1
EXHIBIT 1.1
WF&G Draft
3/6/97
2,275,000 Shares
▇▇▇▇▇▇ INCORPORATED
(Common Stock $.001 Par Value)
UNDERWRITING AGREEMENT
__________, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INC.
As Representatives of the several Underwriters
named in Schedule A hereto
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
1. Introductory. ▇▇▇▇▇▇ Incorporated, a Nevada corporation
(the "Company"), proposes to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters," or,
each, an "Underwriter"), an aggregate of 2,275,000 shares of Common Stock,
$.001 par value per share (the "Common Stock"), of the Company. The aggregate
of 2,275,000 shares so proposed to be sold is hereinafter referred to as the
"Firm Stock." The Company also proposes to sell to the Underwriters, upon the
terms and conditions set forth in Section 3 hereof, up to an additional 341,250
shares of Common Stock (the "Option Stock"). The Firm Stock and the Option
Stock are hereinafter collectively referred to as the "Stock." Ladenburg
▇▇▇▇▇▇▇▇ & Co. Inc. ("Ladenburg") and ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Inc.
("Stifel") are acting as representatives of the several Underwriters and in
such capacity are hereinafter referred to as the "Representatives."
2. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, the several Underwriters
that:
(a) A registration statement on Form S-1
(File No. 333-________) in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective with
respect to the Stock, including any pre-effective prospectuses
included as part of the registration statement as originally
filed or as part of
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any amendment or supplement thereto, or filed pursuant to Rule
424 under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder, copies of which have heretofore
been delivered to you, has been carefully prepared by the
Company in conformity with the requirements of the Securities
Act and has been filed with the Commission under the
Securities Act; one or more amendments to such registration
statement, including in each case an amended pre-effective
prospectus, copies of which amendments have heretofore been
delivered to you, have been so prepared and filed. Such
registration statement is referred to hereinafter as the
"Registration Statement." If it is contemplated, at the time
this Agreement is executed, that a post-effective amendment to
the Registration Statement will be filed and must be declared
effective before the offering of the Stock may commence, the
term "Registration Statement" as used in this Agreement means
the Registration Statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this
Agreement shall also include any registration statement
relating to the Stock that is filed and declared effective
pursuant to Rule 462(b) under the Securities Act. The term
"Prospectus" as used in this Agreement means the prospectus in
the form included in the Registration Statement, or, (A) if
the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act
and such information is included in a prospectus filed with
the Commission pursuant to Rule 424(b) under the Securities
Act, the term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement
as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant
to Rule 424(b) and (B) if prospectuses that meet the
requirements of Section 10(a) of the Securities Act are
delivered pursuant to Rule 434 under the Securities Act, then
(i) the term "Prospectus" as used in this Agreement means the
"prospectus subject to completion" (as such term is defined in
Rule 434(g) under the Securities Act) as supplemented by (a)
the addition of Rule 430A information or other information
contained in the form of prospectus delivered pursuant to Rule
434(b)(2) under the Securities Act or (b) the information
contained in the term sheets described in Rule 434(b)(3) under
the Securities Act, and (ii) the date of such prospectuses
shall be deemed to be the date of the term sheets. The term
"Pre- Effective Prospectus" as used in this Agreement means
the prospectus subject to completion in the form included in
the Registration Statement at the time of the initial filing
of the
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Registration Statement with the Commission, and as such
prospectus shall have been amended from time to time prior to
the date of the Prospectus.
(b) The Commission has not issued or
threatened to issue any order preventing or suspending the use
of any Pre-Effective Prospectus, and, at its date of issue,
each Pre-Effective Prospectus conformed in all material
respects with the requirements of the Securities Act and did
not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and,
when the Registration Statement becomes effective and at all
times subsequent thereto up to and including the Closing Date,
the Registration Statement and the Prospectus and any
amendments or supplements thereto contained and will contain
all material statements and information required to be
included therein by the Securities Act and conformed and will
conform in all material respects to the requirements of the
Securities Act and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included
or will include any untrue statement of a material fact or
omit to state any 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, however, that the foregoing representations,
warranties and agreements shall not apply to information
contained in or omitted from any Pre-Effective Prospectus or
the Registration Statement or the Prospectus or any such
amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company
by or on behalf of any Underwriter, directly or through you,
specifically for use in the preparation thereof; there is no
franchise, lease, contract, agreement or document required to
be described in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which is
not described or filed therein as required; and all
descriptions of any such franchises, leases, contracts,
agreements or documents contained in the Registration
Statement are accurate and complete descriptions of such
documents in all material respects.
(c) Subsequent to the respective dates
as of which information is given in the Registration Statement
and Prospectus, and except as set forth or contemplated in the
Prospectus, neither the Company nor any of its subsidiaries
has incurred any liabilities or obligations, direct or
contingent, nor entered into any transactions not in the
ordinary course of business, and
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there has not been any material adverse change in the
condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of
the Company and its subsidiaries considered as a whole, or any
change in the capital stock, short-term or long-term debt of
the Company and its subsidiaries considered as a whole (as
used herein, "subsidiaries" shall include any entities in
which the Company owns, directly or indirectly, any
partnership or other equity interest).
(d) The financial statements, together
with the related notes and schedules, set forth in the
Prospectus and elsewhere in the Registration Statement fairly
present, on the basis stated in the Registration Statement,
the financial position and the results of operations and
changes in financial position of the Company and its
consolidated subsidiaries at the respective dates or for the
respective periods therein specified. Such statements and
related notes and schedules have been prepared in accordance
with generally accepted accounting principles applied on a
consistent basis except as may be set forth in the Prospectus.
The selected financial and statistical data set forth in the
Prospectus under the caption "SELECTED COMBINED AND PRO FORMA
FINANCIAL AND OPERATING INFORMATION" fairly present, on the
basis stated in the Registration Statement, the information
set forth therein.
(e) KPMG Peat Marwick LLP, who have
expressed their opinions on the audited financial statements
and related schedules included in the Registration Statement
and the Prospectus, are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(f) The Company and each of its
subsidiaries have been duly organized and are validly existing
and in good standing as corporations, partnerships or limited
liability companies, under the laws of their respective
jurisdictions of organization, with power and authority
(corporate and other) to own or lease, as applicable, their
properties and to conduct their businesses as described in the
Prospectus; the Company is, and each of its subsidiaries are,
in possession of and operating in compliance with all
franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders required for the
conduct of its business, all of which are valid and in full
force and effect; and the Company is, and each of such
subsidiaries are, duly qualified to do business and in good
standing as foreign corporations, partnerships or limited
liability companies in all other jurisdictions where their
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ownership or leasing of properties or the conduct of their
businesses requires such qualification. The Company and each
of its subsidiaries have all requisite power and authority,
and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and
from all public regulatory or governmental agencies and bodies
to own, lease and operate its properties and conduct its
business as now being conducted and as described in the
Registration Statement and the Prospectus, and no such
consent, approval, authorization, order, registration,
qualification, license or permit contains a materially
burdensome restriction not adequately disclosed in the
Registration Statement and the Prospectus. The Company owns
or controls, directly or indirectly, only the corporations,
partnerships, limited liability companies, associations or
other entities listed on Schedule B hereto.
