined below). The Global Certificate
shall be made available to you for inspection not later than 9:30 A.M., New York
3
City time, on the business day prior to the Closing Date or, if applicable, each
Option Closing Date, at the office of DTC or its designated custodian (the
"Designated Office"). The Global Certificate, or other form agreed to in the
alternative, evidencing the Securities, shall be delivered to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ Securities Corporation through the facilities of DTC or the
Designated Office on the Closing Date or, if applicable, each Option Closing
Date, with any transfer taxes thereon duly paid by the Company, for the
respective accounts of the several Underwriters, against payment to the Company
of the Purchase Price therefore by wire transfer of Federal or other funds
immediately available in New York City. The time and date of delivery and
payment for the Firm Securities shall be 9:00 A.M., New York City time, on
________, 1998 or such other time on the same or such other date as ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and the Company shall agree in writing.
The time and date of such delivery and payment are hereinafter referred to as
the "Closing Date". The time and date of delivery and payment for the
Additional Securities shall be 9:00 A.M., New York City time, on such date or
dates (each, an "Option Closing Date"), which may be the same as the Closing
Date, but shall in no event be earlier than the Closing Date, as shall be
specified in the applicable exercise notice given by you pursuant to Section 2.
Any such Option Closing Date and the location of delivery of and the form of
payment for such Additional Securities may be varied by agreement between you
and the Company.
The documents to be delivered on the Closing Date on behalf of the parties
hereto pursuant to Section 8 of this Agreement shall be delivered at the offices
of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ and the Securities shall be delivered at the Designated Office, all on the
Closing Date or, if applicable, the Option Closing Date.
Section 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, (iii) when any amendment to
the Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish you up to four signed copies of the Registration Statement
as first filed with the Commission and of each amendment to it, including all
exhibits and documents incorporated therein by reference, and to furnish to you
and each Underwriter designated by you
4
such number of conformed copies of the Registration Statement as so filed and of
each amendment to it, without exhibits but including documents incorporated
therein by reference, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the Commission
within the applicable period specified in Rule 424(b) under the Act; during the
period specified in Section 5(d) below, not to file any further amendment to the
Registration Statement and not to make any amendment or supplement (including,
without limitation, the issuance or filing of any term sheet within the meaning
of Rule 434 under the Act) to the Prospectus of which you shall not previously
have been advised or to which you shall reasonably object after being so
advised; and, during such period, to prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the Registration
Statement or amendment or supplement (including, without limitation, the
issuance or filing of any term sheet within the meaning of Rule 434 under the
Act) to the Prospectus which may be necessary or advisable in connection with
the distribution of the Securities by you, and to use its best efforts to cause
any such amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
and any documents incorporated herein by reference as such Underwriter or dealer
may reasonably request.
(e) If during the period specified in Section 5(d), any event shall occur
or condition shall exist as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request.
(f) Prior to any public offering of the Securities, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such jurisdictions
as you may request, to continue such registration or qualification in effect so
long as required for distribution of the Securities and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to
5
take any action that would subject it to general consent to service of process
or taxation other than as to matters and transactions relating to the
Prospectus, the Registration Statement, any preliminary prospectus or the
offering or sale of the Securities, in any jurisdiction in which it is not now
so subject.
(g) To mail and make generally available to its security holders as soon as
practicable an earnings statement covering the twelve-month period ending March
31, 1998 that shall satisfy the provisions of Section 11(a) of the Act, and to
advise you in writing when such statement has been so made available.
(h) So long as the Securities are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Securities a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent public accountants and (ii) to mail and make generally available as
soon as practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated balance
sheet, a consolidated statement of operations and a consolidated statement of
cash flows (and similar financial reports of all unconsolidated subsidiaries, if
any) as of the end of and for such period, and for the period from the beginning
of such year to the close of such quarterly period, together with comparable
information for the corresponding periods of the preceding year.
