ALLIED DIGITAL, INC.
$100,000,000
[ ]% Senior Subordinated Notes Due 2008
Underwriting Agreement
[ ], 1998
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Allied Digital, Inc., a New York corporation (the "Issuer"), proposes
to issue and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), $100,000,000 principal amount of its [ ]% Senior
Subordinated Notes Due 2008 (the "Notes"). To the extent there are no additional
Underwriters listed on Schedule I other than you, the term Representatives as
used herein shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires.
The Senior Subordinated Notes will be fully and unconditionally guaranteed (the
"Guarantees" and, together with the Notes, the "Securities") as to payment of
principal, premium (if any) and interest by Allied Digital Technologies Corp.
("ADT"), HMG Digital Technologies Corp. and HRM Holdings Corp., each a Delaware
corporation, as guarantors (the "Guarantors"). The Securities will be issued
pursuant to the provisions of an Indenture to be dated as of [ ], 1998 among the
Issuer, the Guarantors and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee (the
"Trustee").
The Issuer and the Guarantors have 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 "Securities Act"), a
registration statement, including a prospectus, relating to the Securities. The
registration statement as amended at the time when it shall become effective,
or, if a post-effective amendment is filed with respect thereto, as amended by
such post-effective amendment at the time of its effectiveness, including in
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each case information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement", and the
prospectus in the form first used to confirm sales of Securities is referred to
in this Agreement as the "Prospectus". If the Issuer and the Guarantors have
filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-2 under the Securities Act, as of the effective date of the
Registration Statement or the date of such preliminary prospectus or the
Prospectus, as the case may be.
The Issuer and the Guarantors hereby agree with the Underwriters as
follows:
1. The Issuer and the Guarantors agree to issue and sell the Securities
to the several Underwriters as hereinafter provided, and each Underwriter, upon
the basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees to purchase, severally and not
jointly, from the Issuer and the Guarantors the respective principal amount of
Securities set forth opposite such Underwriter's name in Schedule I hereto at a
price equal to [ ]% of their principal amount plus accrued interest, if any,
from [ ], 1998 to the date of payment and delivery.
2. The Issuer and the Guarantors understand that the Underwriters
intend (i) to make a public offering of their respective portions of the
Securities as soon after (A) the Registration Statement has become effective and
(B) the parties hereto have executed and delivered this Agreement, as in the
judgment of the Representatives is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Issuer to the
Representatives on [ ], 1998, or at such other time on the same or
such other date, not later than the third Business Day thereafter, as the
Representatives and the Issuer may agree upon in writing. The time and date of
such payment is referred to herein as the "Closing Date". As used herein, the
term "Business Day" means any day other than a day on which banks are permitted
or required to be closed in New York City.
Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of the Securities of one or more global notes
(collectively, the "Global Note") representing the Securities, with any transfer
taxes payable in connection with the transfer to the Underwrit-
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ers of the Securities duly paid by the Issuer and the Guarantors. The Global
Note will be made available for inspection by the Representatives at the office
of ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date.
As compensation to the Underwriters for their commitments hereunder,
the Issuer will pay, or cause to be paid, to ▇.▇. ▇▇▇▇▇▇ Securities Inc., for
the accounts of the several Underwriters, an amount equal to [ ]% of the
principal amount of the Securities to be delivered by the Issuer and the
Guarantors hereunder on the Closing Date. On [ ], 1998, or on such
other date, no later than the third Business Day thereafter, as the
Representatives and the Issuer may agree upon in writing, the Issuer will pay or
cause to be paid, by wire transfer, in immediately available funds, such
commission to the account specified by ▇.▇. ▇▇▇▇▇▇ Securities Inc.