(g) The Company's authorized and
outstanding capital stock is on the date hereof, and will be
on the Closing Date, as set forth under the heading
"Capitalization" in the Prospectus; the outstanding shares of
Common Stock conform to the description thereof in the
Prospectus and have been duly authorized and validly issued
and are fully paid and nonassessable and have been issued in
compliance with all federal and state securities laws and were
not issued in violation of or subject to any preemptive rights
or similar rights to subscribe for or purchase securities and
conform to the description thereof contained in the
Prospectus. Except as disclosed in or contemplated by the
Prospectus and the financial statements of the Company and
related notes thereto included in the Prospectus, the Company
does not have outstanding any options or warrants to purchase,
or any preemptive rights or other rights to subscribe for or
to purchase, any securities or obligations convertible into,
or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible
securities or obligations. The description of the Company's
stock option and other stock plans or arrangements, and the
options or other rights granted or exercised thereunder, as
set forth in the Prospectus, accurately and fairly presents
the information required to be shown with respect to such
plans, arrangements, options and rights. All outstanding
shares of capital stock, partnership interests, membership
interests or other equity interests of each subsidiary have
been duly authorized and validly issued, and are fully paid
and nonassessable and are owned directly by the Company or by
another wholly owned subsidiary of the Company free and clear
of any liens, encumbrances, equities or claims.
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(h) The shares of Stock to be issued and
sold by the Company to the Underwriters hereunder (including
the Option Stock) have been duly and validly authorized and,
when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid and
nonassessable and free of any preemptive or similar rights and
will conform to the description thereof in the Prospectus.
The shares of Common Stock issuable upon exercise of the
Warrants (as hereinafter defined) have been properly reserved
for the event of exercise of the Warrants and have been duly
and validly authorized and, when issued and delivered against
payment therefor in accordance with the terms thereof, will be
duly and validly issued, fully paid and nonassessable and free
of any preemptive or similar rights.
(i) Except as set forth in the
Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries or
affiliates is a party or of which any property of the Company
or any subsidiary or affiliate is subject, which, if
determined adversely to the Company or any such subsidiary or
affiliate, might individually or in the aggregate (i) prevent
or adversely affect the transactions contemplated by this
Agreement, (ii) suspend the effectiveness of the Registration
Statement, (iii) prevent or suspend the use of the
Pre-Effective Prospectus in any jurisdiction or (iv) result in
a material adverse change in the condition (financial or
otherwise), properties, business, management, prospects, net
worth or results of operations of the Company and its
subsidiaries considered as a whole; and to the best of the
Company's knowledge no such proceedings are threatened or
contemplated against the Company or any subsidiary or
affiliate by governmental authorities or others. Neither the
Company nor any of its subsidiaries is a party or subject to
the provisions of any material injunction, judgment, decree or
order of any court, regulatory body or other governmental
agency or body. The description of the Company's litigation
under the heading "Business--Legal Proceedings" in the
Prospectus is true and correct and complies with the Rules and
Regulations.
(j) The execution, delivery and
performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach
or violation of any of the terms or provisions of or
constitute a default under any indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by
which it or any of them or any of their properties is or may
be bound, the
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Certificate of Incorporation, By-laws or other organizational
documents of the Company or any of its subsidiaries, or any
law, order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties or will result in
the creation of a lien.
(k) No consent, approval, authorization
or order of any court or governmental agency or body is
required for the consummation by the Company of the
transactions contemplated by this Agreement, except such as
may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or under the Securities Act or the
securities or "Blue Sky" laws of any jurisdiction in
connection with the purchase and distribution of the Stock by
the Underwriters.
(l) The Company has the full corporate
power and authority to enter into this Agreement and to
perform its obligations hereunder (including to issue, sell
and deliver the Stock), and this Agreement has been duly and
validly authorized, executed and delivered by the Company and
is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to
the extent that rights to indemnity and contribution hereunder
may be limited by federal or state securities laws or the
public policy underlying such laws. The Company has the full
corporate power and authority to execute and deliver the
Warrants on the terms and conditions set forth in this
Agreement and in the Warrants, and such execution and delivery
of the Warrants has been duly and validly authorized. When
executed and delivered pursuant to this Agreement, the
Warrants will be enforceable against the Company in accordance
with their terms.
(m) The Company and its subsidiaries are
in all material respects in compliance with, and conduct their
businesses in conformity with, all applicable federal, state,
local and foreign laws, rules and regulations of each court or
governmental agency or body having jurisdiction over the
Company and its subsidiaries; to the knowledge of the Company,
otherwise than as set forth in the Registration Statement and
the Prospectus, no prospective change in any of such federal
or state laws, rules or regulations has been adopted which,
when made effective, would have a material adverse effect on
the operations of the Company and its subsidiaries.
(n) The Company, its subsidiaries and
its stockholders have filed all necessary federal, state,
local and foreign income, payroll, franchise and other
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tax returns and have paid all taxes shown as due thereon or
with respect to any of the properties of the Company or any
subsidiary, and there is no tax deficiency that has been, or
to the knowledge of the Company is likely to be, asserted
against the Company, any of its subsidiaries or stockholders,
or any of their respective properties or assets that would
adversely affect the financial position, business or
operations of the Company and its subsidiaries.
(o) No person or entity has the right to
require registration of shares of Common Stock or other
securities of the Company because of the filing or
effectiveness of the Registration Statement or otherwise,
except for persons and entities who have expressly waived such
right or who have been given proper notice and have failed to
exercise such right within the time or times required under
the terms and conditions of such right.
(p) Neither the Company nor any of its
officers, directors or affiliates has taken or will take,
directly or indirectly, any action designed or intended to
stabilize or manipulate the price of any security of the
Company, or which caused or resulted in, or which might in the
future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of
the Company.
(q) The Company has provided you with
all financial statements of the Company and its consolidated
subsidiaries since January 1, 1992 to the date hereof that are
available to the officers of the Company.
(r) The Company and its subsidiaries own
or possess all patents, trademarks, trademark registrations,
service marks, service ▇▇▇▇ registrations, tradenames,
copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or any of
them or necessary for the conduct of their respective
businesses, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of
the Company and its subsidiaries with respect to the
foregoing. The Company's business as now conducted and as
proposed to be conducted does not and will not infringe or
conflict with any patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses or other
intellectual property or franchise right of any person. No
claim has been made against the Company alleging the
infringement by the Company of any patent, trademark, service
▇▇▇▇, tradename, copyright, trade secret, license in or other
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intellectual property right or franchise right of any person.
(s) Each of the Company and its
subsidiaries has performed all material obligations required
to be performed by it under any indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to
which it is a party or by which it or any of its properties is
or may be bound, and neither the Company nor any of its
subsidiaries nor any other party to such indenture, mortgage,
deed of trust, note agreement or other agreement or instrument
is in default under or in breach of any such obligations.
Neither the Company nor any of its subsidiaries has received
any notice of such default or breach.
(t) The Company is not involved in any
labor dispute nor is any such dispute threatened. The Company
is not aware that (A) any executive, key employee or
significant group of employees of the Company or any
subsidiary plans to terminate employment with the Company or
any such subsidiary or (B) any such executive or key employee
is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the
Company and its subsidiaries. Neither the Company nor any
subsidiary has or expects to have any liability for any
prohibited transaction or funding deficiency or any complete
or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
to which the Company or any subsidiary makes or ever has made
a contribution and in which any employee of the Company or any
subsidiary is or has ever been a participant. With respect to
such plans, the Company and each subsidiary are in compliance
in all material respects with all applicable provisions of
ERISA.
(u) The Company has obtained the written
agreement described in Section 8(j) of this Agreement from
each of its officers, directors and holders of Common Stock.
(v) The Company and its subsidiaries
have, and as of the Closing Date will have, good and
marketable title in fee simple to all real property owned by
it and good and marketable title to all personal property
owned or proposed to be owned by them which is material to the
business of the Company or of its subsidiaries, in each case
free and clear of all liens, encumbrances and defects except
such as are described the Prospectus or such as do not affect
the
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value of such property or interfere with the use made or
proposed to be made of such property by the Company and its
subsidiaries; and any agreements pursuant to which the Company
and its subsidiaries have a right to acquire real property
are, and will be as of the Closing Date, duly and validly
authorized, executed and delivered by the parties thereto, are
not subject to termination by any act of the sellers of such
real property and are enforceable against the respective
sellers in accordance with their terms; and any real property
and buildings held under lease by the Company and its
subsidiaries are, and will be as of the Closing Date, held by
them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the
use made and proposed to be made of such real property and
buildings by the Company and its subsidiaries, in each case
except as described in or contemplated by the Prospectus.