(i) So long as the Securities are outstanding, to furnish to you as soon as
available copies of all reports or other communications furnished to its
security holders or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
reasonable expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the registration and
delivery of the Securities under the Act and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
costs of printing or producing this Agreement and any other agreements or
documents in connection with the offering, purchase, sale or delivery of the
Securities, (iv) all expenses in connection with the registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in
6
connection therewith (including the filing fees and fees and disbursements of
counsel for the Underwriters in connection with such registration or
qualification and memoranda relating thereto), (v) the filing fees and
disbursements of counsel for the Underwriters in connection with the review and
clearance of the offering of the Securities by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to the
Securities and all costs and expenses incident to the listing of the Securities
on the Nasdaq SmallCap Market, (vii) the cost of printing certificates
representing the Securities, (viii) the costs and charges of any transfer agent,
registrar and/or depositary (including the Depository Trust Company), (ix) any
fees charged by rating agencies for the rating of the Securities, (x) the fees
and expenses of the Trustee and the Trustees counsel in connection with the
Indenture and the Securities and (xi) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section.
(k) To use its best efforts to list for quotation the Securities on the
Nasdaq SmallCap Market and to maintain the listing of the Securities on the
Nasdaq SmallCap Market for so long as the Securities are outstanding.
(l) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
transfer or dispose of any debt securities of the Company or any warrants,
rights or options to purchase or otherwise acquire debt securities of the
Company substantially similar to the Securities (other than (i) the Securities
and (ii) commercial paper issued in the ordinary course of business), without
the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation.
(m) Not to voluntarily claim, and to actively resist any attempts to claim,
the benefit of any usury laws against the holders of the Securities.
(n) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date and to satisfy all conditions precedent to the delivery of the
Securities.
(o) If the Registration Statement at the time of the effectiveness of this
Agreement does not cover all of the Securities, to file a Rule 462(b)
Registration Statement with the Commission registering the Securities not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
Section 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any Rule
462(b) Registration Statement to be filed by the Company after the effectiveness
of this Agreement); any Rule 462(b) Registration Statement filed after the
effectiveness of this Agreement will become effective no later than 10:00 P.M.,
New York City time, on the date of this Agreement;
7
and no stop order suspending the effectiveness of the Registration Statement is
in effect, and no proceedings for such purpose are pending before or threatened
by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act; (ii) the
Registration Statement (other than any Rule 462(b) Registration Statement to be
filed by the Company after the effectiveness of this Agreement), when it became
effective, did not and, as amended, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iii)
the Registration Statement (other than any Rule 462(b) Registration Statement to
be filed by the Company after the effectiveness of this Agreement) and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Act, (iv) if the Company is required to file a
Rule 462(b) Registration Statement after the effectiveness of this Agreement,
such Rule 462(b) Registration Statement and any amendments thereto, when they
become effective (A) will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (B) will comply in all material
respects with the Act and (v) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(c) The Prospectus is not materially different from the prospectus included
in the Registration Statement at the time of its effectiveness (including the
information (if any) deemed to be part of the Registration Statement at the time
of effectiveness pursuant to Rule 430A under the Act); and the term sheet, if
any, that is included in the Prospectus sets forth all information material to
investors with respect to the offering of the Shares that is not disclosed in
the prospectus subject to completion that is included in the Prospectus.
(d) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all material respects with the
Act, and did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in any preliminary
prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(e) Each of the Company and its subsidiary has been duly incorporated, is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to carry
on its business as described in the Prospectus and
8
to own, lease and operate its properties, and each is duly qualified and is in
good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its subsidiary,
taken as a whole.
(f) All the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights.
(g) All of the outstanding shares of capital stock of the Company's
subsidiary have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature (each, a
"Lien").
(h) The Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Securities have been duly authorized and, on the Closing Date, will
have been validly executed and delivered by the Company. When the Securities
have been executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, the Securities will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors rights generally and (B) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
(j) The Securities conform as to legal matters to the description thereof
contained in the Prospectus.
(k) Neither the Company nor its subsidiary is in violation of its
respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiary, taken as a whole, to which the Company or its
subsidiary is a party or by which the Company or its subsidiary or their
respective property is bound.