4. Each of the Issuer and the Guarantors, jointly and severally,
represents and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and each
preliminary prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant
to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act, and 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 light of the circumstances under which they were made, not
misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Issuer and the Guarantors in writing by such Underwriter through
the Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Issuer and the
Guarantors, threatened by the Commission; and the Registration
Statement and Prospectus (as amended or supplemented if the Issuer and
the Guarantors shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material
respects with the Securities Act and the Trust Indenture Act of 1939,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Trust Indenture Act") and do not and will not, as
of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the date of the Prospectus and any
amendment or supplement thereto, contain any untrue statement of a
material fact or omit to state any ma-
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terial fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date 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 foregoing representations and warranties shall not apply to (i)
that part of the Registration Statement which constitutes the Statement
of Eligibility and Qualification (Form T-1) of the Trustee under the
Trust Indenture Act, and (ii) statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Issuer and the Guarantors in writing by such Underwriter through
the Representatives expressly for use therein;
(c) the Issuer and the Guarantors meet the requirements for
use of Form S-2 under the Securities Act; the documents incorporated by
reference in the Prospectus, when they were filed with the Commission,
conformed in all material respects to the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange
Act") and none of such documents contained an 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 any further documents so filed and
incorporated by reference in the Prospectus, when such documents are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an 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;
(d) the financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the consolidated financial position of
ADT and its consolidated subsidiaries as of the dates indicated and the
results of their operations and the changes in their consolidated cash
flows for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly
the information required to be stated therein; and the pro forma
financial information, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the
Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as applica-
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ble and is based upon good faith estimates and assumptions believed by
the Issuer and the Guarantors to be reasonable;
(e) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of ADT or any of
its subsidiaries (including the Issuer, the "Subsidiaries"), or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or
results of operations of ADT and the Subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; and
except as set forth or contemplated in the Prospectus neither ADT nor
any of the Subsidiaries has entered into any transaction or agreement
(whether or not in the ordinary course of business) material to ADT and
the Subsidiaries taken as a whole;
(f) each of ADT and the Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of
its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a
material adverse effect on ADT and the Subsidiaries taken as a whole;
and all the outstanding shares of capital stock of ADT and each
Subsidiary have been duly authorized and validly issued, are fully-paid
and non-assessable, and, in the case of the Subsidiaries (except as
described in the Prospectus), are owned by ADT, directly or indirectly,
free and clear of all liens, encumbrances, security interests and
claims;
(g) this Agreement has been duly authorized, executed and
delivered by the Issuer and the Guarantors;
(h) the Notes have been duly authorized, and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
binding obligations of the Issuer entitled to the benefits provided by
the Indenture; the Guarantees have been duly authorized, and when
issued and delivered together with the Notes pursuant to this
Agreement, will have been duly executed, issued and delivered and will
constitute valid and binding obligations of the Guarantors entitled to
the benefits provided by the Indenture; the Indenture has been duly
authorized and upon effectiveness of the Registration Statement will
have been duly qualified
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under the Trust Indenture Act and, when executed and delivered by the
Issuer, the Guarantors and the Trustee, the Indenture will constitute a
valid and binding instrument; and the Securities and the Indenture will
conform to the descriptions thereof in the Prospectus;
(i) neither ADT nor any of the Subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or
in default under, (A) its Certificate of Incorporation or Articles of
Incorporation, as the case may be, or By-Laws or (B) any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which ADT or any of the Subsidiaries is a party or by
which it or any of them or any of their respective properties is bound,
except in the case of subclause (B), for violations and defaults which
individually and in the aggregate are not material to ADT and the
Subsidiaries taken as a whole or to the holders of the Securities;
(j) the issue and sale by the Issuer of the Notes and by the
Guarantors of the Guarantees and the performance by each of the Issuer
and the Guarantors of all of the provisions of its respective
obligations under the Securities, the Indenture and this Agreement and
the consummation of the transactions herein and therein contemplated
and of the Transactions as defined in the Registration Statement and
the Prospectus (the "Transactions") will not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which ADT or any of the Subsidiaries is a
party or by which ADT or any of the Subsidiaries is bound or to which
any of the property or assets of ADT or any of the Subsidiaries is
subject, nor will any such action result in any violation of the
provisions of the Certificate of Incorporation or Articles of
Incorporation, as the case may be, or the By-Laws of ADT or any of the
Subsidiaries or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over ADT, the Subsidiaries or any of their respective