(w) The Company and its subsidiaries are
insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are
customary in the businesses in which they are engaged as
described in the Prospectus; and neither the Company nor any
subsidiary of the Company 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 their
business at a cost that would not materially and adversely
affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries
considered as a whole, except as described in or contemplated
by the Prospectus.
(x) Other than as contemplated by this
Agreement, there is no broker, finder or other party that is
entitled to receive from the Company any brokerage or finder's
fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(y) The Company has complied with all
provisions of Florida Statutes Section 517.075 (Chapter
92-198; Laws of Florida).
(z) There is no claim pending or
threatened or, to the best knowledge of the Company,
contemplated under any Environmental Law (as defined below)
against the Company or any Subsidiary which, if adversely
determined, might be reasonably likely to have a material
adverse effect on the condition (financial or other),
business, properties, prospects, net worth or results of
operations of the Company and its
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subsidiaries taken as a whole; there are no past or present
actions or conditions, including without limitation the
release of any Hazardous Material (as defined below) regulated
under any Environmental Law, that are likely to form the basis
of any such claim under existing law against the Company or
any of its subsidiaries which, if adversely determined, might
be reasonably likely to have a material adverse effect on the
condition (financial or other), business, properties,
prospects, net worth or results of operations of the Company
and its subsidiaries taken as a whole; there are no costs or
liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any
potential liabilities to third parties) that might be
reasonably likely, singly or in the aggregate, to have a
material adverse effect on the condition (financial or other),
business, properties, prospects, net worth or results of
operations of the Company and the subsidiaries taken as a
whole; and there are no events, conditions, contingencies or
occurrences of environmental nature that have resulted or
could reasonably be expected to result in any material
expenditure, impairment to development, operation or use of
any real property referred to in the Prospectus or to
otherwise have a material adverse effect on the Company or its
subsidiaries.
The Company has provided copies to the
Representatives or their counsel of all written reports of
environmental studies, assessments, audits, tests or other
investigations of the real property referred to in the
Prospectus within its or its subsidiaries' possession, custody
or control.
As used herein, "Hazardous Material" shall
include, without limitation, any and all flammable explosives,
radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, or related materials, asbestos,
polychlorinated biphenyls ("PCBs"), petroleum products and
by-products and substances defined or listed as "hazardous
substances," "toxic substances," "hazardous waste," or
"hazardous materials" in any federal, state or local
Environmental Law. As used herein, "Environmental Law" shall
mean all laws, regulations or ordinances of any federal, state
or local governmental authority having or claiming
jurisdiction over the Company, its subsidiaries or any of the
real property referred to in the Prospectus that are designed
to protect public health and the environment or regulate the
handling of Hazardous
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Materials, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. Section 9601 et seq.) ("CERCLA"),
the Hazardous Material Transportation Act, as amended (49
U.S.C. Section 1801 et seq.), the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 et seq.),
the Federal Water Pollution Control Act, as amended (33 U.S.C.
Section 1251 et seq.), and the Clear Air Act, as amended (42
U.S.C. Section 7401 et seq.), and any and all analogous
federal, state or local laws.
(aa) The Company and each of its
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(bb) To the Company's knowledge, neither
the Company nor any of its subsidiaries nor any employee or
agent of the Company or any of its subsidiaries has made any
payment of funds of the Company or any of its subsidiaries or
received or retained any funds in violation of any law, rule
or regulation.
(cc) Neither the Company nor any of its
subsidiaries is 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.
(dd) 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 as to the matters
covered thereby.
3. Purchase by, and Sale and Delivery to,
Underwriters--Closing Dates. The Company agrees to sell to the Underwriters
the Firm Stock, and on the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Underwriters agree, severally and not jointly, to purchase the
Firm Stock from the Company, the number of shares of Firm Stock to be purchased
by each Underwriter being set opposite
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its name in Schedule A, subject to adjustment in accordance with Section 12
hereof.
The purchase price per share to be paid by the Underwriters to the
Company will be $_________ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives
for the respective accounts of the several Underwriters (in the form of
definitive certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or
prior to 12:00 noon, New York City time, on the second full business day
preceding the First Closing Date (as defined below) or, if no such direction is
received, in the names of the respective Underwriters or in such other names as
Ladenburg may designate (solely for the purpose of administrative convenience)
and in such denominations as Ladenburg may determine), against payment of the
aggregate Purchase Price therefor by certified or official bank check or checks
in Clearing House funds (next day funds), payable to the order of the Company,
all at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, One Citicorp Center, ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The time and date of the delivery and
closing shall be at 10:00 A.M., New York City time, on ________, 1997, in
accordance with Rule 15c6-1 of the Securities Exchange Act of ▇▇▇▇ (▇▇▇
"▇▇▇▇▇▇▇▇ ▇▇▇"). The time and date of such payment and delivery are herein
referred to as the "First Closing Date." The First Closing Date and the
location of delivery of, and the form of payment for, the Firm Stock may be
varied by agreement between the Company and Ladenburg. The First Closing Date
may be postponed pursuant to the provisions of Section 12.
The Company shall make the certificates for the Stock
available to the Representatives for examination on behalf of the Underwriters
not later than 10:00 A.M., New York City time, on the business day preceding
the First Closing Date at the offices of Ladenburg, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
It is understood that Ladenburg or Stifel, individually and
not as Representatives of the several Underwriters, may (but shall not be
obligated to) make payment to the Company on behalf of any Underwriter or
Underwriters, for the Stock to be purchased by such Underwriter or
Underwriters. Any such payment by Ladenburg or Stifel shall not relieve such
Underwriter or Underwriters from any of its or their other obligations
hereunder.
The several Underwriters agree to make an initial public
offering of the Firm Stock at the initial public offering price as soon after
the effectiveness of the Registration Statement as in their judgment is
advisable. The Representatives shall promptly advise the Company of the making
of the initial public offering.
For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Stock as
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contemplated by the Prospectus, the Company hereby grants to the Underwriters
an option to purchase, severally and not jointly, the Option Stock. The price
per share to be paid for the Option Stock shall be the Purchase Price. The
option granted hereby may be exercised as to all or any part of the Option
Stock at any time, and from time to time, not more than thirty (30) days
subsequent to the effective date of this Agreement. No Option Stock shall be
sold and delivered unless the Firm Stock previously has been, or simultaneously
is, sold and delivered. The right to purchase the Option Stock or any portion
thereof may be surrendered and terminated at any time upon notice by the
Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters
by giving written notice from Ladenburg to the Company setting forth the number
of shares of the Option Stock to be purchased by them and the date and time for
delivery of and payment for the Option Stock. Each date and time for delivery
of and payment for the Option Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event
be earlier than two (2) business days nor later than ten (10) business days
after written notice is given. (The Option Closing Date and the First Closing
Date are herein called the "Closing Dates.") All purchases of Option Stock
from the Company shall be made on a pro rata basis. Option Stock shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Stock set forth opposite such Underwriter's name in
Schedule A hereto bears to the total number of shares of Firm Stock (subject to
adjustment by the Underwriters to eliminate odd lots). Upon exercise of the
option by the Underwriters, the Company agrees to sell to the Underwriters the
number of shares of Option Stock set forth in the written notice of exercise
and the Underwriters agree, severally and not jointly and subject to the terms
and conditions herein set forth, to purchase the number of such shares
determined as aforesaid.