(l) The execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Company, the compliance by the Company with
all the provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court
9
or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or its subsidiary or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiary, taken as a whole, to which the Company or its
subsidiary is a party or by which the Company or its subsidiary or their
respective property is bound, (iii) violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, its subsidiary
or their respective property, (iv) result in the imposition or creation of (or
the obligation to create or impose) a Lien under any agreement or instrument to
which the Company or its subsidiary is a party or by which the Company or its
subsidiary or their respective property is bound or (v) result in the
suspension, termination or revocation of any Authorization (as defined below) of
the Company or its subsidiary or any other impairment of the rights of the
holder of any such Authorization.
(m) There are no legal or governmental proceedings pending to which the
Company or its subsidiary is a party or to which any of their respective
property is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated; nor are
there any statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not so described or filed as
required.
(n) Neither the Company nor its subsidiary has violated any foreign,
federal, state or local law or regulation relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), laws or regulations relating
to discrimination in the hiring, promotion or pay of employees (including
federal or state wages and hours laws) any provisions of the Employee Retirement
Income Security Act of 1974, as amended, or any provisions of the Foreign
Corrupt Practices Act or the rules and regulations promulgated thereunder,
except for such violations which, singly or in the aggregate, would not have a
material adverse effect on the business, prospects, financial condition or
results of operation of the Company and its subsidiary, taken as a whole.
(o) Each of the Company and its subsidiary has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and its
subsidiary, taken as a whole. Each such Authorization is valid and in full
force and effect and each of the Company and its subsidiary is in compliance
with all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the receipt of any
notice from any authority or governing body) which allows or, after
10
notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or its subsidiary; except where such failure to be
valid and in full force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not, singly or in the
aggregate, have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiary, taken as a
whole.
(p) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a whole.
(q) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of operation
of the Company, the Company has good and marketable title, free and clear of all
liens, claims, encumbrances and restrictions except liens for taxes not yet due
and payable, to all property and assets described in the Registration Statement
as being owned by it. All leases to which the Company is a party are valid and
binding and no default has occurred or is continuing thereunder, which would
reasonably be expected to result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company, and the
Company enjoys peaceful and undisturbed possession under all such leases to
which it is a party as lessee with such exceptions as do not materially
interfere with the use made by the Company.
(r) The Company maintains reasonably adequate insurance.
(s) This Agreement has been duly authorized, executed and delivered by the
Company.
(t) Price Waterhouse LLP are independent public accountants with respect to
the Company and its subsidiary as required by the Act.
(u) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its subsidiary on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in accordance with generally accepted
accounting principles the information required to be stated therein; and the
other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are, in all material respects, accurately
11
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company.
(v) The Company is not and, after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(w) Except as disclosed in the Registration Statement, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Securities registered
pursuant to the Registration Statement.
(x) No "nationally recognized statistical rating organization" as such term
is defined for purposes of Rule 436(g)(2) under the Act has indicated to the
Company that it is considering (i) the downgrading, suspension or withdrawal of,
or any review for a possible change that does not indicate the direction of the
possible change in, any rating assigned to the Company or any securities of the
Company or (ii) any change in the outlook for any rating of the Company or any
securities of the Company.
(y) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiary, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or its subsidiary and
(iii) neither the Company nor its subsidiary has incurred any material liability
or obligation, direct or contingent.
(z) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(aa) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company except as
otherwise disclosed in the Registration Statement.
(bb) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with managements general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with managements general or specific authorization; and (iv) the
recorded accountability for assets
12
is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(cc) All material tax returns required to be filed by the Company and its
subsidiary in any jurisdiction have been filed, other than those filings being
contested in good faith, and all material taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or its subsidiary
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided.
(dd) The Company has filed a registration statement pursuant to Section
12(g) of the Exchange Act to register the Common Stock, has filed an application
to list the Securities on The Nasdaq SmallCap Market and has received
notification that the listing has been approved, subject to notice of issuance
of the Securities.