properties;
(k) no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or
the consummation by the Issuer and the Guarantors of the Transactions
or the other transactions contemplated by this Agreement or the
Indenture, except such consents, approvals, authorizations, orders,
licenses, registrations or qualifications as have been obtained under
the Securities Act, the Trust Indenture Act and as may be required
under state securities or Blue Sky Laws in connection with the purchase
and distribution of the Securities by the Underwriters;
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(l) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of the Issuer and the
Guarantors, threatened against or affecting ADT or any of the
Subsidiaries or any of their respective properties or of which ADT or
any of the Subsidiaries is or may be a party or to which any property
of ADT or any of the Subsidiaries is or may be the subject which, if
determined adversely to ADT or any of the Subsidiaries, could
individually or in the aggregate have, or reasonably be expected to
have, a material adverse effect on the general affairs, business,
prospects, management, financial position, stockholders' equity or
results of operations of ADT and the Subsidiaries, taken as a whole,
and, to the best of the Issuer's and the Guarantors' knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others; and there are no statutes, regulations,
contracts or other documents that are required to be filed as an
exhibit to the Registration Statement or required to be described in
the Registration Statement or the Prospectus which are not filed or
described as required;
(m) ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (collectively,
the "Auditors"), who have certified certain financial statements of ADT
and its consolidated subsidiaries and delivered their reports with
respect to the audited consolidated financial statements included in
the Prospectus, are each independent public accountants as required by
the Securities Act;
(n) ADT and the Subsidiaries have good and marketable title in
fee simple to all items of real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described or
referred to in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made or
proposed to be made of such property by ADT and the Subsidiaries; and
any real property and buildings held under lease by ADT and the
Subsidiaries are held by them under valid, existing and enforceable
leases with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such property and buildings
by ADT or the Subsidiaries;
(o) no relationship, direct or indirect, exists between or
among ADT or any of the Subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of ADT or any
of the Subsidiaries on the other hand, which is required by the
Securities Act to be described in the Registration Statement and the
Prospectus which is not so described;
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(p) neither the Issuer nor any of the Guarantors is and, after
giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Prospectus,
neither will be an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(q) the Issuer and the Guarantors have complied with all
provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws
of Florida) relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba;
(r) ADT and the Subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and
have paid all taxes shown thereon and all assessments received by them
or any of them to the extent that such taxes have become due and are
not being contested in good faith; and, except as disclosed in the
Prospectus, there is no tax deficiency which has been or might
reasonably be expected to be asserted or threatened against ADT or any
Subsidiary;
(s) each of ADT and the Subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals,
domestic or foreign, necessary to own or lease, as the case may be, and
to operate its properties and to carry on its business as conducted as
of the date hereof, and neither ADT nor any such Subsidiary has
received any actual notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization, except as described in the
Registration Statement and the Prospectus; and each of ADT and the
Subsidiaries is in compliance with all laws and regulations relating to
the conduct of its business as conducted as of the date hereof;
(t) there are no existing or, to the best knowledge of the
Issuer and the Guarantors, threatened labor disputes with the employees
of ADT or any of the Subsidiaries which are likely to have a material
adverse effect on ADT and the Subsidiaries taken as a whole;
(u) ADT and each of the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in
which they are en-
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gaged; all policies of insurance and fidelity or surety bonds insuring
ADT or any of the Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; ADT and
the Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and neither ADT 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 have a material adverse
effect on ADT and the Subsidiaries, taken as a whole;
(v) ADT and the Subsidiaries own, possess, license or have
other rights to use, on reasonable terms, all material patents, patent
applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of each of ADT's and the Subsidiaries' business as now conducted or as
proposed in the Prospectus to be conducted;
(w) each of the Issuer and the Guarantors is in compliance
with the Commission's staff legal bulletin No. 5 dated October 8, 1997
related to Year 2000 compliance;
(x) ADT and the Subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on ADT and the Subsidiaries, taken as a whole;
and
(y) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by the
Issuer, the Guarantors or any of their respective affiliates for
employees or former employees of the Issuer and the Guarantors and
their respective affiliates has been maintained in compliance with its
terms and the requirements of any applicable statutes, orders, rules
and regulations, including but not limited to ERISA and
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the Internal Revenue Code of 1986, as amended ("Code"). No prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975
of the Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative
exemption. For each such plan which is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA no "accumulated funding
deficiency" as defined in Section 412 of the Code has been incurred,
whether or not waived, and the fair market value of the assets of each
such plan (excluding for these purposes accrued but unpaid
contributions) exceeded the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions.