The Company will deliver the Option Stock to the Underwriters
(in the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 noon, New York City time, on the second full
business day preceding the Option Closing Date or, if no such direction is
received, in the names of the respective Underwriters or in such other names as
Ladenburg may designate (solely for the purpose of administrative convenience)
and in such denominations as Ladenburg may determine), against payment of the
aggregate Purchase Price therefor by certified or official bank check or checks
in Clearing House funds (next day funds), payable to the order of the Company
all at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, One Citicorp Center, ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Company shall make the
certificates for the Option Stock available to the Underwriters for examination
not later than 10:00 A.M., New York City time, on the business day preceding
the Option Closing Date at the offices of Ladenburg, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇
-▇▇-
▇▇
▇▇▇▇ ▇▇▇▇▇. The Option Closing Date and the location of delivery of, and the
form of payment for, the Option Stock may be varied by agreement between the
Company and Ladenburg. The Option Closing Date may be postponed pursuant to
the provisions of Section 12.
In order to induce you to enter into this Agreement, the
Company, in consideration of the receipt of $[___] for each Warrant and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, shall execute and deliver to you, in your individual capacity and
not as Representatives, or your assignees, in compliance with the rules of the
NASD, warrants exercisable during the five-year period commencing ___________,
1997 (the "Warrants") to purchase an aggregate of 227,500 shares of Common
Stock at an exercise price per share equal to 120% of the initial public
offering price set forth on the cover page of the Prospectus. The Warrants
shall be in the form of Exhibit 4.2 to the Registration Statement. Execution
and delivery of Warrants, registered in your name or the names of such of your
officers or such assignees as you shall notify the Company in writing, shall be
made to you, at your offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
at the First Closing Date. The cost of original issue tax stamps, if any, in
connection with the execution and delivery of the Warrants shall be borne by
the Company.
4. Covenants and Agreements of the Company. The Company
covenants and agrees with the several Underwriters that:
(a) The Company will (i) if the Company
and the Representatives have determined not to proceed
pursuant to Rule 430A, use its best efforts to cause the
Registration Statement to become effective, (ii) if the
Company and the Representatives have determined to proceed
pursuant to Rule 430A, use its best efforts to comply with the
provisions of and make all requisite filings with the
Commission pursuant to Rule 430A and Rule 424 of the Rules and
Regulations and (iii) if the Company and the Representatives
have determined to deliver Prospectuses pursuant to Rule 434
of the Rules and Regulations, to use its best efforts to
comply with all the applicable provisions thereof. The
Company will advise the Representatives promptly as to the
time at which the Registration Statement becomes effective,
will advise the Representatives promptly of the issuance by
the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the institution of any
proceedings for that purpose, and will use its best efforts to
prevent the issuance of any such stop order and to obtain as
soon as possible the lifting thereof, if issued. The Company
will advise the Representatives promptly of the receipt of any
comments of the Commission or any request by the Commission
for any amendment of or supplement to the Registration
Statement or the Prospectus or for additional
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information and will not at any time file any amendment to the
Registration Statement or supplement to the Prospectus which
shall not previously have been submitted to the
Representatives a reasonable time prior to the proposed filing
thereof or to which the Representatives shall reasonably
object in writing or which is not in compliance with the
Securities Act and the Rules and Regulations.
(b) The Company will prepare and file
with the Commission, promptly upon the request of the
Representatives, any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion
of the Representatives may be necessary to enable the several
Underwriters to continue the distribution of the Stock and
will use its best efforts to cause the same to become
effective as promptly as possible.
(c) If at any time after the effective
date of the Registration Statement when a prospectus relating
to the Stock is required to be delivered under the Securities
Act any event relating to or affecting the Company or any of
its subsidiaries occurs as a result of which the Prospectus or
any other prospectus as then in effect would include an untrue
statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or
if it is necessary at any time to amend the Prospectus to
comply with the Securities Act, the Company will promptly
notify the Representatives thereof and will prepare an amended
or supplemented prospectus which will correct such statement
or omission; and in case any Underwriter is required to
deliver a prospectus relating to the Stock nine (9) months or
more after the effective date of the Registration Statement,
the Company upon the request of the Representatives and at the
expense of such Underwriter will prepare promptly such
prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the
Securities Act.
(d) The Company will deliver to the
Representatives, at or before the Closing Dates, signed copies
of the Registration Statement, as originally filed with the
Commission, and all amendments thereto including all financial
statements and exhibits thereto and will deliver to the
Representatives such number of copies of the Registration
Statement, including such financial statements but without
exhibits, and all amendments thereto, as the Representatives
may reasonably request. The Company will deliver or mail to
or upon the order of the Representatives, from time to
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time until the effective date of the Registration Statement,
as many copies of the Pre-Effective Prospectus as the
Representatives may reasonably request. The Company will
deliver or mail to or upon the order of the Representatives on
the date of the initial public offering, and thereafter from
time to time during the period when delivery of a prospectus
relating to the Stock is required under the Securities Act, as
many copies of the Prospectus, in final form or as thereafter
amended or supplemented, as the Representatives may reasonably
request; provided, however, that the expense of the
preparation and delivery of any prospectus required for use
nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters
required to deliver such prospectus.
(e) The Company will make generally
available to its stockholders as soon as practicable, but not
later than fifteen (15) months after the effective date of the
Registration Statement, an earnings statement which will be in
reasonable detail (but which need not be audited) and which
will comply with Section 11(a) of the Securities Act, covering
a period of at least twelve (12) months beginning after the
"effective date" (as defined in Rule 158 under the Securities
Act) of the Registration Statement.
(f) The Company will cooperate with the
Representatives to enable the Stock to be registered or
qualified for offering and sale by the Underwriters and by
dealers under the securities laws of such jurisdictions as the
Representatives may designate and at the request of the
Representatives will make such applications and furnish such
consents to service of process or other documents as may be
required of it as the issuer of the Stock for that purpose;
provided, however, that the Company shall not be required to
qualify to do business or to file a general consent (other
than that arising out of the offering or sale of the Stock) to
service of process in any such jurisdiction where it is not
now so subject. The Company will, from time to time, prepare
and file such statements and reports as are or may be required
of it as the issuer of the Stock to continue such
qualifications in effect for so long a period as the
Representatives may reasonably request for the distribution of
the Stock. The Company will advise the Representatives
promptly after the Company becomes aware of the suspension of
the qualifications or registration of (or any such exception
relating to) the Common Stock of the Company for offering,
sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and, in the
event of
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the issuance of any orders suspending such qualifications,
registration or exception, the Company will, with the
cooperation of the Representatives, use its best efforts to
obtain the withdrawal thereof.
(g) The Company will furnish to its
stockholders annual reports containing financial statements
certified by independent public accountants and with quarterly
summary financial information which may be unaudited in
reasonable detail. During the period of five (5) years from
the date hereof, the Company will deliver to the
Representatives and, upon request, to each of the other
Underwriters, as soon as they are available, copies of each
annual report of the Company containing the balance sheet of
the Company as of the close of such fiscal year and statements
of income, stockholders' equity and cash flows for the year
then ended and the opinion thereon of the Company's
independent public accountants, and each other report or
communication furnished by the Company to its stockholders and
will deliver to the Representatives, (i) as soon as they are
available, copies of any other reports or communication
(financial or otherwise) which the Company shall publish or
otherwise make available to any of its stockholders as such,
(ii) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the
Commission, or the NASD or any national securities exchange
and (iii) from time to time such other information concerning
the Company as you may request. So long as the Company has
active subsidiaries, such financial statements will be on a
consolidated basis to the extent the accounts of the Company
and its subsidiaries are consolidated in reports furnished to
its stockholders generally. Separate financial statements
shall be furnished for all subsidiaries whose accounts are not
consolidated but which at the time are significant
subsidiaries as defined in the Rules and Regulations.