(ee) The Company and its subsidiary own and possess all right, title and
interest in and to, or has duly licensed from third parties, all patents,
rights, trademarks, trade names, service marks, copyrights, inventions, know-how
(including trade secrets and other unprotected and/or unpatentable proprietary
or confidential information systems, procedures, processes, techniques and
substances) and other proprietary rights which are necessary for the conduct of
the business now operated by them as described in the Prospectus (collectively,
"Trade Rights"); no such Trade Rights as are material to the business of the
Company and its subsidiary expire or are subject to termination at the election
of another party without their consent at a time or under circumstances which
would reasonably be expected to have a material adverse effect upon the
business, prospects, financial condition or results of operations of the Company
and its subsidiary, taken as a whole, and the Company and its subsidiary have
not granted any lien or encumbrance on, or granted any right of license (other
than in the ordinary course of its business) with respect to, any such Trade
Rights. The Company and its subsidiary have not received any notice of
infringement, misappropriation or conflict from any third party as to Trade
Rights that has not been resolved or disposed of and the Company and its
subsidiary have not infringed, misappropriated or otherwise conflicted with
Trade Rights of any third parties, which infringement, misappropriation or
conflict, singly or in the aggregate, would reasonably be expected to have a
material adverse effect upon the business, prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a whole.
(ff) Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
Section 7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter, its
directors, its officers and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
13
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus, as then
amended or supplemented, (so long as the Prospectus and any amendment or
supplemented thereto was provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages,
liabilities or judgements caused by any untrue statement or alleged untrue
statement of a material fact contained in the preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to such Underwriter but only with
reference to information relating to such Underwriter furnished in writing to
the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 7(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory
14
to the indemnified party or (iii) the named parties to any such action
(including any impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, in the case of parties
indemnified pursuant to Section 7(a), and by the Company, in the case of parties
indemnified pursuant to Section 7(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause 7(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in
15
the table on the cover page of the Prospectus. The relative fault of the
Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters and the parties relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective
principal amount of Securities purchased by each of the Underwriters hereunder
and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
Section 8. Conditions of Underwriters Obligations. The several
obligations of the Underwriters to purchase the Securities under this Agreement
are subject to the satisfaction of each of the following conditions on the
Closing Date and, as applicable, each Option Closing Date:
(a) All the representations and warranties of the Company contained in this
Agreement shall be true and correct on the Closing Date and each Option Closing
Date, if applicable, with the same force and effect as if made on and as of the
Closing Date or Option Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., New York City time, on the
date of this Agreement; and at the Closing Date or Option Closing Date, if
applicable, no stop order suspending the effectiveness of the
16
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission.
(c) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any securities of the Company (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any securities of the Company by any
such rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Securities than that on which the Securities were marketed.
(d) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, in their capacities as
the Chief Executive Officer and Chief Financial Officer of the Company,
confirming the matters set forth in Sections 6(y), 8(a), 8(b) and 8(c) and that
the Company has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by the
Company on or prior to the Closing Date or Option Closing Date, if applicable.