5. Each of the Issuer and the Guarantors covenants and agrees with each
of the several Underwriters as follows:
(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, to file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act; and to furnish copies of the Prospectus to the
Underwriters in New York City prior to 10:00 a.m., New York City time,
on the Business Day next succeeding the date of this Agreement in such
quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Issuer and the
Guarantors, to the Representatives, three (3) signed copies of the
Registration Statement (as originally filed) and each amendment
thereto, in each case including exhibits and documents incorporated by
reference therein, and to each other Underwriter a conformed copy of
the Registration Statement (as originally filed) and each amendment
thereto, in each case without exhibits but including the documents
incorporated by reference therein and, during the period mentioned in
paragraph (e) below, to each of the Underwriters as many copies of the
Prospectus (including all amendments and supplements thereto) as the
Representatives may reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the
time the Registration Statement becomes effective, to furnish to the
Representatives a copy of the proposed amendment or supplement for
review and not to file any such proposed amendment or supplement to
which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm
such advice in writing, (i) when the Registration Statement has become
effective, (ii)
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when any amendment to the Registration Statement has been filed or
becomes effective, (iii) when any supplement to the Prospectus or any
amendment to the Prospectus has been filed and to furnish the
Representatives with copies thereof, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus or
the Prospectus or the initiation or threatening of any proceeding for
that purpose, (vi) of the occurrence of any event, within the period
referenced in paragraph (e) below, as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, and (vii) of
the receipt by the Issuer or the Guarantors of any notification with
respect to any suspension of the qualification of the Securities for
offer and sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and to use its best efforts to prevent
the issuance of any such stop order, or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any order suspending any such qualification of the Securities, or
notification of any such order thereof and, if issued, to obtain as
soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by law
to be delivered in connection with sales by an Underwriter or dealer,
any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement
the Prospectus to comply with law, forthwith to prepare and furnish, at
the expense of the Issuer and the Guarantors, to the Underwriters and
to the dealers (whose names and addresses the Representatives will
furnish to the Issuer and the Guarantors) to which Securities may have
been sold by the Representatives on behalf of the Underwriters and to
any other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus will comply with law;
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(f) to endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and to continue such
qualification in effect so long as reasonably required for distribution
of the Securities; provided that neither the Issuer nor the Guarantors
shall be required to file a general consent to service of process in
any jurisdiction;
(g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement which
will satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Commission promulgated thereunder covering a period of
at least twelve months beginning with the first fiscal quarter of the
Issuer and the Guarantors occurring after the "effective date" (as
defined in Rule 158) of the Registration Statement;
(h) so long as the Securities are outstanding, to furnish to
the Representatives copies of all reports or other communications
(financial or other) furnished to holders of the Securities, and copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange;
(i) during the period beginning on the date hereof and
continuing to and including the Business Day following the Closing
Date, not to offer, sell, contract to sell, or otherwise dispose of any
debt securities of or guaranteed by the Issuer or the Guarantors which
are substantially similar to the Securities;
(j) to use the net proceeds received by the Issuer from the
sale of the Securities pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds"; and
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
its obligations hereunder, including without limiting the generality of
the foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution, authentication and delivery of the Notes and the
Guarantees, including any expenses of the Trustee, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the
Securities under the laws of such jurisdictions as the Underwriters may
designate (including fees of counsel for the Underwriters and their
disbursements), (iv) related to any filing with the National
Association
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of Securities Dealers, Inc., (v) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Preliminary and Supplemental Blue Sky
Memoranda and any Legal Investment Survey and the furnishing to
Underwriters and dealers of copies of the Registration Statement and
the Prospectus, including mailing and shipping, as herein provided,
(vi) payable to rating agencies in connection with the rating of the
Securities, (vii) any expenses incurred by the Issuer and the
Guarantors in connection with a "road show" presentation to potential
investors and (viii) the cost and charges of any transfer agent.