(h) The Company will use its best
efforts to have included, subject to official notice of
issuance, on the Nasdaq National Market, the Stock to be
issued and sold by the Company.
(i) The Company will maintain a transfer
agent and registrar for its Common Stock.
(j) Prior to filing its quarterly
reports on Form 10-Q, the Company will have its independent
public accountants perform a limited quarterly review of its
quarterly financial statements.
(k) The Company will not offer, sell,
assign, transfer, encumber, contract to sell, grant an option
to
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purchase or otherwise dispose of any shares of Common Stock or
securities convertible into or exercisable or exchangeable for
Common Stock during the 180 days following the date on which
the price of the Common Stock to be purchased by the
Underwriters is established, other than the Company's sale of
Common Stock hereunder, the issuance of the Warrants and the
Company's issuance of Common Stock upon the exercise of the
Warrants and of stock options which are presently outstanding
and described in the Prospectus.
(l) The Company will apply the net
proceeds from the sale of the Stock as set forth in the
description under "Use of Proceeds" in the Prospectus, which
description complies in all respects with the requirements of
Item 504 of Regulation S-K.
(m) The Company will supply you with
copies of all correspondence to and from, and all documents
issued to and by, the Commission in connection with the
registration of the Stock under the Securities Act.
(n) Prior to the Closing Dates the
Company will furnish to you, as soon as they have been
prepared, copies of any unaudited interim consolidated
financial statements of the Company and its subsidiaries for
any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the
Prospectus.
(o) Prior to the Closing Dates the
Company will issue no press release or other communications
directly or indirectly and hold no press conference with
respect to the Company or any of its subsidiaries, the
financial condition, results of operation, business,
prospects, assets or liabilities of any of them, or the
offering of the Stock, without your prior written consent.
For a period of twelve (12) months following the Closing Date,
the Company will use its best efforts to provide to you copies
of each press release or other public communications with
respect to the financial condition, results of operations,
business, prospects, assets or liabilities of the Company at
least twenty-four (24) hours prior to the public issuance
thereof or such longer advance period as may reasonably be
practicable.
5. Payment of Expenses. (a) The Company will pay
(directly or by reimbursement) all costs, fees and expenses incurred in
connection with expenses incident to the performance of its obligations under
this Agreement and in connection with the transactions contemplated hereby,
including but not limited to (i) all expenses and taxes incident to the
issuance and delivery of the Stock to the Representatives; (ii) all expenses
incident to the
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registration of the Stock under the Securities Act; (iii) the costs of
preparing stock certificates (including printing and engraving costs); (iv) all
fees and expenses of the registrar and transfer agent of the Common Stock; (v)
all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Stock to the Underwriters; (vi) fees and expenses of
the Company's counsel and the Company's independent public accountants; (vii)
all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement, each
Pre-Effective Prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for herein,
the "Agreement Among Underwriters" between the Representatives and the other
Underwriters, the Master Selected Dealers' Agreement, the Underwriters'
Questionnaire, the Blue Sky memoranda and this Agreement; (viii) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with exemptions from the qualifying or registering (or obtaining
qualification or registration of) all or any part of the Stock for offer and
sale and determination of its eligibility for investment under the Blue Sky or
other securities laws of such jurisdictions as the Representatives may
designate; (ix) all fees and expenses paid or incurred in connection with
filings made with the NASD; (x) all fees and expenses paid or incurred in
connection with inclusion of the Stock on the NASDAQ National Market; and (xi)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section 5.
(b) In addition to its other obligations under Section
6(a) hereof, the Company agrees that, as an interim measure during the pendency
of any claim, action, investigation, inquiry or other proceeding arising out of
or based upon (i) any statement or omission or any alleged statement or
omission or (ii) any breach or inaccuracy in its representations and
warranties, it will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse each Underwriter for
such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that
any such interim reimbursement payment is so held to have been improper, each
Underwriter shall promptly return it to the Company together with interest,
compounded daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit standing) announced
from time to time by Citibank, N.A., New York, New York (the "Prime Rate").
Any such interim reimbursement payments which are not made to an Underwriter in
a timely manner as provided below shall bear interest at the Prime Rate from
the due date for such reimbursement. This expense reimbursement agreement will
be in addition to any other liability
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which the Company may otherwise have. The request for reimbursement will be
sent to the Company.
(c) In addition to its other obligations under Section
6(b) hereof, each Underwriter severally agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in Section 6(b) hereof which relates
to written information furnished to the Company by the Representatives on
behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus, it will reimburse the Company (and, to the extent
applicable, each officer, director, or controlling person) on a quarterly basis
for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Underwriters' obligation to reimburse
the Company (and, to the extent applicable, each officer, director, or
controlling person) for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent jurisdiction.
To the extent that any such interim reimbursement payment by an Underwriter is
so held to have been improper, the Company (and, to the extent applicable, each
officer, director, or controlling person) shall promptly return it to such
Underwriter together with interest, compounded daily, determined on the basis
of the Prime Rate. Any such interim reimbursement payments which are not made
to the Company within thirty (30) days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in paragraph (b)
and/or (c) of this Section 5, including the amounts of any requested
reimbursement payments and the method of determining such amounts, shall be
settled by arbitration conducted under the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc. or
pursuant to the Code of Arbitration Procedure of the NASD. Any such
arbitration must be commenced by service of a written demand for arbitration or
written notice of intention to arbitrate, therein electing the arbitration
tribunal. In the event the party demanding arbitration does not make such
designation of an arbitration tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do so. Such an
arbitration would be limited to the operation of the interim reimbursement
provisions contained in paragraph (b) and/or (c) of this Section 5 and would
not resolve the ultimate propriety or enforceability of the obligation to
reimburse expenses which is created by the provisions of Section 6.
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6. Indemnification and Contribution. (a) The Company
and its subsidiaries agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls such Underwriter within the meaning of the
Securities Act and the respective officers, directors, partners, employees,
representatives and agents of each of such Underwriter (collectively, the
"Underwriter Indemnified Parties" and, each, an "Underwriter Indemnified
Party"), against any losses, claims, damages, liabilities or expenses
(including the reasonable cost of investigating and defending against any
claims therefor and counsel fees incurred in connection therewith), joint or
several, which may be based upon the Securities Act, or any other statute or at
common law, on the ground or alleged ground that any Pre-Effective Prospectus,
the Registration Statement or the Prospectus (or any Pre-Effective Prospectus,
the Registration Statement or the Prospectus as from time to time amended or
supplemented) includes or allegedly includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company or any subsidiary by any Underwriter,
directly or through the Representatives, specifically for use in the
preparation thereof. The Company or any subsidiary will be entitled to
participate at its own expense in the defense or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but if the
Company elects to assume the defense, such defense shall be conducted by
counsel chosen by it. In the event the Company or any subsidiary elects to
assume the defense of any such suit and retain such counsel, any Underwriter
Indemnified Parties, defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) the
Company or such subsidiary shall have specifically authorized the retaining of
such counsel or (ii) the parties to such suit include any such Underwriter
Indemnified Parties, and the Company or any subsidiary and such Underwriter
Indemnified Parties at law or in equity have been advised by counsel to the
Underwriters that one or more legal defenses may be available to it or them
which may not be available to the Company or any subsidiary, in which case the
Company or any subsidiary shall not be entitled to assume the defense of such
suit notwithstanding its obligation to bear the fees and expenses of such
counsel. This indemnity agreement is not exclusive and will be in addition to
any liability which the Company or any subsidiary might otherwise have and
shall not limit any rights or remedies which may otherwise be available at law
or in equity to each Underwriter Indemnified Party.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company and any subsidiary, each of its
directors, each of its officers who have signed the Registration Statement and
each person, if any, who controls the Company or any subsidiary within the
meaning of the Securities Act (collectively, the "Company Indemnified
Parties"), against any
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losses, claims, damages, liabilities or expenses (including, unless the
Underwriter or Underwriters elect to assume the defense, the reasonable cost of
investigating and defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several, which arise out of or are
based in whole or in part upon the Securities Act, the Exchange Act or any
other federal, state, local or foreign statute or regulation, or at common law,
on the ground or alleged ground that any Pre-Effective Prospectus, the
Registration Statement or the Prospectus (or any Pre-Effective Prospectus, the
Registration Statement or the Prospectus, as from time to time amended and
supplemented) includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading, but only insofar as any such statement or omission was made in
reliance upon, and in conformity with, written information furnished to the
Company by such Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof; provided, however, that in no
case is such Underwriter to be liable with respect to any claims made against
any Company Indemnified Party against whom the action is brought unless such
Company Indemnified Party shall have notified such Underwriter in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Company
Indemnified Party, but failure to notify such Underwriter of such claim shall
not relieve it from any liability which it may have to any Company Indemnified
Party otherwise than on account of its indemnity agreement contained in this
paragraph. Such Underwriter shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if such Underwriter elects to
assume the defense, such defense shall be conducted by counsel chosen by it.