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations, whether or not arising in the ordinary
course of business, of the Company and its subsidiary, taken as a whole, (ii)
there shall not have been any change or any development involving a prospective
change in the capital stock or in the long-term debt of the Company or its
subsidiary and (iii) neither the Company nor its subsidiary shall have incurred
any liability or obligation, direct or contingent, the effect of which, in any
such case described in clause 8(e)(i), 8(e)(ii) or 8(e)(iii), in your judgment,
is material and adverse and, in your judgment, makes it impracticable to market
the Securities on the terms and in the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Underwriters), dated the Closing Date, of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, counsel for the Company, to the effect that:
(i) each of the Company and its subsidiary has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business as described in the Prospectus and to own, lease and
operate its properties;
17
(ii) each of the Company and its subsidiaries is duly qualified and is
in good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the Company
and its subsidiary, taken as a whole;
(iii) all the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights granted by the Company
under its Certificate of Incorporation or by-laws or any contract known to
such counsel;
(iv) all of the outstanding shares of capital stock of the Company's
subsidiary have been duly authorized and validly issued and are fully paid
and non-assessable, and are owned by the Company free and clear of any
Lien;
(v) the Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of this Agreement, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(vi) the Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability;
(vii) this Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company
enforceable in accordance with its terms (except as rights to indemnity and
contribution hereunder may be limited by applicable law);
(viii) the Registration Statement has become effective under the Act,
no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's knowledge
after due inquiry, pending before or contemplated by the Commission;
(ix) the statements under the captions "Management -- Director
Compensation", "-- Indemnification and Limitation of Liabilities",
"-- Stock Option Plans", "-- Employee Stock Ownership Plan" and
"-- Employment Agreements" in the Company's Annual Report for the year
ended September 30, 1997, "Shares Eligible For Future Sale" in
_________________, "Description of Capital Stock," "Description of
18
the Notes" and "Underwriting" in the Prospectus and Item 15 of Part II of
the Registration Statement, insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings;
(x) the statements under the caption "Certain United States Federal
Income Tax Considerations" in the Prospectus, insofar as such statements
constitute a summary of the United States federal tax laws referred to
therein, are accurate and fairly summarize in all material respects the
United States federal tax laws referred to therein;
(xi) neither the Company nor its subsidiary is in violation of its
respective charter or by-laws and, to the best of such counsel's knowledge
after due inquiry, neither the Company nor its subsidiary is in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiary,
taken as a whole, to which the Company or its subsidiary is a party or by
which the Company or its subsidiary or their respective property is bound;
(xii) the execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Company, the compliance by the Company
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (A) require any
consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as may be required
under the securities or Blue Sky laws of the various states), (B) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or its subsidiary or
any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken as a
whole, to which the Company or its subsidiary is a party or by which the
Company or its subsidiary or their respective property is bound, (C)
violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency
having jurisdiction over the Company, its subsidiary or their respective
property, (D) result in the imposition or creation of (or the obligation to
create or impose) a Lien under any agreement or instrument to which the
Company or its subsidiary is a party or by which the Company or its
subsidiary or their respective property is bound or (E) result in the
suspension, termination or revocation of any Authorization of the Company
or its subsidiary or any other impairment of the rights of the holder of
any such Authorization;
(xiii) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or its
subsidiary is or could be a party or to which any of their respective
property is or could be subject that are required to be described in the
Registration Statement or the Prospectus and are not so described, or of
any statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not so described
or filed as required;
19
(xiv) to the best of such counsel's knowledge, after due inquiry,
neither the Company nor its subsidiary has violated any Environmental Law,
any provisions of the Employee Retirement Income Security Act of 1974, as
amended, any federal or state law relating to discrimination in the hiring,
promotion or pay of employees or any federal or state wages and hours laws,
or any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operation of the
Company and its subsidiary, taken as a whole;
(xv) each of the Company and its subsidiary has such Authorizations
of, and has made all filings with and notices to, all governmental or
regulatory authorities and self-regulatory organizations and all courts and
other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure
to have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiary, taken as a whole; each such Authorization is
valid and in full force and effect and each of the Company and its
subsidiary is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies
having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time
or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or its subsidiary; except where such failure to
be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction would
not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiary, taken as a whole;
(xvi) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended;
(xvii) to the best of such counsel's knowledge after due inquiry,
there are no contracts, agreements or understandings between the Company
and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities
of the Company or to require the Company to include such securities with
the Securities registered pursuant to the Registration Statement other than
as disclosed in the Registration Statement; and
20
(xviii) (A) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied
or will comply when so filed in all material respects with the Exchange
Act; (B) the Registration Statement and the Prospectus and any supplement
or amendment thereto (except for the financial statements and other
financial data included therein as to which no opinion need be expressed)
comply as to form with the Act, (C) such counsel has no reason to believe
that at the time the Registration Statement became effective or on the date
of this Agreement, the Registration Statement and the prospectus included
therein (except for the financial statements and other financial data as to
which such counsel need not express any belief and except for that part of
the Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act) 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 and (D)
such counsel has no reason to believe that the Prospectus, as amended or
supplemented, if applicable (except for the financial statements and other
financial data, as aforesaid) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and the Prospectus is not materially different from
the prospectus included in the Registration Statement at the time of its
effectiveness (including the information (if any) deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A
under the Act).
The opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, described in Section 8(f) above shall be
rendered to you at the request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Underwriters, as to the
matters referred to in Sections 8(f)(v), 8(f)(vi), 8(f)(vii) and 8(f)(ix) (but
only with respect to the statements under the caption "Description of the Notes"
and "Underwriting") and clauses 8(f)(xviii)(C) and 8(f)(xviii)(D).
In giving such opinions with respect to the matters covered by Section
8(f)(xviii), ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ may state that their opinion and belief are based
upon their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents incorporated
therein by reference and review and discussion of the contents thereof, but is
without independent check or verification except as specified. In giving such
opinions with respect to the matters covered by clauses 8(f)(xviii)(C) and
8(f)(xviii)(D) above, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ may state that their opinion and
belief are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (other than
the documents incorporated therein by reference) and review and discussion of
the contents thereof (including the documents incorporated therein by
reference), but are without independent check or verification except as
specified.
(h) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from Price Waterhouse LLP, independent
public accountants, containing the information
21
and statements of the type ordinarily included in accountants' "comfort letters"
to Underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Registration
Statement and the Prospectus.
(i) The Securities shall have been duly listed for quotation on the Nasdaq
SmallCap Market.
(j) The Securities shall have been rated " " by [Standard & Poor's
Corporation] and " " by [▇▇▇▇▇'▇ Investors Service, Inc.]
(k) The Underwriters shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the Company and
the Trustee.
(l) The Company shall not have failed on or prior to the Closing Date of,
if applicable, the Option Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company on or prior to the Closing Date or Option Closing Date.
Section 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any adverse change or development
involving a prospective adverse change in the condition, financial or otherwise,
of the Company or its subsidiary or the earnings, affairs, or business prospects
of the Company or its subsidiary, whether or not arising in the ordinary course
of business, which would, in your judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Securities
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iv) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (v) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiary, taken as a whole, (vi) the declaration of a banking moratorium by
either federal or New York State authorities or (vii) the taking of any action
by any federal, state or local government or agency in respect of its monetary
or fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
22
If on the Closing Date or any Option Closing Date, if applicable, any one
or more of the Underwriters shall fail or refuse to purchase the Securities
which it or they have agreed to purchase hereunder on such date and the
aggregate principal amount of Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of Securities to be purchased on such date by
all Underwriters, each non-defaulting Underwriter shall be obligated severally,
in the proportion which the principal amount of Firm Securities set forth
opposite its name in Schedule I bears to the aggregate principal amount of
Securities which all the non-defaulting Underwriters have agreed to purchase, or
in such other proportion as you may specify, to purchase the Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the aggregate principal
amount of Securities which any Underwriter has agreed to purchase pursuant to
Section 2 hereof be increased pursuant to this Section 9 by an amount in excess
of one-ninth of such principal amount of Securities without the written consent
of such Underwriter. If on the Closing Date or an Option Closing Date, as the
case may be, any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Securities are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date or an Option
Closing Date, if applicable, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
Section 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to May &
▇▇▇▇, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ and (ii) if to any Underwriter or to you, to you c/▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 9), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses
23
(including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(j) hereof.
The Company also agrees to reimburse the several Underwriters, their directors
and officers and any persons controlling any of the Underwriters for any and all
fees and expenses (including, without limitation, the fees disbursements of
counsel) incurred by them in connection with enforcing their rights hereunder
(including, without limitation, pursuant to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Company's directors and the Company's officers who sign the
Registration Statement and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
24
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
MAY & ▇▇▇▇, INC.
By: ________________________________
Title:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
ABN AMRO INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: __________________________
25
SCHEDULE I
----------
Principal Amount
of Securities
Underwriters to be Purchased
-------------------------------------------------- --------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
ABN AMRO Incorporated
-------------
Total
=============
26