6. The several obligations of the Underwriters hereunder to purchase
the Securities on the Closing Date are subject to the performance by each of the
Issuer and the Guarantors of its respective obligations hereunder and to the
following additional conditions:
(a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 P.M., New York City time, on the date
hereof; and no stop order suspending the effectiveness of the
Registration Statement or any post-affective amendment shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; the Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under
the Securities Act and in accordance with Section 5(a) hereof; and all
requests for additional information shall have been complied with to
the satisfaction of the Representatives;
(b) the representations and warranties of each of the Issuer
and the Guarantors contained herein are true and correct on and as of
the Closing Date as if made on and as of the Closing Date and each of
the Issuer and the Guarantors shall have complied with all agreements
and all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any
downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Issuer or the
Guarantors by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
-14-
(d) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the
capital stock or long-term debt of ADT or any of the Subsidiaries or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or
results of operations of ADT and the Subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the
effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the Closing Date on the terms and in the
manner contemplated in the Prospectus; and neither ADT nor any of the
Subsidiaries has sustained since the date of the latest audited
financial statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order to decree, otherwise
than as set forth or contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the
Closing Date a certificate of an executive officer of each of the
Issuer and the Guarantors, with specific knowledge about the financial
matters of the Issuer and the Guarantors, satisfactory to the
Representatives to the effect set forth in subsections (a) through (c)
(with respect to the respective representations, warranties, agreements
and conditions of the Issuer and the Guarantors) of this Section and to
the further effect that there has not occurred any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of ADT and the Subsidiaries taken as a whole from that set
forth or contemplated in the Registration Statement;
(f) ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ & Kuh, LLP, counsel for the Issuer and the Guarantors,
shall have furnished to the Representatives their written opinions,
dated the Closing Date, in form and substance satisfactory to the
Representatives, which opinions shall, in the aggregate, cover the
following:
(i) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
threatened;
-15-
(ii) such counsel is of the opinion that the
Registration Statement and the Prospectus and any amendments
and supplements thereto (other than the financial statements
included therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Trust Indenture Act
and believes that (other than the financial statements
included therein, as to which such counsel need express no
opinion, and other than that part of the Registration
Statement which constitutes the Form T-1 of the Trustee under
the Trust Indenture Act) the Registration Statement and the
prospectus included therein at the time the Registration
Statement became effective did 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 that the Prospectus, as
amended or supplemented, if applicable, does not contain any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(iii) each of ADT and the Subsidiaries has been duly
incorporated and is validly existing as a corporation under
the laws of its jurisdiction of incorporation with power and
authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus and has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified
and in good standing would not have a material adverse effect
on ADT and the Subsidiaries taken as a whole; and all of the
outstanding shares of capital stock of ADT and each Subsidiary
have been duly and validly authorized and issued, are fully
paid and non-assessable, and, in the case of the Subsidiaries
(except as otherwise set forth in the Prospectus), are owned
directly or indirectly by ADT, free and clear of all liens,
encumbrances, equities or claims;
(iv) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such
counsel's knowledge, threatened against or affecting ADT or
any of the Subsidiaries or any of their respective properties
or to which ADT or any of the Subsidiaries is or may be a
party or to which any property of ADT or the Subsidiaries is
or may be the subject which, if determined adversely to ADT or
any of the Subsidiaries, could individually or in the
aggregate have, or reasonably be expected to have, a material
adverse effect on the general affairs, business, prospects,
management, ▇▇▇▇▇-
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cial position, stockholders' equity or results of operations
of ADT and the Subsidiaries taken as a whole; to the best of
such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by
others; and such counsel does not know of any statutes,
regulations, contracts or other documents required to be
described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement that are not
described or filed as required;
(v) this Agreement has been duly authorized, executed
and delivered by the Issuer and the Guarantors;
(vi) the Notes have been duly authorized, executed
and delivered by the Issuer and, when they have been duly
authenticated in accordance with the terms of the Indenture
and the Securities have been delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement,
the Notes will constitute valid and binding obligations of the
Issuer entitled to the benefits provided by the Indenture;
(vii) the Guarantees have been duly authorized,
executed and delivered by the Guarantors, and when the Notes
have been duly authenticated in accordance with the terms of
the Indenture and the Securities have been delivered to and
paid for by the Underwriters in accordance with the terms of
this Agreement, the Guarantees will constitute valid and
binding obligations of the Guarantors entitled to the benefits
provided by the Indenture;
(viii) the Indenture has been duly authorized,
executed and delivered by the Issuer and the Guarantors and
constitutes a valid and binding instrument of each of the