In the event that any Underwriter elects to assume the defense of any such suit
and retain such counsel, the Company Indemnified Parties and any other
Underwriter or Underwriters or controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, respectively. The Underwriter against whom indemnity
may be sought shall not be liable to indemnify any person for any settlement of
any such claim effected without such Underwriter's consent. This indemnity
agreement is not exclusive and will be in addition to any liability which such
Underwriter might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to any Company Indemnified
Party.
(c) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) in such proportion as is
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appropriate to reflect the relative benefits received by the Company or any
subsidiary on the one hand and the Underwriters on the other from the offering
of the Stock. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company or any subsidiary on the one hand
and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company or any
subsidiary on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company or any subsidiary bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault 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 any subsidiary or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, its subsidiaries and the Underwriters
agree that it would not be just and equitable if contribution 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 above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions in respect thereof) referred to above shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, defending, settling or compromising any
such claim. Notwithstanding the provisions of this subsection (c), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of the Stock 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.
The Underwriters' obligations to contribute are several in proportion to their
respective underwriting obligations and not joint. 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.
7. Survival of Indemnities, Representations,
Warranties, etc. The respective indemnities, covenants, agreements,
representations, warranties and other statements of the Company and its
subsidiaries and the several Underwriters, as set
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forth in this Agreement or made by them respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Company or any of
its subsidiaries or any of their officers or directors or any controlling
person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters' Obligations. The
respective obligations of the several Underwriters hereunder shall be subject
to the accuracy, at and (except as otherwise stated herein) as of the date
hereof and at and as of the Closing Dates, of the representations and
warranties made herein by the Company to compliance at and as of the Closing
Dates by the Company with its covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to the Closing Dates, and
to the following additional conditions:
(a) The Registration Statement shall have
become effective and no stop order suspending the
effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to
the knowledge of the Company or the Representatives, shall be
threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction
of the Representatives. Any filings of the Prospectus, or any
supplement thereto, required pursuant to Rule 424(b) or Rule
434 of the Rules and Regulations, shall have been made in the
manner and within the time period required by Rule 424(b) and
Rule 434 of the Rules and Regulations, as the case may be.
(b) The Representatives shall have been
satisfied that there shall not have occurred any change, on a
consolidated basis, prior to the Closing Dates in the
condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of
the Company and its subsidiaries considered as a whole, or any
change in the capital stock, short-term or long-term debt of
the Company and its subsidiaries considered as a whole, such
that (i) the Registration Statement or the Prospectus, or any
amendment or supplement thereto, contains an untrue statement
of fact which, in the opinion of the Representatives, is
material, or omits to state a fact which, in the opinion of
the Representatives, is required to be stated therein or is
necessary to make the statements therein not misleading, or
(ii) it is impracticable in the reasonable judgment of the
Representatives to proceed with the public offering or
purchase the Stock as contemplated hereby.
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(c) The Representatives shall be satisfied
that no legal or governmental action, suit or proceeding
affecting the Company which is material and adverse to the
Company or which affects or may affect the Company's ability
to perform its obligations under this Agreement shall have
been instituted or threatened and there shall have occurred no
material adverse development in any existing such action, suit
or proceeding.
(d) At the time of execution of this
Agreement, the Representatives shall have received from KPMG
Peat Marwick LLP, independent certified public accountants, a
letter, dated the date hereof, in form and substance
satisfactory to the Representatives.
(e) The Representatives shall have received
from KPMG Peat Marwick LLP, independent certified public
accountants, a letters, dated the Closing Dates, to the effect
that such accountants reaffirm, as of the Closing Dates, and
as though made on the Closing Dates, the statements made in
the letter furnished by such accountants pursuant to paragraph
(d) of this Section 8.
(f) The Representatives shall have received
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company, an
opinion, dated the Closing Dates, to the effect set forth in
Exhibit I hereto. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP may rely as to all matters governed other than by the
laws of the States of California, New York and Nevada or
federal laws on the opinion of local counsel of good standing
in such jurisdictions, provided that such local counsel is
satisfactory to the counsel to the Underwriters and that in
each case ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP shall state that they
believe that they and the Underwriters are justified in
relying on such other counsel.
(g) The Representatives shall have received
from ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Underwriters,
their opinion or opinions dated the Closing Dates with respect
to the incorporation of the Company, the validity of the
Stock, the Registration Statement and the Prospectus and such
other related matters as it may reasonably request, and the
Company shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon
such matters. In rendering such opinion, ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ may rely as to all matters governed other than by
the laws of the State of New York or federal laws on the
opinion of counsel referred to in paragraph (f) of this
Section 8.
(h) The Representatives shall have received
a certificate, dated the Closing Dates, of the chief
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executive officer or the President and the chief financial or
accounting officer of the Company to the effect that:
(i) The Registration Statement has
become effective under the Act and no stop order
suspending the effectiveness of the Registration
Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that
purpose have been instituted or are pending or
contemplated under the Securities Act;
(ii) All filings required to have been
made pursuant to Rules 424 or 430A under the Act have
been made;
(iii) Neither any Pre-Effective
Prospectus, as of its date, nor the Registration
Statement nor the Prospectus, nor any amendment or
supplement thereto, as of the time when the
Registration Statement became effective and at all
times subsequent thereto up to the delivery of such
certificate, included any untrue statement of a
material fact or omitted to state any 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 and since
the effective date of the Registration Statement, no
event has occurred which should have been set forth
in a supplement to or an amendment of the Prospectus
which has not been so set forth in such supplement or
amendment;
(iv) Subsequent to the respective
dates as of which information is given in the
Registration Statement and the Prospectus, and except
as set forth or contemplated in the Prospectus,
neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations,
direct or contingent, nor entered into any material
transactions not in the ordinary course of business
and there has not been any material adverse change in
the condition (financial or otherwise), properties,
business, management, prospects, net worth or results
of operations of the Company and its subsidiaries
considered as a whole, or any change in the capital
stock, short-term or long-term debt of the Company
and its subsidiaries considered as a whole;
(v) The representations and warranties
of the Company in this Agreement are true and correct
at and as of the Closing Dates, and the Company has
complied with all the agreements and
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performed or satisfied all the conditions on its part
to be performed or satisfied at or prior to the
Closing Dates; and
(vi) Since the respective dates as of
which information is given in the Registration
Statement and the Prospectus, and except as disclosed
in or contemplated by the Prospectus, (i) there has
not been any material adverse change or a development
involving a material adverse change in the condition
(financial or otherwise), properties, business,
management, prospects, net worth or results of
operations of the Company and its subsidiaries
considered as a whole; (ii) the business and
operations conducted by the Company and its
subsidiaries have not sustained a loss by strike,
fire, flood, accident or other calamity (whether or
not insured) of such a character as to interfere
materially with the conduct of the business and
operations of the Company and its subsidiaries
considered as a whole; (iii) no legal or governmental
action, suit or proceeding is pending or threatened
against the Company or any of its subsidiaries which
is material to the Company and its subsidiaries taken
as a whole, whether or not arising from transactions
in the ordinary course of business, or which may
materially and adversely affect the transactions
contemplated by this Agreement; (iv) since such dates
and except as so disclosed, neither the Company nor
any of its subsidiaries has incurred any material
liability or obligation, direct, contingent or
indirect, made any change in its capital stock, made
any material change in its short-term or funded debt
or repurchased or otherwise acquired any of the
Company's capital stock; and (v) the Company has not
declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock
payable to stockholders of record on a date prior to
the Closing Date.
(i) The Company shall have furnished to the
Representatives such additional certificates as the
Representatives may have reasonably requested as to the
accuracy, at and as of the Closing Dates, of the
representations and warranties made herein by it and as to
compliance at and as of the Closing Dates by it with its
covenants and agreements herein contained and other provisions
hereof to be satisfied at or prior to the Closing Dates, and
as to satisfaction of the other conditions to the obligations
of the Underwriters hereunder.
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(j) Ladenburg shall have received the
written agreements of all officers and directors of the
Company and all holders of securities of the Company that each
will not offer, sell, assign, transfer, encumber, contract to
sell, grant an option to purchase or otherwise dispose of,
other than by operation of law, gifts, pledges or dispositions
by estate representatives, any shares of Common Stock
(including, without limitation, Common Stock which may be
deemed to be beneficially owned by such officer, director or
holder in accordance with the Rules and Regulations) or
securities convertible into or exercisable or exchangeable for
Common Stock during the 180 days following the date of the
final Prospectus.
(k) The Nasdaq National Market shall have
approved the Stock for inclusion, subject only to official
notice of issuance.
All opinions, certificates, letters and other documents will
be in compliance with the provisions hereunder only if they are satisfactory in
form and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Dates, but Ladenburg shall
be entitled to waive any of such conditions.
9. Effective Date. This Agreement shall become
effective immediately as to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16, 17, 18
and 19, as to all other provisions, at 11:00 A.M. New York City time, on the
first full business day following the effectiveness of the Registration
Statement or at such earlier time after the Registration Statement becomes
effective as the Representatives may determine on and by notice to the Company
or by release of any of the Stock for sale to the public. For the purposes of
this Section 9, the Stock shall be deemed to have been so released upon the
release for publication of any newspaper advertisement relating to the Stock or
upon the release by you of telegrams (i) advising Underwriters that the shares
of Stock are released for public offering or (ii) offering the Stock for sale
to securities dealers, whichever may occur first.
10. Termination. This Agreement (except for the
provisions of Section 5) may be terminated by the Company at any time before it
becomes effective in accordance with Section 9 by notice to the Representatives
and may be terminated by the Representatives at any time before it becomes
effective in accordance with Section 9 by notice to the Company. In the event
of any termination of this Agreement under this or any other
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provision of this Agreement, there shall be no liability of any party to this
Agreement to any other party, other than as provided in Sections 5, 6 and 11
and other than as provided in Section 12 as to the liability of defaulting
Underwriters.
This Agreement may be terminated after it becomes effective by
the Representatives by notice to the Company (i) if at or prior to the First
Closing Date trading in securities on any of the New York Stock Exchange,
American Stock Exchange or Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established on any such exchange or
market, or a banking moratorium shall have been declared by New York or United
States authorities; (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market; (iii) if at
or prior to the First Closing Date there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign power or of
any other insurrection or armed conflict involving the United States or (B) any
change in financial markets or any calamity or crisis which, in the judgment of
the Representatives, makes it impracticable or inadvisable to offer or sell the
Firm Stock on the terms contemplated by the Prospectus; (iv) if there shall
have been any development or prospective development involving particularly the
business or properties or securities of the Company or any of its subsidiaries
or the transactions contemplated by this Agreement, which, in the judgment of
the Representatives, makes it impracticable or inadvisable to offer or deliver
the Firm Stock on the terms contemplated by the Prospectus; (v) if there shall
be any litigation or proceeding, pending or threatened, which, in the judgment
of the Representatives, makes it impracticable or inadvisable to offer or
deliver the Firm Stock on the terms contemplated by the Prospectus; or (vi) if
there shall have occurred any of the events specified in the immediately
preceding clauses (i) - (v) together with any other such event that makes it,
in the judgment of the Representatives, impracticable or inadvisable to offer
or deliver the Firm Stock on the terms contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any
other provisions hereof, if this Agreement shall not become effective by reason
of any election of the Company pursuant to the first paragraph of Section 10 or
shall be terminated by the Representatives under Section 8 or Section 10, the
Company will bear and pay the expenses specified in Section 5 hereof and, in
addition to its obligations pursuant to Section 6 hereof, the Company will
reimburse the reasonable out-of-pocket expenses of the several Underwriters
(including reasonable fees and disbursements of counsel for the Underwriters)
incurred in connection with this Agreement and the proposed purchase of the
Stock, and promptly upon demand the Company will pay such amounts to you as
Representatives.
12. Substitution of Underwriters. If on the First
Closing Date or the Option Closing Date, as the case may be, any Underwriter or
Underwriters shall default in its or their
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31
obligations to purchase shares of Stock hereunder (otherwise than by reason of
default on the part of the Company), you, as Representatives of the
Underwriters, shall use your reasonable efforts to procure within 48 hours
thereafter one or more of the other Underwriters, or any others, to purchase
from the Company such amounts as may be agreed upon and upon the terms set
forth herein, the shares of Stock which the defaulting Underwriter or
Underwriters failed to purchase. If during such 48 hours you, as such
Representatives, shall not have procured such other Underwriters, or any
others, to purchase the shares of Stock agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate number of
shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent (10%) of the total number of shares
underwritten, the other Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the shares of
Stock which such defaulting Underwriter or Underwriters agreed but failed to
purchase, or (b) if the aggregate number of shares of Stock with respect to
which such default or defaults occur is more than ten percent (10%) of the
total number of shares underwritten, the Company or you, as the Representatives
of the Underwriters, will have the right, by written notice given within the
next 48-hour period to the parties to this Agreement, to terminate this
Agreement without liability on the part of the non- defaulting Underwriters or
the Company.
If the remaining Underwriters or substituted Underwriters are
required hereby or agree to take up all or part of the shares of Stock of a
defaulting Underwriter or Underwriters as provided in this Section 12, (i) the
Company shall have the right to postpone the Closing Dates for a period of not
more than five (5) full business days in order that the Company may effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees promptly to file any amendments to the Registration Statement or
supplements to the Prospectus which may thereby be made necessary, and (ii) the
respective numbers of shares to be purchased by the remaining Underwriters or
substituted Underwriters shall be taken as the basis of their underwriting
obligation for all purposes of this Agreement. Nothing herein contained shall
relieve any defaulting Underwriter of its liability to the Company or the other
Underwriters for damages occasioned by its default hereunder. Any termination
of this Agreement pursuant to this Section 12 shall be without liability on the
part of any non-defaulting Underwriter or the Company, except for expenses to
be paid or reimbursed pursuant to Section 5 and except for the provisions of
Section 6.