Issuer and the Guarantors; and the Indenture has been duly
qualified under the Trust Indenture Act;
(ix) neither ADT nor any of the Subsidiaries is, or
with the giving of notice or lapse of time or both would be,
in violation of or in default under (A) its Certificate of
Incorporation or Articles of Incorporation, as the case may
be, or By-Laws or (B) any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which ADT or any of the Subsidiaries is a party or
by which it or any of them or any of their respective
properties is bound, except in the case of subclause (B), for
violations and defaults which individually and in the
aggregate are not material to ADT and the Subsidiaries taken
as a whole or to the holders of the Securities;
-17-
(x) the issue and sale by the Issuer of the Notes and
by the Guarantors of the Guarantees and the performance by
each of the Issuer and the Guarantors of its respective
obligations under the Securities, the Indenture and this
Agreement and the consummation of the transactions herein and
therein contemplated and of the Transactions will not conflict
with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
known to such counsel to which ADT or any of the Subsidiaries
is a party or by which ADT or any of the Subsidiaries is bound
or to which any of the property or assets of ADT or any of the
Subsidiaries is subject, nor will any such action result in
any violation of the provisions of the Certificate of
Incorporation or Articles of Incorporation, as the case may
be, or the By-Laws of the Issuer or the Guarantors or any
applicable law or statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over ADT, the Subsidiaries or any of their respective
properties;
(xi) no consent, approval, authorization, order,
license, registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Securities, or the consummation of the Transactions or
the other transactions contemplated by this Agreement or the
Indenture, except such consents, approvals, authorizations,
orders, licenses, registrations or qualifications as have been
obtained under the Securities Act and the Trust Indenture Act
and as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the
Securities by the Underwriters;
(xii) each of ADT and the Subsidiaries owns,
possesses or has obtained all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and
has made all declarations and filings with, all federal,
state, local and other governmental authorities (including
foreign regulatory agencies), all self-regulatory
organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to
operate its properties and to carry on its business as
conducted as of the date hereof, and such counsel has not
received any actual notice of any proceeding relating to
revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization,
except as described in the Registration Statement and the
Prospectus; and each of ADT and the Subsidiaries is in
compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date of the
Prospectus;
-18-
(xiii) ADT and the Subsidiaries have good and
marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and
defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and
proposed to be made of such property by ADT and the
Subsidiaries; and any real property and buildings held under
lease by ADT and the Subsidiaries are held by them under
valid, existing and enforceable leases with such exceptions as
are not material and do not interfere with the use made or
proposed to be made of such property and buildings by ADT or
the Subsidiaries; and
(xiv) each of ADT and the Subsidiaries is in
compliance with all Environmental Laws, except, in each case,
where noncompliance, individually or in the aggregate, would
not have a material adverse effect on ADT and the Subsidiaries
taken as a whole; there are no legal or governmental
proceedings pending or, to the knowledge of such counsel,
threatened against or affecting ADT or any of the Subsidiaries
under any Environmental Law which, individually or in the
aggregate, could reasonably be expected to have a material
adverse effect on ADT and the Subsidiaries taken as a whole;
(xv) ADT and the Subsidiaries own, possess, license
or have other rights to use all Intellectual Property
necessary for the conduct of each of ADT's and the
Subsidiaries' business as now conducted or as proposed in the
Prospectus to be conducted;
(xvi) the statements in the Prospectus under
"Business -- Legal Proceedings", "Description of Notes",
"Description of Credit Agreement" and "Underwriting" and in
the Registration Statement in Item 15, 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 or proceedings;
(xvii) neither the Issuer nor any of the Guarantors
is and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as
described in the Prospectus, neither will be an "investment
company" or an entity "controlled" by an "investment company",
as such terms are defined in the Investment Company Act;
(xviii) the documents incorporated by reference in
the Prospectus (other than the financial statements and
related schedules therein, as to which such counsel need
express no opinion), when they were filed with the Com-
-19-
ission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
of the Commission thereunder; and they have no reason to
believe that any of such documents, when such documents were
so filed, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading;
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and the States of New York and Delaware, to the extent
such counsel deems proper and to the extent specified in such opinion,
if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Issuer and
the Guarantors and certificates or other written statements of
officials of jurisdictions having custody of documents respecting the
corporate existence or good standing of the Issuer or the Guarantors.
The opinion of such counsel for the Issuer and the Guarantors shall
state that the opinion of any such other counsel upon which they relied
is in form satisfactory to such counsel and, in such counsel's opinion,
the Underwriters and they are justified in relying thereon. With
respect to the matters to be covered in subparagraph (ii) above counsel
may state their opinion and belief is based upon their participation in
the preparation of the Registration Statement and the Prospectus and
any amendment or supplement thereto (other than the documents
incorporated by reference therein) and review and discussion of the
contents thereof (including the documents incorporated by reference
therein) but is without independent check or verification except as
specified.