13. Notices. All communications hereunder shall be in
writing and, if sent to the Underwriters, shall be mailed, delivered or
telegraphed and confirmed to you, as their Representatives ▇/▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co. Inc. at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, One Citicorp Center,
▇▇▇ ▇▇▇▇
-▇▇-
▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇, except that
notices given to an Underwriter pursuant to Section 6 hereof shall be sent to
such Underwriter at the address furnished by the Representatives or, if sent to
the Company, shall be mailed, delivered or telegraphed and confirmed c/▇ ▇▇▇▇▇▇
Incorporated, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇,
Attention: Chief Executive Officer, with a copy to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇,
L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
14. Successors. This Agreement shall inure to the
benefit of and be binding upon the several Underwriters, the Company and their
respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of
such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Company contained in this Agreement shall also be for the benefit of the person
or persons, if any, who control any Underwriter or Underwriters within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and the indemnities of the several Underwriters shall also be for the benefit
of each director of the Company, each of its officers who has signed the
Registration Statement and the person or persons, if any, who control the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act.
15. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to the choice of law principles thereof.
16. Authority of the Representatives. In connection with
this Agreement, you will act for and on behalf of the several Underwriters, and
any action taken under this Agreement by Ladenburg and Stifel, as
Representatives, will be binding on all the Underwriters.
17. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
18. General. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements,
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33
understandings and negotiations with respect to the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and the Representatives.
19. Counterparts. This Agreement may be signed in two
(2) or more counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
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34
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement between us.
Very truly yours,
▇▇▇▇▇▇ INCORPORATED
By:_________________________
Name:
Title:
Accepted and delivered in
New York, New York as of
the date first above written.
LADENBURG ▇▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INC.
Acting on their own behalf
and as Representatives of the several
Underwriters referred to in the
foregoing Agreement.
By: Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
By:______________________________
Name:
Title:
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35
SCHEDULE A
Number of shares of Firm Stock
Name to be Purchased
---- ------------------------------
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc...
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Inc.
Total......................... -----------
2,275,000
36
SCHEDULE B
SUBSIDIARIES OF THE COMPANY
[TO COME]
37
EXHIBIT I
Matters to be covered in opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP(1)
1. The Company and each of its subsidiaries have been duly organized and
are validly existing as corporations, partnerships or limited liability
companies in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing as
foreign corporations, partnerships or limited liability companies in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective properties
and conduct the businesses in which they are engaged.
2. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and all of the shares of Stock to be issued and sold by the Company to the
Underwriters pursuant to the Underwriting Agreement have been duly and validly
authorized and, when issued and delivered against payment therefor as provided
for in the Underwriting Agreement, will be duly and validly issued, fully paid
and non- assessable and free of any preemptive or similar rights; and all of
the shares of Common Stock to be issued upon exercise of the Warrants have been
properly reserved for the event of exercise of the Warrants and have been duly
and validly authorized and, when issued and delivered against payment therefor
as provided in the Warrants, will be duly and validly issued, fully paid and
nonassessable; and all of the issued shares of capital stock, partnership
interests, membership interests or other equity interests of each subsidiary of
the Company have been duly and validly authorized and issued and are fully
paid, non-assessable and are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims.
3. Except as disclosed in or contemplated by the Prospectus and the
financial statements of the Company and related notes thereto included in the
Prospectus, the Company does not have outstanding any options or warrants to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase
_______________________________
(1) Capitalized terms used herein but not defined shall have the meanings
given such terms in the Underwriting Agreement.
38
any securities or obligations convertible into, or any contracts or commitments
to issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations, except for options granted subsequent to
the date of information provided in the Prospectus pursuant to the Company's
employee and stock option plans as disclosed in the Prospectus. There are no
restrictions upon the voting or transfer of any of the Stock pursuant to the
Company's Certificate of Incorporation or By-laws or any agreement or other
instrument of the Company.
4. To the best of such counsel's knowledge, except as set forth in the
Prospectus, there are no material legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries, could
have a material adverse effect on the Company and its subsidiaries or prevent
or adversely affect the transactions contemplated by the Underwriting
Agreement; and, to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or other third
parties. To the best of such counsel's knowledge, neither the Company nor any
of its subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body or other
governmental agency or body.
5. The Company has the full corporate power and authority to enter into
the Underwriting Agreement and to perform its obligations thereunder (including
to issue, sell and deliver the Stock), and the Underwriting Agreement has been
duly and validly authorized, executed and delivered by the Company. The
Company has the full corporate power and authority to execute and deliver the
Warrants on the terms and conditions set forth in the Underwriting Agreement
and in the Warrants, and such execution and delivery of the Warrants has been
duly and validly authorized and are enforceable against the Company in
accordance with their terms.
6. The execution, delivery and performance of the Underwriting Agreement
and the consummation of the transactions therein contemplated will not result
in a breach or violation of any of the terms or provisions of or constitute a
default under the Certificate of Incorporation, By-laws or other organizational
documents of the Company or any of its subsidiaries, or any indenture,
mortgage, deed of trust, note agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a party or
by which it or any of them or any of their properties is or may be bound, or
any law, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
properties or result in the creation of a lien.
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39
7. No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company of
the transactions contemplated by the Underwriting Agreement (except such as may
be required by the NASD or as required by the securities or "Blue Sky" laws of
any jurisdiction as to which such counsel need express no opinion) in
connection with the purchase and distribution of the Stock by the Underwriters
except such as have been obtained or made, specifying the same.
8. The Registration Statement was declared effective under the Securities
Act as of _____________, 1997, the Prospectus was filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations on ____________, 1997 and,
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose is pending or threatened by the Commission.
9. The Registration Statement and the Prospectus and any amendments or
supplements thereto (except for the financial statements and notes thereto and
related schedules as to which such counsel need express no opinion) comply as
to form in all respects with the requirements of the Securities Act and the
Rules and Regulations.
10. To the best of such counsel's knowledge, there are no contracts,
leases, agreements or other documents which are required by the Securities Act
or by the Rules and Regulations to be described in the Prospectus or filed as
exhibits to the Registration Statement which have not been described in the
Prospectus or filed as exhibits to the Registration Statement. All
descriptions of such contracts, leases, agreements and other documents
contained in the Prospectus are accurate and complete descriptions of such
documents in all material respects.
11. To the best of such counsel's knowledge, no person or entity has the
right to require registration of shares of Common Stock or other securities of
the Company because of the filing or effectiveness of the Registration
Statement or otherwise, except for persons and entities who have expressly
waived such right or who have been given proper notice and have failed to
exercise such right within the time or times required under the terms and
conditions of such right.
12. The statements in the Prospectus, to the extent they constitute a
summary of documents referred to therein or reflect matters of law or legal
conclusions relating to such law, accurately summarize and fairly present the
information called for with respect to such documents and matter and the legal
and regulatory matters described therein.
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13. Neither the Company nor any of its subsidiaries is 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.
14. In respect of all real property described in the Prospectus as being
owned or held under lease by the Company or its direct and indirect corporate
and partnership subsidiaries, such counsel has reviewed the title commitments
of title companies rendered or issued in connection with the purchase of such
property by the Company or its subsidiaries and based upon such review, and its
representation of the Company, its subsidiaries and the transactions relating
thereto, no facts have come to such counsel's attention that have led such
counsel to believe that there is any inaccuracy in such commitments relating to
the real property described in the Prospectus as being owned or held under
lease by the Company or its subsidiaries (such counsel being entitled to rely
in respect of matters of fact upon certificates of officers of the Company,
provided that such counsel shall state that they believe that both you and they
are justified in relying upon such certificates).
In addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that (i) the Registration Statement or any
amendment thereto, as of the time it became effective under the Securities Act
(but after giving effect to any modifications incorporated therein pursuant to
Rule 430A under the Securities Act), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or (ii)
that the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the First Closing Date or the
Option Closing Date, as the case may be, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that such
counsel need express no view as to financial statements and notes thereto,
schedules and statistical information therein). With respect to such
statement, such counsel may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
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