The opinions of ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & Kuh, LLP described above shall be rendered
to the Underwriters at the request of the Issuer and the Guarantors and
shall so state therein;
(g) on the effective date of the Registration Statement and
the effective date of the most recently filed post-effective amendment
to the Registration Statement and also on the Closing Date, each of the
Auditors shall have furnished to you letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to you,
containing statements and information of the type customarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus;
-20-
(h) substantially concurrent with or prior to the Closing Date
each of the Transactions shall have been completed as described in the
Registration Statement and the Prospectus;
(i) the Representatives shall have received on and as of the
Closing Date an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the
Underwriters, with respect to the validity of the Indenture, the Notes
and the Guarantees, the Registration Statement, the Prospectus and
other related matters as the Representatives may reasonably request,
and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
and
(j) on or prior to the Closing Date, each of the Issuer and
the Guarantors shall have furnished to the Representatives such further
certificates and documents as the Representatives shall reasonably
request.
7. The Issuer and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, the
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Issuer and the Guarantors
shall have furnished any amendments or supplements 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 or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Issuer and the Guarantors in
writing by such Underwriter through the Representatives expressly for use
therein.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Issuer, the Guarantors, their respective directors, their
respective officers who sign the Registration Statement and each person who
controls the Issuer or the Guarantors within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Issuer and the Guarantors to each Underwriter, but
only with reference to information relating to such Underwriter furnished to the
Issuer and the Guarantors in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.
-21-
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters
and such control persons of the Underwriters shall be designated in writing by
▇.▇. ▇▇▇▇▇▇ Securities Inc. and any such separate firm for the Issuer, the
Guarantors, their respective directors, their respective officers who sign the
Registration Statement and such control persons of the Issuer and the Guarantors
shall be designated in writing by the Guarantors. The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
-22-
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuer and the Guarantors 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 (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 (i) above but also the relative fault of the Issuer and
the Guarantors on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer and the Guarantors on the one hand and
the Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Issuer and the total underwriting discounts and the commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities. The relative fault of the Issuer and the Guarantors on the one hand
and the Underwriters on the other 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 Issuer and the Guarantors or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Issuer, the Guarantors and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter 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 that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The
-23-
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective principal amount of Securities set forth
opposite their names in Schedule I hereto, and not joint.
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 of in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of each of the Issuer and the Guarantors
set forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Issuer or the Guarantors, their respective officers or
directors or any other person controlling the Issuer or the Guarantors and (iii)
acceptance of and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representatives, by notice given to
the Issuer and the Guarantors, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Issuer or the Guarantors shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives, makes
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase 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 the
Securities to be purchased on such date, the other Underwriters
-24-
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the
Representatives 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 principal amount of Securities that
any Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by an amount in excess of one-tenth of such principal
amount of Securities without the written consent of such Underwriter. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Securities which it or they have agreed to purchase hereunder on such date, 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 on such date, and arrangements satisfactory to the Representatives
and the Issuer for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter, the Issuer or the Guarantors. In any such
case either you or the Issuer shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Issuer or the
Guarantors to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Issuer or the Guarantors shall be unable to
perform its obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled, the Issuer and the Guarantors
agree, jointly and severally, to reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Issuer, the Guarantors, the Underwriters, any controlling persons referred
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
-25-
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by ▇.▇. ▇▇▇▇▇▇ Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
▇.▇. ▇▇▇▇▇▇ Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (telefax: [(▇▇▇) ▇▇▇-▇▇▇▇]); Attention: Syndicate Department.
Notices to each of the Issuer and the Guarantors shall be given to it at Allied
Digital Technologies Corp., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (telefax: (516)
232-5370); Attention: [ ].
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.
-26-
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
ALLIED DIGITAL, INC.
By:
-------------------------------
Name:
Title:
ALLIED DIGITAL TECHNOLOGIES CORP.
HMG DIGITAL TECHNOLOGIES CORP.
HRM HOLDINGS CORP.
By:
-------------------------------
Name:
Title:
-27-
Accepted: [ ], 1998
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Acting severally on behalf of
themselves and the several Underwriters
listed in Schedule I hereto.
By: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
By:
-----------------------------------
Name:
Title:
SCHEDULE I
----------
Principal Amount
of Securities
Underwriters to be Purchased
------------ ---------------
▇.▇. ▇▇▇▇▇▇ Securities Inc......................... $
Bear, ▇▇▇▇▇▇▇ & Co. Inc............................ $
-----------
Total..................................... $100,000,000
===========